Source: http://wthslaw.com/site/resources/summer-2009-newsletter.html
Timestamp: 2019-04-23 08:59:14+00:00

Document:
On December 4, 2008, our firm celebrated ten years of service at a client reception and holiday party with approximately two hundred clients. We value our clients, and are proud to have developed such positive, long-standing relationships.
We also held our biannual insurance litigation seminar on December 4, 2008, which drew insurance professionals from Evansville to Cincinnati to Indianapolis. Bill Smock, a nationally-recognized forensic doctor, headlined the seminar with a lecture on biomechanical investigations of automobile accidents. Michael Barnes, an accident reconstruction expert with Crashteams, also presented information about 3-D graphic animations of such accidents. Scott Tyler and Tricia Hofmann also presented legal materials at the seminar. Rodney Scott and Matt Schad, a local accident attorney, participated in a mock debate.
WTSHD, LLC takes a lot of pride in recognizing Lisa Scott for ten full years of service to the firm. We recognize her contributions to our success.
The firm family is excited to welcome its newest member, Kathleen Suzanne (“Kate”) Tyler, daughter of Scott Tyler and his wife Alison. Kate was born on December 19, and is beautiful and healthy. She joins proud big brothers Jack and Mitchell.
George Budd is serving a one-year term as Vice President of the Floyd County Bar Association.
Since our last newsletter, Rodney Scott, Ken Doane and Tricia Hofmann have participated in the “Talk to a Lawyer” program, which conducts a monthly phone bank to make referrals and answer simple legal questions on a pro bono basis. In 2008, the firm donated our former multi-line phone system to Legal Associates, which runs the “Talk to a Lawyer” program, to assist them in being better able to serve the public.
Scott Tyler served again this year as the Chair of the Rotary Club of New Albany Community Toast Ambassador Campaign. Scott’s Campaign Committee secured a record number of corporate sponsors for the event, the proceeds of which were shared equally by Rotary and Junior Achievement. For his efforts, Scott was awarded the Starfish Flinger Award by Junior Achievement.
Rodney and Lisa Scott are pleased to announce that daughter Emmawas designated a National Merit Semifinalist this fall. Finalists will be selected in the spring. She also was selected to play the violin in the All-State Symphonic Orchestra.
Rodney and Lisa Scott are also pleased to announce that daughter Meghan was awarded a scholarship from Ideal Beauty Academy for an essay she wrote about her chosen profession and future plans.
The Floyd County Youth Services Bureau has recently instituted a new Teen Court program. According to the Bureau’s materials Teen Court is a deferral program for first-time juvenile offenders, who admit to misdemeanors and are sentenced to punishment by a jury of their peers. Since July, Scott Tyler, Ken Doane and Tricia Hofmann have served as the charter volunteer attorneys for the program. Scott, Ken and Tricia meet with the teen court participants two or three afternoons a month to train them in how to question witnesses, frame arguments, and fulfill their duties as jurors. After considerable training, Floyd County’s Teen Court conducted its first actual trial in December. It is expected that trials and training sessions will continue to occur at least twice a month for the foreseeable future.
Tricia Hofmann is serving as room parent, a liaison between teachers, parents and board members, at her daughter Casey’s school, Hayfield Montessori School in Louisville. While drafting school directories and coordinating volunteer coverage has been within her comfort zone, she was considerably less at ease helping the preschoolers and kindergarteners with their glitter glue and paint.
Scott Tyler was selected by Westfield Insurance Company to represent the firm at its annual Defense Days on August 18th and 19th at its home office located in Westfield Center, Ohio. During Defense Days, Westfield recognized forty of its top attorneys and, in addition, Scott was one of only twelve attorneys selected to participate in Westfield’s Litigation Summit conducted before the start of Defense Days.
The firm remains committed to taking aggressive and proactive steps to reduce the size of its carbon footprint, as discussed in the Spring, 2008, issue of this newsletter. We have substantially reduced our use of paper, ink and waste. In that regard, we are grateful to our clients who assist us in this goal by accepting correspondence electronically or via fax. We continue to employ Shred-It, a paper-waste recycling business, to reclaim our used paper products. Shred-It has advised that we saved twenty-nine trees in 2008.
Rodney Scott, Rick Bartlett and Chad Smith all contributed to the dismissal of an adult wrongful death action filed by the non-custodial father acting as a personal representative of an Estate opened for that purpose by a Bloomington, Indiana law firm. To the father and law firm’s surprise, the 20 year-old decedent was a full-time student at Ivy Tech and, therefore, an adult wrongful death action was an inappropriate vehicle to seek recovery for her death. J. Scott Waters, IV, of our firm, was helping the residential and custodial mother with her plans for a memorial for her daughter when the mother learned of the lawsuit and her ex-husband’s intentions. We filed a motion to dismiss on her behalf. The Orange County Circuit Court granted the motion and permitted mother to file an intervening complaint against the tortfeasor and the ex-husband. The residential and custodial mother, therefore, will be able to proceed with her initial plans.
Ken Doane and George Budd successfully defended an appeal to the Indiana Court of Appeals in McClanahan v. Mason, 881 N.E.2d 103 (Ind. Ct. App. 2008). Previously, Rodney had defended the case at a jury trial and received a defense verdict. Plaintiff appealed the jury’s verdict and requested a new trial. The Court of Appeals held that the trial court’s admission of evidence of other post-accident claims Plaintiff pursued was harmless error. It further determined that the jury’s defense verdict was supported by sufficient evidence.
Rodney Scott successfully mediated Gentry v. Zingg with Darryl Isaacs’ office. The injury claim was catastrophic. In addition to $134,000 in medical billings, Plaintiff had been unemployed since the date of the accident with no prospects of returning to his employment because of the significant and permanent injuries sustained in the accident. While Rodney’s client definitely had significant liability and damage exposure, he believed that it should be shared by Plaintiff and, most significantly, by Harrison County. Both parties had accident reconstructions performed which agreed that both Plaintiff and Defendant were across the centerline, that Defendant may have been 4 inches further across the centerline, that both Plaintiff and Defendant were about equal distances from their respective edges and that both vehicles were travelling within the speed limit. After the suit filing, Rodney asked the defense accident reconstructionist to revisit the scene and analyze the road design. The Defendant’s accident reconstructionist concluded that the maximum advisable speed for the roadway – based upon its design – was more in the range of 20 mph than the posted 55 mph limit. Additionally, the road lacked any necessary warnings or advisories to notify traffic of the narrowness of the roadway and the visibility limitations at the location of the accident. Harrison County, therefore, was named a non-party to the action and Rodney successfully argued that his 16 year-old client, in particular, needed warnings and advice about speed and visibility and that, as such, Harrison County bore at least 50% of the total fault, for settlement purposes, for the accident and the parties each bore no more than 25% of the fault. The case was settled within the insured’s available liability limits.
Ken Doane and George Budd received a favorable published opinion from the Indiana Court of Appeals in Bailey v. State Farm Mut. Auto. Ins. Co., 881 N.E.2d 996 (Ind. Ct. App. 2008). Rodney Scott and Ken Doane had previously achieved a defense verdict at the trial court level for the client, State Farm, Plaintiff’s underinsured motorist (UIM) insurance carrier. By way of brief background, Caudill allowed Bailey to drive his car, and they were involved in a single-car accident. Both men were intoxicated. Bailey sued Caudill, who subsequently tendered his liability limits, and then pursued a UIM claim against State Farm. At trial, Plaintiff moved to amend his Complaint to add a claim of negligent entrustment. The trial court denied this motion and granted State Farm’s motion in limine on the same issue. After the jury entered a defense verdict, Plaintiff appealed. The Court of Appeals held, as a matter of first impression, that a voluntarily intoxicated adult (Bailey) does not have a right to maintain a first-party cause of action against the vehicle owner (Caudill) for negligently entrusting the vehicle to him. The Court of Appeals also held that the evidence at trial also failed to establish Caudill’s actual knowledge of Bailey’s intoxication. The defense verdict was upheld.
Insurer’s Post-Complaint Conduct Can Not Be Considered as Evidence of Bad Faith.
In Allstate Insurance Company v. Fields, 885 N.E.2d 728 (Ind. Ct. App. 2008), the insureds brought a UM claim against Allstate demanding the $50,000 limits. Allstate refused to make an offer until the insureds complied with the policy condition requiring them to complete medical/wage authorizations and Proof of Loss forms. The insureds ultimately provided executed authorizations, but no Proof of Loss forms. Allstate reiterated that no settlement offer would be made unless the insureds submitted the forms as required by the policy. The insureds sued Allstate for breach of contract and bad faith.
During litigation, Allstate’s motion for partial summary judgment on the bad faith claim was denied. In addition, various discovery disputes erupted which ultimately resulted in a default judgment against Allstate on the bad faith claim. Allstate sought to appeal both decisions and was successful at the Indiana Court of Appeals. However, the decision was vacated by the Indiana Supreme Court, which held that an appeal was premature. The case was remanded and tried on the issue of damages only. At trial, the insureds argued that Allstate’s claims handling had caused Ted Fields to suffer two strokes, two heart attacks, and diabetes. The jury awarded the insureds $2 million compensatory damages and $18 million punitive damages (reduced to $6 million by the trial court per the statutory cap) and Allstate appealed.
The Court of Appeals, for the second time, found in favor of Allstate and vacated the jury verdict. First, the Court limited its review to Allstate’s conduct before the bad faith claim was filed. Second, the Court concluded that there was no indication that Allstate caused an unfounded delay in making payment or acted with ill will or conscious wrongdoing by delaying payments until Fields complied with provisions of his policy or until Allstate could obtain complete medical and wage information to evaluate the claim. Accordingly, the Court remanded the case to the trial court with instructions to enter summary judgment in favor of Allstate on the bad faith claim.
Kentucky Drastically Alters Permissive Use Rules – Abandons Minor Deviation Rule for Initial Permission Standard.
The Kentucky Supreme Court issued an opinion in Mitchell v. Allstate Insurance Company, 244 S.W.3d 59 (Ky. 2008) which drastically altered the state’s rule in permissive use cases. In Mitchell, Rita allowed her friend Virginia to use her car, and Virginia in turn allowed her son Allan to use it to drive to and from work. There was conflicting testimony about whether Allan was allowed to ever use it for other purposes. One day, Allan picked up some friends and was involved in a single-vehicle accident, killing Allan and injuring his passengers.
Allstate denied coverage for the loss, based on Maryland Casualty Company v. Hassell, 426 S.W.2d 133 (Ky. App. 1967), which adopted the “minor deviation” rule. Since Allan was not driving to or from work at the time of the accident, Allstate reasoned, he was outside the scope of permission, and not an insured. The trial court entered summary judgment for Allstate, which was affirmed by the Kentucky Court of Appeals.
The Kentucky Supreme Court reversed. The Mitchell court agreed with Hassell insofar as it held that initial permission from an insured could either be express or implied. However, a majority of the court concluded that the “minor deviation” rule was not consistent with the goals of the Kentucky Motor Vehicle Reparations Act (“KMVRA”), which was not in existence when Hassell was decided. The majority noted that Kentucky courts interpret omnibus clauses broadly so as to maximize availability of liability insurance for the protection of the general public. Consistent with that interpretation, the five justices in the majority decided that the “initial permission” rule would better achieve the KMVRA’s goals of protecting innocent victims of auto accidents and speed up the recovery process.
Under the “initial permission” rule, which is in use in a handful of other jurisdictions, as long as the insured initially affords permission to use an insured vehicle, any subsequent use of that vehicle will be covered, even if it is wholly outside the bounds of the contemplated use. As such, even if Rita expressly told Virginia not to let Allan drive the car at all, Allan would be an insured under the policy, as Rita gave permission to Virginia.
There are two exceptions to the “initial permission” rule. If an individual’s use of a vehicle constitutes theft or conversion, he or she will not be an insured. According to the Mitchell majority, an individual is not a converter if he or she uses the vehicle “in the good faith belief that he is legally entitled to do so.” The second exception occurs if the operator uses a motor vehicle in a manner intending to injure others. Absent one of these two limited circumstances, any use of an insured vehicle will be found to be within the scope of the insured’s consent, rendering the operator an “insured” under the liability portion of the policy.
Vocational Expert’s Reliance on General Census Data Fails Daubert Evidentiary Standard.
The Indiana Court of Appeals ruled in Kempf Contracting and Design, Inc. v. Holland-Tucker, 892 N.E.2d 672 (Ind. Ct. App. 2008), that the trial court abused its discretion in permitting John Tierney, Vocational Economics, to testify regarding his opinions as to the reduction of plaintiff’s capacity to work and earn money after she was injured. In doing so, the Court found that plaintiff had failed to prove that Tierney’s methodology was scientifically reliable under Indiana Evidence Rule 702(b). At the trial, Tierney testified that plaintiff had sustained a physical disability as a result of the accident. To reach his conclusion, Tierney testified that he used the definition of physical disability found in the American Community Survey (which is conducted by the U.S. Census Bureau). He then reviewed compiled databases regarding the earning capacity of people with physical disability who have a bachelor’s degree, as does the plaintiff. However, he did not compare the data as to the plaintiff’s specific profession, nor the plaintiff’s specific disability. Tierney testified this methodology was well known in the vocational field. However, since Tierney did not provide any support for this claim, the Court of Appeals held that such a statement was insufficient to show that the methodology was reliable, and therefore, the testimony should have been excluded.
Third-Party Carrier Has No Duty to Preserve Evidence Which Has No Foreseeable Evidentiary Value.
Insurance carrier can have a duty to a third party claimant to preserve evidence. The Indiana Court of Appeals in ANPAC v. Wilmoth and Sharpe and Bowers, 893 N.E.2d 1068 (Ind. Ct. App. 2008), explained that, in order to determine whether an insurer has a duty to a third party claimant, courts must analyze the relationship of the parties, the foreseeability of the harm and the public policy behind enforcing a duty.
Wilmoth and Rider lived in a house rented from the Bowers and insured by ANPAC. The house was destroyed by fire, and Rider died as a result of the fire. The firefighters threw several items out of the house, including a couch, which remained on site for approximately six weeks. The Bowers eventually threw the items away, including the couch. The firefighters determined the fire was accidental and originated from an electric space heater. Later, plaintiffs’ expert believed the fire started in the area of the sofa. Plaintiffs sued ANPAC under a spoliation theory for allowing the couch to be destroyed. The trial court denied ANPAC’s summary judgment motion, and the Court of Appeals reversed.
The Court of Appeals first found that ANPAC had no contractual relationship with Wilmoth or Sharpe, and, further, never had possession of the couch. Indeed, it was the owner who threw out the couch. Notwithstanding the lack of any special relationship, the Court found that an insurer can have a relationship to a third-party sufficient to allow a spoliation theory to proceed if the insurer takes possession of items that will be key to litigation if a claim is denied. The Court also denied ANPAC’s invitation to hold an insurer can never owe a third party a duty to preserve evidence not in its exclusive control. Rather, the Court concluded that ANPAC did not owe a duty to Wilmoth and Sharpe since the couch had no forseeable evidentiary value.
First-Party Cause of Action for Negligent Entrustment Rejected.
Bailey v. State Farm Mut. Auto. Ins. Co., 881 N.E.2d 996 (Ind. Ct. App. 2008), involved a claim for underinsured motorist benefits. Caudill allowed Bailey to drive his car, and they were involved in a single-car accident in which Bailey sustained serious injuries. Both were intoxicated. Bailey sued Caudill, who subsequently tendered his liability limits, and then pursued a UIM claim against State Farm. At trial, Bailey moved to amend his Complaint to add a claim of first-party negligent entrustment. The trial court denied this motion and granted State Farm’s motion in limine on the same issue. After the jury entered a defense verdict, Plaintiff appealed. We are proud to note that Rodney Scott and Ken Doane tried the case on behalf of State Farm.
The Court of Appeals held, as a matter of first impression, that a voluntarily intoxicated adult (Bailey) does not have a right to maintain a first-party cause of action against the vehicle owner (Caudill) for negligently entrusting the vehicle to him. The Court of Appeals also held that the evidence at trial also failed to establish Caudill’s actual knowledge of Bailey’s intoxication. The defense verdict was upheld.
Synopsis: This lawsuit arose from an injury suffered by the Plaintiff while he and the Defendant were operating a compound miter saw. On the day of the accident, the Plaintiff, who is the step-son of the Defendant, asked the Defendant to come over and help cut some stakes for a project. The Defendant was being instructed on the location of the power switch when he inadvertently turned on the power saw. Unfortunately, at that same time, the Plaintiff had placed his hand under the saw blade to position the wood in order to go ahead and cut the wood stake himself. The Plaintiff is legally blind and was not aware that the Defendant was going to turn on the saw. The parties disputed how the energized saw blade was lowered into position to cut. The saw blade cut the Plaintiff’s right ring finger completely and significantly tore and damaged his right long finger.
The Defendant denied liability in this case. The Plaintiff insisted that the Defendant was more at fault in causing this accident and pursued forward with the lawsuit. Experts were employed to discuss proper and safe handling of the saws. Upon Motions in Limine, the Judge severely restricted their testimony. Accordingly, both parties decided to try the case without the liability experts.
The Plaintiff emphasized the severity of his injuries through the primary treating surgeon, Dr. Tien, of the well-known hand surgery center, Kutz & Kleinert. Dr. Tien re-attached the two fingers but indicated Plaintiff would have permanent functional problems in the fingers and hand. He assigned an 8% whole person permanent impairment rating.
The evidence regarding the amount of medicals billed versus the amounts paid was a critical factor in this case, as there were substantial insurance adjustments. Indeed, only approximately $20,000.00 was actually paid toward those bills. As described in the “Our Perspective” column of our Spring 2008 firm newsletter, Indiana law on which figure to introduce is currently unsettled. The Defendant vigorously argued that the amounts paid should be the sole evidence of medicals submitted to the jury. On the other hand, the Plaintiff argued that the evidence should solely be the medicals billed. The Judge initially ruled that both amounts would be submitted to the jury. During trial, however, Plaintiff elected to seek just the amounts actually paid.
The jury returned a verdict assigning 80% fault to the Plaintiff and 20% fault to the Defendant. Under Indiana’s Comparative Fault Act, the Defendant owed no money to the Plaintiff.

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