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Virginia Supreme Court reverses $1,750,000 jury verdict due to errors in admitting expert testimony
In CNH America, LLC v. Smith, No. 091991 (Va. Jan. 13, 2011), the Court reversed a jury verdict of $1,750,000 in a product defect case, on the grounds that the plaintiff's expert testimony was not based on an adequate foundation. The Court remanded the case for a full retrial on the merits.
The plaintiff had been injured when a hose on his newly-purchased disc mower exploded and injected burning hydraulic fluid into his hand. The injuries required five surgeries, including the partial amputation of the middle finger on his right hand.
The plaintiff filed suit against the manufacturer and dealer of the mower, alleging negligence, strict liability, failure to warn, and breach of express and/or implied warranties.
On appeal, the Virginia Supreme Court found both of the plaintiff's liability experts had testified based on inadequate foundation. One expert based his opinion that the hose had a manufacturing defect solely on the failure of the hose itself. The Court held that it was insufficient for this expert to base his opinion upon the premise that because the hose failed, it was the result of a manufacturing defect. Further, the expert admitted that he failed to perform tests that could have determined whether the hose had the defect.
The second expert admitted that he was not an expert in the hydraulic systems of mowers and had no experience in the design or manufacture of mowers or any other agricultural equipment. The Court noted that "An expert's qualifications must correlate to the opinions for which the expert is being offered. . . . the fact that a person is a qualified expert in one field does not make him an expert in another field, even if they are closely related." Further, the trial court ruled that the second expert's testimony was to be restricted to hydraulic systems generally and was not supposed to include opinions specifically about the particular mower at issue. Yet, that expert's testimony went far beyond the trial court's limitations.
Posted by David B. Stratton on 01/20/2011 at 02:23 AM
Expert Witness Issues •
Virginia •
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Legal Malpractice Claim Barred by Virginia Statute of Limitations
In Van Dam v. Gay, No. 091659 (Va. Sept. 16, 2010), the Court affirmed the trial court's award of summary judgment to an attorney in a legal malpractice case based on the statute of limitations.
The alleged malpractice involved the representation of the former wife in a divorce case. As part of the divorce settlement, the wife's attorney drafted a property settlement agreement. During the marriage, the former husband participated in two federal retirement plans, military and civil service. The property settlement agreement made only the following reference to them: "The wife shall receive . . . survivor's benefits from the husband's retirement pay."
Twenty years later, the former husband died. The former wife then applied for survivor's benefits under her former husband's two retirement plans. Both claims were denied on the ground that the 1986 property settlement agreement was insufficient, as a matter of federal law, to entitle her to benefits under either plan.
The former wife then brought a legal malpractice suit against her attorney, who entered a plea in bar asserting the statute of limitations.
The Circuit Court sustained the plea in bar of the statute of limitations, and the wife was awarded an appeal.
On appeal, the former wife argued that her cause of action could not have accrued until her husband's death in 2006, because up to that point, her right to survivor's benefits would have been purely contingent upon the former husband predeceasing her.
The Court disagreed, reasoning that the legal injury suffered by the wife in 1986 was not vitiated by the fact that her right to pension benefits was contingent upon her surviving her former husband. Under the equitable distribution statute, Va. Code sec. 20-107.3(A)(2), in divorce proceedings all pensions are presumed to be marital property in the absence of satisfactory evidence that they are separate property and the court may direct payment of the marital share of such benefits whether they are "vested or nonvested" as they become payable.
Some injury or damage, however slight, is essential to a cause of action, but it is immaterial that all the damages resulting from the injury do not occur at the time of the injury.
Accordingly, the Court held that the Circuit Court correctly held that the wife's legal injury arising out of the defendant's alleged malpractice occurred on November 3, 1986, when the court entered a final decree of divorce, terminating the defendant's employment in the matter.
Carol T. Stone, Esq., of Jordan Coyne & Savits, LLP, represented the defendant/appellee in this matter.
Posted by David B. Stratton on 01/05/2011 at 10:41 PM
Legal Malpractice •
Virginia •
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Legal malpractice opinion addresses superseding cause in Virginia
In Williams v. Joynes, 278 Va 57, 677 S.E.2d 261 (2009), the Supreme Court of Virginia reversed the Circuit Court's ruling that plaintiff's failure to file a personal injury action in a foreign jurisdiction was a superseding event sufficient to sever the link of proximate causation between the defendants' failure to timely file a personal injury action in Virginia and the plaintiff's loss of his personal injury claim.
The personal injury action arose out of an automobile accident that occurred when a truck driven by a Maryland resident hit a car driven by a Virginia resident and caused that car to hit the plaintiff. The defendant attorneys were retained to file the personal injury action, but failed to do so within Virginia's two year statute of limitations. The malpractice action arose as a result of the defendant attorneys' failure to timely file the Virginia personal injury action.
The defendant attorneys notified the plaintiff that he should find a Maryland attorney to advise him as to whether he could file a Maryland action against the Maryland resident based on the three year statute of limitations. Plaintiff was unable to find an attorney to take the Maryland case because of proof problems arising out of the fact that Maryland had no subpoena power over the Virginia witnesses.
The Circuit Court held that Williams' decision not to file suit in Maryland was an intervening act that severed any connection between the negligent act of the defendants and the loss claimed by plaintiff.
The Supreme Court of Virginia reversed on the grounds that the plaintiff's intervening act was set in motion by the defendant attorney's failure to timely file the action in Virginia. The Court stated that an intervening act will never be deemed a superseding cause if the intervening act was set in motion by the initial tortfeasor's negligence.
Additionally, the Court found that the Circuit Court failed to consider that, as a result of the defendant attorneys' negligence, the plaintiff had forever lost his claim against the Virginia resident who could not be sued in Maryland.
Posted by Sara Allenson on 09/05/2009 at 06:54 PM
Legal Malpractice •
Virginia •
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Legal Malpractice Claim Against Immigration Attorney Is Dismissed
In Baserva v. Remes, et al, 2009 U.S. Dist. LEXIS 63597 (E.D. Va. 2009), a legal malpractice action, the plaintiff, a non-U.S. citizen, sued his former attorney for damages arising out of the plaintiff's detention by immigration authorities.
Mr. Baserva filed suit in 2008 against his attorney in connection with two separate immigration matters, a 1993 deportation proceeding and a 2005 matter where Baserva was detained by immigration authorities.
Granting Defendant's Motion for Summary Judgment, in part, the U.S. District Court held that Baserva's malpractice claim for the 1993 representation was barred by the three-year statute of limitations. Defendant's representation terminated when he withdrew as counsel in 1993, thereby defeating Baserva's argument that the statute of limitations was tolled due to Defendant's continuous representation.
The Court also dismissed the 2005 fraud count as time barred. Fraud has a two-year statute of limitations in Virginia. The Court then dismissed the 2005 counts for negligence and gross negligence. Even though legal malpractice claims sound in tort, they are actually breach of contract claims.
On the remaining legal malpractice and breach of contract claims, the Court held that a reasonable jury could find that Defendant breached his duty to Baserva by waiting three-months to file the appropriate forms and motions with immigration authorities. However, Baserva's legal expert failed to opine as to whether Defendant's failure to file a motion to re-open the immigration proceedings proximately caused Baserva's detention, leaving a question as to causation. Baserva argued that expert testimony was not necessary. Defendant asserted that expert testimony was required to prove that filing a motion would have prevented Baserva's detention. Defendant further argued that such testimony was unlikely to establish causation since granting any such motion is discretionary, and Immigration might not have granted the motion even if it had been filed.
Ultimately, the Court held that expert testimony was required to prove causation and granted Baserva's request for leave to supplement his expert report provided that he pays all costs since discovery had closed.
In a subsequent ruling, the court granted the defendant's motion for summary judgment on the grounds that the plaintiff had failed to establish that the failure to file the motion was a cause of the plaintiff's arrest. In so ruling, the court noted that the defendant did not "cause" the arrest, as the arrest was an independent decision by the immigration authorities; the plaintiff was aware beforehand that he could be subject to arrest; no evidence was introduced demonstrating that the Department of Homeland Security would have joined in the motion, which would have been necessary to resolve the underlying issue; and no evidence was presented to demonstrate that the motion, if filed, would have prevented the arrest. As the plaintiff could not demonstrate that the alleged failure of the defendant to file the motion was in fact a cause of the plaintiff?s damages, summary judgment was entered for the defendant.
Posted by Rob Anderson and Padraic Keane on 08/31/2009 at 11:06 PM
Legal Malpractice •
Virginia •
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Award of Permanent Partial Impairment by Virginia Commission Is Voided On Appeal
In Hitt Construction v. Pratt, 53 Va. App. 423, 672 S.E.2d 904 (Va. App. Feb. 17, 2009), the Court held that for the Virginia Workers Compensation Commission to exercise its review authority under the Act, when that authority is timely challenged, it must be composed of three statutorily authorized members. As a result, a decision that had concluded that claimant suffered permanent impairment was remanded for review by a properly constituted commission.
The majority of the commissions had appointed a deputy to serve as the third commissioner. However, the Court noted that no statute grants that authority.
The Court emphasized that the commission's decision in this case was "voidable", not void. The authority of the commission to exercise its subject matter jurisdiction was compromised by its composition -- a composition not authorized by statute. While a challenge to the authority of the commission was subject to being waived, that challenge was not here waived. Rather, it was specifically raised to the commission by the employer's motion to reconsider and vacate award. Therefore, the case was reversed and remanded to the commission.
John H. Carstens, Esq. of Jordan Coyne & Savits, LLP represented the employer.
Posted by David B. Stratton on 04/10/2009 at 03:41 AM
Virginia •
Workers Compensation •
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In Virginia, An Error of Judgment, or Even Negligence, Does Not Show Bad Faith By Insurer
In Goldstein v. National Casualty Company, 2008 U.S. Dist. Lexis 58129 (W.D. Va. July 28, 2008), Judge Kiser granted the insurer's motion for summary judgment on an insurance bad faith claim.
The claim arose from an excess judgment. The insured was a truck driver who was involved in an accident as he was attempting to pull out of a lot and onto a major road. The other driver was killed, and his family brought suit for twenty-five million dollars. Liability was contested. The insurer sent the truck driver a reservation of rights letter, pointing out that the insurer would not be responsible payment of any amount in excess of the policy limits.
Defense counsel's assessment of the case was that there was a 55% chance of a defense verdict, and that a potential verdict range of $1,000,000 to $1,500,000 if plaintiff prevailed. There was a future loss of income claim of $884,000. However, defense counsel only recommended a settlement offer of $100,000. Prior to trial, the plaintiffs made a demand for policy limits of $1,000,000. This offer was rejected. Later, during trial, the plaintiffs reduced their demand to $925,000. The insurer did not make any increased offer.
The jury returned a verdict for $2.5 million. The insurer paid its $1,000,000 policy limits. Plaintiffs then offered to release the insured truck driver from his debt in exchange for his assignment to them of a bad faith claim against the insurer. The truck driver rejected the offer. After trying to settle the debt of $1.5 million with an offer of $7,000, the truck driver was forced to declare bankruptcy.
The truck driver's bankruptcy trustee then filed the action alleging bad faith by the insurer. The truck driver's deposition was favorable to the insurer, and included testimony that the truck driver told the insurer that it should not pay the policy limits and that the insurer did not owe the plaintiffs anything. He testified that he did not think there was any bad faith.
The Court granted the insurer's motion for summary judgment. The Court stated the applicable law as follows:
In Virginia, "an insured, in order to recover for an excess judgment on the ground that the insurer failed to take advantage of an opportunity to settle within the policy limits, is required to show that the insurer acted in furtherance of its own interest, with intentional disregard of the financial interest of the insured." State Farm Mut. Auto. Ins. Co. v. Floyd, 235 Va. 136, 366 S.E.2d 93, 97 (1988). Further, because bad faith requires proving more than simply negligence and because there is a presumption of good faith, the insured must make the necessary demonstration by clear and convincing evidence. Id. at 98.
The Court noted that the insurer did not make a settlement offer above $100,000 and did not accept an offer of $925,000 when the defense counsel suggested offering $100,000 -- even though she determined that there was a 45% chance of a verdict between $1,000,000 and $1,500,000. The Court found that this did not constitute clear and convincing evidence that the insurer acted in its own interest with intentional disregard of the insured's financial interest. The $100,000 offer seemed low given defense counsel's assessment, but the insurer was responsible for the next $900,000 and there was no certainty that the insurer would go beyond that. The Court concluded that in retrospect, the insurer's settlement offer "seems to have been an error of judgment, maybe even negligence. But it does not demonstrate bad faith."
John H. Carstens, Esq. of Jordan Coyne & Savits, LLP was lead counsel for the defense.
Posted by David B. Stratton on 04/09/2009 at 02:09 AM
Insurance •
Virginia •
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Legal Malpractice Insurance Policy Rescinded Due To Fraud in the Application
In Minnesota Lawyers Mutual Ins. Co. v. Hancock, 2009 U.S. Dist. LEXIS 20536 (E.D. Va. March 3, 2009), Judge Henry E. Hudson granted summary judgment in an insurer's rescission action based on fraud in the application. The policy at issue was a legal malpractice insurance policy issued by Minnesota Lawyers Mutual Insurance Company. One of the partners in a two-man firm had for several years been engaged in a practice of embezzling money from his clients by moving money from his client escrow account to his operating account without his clients' authority and without having earned the money. The funds were used in part to cover the firm's overhead and operating expenses. The attorney voluntarily reported his misconduct and surrendered his law license to the Virginia State Bar, and subsequently he was indicted by a grand jury for embezzlement.
His partner was unaware of all this until reviewing pleadings filed by the Virginia State Bar. Meanwhile, applications for the firm's professional liability insurance had been submitted without any disclosure of the basis for possible claims. The insurer brought a rescission action, arguing that the misrepresentations made on behalf of the firm warrented rescission of the Policy, and moved for summary judgment.
The policy contained an exclusion for claims arising ouf of the dishonest, criminal, malicious or deliberately fraudulent act, error, or omission of the insured. However, that exclusion was qualified by an "Innocent Insured" provision, which afforded coverage for any insured who did not personally participate in or acquiesce to any actual or alleged dishonest, criminal, malicious, or deliberately fraudulent act, error, or omission of another insured.
The policy also contained language that specifically incorporated the application for coverage as part of the policy.
The defendant attorneys argued that because the application required the firm's representative to certify that "a reasonable inquiry has been made . . . to ensure the accuracy of all information contained herein", the firm had only been required to answer the application to the best of its knowledge. Therefore, defendants argued, the insurer must among other things demonstrate by clear proof that the insured's statements were knowingly false to obtain rescission.
The Court rejected that argument, saying that the provision imposed upon the firm an additional affirmative duty to investigate the truthfulness of the statements made to the insurer. That was not the equivalent of language permitting an insured to warrant that its statements are only true to the best of its knowledge. Accordingly, the insurer was not required to demonstrate that any of the insureds knowingly made a false representation; rather, the insurer only needed to demonstrate by clear proof that the application contained a false statement and that the false statement was material to the company's decision to issue the policy. The insurer easily satisfied its burden on those points.
The Court concluded by observing that the innocent partner's lack of awareness of the embezzlement did not prevent rescission of the policy as to all insureds. The policy did contain an Innocent Insureds provision which, absent rescission, may have afforded the innocent partner coverage under the facts of this case. But the policy's Innocent Insured provision did not reference or preclude the remedy of rescission for a material misrepresentation in the application. Therefore, the policy was rescinded as to all insureds notwithstanding the innocent partner's lack of personal knowledge of the embezzlement.
Posted by David B. Stratton on 04/07/2009 at 06:04 PM
Legal Malpractice •
Virginia •
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