Fred Shackelford—Senior Attorney, National Legal Research Group

            Can a plaintiff pursue claims of direct negligence against an employer when the employer admits that its employee was acting within the scope of employment at the time a tort occurs? The Louisiana Supreme Court addressed this issue of first impression in Martin v. Thomas, 2021-01490 (La. 6/1/22); 346 So. 3d 238. In the Martin case, the plaintiff (Reginald Martin) alleged that a truck driver (Rodney Thomas) caused an accident while operating a tractor truck owned by his employer (Greer Logging, LLC). After the employer admitted that its driver was acting within the scope of his employment, the plaintiff amended his complaint to add claims of direct negligence against the employer, including allegations of negligent hiring, supervision, training, retention, and negligent entrustment.

            The trial court dismissed the direct negligence claims, agreeing with defense counsel that a plaintiff cannot pursue both direct negligence and vicarious liability claims after the course and scope of employment have been admitted. The Martin court reversed on appeal, holding that Louisiana’s pure comparative fault system allows a jury to consider the degree of fault of both an employer and an employee.

Amy Gore—Senior Attorney, National Legal Research Group

            The Virginia Supreme Court in Erie Insurance Exchange v. Jones by Hardison, ___ Va. ___, 870 S.E.2d 716 (2022), reversed a lower court ruling concerning the scope of coverage under a homeowner’s policy for injuries involving an all-terrain vehicle (“ATV”). There, a passenger on an ATV was injured when a tree limb struck her. The vehicle was operated by the daughter of the named insureds under the Erie Exchange Insurance policy. As with most homeowner’s policies, the Erie Exchange policy excluded coverage for bodily injury arising out of the ownership, maintenance, or use of a land motor vehicle. However, the policy exempted from the exclusion a vehicle if “they are a lawn or farm type vehicle or snowblower, wherever used or located, if not subject to motor vehicle registration.” Id. at ___, 870 S.E.2d at 717.

            The court focused its analysis on whether the ATV was a “farm type vehicle” within the meaning of the exception.

Fred Shackelford—Senior Attorney, National Legal Research Group

        In Capriati Construction Corp. v. Yahyavi, 137 Nev. Adv. Op. 69, 498 P.3d 226 (2021), a motorist brought an action against a forklift operator's employer to recover for injuries caused by a collision with the forklift. At trial, the forklift operator admitted fault, and the plaintiff told the jury that the defendant had discarded the forklift operator’s employment file. After the plaintiff rested, the defendant employer elicited testimony that it had filed for reorganization under the bankruptcy laws. The plaintiff objected on the ground that the bankruptcy evidence was inadmissible because it suggested that the defendant would be unable to pay a judgment. The defendant argued that the evidence was introduced in order to rebut the plaintiff’s allegation of spoliation of the employment file.

        The trial court agreed with the plaintiff and instructed the jury that the defendant had liability insurance to satisfy any verdict. On appeal, an issue of first impression was whether evidence of the defendant’s liability insurance was admissible.

Fred Shackelford—Senior Attorney, National Legal Research Group

     In a case of first impression, New York’s highest court has expanded the scope of “bystander recovery” for the negligent infliction of emotional distress. A cause of action for negligent infliction of emotional distress compensates a witness for experiencing shock and emotional distress as a result of observing harm to another person. In many states, recovery for the negligent infliction of emotional distress is limited to persons who are in the zone of danger and who witness injury to someone who is a member of their family.

     In Greene v. Esplanade Venture Partnership, 36 N.Y.3d 513, 2021 WL 623832 (2021), the plaintiff and her two-year-old granddaughter were in front of a building when they were struck by debris that fell from its façade. The child died the next day, and the grandmother sued various defendants for emotional distress that she experienced as a result of witnessing injury to her granddaughter.

Fred Shackelford—Senior Attorney, National Legal Research Group

        The concept of bystander liability was first recognized by American courts in the landmark California case of Dillon v. Legg, 68 Cal. 2d 728, 441 P.2d 912 (1968). Today, most courts allow recovery under this doctrine, also known as negligent infliction of emotional distress ("NIED"). Under this theory of liability, a tortfeasor can sometimes be held liable to a bystander who experiences emotional distress from observing a direct injury to another person. Under Dillon, bystander liability was limited by foreseeability, and courts would take into account such factors as (1) whether the plaintiff was located near the scene of the accident as opposed to a distance away from it; (2) whether the shock resulted from a direct emotional impact upon the plaintiff from the sensory and contemporaneous observance of the accident rather than learning of the accident from others after its occurrence; and (3) whether the plaintiff and the victim were closely related, as contrasted with an absence of any relationship or only a distant relationship.

John Stone—Senior Attorney, National Legal Research Group

            A youth mentor brought a 12-year-old boy to his farm for a weekend of outdoor activities, where he allowed the boy to drive an all-terrain vehicle ("ATV") without a helmet or supervision. When the boy suffered permanent serious injuries, including a brain injury and partial blindness, after he lost control of the ATV, he sued the mentor for negligent entrustment and supervision. A trial court granted summary judgment dismissing the suit, concluding that the Minnesota Nonprofit Corporations Act immunized the defendant from civil liability for his alleged negligence.

            An appellate court reversed the lower court because the Act applies only to a volunteer's actions that are undertaken "within the scope of the person's responsibilities as a[n] . . . agent[.]" Hogan v. Brass, No. A20-0846, 2021 WL 852073 (Minn. Ct. App. Mar. 8, 2021). In this case, the nonprofit organization through which the mentor and the boy became associated connected adult mentors with children affected by a parent's incarceration. It provided only same-day mentoring services, encouraging each volunteer mentor to connect with the child on a weekly basis for one to four hours. In various ways, the organization expressly declined a role in interactions that involve overnight or extended arrangements.

Amy Gore—Senior Attorney, National Legal Research Group

            During this pandemic, many business owners believed that valuable coverage they had purchased for the businesses would provide a source of some financial security. Prudent business entities purchased business interruption coverage to "indemnify the insured against losses arising from the inability to continue the normal operation and functions of the business, industry, or other commercial establishment insured." Annotation, William H. Danne Jr., Business Interruption Insurance, 37 A.L.R. 5th 41 (1996 & Westlaw 2020). A typical event that has triggered this kind of coverage would be a fire or a hurricane, or some other natural disaster that caused damage to the business premises and closure of the business.

            Today, more and more businesses have discovered that the claim to recover this valuable coverage is being denied by insurers. The need by the insurance industry to stop an anticipated onslaught of claims arising out of the pandemic is evidenced by the fact that "[i]n mid-March 2020, in response to inquiries from members of the United States House of Representatives, the CEOs of four leading insurance industry trade organization[s] jointly signed a letter stating, 'Business interruption policies do not, and were not designed to, provide coverage against communicable diseases such as COVID-19.'"

Fred Shackelford—Senior Attorney, National Legal Research Group

            Can a hospitalist be held liable for advising against admitting a patient to a hospital when he has no doctor-patient relationship and no direct contact with the patient? In Warren v. Dinter, 926 N.W.2d 370 (Minn. 2019), Susan Warren arrived at a health clinic with symptoms of abdominal pain, fever, and chills. A nurse practitioner (Simon) ordered tests and concluded that the patient had an infection that required hospitalization. Simon then called a local hospital to seek admission for the patient, and her call was randomly assigned to Dr. Richard Dinter, a hospitalist on call. Although the facts were disputed as to the nature of the conversation between Simon and Dr. Dinter, the Warren court accepted the nurse's account that Dr. Dinter decided that the patient did not need to be admitted to the hospital.

            Three days later, the patient died at home. Her son sued the doctor and the hospital, alleging negligence in caring for the patient, including advising the nurse that the patient did not require hospitalization. The lower courts ruled that there was no liability, concluding that the relationship between the nurse and the doctor was merely an informal conversation and did not create a doctor-patient relationship.

The Lawletter Vol 44 No 4

Fred Shackelford—Senior Attorney, National Legal Research Group

            Can a government agency be held liable in tort when a child is abused by a foster parent? The Washington Supreme Court addressed this issue of first impression in H.B.H. v. State, 429 P.3d 484 (Wash. 2018). In that case, several children were placed in foster care with a couple who abused the children physically, sexually, and psychologically over a five-year period. For a year during that period, social workers failed to conduct mandatory in-home health and safety checks, and the agency ultimately recommended that the foster parents be allowed to adopt the children. Years later, two of the children brought a tort action against the state Department of Social and Health Services (“DSHS”).

            The DSHS argued that it owed no common-law duty because the children were not in the agency's physical custody at the time the abuse occurred. Rejecting that argument, the court concluded that a detailed statutory scheme created a special relationship between the agency and the children. The custodial relationship between the DSHS and the children gives rise to a common-law duty in accordance with Restatement (Second) of Torts § 315(b). The court found that such a special relationship exists even though the DSHS did not have actual physical custody of the children.

Matthew McDavitt—Senior Attorney, National Legal Research Group

            Sometimes, through ignorance or neglect, employers subject to the state statutory workers' compensation mandates fail to obtain or maintain the requisite insurance. Where employers subject to the system's mandates are found on the date of an employee's workplace accident (or other compensable event) to lack such insurance (either as a self-insurer or through a third-party insurer), such noncompliance with the workers' compensation insurance mandate has serious consequences for the employer.

            First, a noncompliant employer loses a primary benefit of the workers' compensation system's exclusive remedy provision.  This provision bars injured workers from suing their employers in tort in exchange for statutorily defined wage replacement and medical benefits, thereby significantly limiting the potential legal exposure of the employer regarding such accidents.