Legislature(1995 - 1996)
02/01/1995 01:05 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HJUD-02/01/95 HB 19 - DEFINITION OF "FAULT" FOR CIVIL LIABILITIES REPRESENTATIVE GENE THERRIAULT, Sponsor, described HB 19 as intending to clarify a gray area of state liability law, which allows defendants to argue that they are not liable for offenses they have committed intentionally. Defendants have argued that because the law refers only to acts that are negligent or reckless, and not specifically to acts that are intentional, it does not allow for a portion of a fault to go to those who have committed offenses intentionally. In cases where more than one person contributed to the injuries, or could be sued, the law is unclear as to whether or not a person who committed an offense intentionally can be held responsible for any portion of the fault. In the cases that have been heard so far, the judges have found the argument to be without merit. Tightening the law would eliminate the need for these costly court proceedings. REPRESENTATIVE THERRIAULT said he introduced this bill after a scenario that arose out of a mail bombing case. He understood that in the civil action, the mail bombers were trying to make the case that because they intentionally meant to injure somebody by sending the bomb, they would not be covered by this definition, and therefore no portion of the fault could be attached to their actions. The courts have turned that argument down so far, but clarifying that language would close the potential loophole that somebody may be able to take advantage of in the future. This would also avoid some abuse of court time. Number 075 REPRESENTATIVE AL VEZEY supported the philosophy of this change, but also expressed concerns as to how it may increase insurance premiums. Insurance policies cover accidental acts, but if they were to cover intentional offenses, rates would rise. Number 120 REPRESENTATIVE THERRIAULT noted that up to now, the courts have turned down that argument. The intentional acts are excluded by the current definition of fault. We are basically clarifying and codifying what the courts have said up to this point. REPRESENTATIVE CON BUNDE thought that broadening the definition of "fault" may affect other areas of tort reform. Number 150 REPRESENTATIVE THERRIAULT believed most insurance policies exclude acts committed intentionally. Number 160 CHAIRMAN PORTER called both Susan Cox and Sheldon Winters forward to testify and answer questions. Number 185 SHELDON WINTERS, Attorney representing State Farm Insurance Company, stated their main concerns were about how the language change may affect the liability aspects in our tort system. This statute does not address when you may be liable, but when you may apportion liability. The general rule is that the intentional tortfeasor is always liable for all the damages. You completely ignore apportionment. An intentional tortfeasor cannot recover, in a lawsuit, for his own damages. There is not a realistic chance of the courts varying from their theme. He felt what Representative Therriault was proposing would create the ability of an intentional tortfeasor to avoid some of his responsibility, when he should be responsible for the whole portion. Number 260 SUSAN COX, Assistant Attorney General, spoke about the problem she encounters when defending the state. A victim may choose not to sue her rapist, because the accused has no money; and instead sues only the property owner. We have a problem of whether the property owner is going to be stuck holding the liability for the entire event, when there is the conduct, arguably intentional, of another party who is not named in the lawsuit. This problem occurs in a number of scenarios. It is not a situation where the truly culpable party is sued at all. It arises in a situation where the defendants who are sued, were allegedly negligent, want to bring the most culpable party to the lawsuit, and that is the intentional tortfeasor, or the arguably intentional tortfeasor. MS. COX continued, saying the tort reform legislation we have in Alaska has attempted to deal with fault, so every defendant bears only their portion of the fault; and so we have had several liabilities since March of 1989, when the most recent enactment became effective. The problem is that juries are told to apportion fault among all people who are parties to the litigation, who were in any way negligent, grossly negligent, or even wilfully and wantonly conducted themselves. When you have multiple defendants, the jury apportions fault among all of them to the extent of the liability. Then those defendants pay only the portion of their personal fault. They are not paying for the fault of someone else who is a defendant who may have no money. That is a policy decision that has been made in this state. The plaintiff may walk away not recovering from those who have no resources to pay a judgment against them. We have decided to abandon the system of joint and several liability where one defendant is responsible for the whole group, and seeks contribution from other defendants if they have any resources to chip in to the final outcome. We have a situation where plaintiffs have chosen not to go after the intentional or arguably intentional tortfeasor because that person has no money. They, instead, go only after one or more possibly negligent parties, and those defendants want to bring a third party into the arguably intentional act. MS. COX continued, saying it has arisen in the mail bombing case Representative Therriault mentioned, where in all but one of the decisions, the courts have said if they are going to apportion fault and make it fair, so that no defendant is paying more than their fair share of fault, we have to allow the defendants who are allegedly negligent to bring in the allegedly intentional actor. It has been in the context where those negligent tortfeasors wanted the intentional tortfeasor in the case, because they were being left out. One case where it has not happened, raises something of an anomaly. We have a ruling from one judge that involves sexual abuse by uncles of a victim. The state has been sued from failing to prevent the abuse to these young victims, and the uncles who committed the sexual abuse were not originally parties. The state sought to bring them in as parties, because they perpetrated the act that is the subject of the lawsuit. The judge says that arguably, they did not act intentionally to cause the resultant harm. They acted intentionally in doing the act, but did not necessarily intend the harm, so it was going to be a question for the jury. If the jury decides that the uncles committed the abuse, but did not intend to hurt the girls, then they were unintentional acts, in the allocation of fault. However, if they intended the harm, then they were intentional actors; and because that is not included in the definition of `fault' in AS 09.17.900, that fault will not be considered or apportioned by the jury. It seems something of an anomaly. MS. COX said there is a problem in making things fair to the defendants who are brought into the litigation by the plaintiff. The proposal here before you in HB 19 would do what at least several courts have implied should be done in terms of fault among all parties. Tortfeasors should not be allowed to be absolved altogether from allocation of fault when under AS 09.17.080. Number 400 CHAIRMAN PORTER noted they intended to file a bill to address and solve that problem soon. There was a big hole in passing the elimination of joint and several liability, because we stated that any party to the suit would be involved. Immediately, those involved on one side of these kinds of issues took that to the court and argued that, by definition, it is only the parties to the suit; those named, as opposed to those unnamed, but still shared in the responsibility. The tort reform bill that will hopefully be going through this legislature should correct that problem. Number 425 MS. COX did not object to the provision in this bill. It would be helpful to the attorneys defending the state because the fact is, the state has the deep pocket and is the one being sued, and there are circumstances in which the culpable party is not there. It does raise an awkward situation when someone is trying to decide how to apportion fault between someone who has acted intentionally in doing something, which is often criminal conduct, and there is no question about it, versus the state for failing to prevent the criminal from doing whatever it was they did. It would be a hard thing for a jury to do. The bottom line is, if they are not there at all, the existing defendants in the case would bear 100 percent of it. This is better than what we have now. She mentioned another better way to go at this is where we included something else in the existing tort reform law that spells out exactly what happens when you have an intentional tortfeasor and specifies that other people, allegedly negligently involved, do not have any responsibility; and if you determine that someone has acted intentionally and caused any of these damages, you go no further in allocating any fault. There are other possibilities, but certainly, as far as this bill is concerned and what it does, Ms. Cox did not have any problem with it. Number 460 REPRESENTATIVE VEZEY asked where the issue of double jeopardy comes in, if it does. Number 470 MS. COX said it does not come in if they are sued civilly. That is not precluded by double jeopardy. There is nothing to prevent someone from suing a criminal who has victimized them. They can definitely sue an intentional tortfeasor. The situation we are confronting is a case where they choose not to because that person has no money, so they have nothing to gain by suing the intentional actor, and instead try to go after the resources of someone else who arguably failed to prevent the intentional actor from doing what they did. Number 495 REPRESENTATIVE VEZEY asked if bringing the party in who has no money, would actually decrease the state or other deep pocketed defendant's liability. Would there be a hole in the award? Number 502 MS. COX said yes. If the person is a party, under the tort reform system, when we have gone from joint and several liability to several liability, it means that each party pays only their share. A jury goes through a verdict form and says, "How much is the plaintiff responsible for whatever happened, if at all?," and for each defendant, "What percentage of the harm was caused by them to the plaintiff?" The plaintiff will not recover for whatever amount is awarded as to the defendant. Number 525 REPRESENTATIVE DAVID FINKELSTEIN was afraid of including "intentional" in this. There is a chance it may be interpreted as removing it from the category it is in now, which is taking complete fault, in some cases. Number 530 MR. WINTERS felt the issue Ms. Cox had discussed can be addressed by the bill that will be filed shortly. That is, saying if you want to apportion fault, you can, even of non-parties. Number 540 CHAIRMAN PORTER noted the courts have impled that "intentional" is in this statute. Number 545 MR. WINTERS knew of no case where they have apportioned intentional conduct with negligent conduct for an allocation of fault. It has basically held that if your act was intentional, you are liable for the whole ball of wax. Number 550 MS. COX clarified that. In Benner v. Whitman, the Supreme Court said in order to allocate fault among parties, they all really have to be parties in the case. Defendants who are not satisfied that everyone who could be responsible is in the case, have brought in any of the defendants who should be part of the litigation in order to get that allocation done. When we have tried to bring in third parties to part of the case, we have had plaintiffs object, saying you cannot do that because they are criminals and they have committed intentional acts, and they cannot be in this lawsuit. The courts have, in a number of situations, let them be in this lawsuit, even recognizing that the word intentional is not in the definition of "fault" in this statute. Number 575 REPRESENTATIVE FINKELSTEIN felt it was unclear that we would be putting "intentional" into a new category, where it would be apportioned out, versus its current category, where it is not apportioned out. If we are doing that, do we know why we are doing it? Are we intending to change this case law conclusion that intentional acts have no sharing, that they are completely liable, and if we are changing that, why? Number 590 MS. COX noted that if you look at AS 09.17.080, it does refer to allocation of fault among the parties, so when you look at fault, it does mean if we include intentional in the definition of fault, those parties that are in there, whether intentional or otherwise, are going to be included in the allocations, so there will be an allocation. The people who are arguing that this party acted intentionally, will argue that, if so, they should bear 100 percent of the liability, and then all the rest of the defendants in there would get a zero for their allocation of fault if the jury is convinced of that. If the jury is not convinced that they acted intentionally, but only negligently, or somewhere else on the scale, they will be in for whatever percentage the jury gives them. One thing that could be done would be to express in some kind of legislative intent, that is not the committee's intention to change the law with respect to the extent of the liability of the intentional actors. This is to make clear that you are not trying to change the common law with respect to intentional fault, only to include allegedly intentionally acting parties in the litigation. Another way to achieve this would be not to change the definition of fault, but to create another section in the tort reform statute that enables the defendant in this situation to bring allegedly intentional tortfeasors into litigation and let the consequences flow from that. Number 625 CHAIRMAN PORTER summed up that this bill would not do anything more than make sure that someone is not excluded from consideration because of an intentional act. It would not affect case law as relates to a case where there are negligent and intentional actors, in a single act; that the intentional actor is going to be apportioned 100 percent of the take. Number 633 MR. WINTERS felt it would, because in layman's terms, the jury shall apportion all fault, and in this amendment, we are redefining "fault" as "negligence, recklessness, and intentional conduct." So the jury is going to be instructed that you shall apportion negligent tortfeasor fault with intentional tortfeasor fault. Number 640 CHAIRMAN PORTER found it hard to believe legislation would supersede case law. He asked Susan Cox to work on a committee substitute or a letter of intent with Anne Carpeneti. The bill would be held until Monday, and then heard again.