Legislature(1995 - 1996)

02/01/1995 01:05 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 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.                             

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