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With the publication of the Fifth Edition of the American Medical Association Guides to the Evaluation of Permanent Impairment (2001) (hereinafter the “Guides”), we have seen a number of cases in which plaintiffs have been awarded Category IV impairment ratings (25-28% whole-person impairment ratings) for loss of motion segment integrity of the spine, arising out of low-impact motor vehicle accidents.
Patrick Luers, M.D., an expert radiologist, has opined in a peer reviewed article, however, that “loss of motion segment integrity . . . as defined in the AMA Guides is rare.” Luers, Motion Analysis of the Cervical Spine, The Guides Newsletter, AMA September/October 2004, at 11. Such a condition most commonly results from a single-level surgical fusion. Id.
Many Category IV spinal impairment ratings are erroneous due to a misinterpretation of the Guides. According to an article authored by Dr. Luers, ambiguous terminology in the medical literature has led to misunderstanding and misinterpretation by those awarding impairment ratings. Luers, Spinal Alteration of Motion Segment Integrity, The Guides Newsletter, AMA March/April 2007, at 1.
On page 379, the Guides define loss of motion segment integrity as an “anteroposterior motion of one vertebra over another that is greater than 3.5 mm in the cervical spine, greater than 2.5 mm in the thoracic spine, and greater than 4.5 mm in the lumbar spine.” Id. As a reference, the Guides cite White AW, Punjabi MM. Clinical Biomechanics of the Spine. 2nd ed. Philadelphia, Pa: JB Lippincott; 1990.
Dr. Luers has critically analyzed the referenced articles in White and Panjabi’s chapter discussing the instability in the spine “necessary to evaluate normal maximal translation and angular motion thresholds in the spine.” Luers, Spinal Alteration of Motion Segment Integrity, at 1. The literature relied on by the Guides provides that maximal normal translation for the cervical spine is 3.5 mm anterior plus 3.5 mm posterior, for a total translation of 7.0 mm. Id. at 2. For the thoracic spine, the maximal normal translation is 2.5 mm anterior plus 2.5 mm posterior, for a total translation of 5.0 mm. Id. For the lumbar spine, the maximal normal translation is 4.5 mm anterior plus 4.5 mm posterior, for a total translation of 9.0 mm. Id. In other words, the maximal normal translation range for the spine is twice what is reported in the Guides.
Apparently, the authors of the Guide misinterpreted the maximal normal translation seen on the radiographs for either anterior or posterior translation to represent the total normal maximal translation thresholds. For that finding, however, the anterior and posterior thresholds must be added together.
Accordingly, Dr. Luers concludes that “the total translation threshold values described in the Guides are within the normal range and inconsistent with the data in the medical literature; therefore they should not be utilized as established by Category IV loss of motion segment integrity impairment.” Id. at 3.
Typically, a Category IV impairment rating for loss of motion segment integrity arises from a single-level surgical fusion of the spine. Accordingly, it should be extremely rare to see such an impairment rating following a low-impact motor vehicle accident.
Written by Michael L. Ford
Earlier this year, the Utah Supreme Court held in Youngblood v. Auto-Owners, that a policyholder can try to prove that he relied reasonably on the agent’s misrepresentations about coverage despite the plain language of the policy. (1) Youngblood bought a business auto policy which did not extend UIM coverage to pedestrians, and later was injured while a pedestrian. He claimed that the agent represented specifically and repeatedly during the application process that he would be covered as a pedestrian.
Auto-Owners pointed out that the policy language did not extend coverage, and the court agreed. Youngblood also admitted that he received a copy of the policy before the accident and did not read it. The court held that Youngblood should have the opportunity to present to a jury his claim that he reasonably relied on the agent’s representations. The court suggested that Youngblood may have a difficult time proving that his reliance on the agent’s verbal statements was reasonable: “Insurance purchasers fail to read their policies at their peril.” If the written terms of coverage are clear and understandable, it is more difficult for the insured to prove reasonable reliance on contrary representations by the agent. Also, the test is not whether Youngblood himself relied on the agent, but whether a reasonable person would have done so. According to the court, this standard will guard against a jury verdict based on undue sympathy.
Inusred Misrepresentations As a grounds for Rescission
Claims handlers deal routinely with losses which are not covered because of an exclusion in the policy. However, rescission of the policy is different. On the one hand, an exclusion or limitation in the policy may require a finding of no coverage for a particular loss, but the policy remains in effect for the policy period and the insurer retains the premium. On the other hand, rescission is an entirely separate theory. Rescission “unmakes” the insurance contract and places the parties back where they were prior to the issuance of the policy, because the policy contract was obtained on false grounds.
Recently, a United States District Judge in Utah granted summary judgment in favor of the insurer to rescind a policy based on misrepresentations by a corporation about its financial condition in its application for a directors and officers liability policy. The corporation had made material misstatements about its financial situation in its application for insurance, which the insurer had relied on when it decided to issue the policy. (2)
Only extreme cases can justify rescission. Trivial or innocent misstatements are not enough. The insured must have some knowledge that the misstatement is untrue. The misrepresentation by the applicant must be material, or made with intent to deceive, and the insurer must rely on it; or the fact misrepresented must contribute to the loss. “Material” in this instance means that the insurer would have rejected the application or would have charged a higher premium for the risk if it had known. (3)
Rescission is a useful tool for the insurer in a proper case. Each case is different and these general rules are not a substitute for your counsel’s opinion based on the facts of the particular case.
(1) Youngblood v. Auto-Owners Ins. Co., 2007 UT 28, filed March 23, 2007.
(2) ClearOne Communs., Inc. v. Lumbermens Mut. Cas. Co., -- F. Supp. 2d --, 2005 U.S. Dist. LEXIS 26187 (D. Utah Oct. 21, 2005).
(3) Utah Code Ann. § 31A-21-105, Representations, warranties, and conditions; Hardy v. Prudential Ins., 763 P.2d 761 (Utah 1988); Berger v. Minnesota Mut. Life Ins., 723 P.2d 388 (Utah 1986); Perkins v. Great-West Life, 814 P.2d 1125 (Ut. App. 1991); Derbridge v. Mutual Protective Ins., 963 P.2d 788 (Ut. App. 1998).
Written by Roger H. Bullock
The following are the cases contained in the Utah Advance Reports that are relevant to the insurance industry.
A. General Security Indemnity Co. v. Tipton : Acknowledgement Required for Lower UM Limits
In this case, the Utah Court of Appeals interpreted Utah Code Ann. § 31A-22-305(3)(b). This section contains the waiver requirement for uninsured motorist (“UM”) coverage. The section states:
For new policies written on or after January 1, 2001, the limits of [UM] coverage shall be equal to the lesser of the limits of the insured’s motor vehicle liability coverage or the maximum [UM] coverage limits available by the insurer under the insured’s motor vehicle policy, unless the insured purchases coverage in a lesser amount by signing an acknowledgment form provided by the insurer….
U.C.A. § 31A-22-305(3)(b).
The court acknowledged that “what is meant by the phrase ‘available by the insurer under the insured’s…policy’ is facially ambiguous.” The court determined the statute provides for “three separate amounts of potential UM coverage: the liability coverage, the maximum UM coverage available from the insurer, and the amount of UM coverage actually obtained.” The court determined that the limit “available by the insurer” refers to the amount an insured could have purchased from the insurer.
B. Youngblood v. Auto-Owners Ins. Co.
In this case, the Utah Supreme Court determined that an insured may recover under the doctrine of estoppel when the insurer's agent materially mistated the scope of coverage prior to the purchase of the policy. Youngblod bought an insurance policy for his company. While buying the policy, the agent specifically stated that if he was injured as a pedestrian, he would have coverage. Youngblood bought underinsured motorist protection as part of the policy believing that he had protection as a pedestrain. The express language of the policy stated that Youngblood did not have coverage as a pdestrain. Youngblood was subsequently injured while walking. The court determined that the agent's comments were material misrepresentations and satisfied the first requirement of equitable estoppel.
The court then remanded the case to the trial court for a determination of whether the insured’s reliance on the misrepresentations was reasonable. The fact finder would need to determine whether the insured should have read the policy and determined that the coverage was not what the agent had represented. In this regard, the court noted that “insurance purchasers fail to make the effort to read and understand the content of their insurance policies at their peril.” The court acknowledged, however, that it is not always easy for the reasonable person to navigate and understand their own insurance policies.
C. Tschaggeny v. Milbank Ins. Co. : Prejudgment Interst and Insured's Duty to Read and Understand Policy
In this case, the plaintiff was in an auto accident and made a claim with Milbank under her uninsured motorist policy. The case went to trial and the jury awarded the plaintiff special and general damages. The court ordered prejudgment interest in accordance with U.C.A. § 78-27-44. Three years prior to trial, Milbank paid the plaintiff $12,915.46 on her claim. For this amount, the trial court only ordered interest for the eighteen month time period between the accident and the date of the payment. The plaintiff argued that she was entitled to interest on this amount until the date of the jury award. The Utah Supreme Court rejected this argument, stating that the plaintiff’s interpretation of the statute would “blatantly controvert the express purpose of the statute” and “incentivize bad faith disputes over compensation owed in order to avoid such an unjust result.”
Also in this case, Milbank had made a motion in limine requesting that the trial court prevent the plaintiff from submitting evidence of the medical expenses that had been written off. The plaintiff had health insurance and received a lower rate than the general public for her health care service as a result of her health insurance’s agreement with health care providers. The trial court granted this motion because the plaintiff’s attorney essentially stipulated to it. The plaintiff then raised the issue in a motion for reconsideration asserting that it is improper to reduce the medical expenses. The trial court denied this motion. The plaintiff raised it again on appeal. The Utah Supreme Court did not rule on this issue because the plaintiff had not properly preserved the issue at the trial court level. The Utah Supreme Court indicated that this was an issue of first impression and, therefore, “the trial court’s decision to grant Milbank’s motion in limine and deny Tschaggeny’s motion for reconsideration does not rise to the level of plain error.”
D. Pratt v. Nelson
In this case, the Pratts sued Nelson and her attorneys for defamation based on their conduct in a previous lawsuit. In the previous lawsuit, Nelson sued a large number of individuals in the Kingston polygamous family and organization, including the Pratts. Her claims included intentional and negligent sexual abuse of a child, assault, false imprisonment, and civil conspiracy. A short time after the lawsuit was filed, Nelson and her attorneys held a press conference concerning the lawsuit to which they invited members of the local and national press. The press conference made local, national, and international news.
The Pratts sued Nelson and her attorney for defamation based on the statements at the press conference. The attorneys claimed that these statements were privileged under the judicial proceedings privilege. The Utah Supreme Court analyzed the case to determine if the statements had been excessively published. The court stated that for the judicial proceedings privilege to apply “the statements must be (1) made during or in the course of a judicial proceeding; (2) have some reference to the subject matter of the proceeding; and (3) be made by someone acting in the capacity of judge, juror, witness, litigant or counsel.” The court analyzed the third requirement to determine if the privileged had been lost by making the statements to the press. The court held that “the press generally lack a connection to judicial proceedings sufficient to warrant an extension of the judicial privilege to statements made by parties to the press.” Therefore, the court determined that the statements at the press conference were not protected by the judicial privilege.
Summaries provided by Andrew D. Wright
Strong & Hanni played an active role in researching and drafting proposed legislation, as well as lobbying and testifying before the Utah Legislature on various tort reform measures during the 2007 legislative session. Earlier in 2006, Strong & Hanni was hired to perform lobbying on behalf of the State Farm Companies in the State of Utah. Strong & Hanni’s attorneys were frequently called upon to push tort reform issues and to stem the tide of plaintiffs’ legislation meant to change Utah’s conservative litigation climate.
As part of Strong & Hanni’s involvement in the legislature the following bills were enacted:
1. HB 44: Amendments to Utah Code Ann.§ 31A-22-321 (Third Party Bl
Arbitration)
The amendment to the existing arbitration statute:
• provides that a person may elect to submit a third party motor vehicle accident bodily injury claim to arbitration by filing a notice to submit the claim to arbitration within 14 days after the complaint has been answered;
• clarifies that an arbitration award is limited to $25,000 in addition to any available personal injury protection benefits and any claim for property damage;
• provides that a claim for property damage may not be made in such arbitration proceedings unless agreed upon by the parties in writing;
• provides a procedure for a person to rescind an election to arbitrate and provides that a person who rescinds an election may not elect to arbitrate again;
• provides for discovery to be conducted in accordance with the Utah Rules of Civil Procedure and that all discovery is to be completed within 150 days of the election to arbitrate;
• provides for the procedures for selecting arbiter(s) within 90 days of the election to arbitrate; and
• makes other technical changes.
2. SB 113: Amendment to Utah Code Ann. § 31A-22-321 (Savings Statute)
Utah appellate courts had previously interpreted the Utah Savings Statute to allow multiple uses of the savings Statute to revive time-barred claims. The amendment clarifies the legislature’s intent that the savings Statute may be invoked only once by a Plaintiff once a case has been dismissed other than on the merits of the claim.
Efforts to bring about additional tort reform measures, including the lowering of the bodily injury statute of limitations from four years to three years, clarifying that the Utah Comparative fault statute allows for comparisons of fault even among intentional tortfeasors, passing a primary seat belt law, and others were met with strong opposition by the plaintiffs’ bar and were defeated ion 2007. Strong & Hanni will continue to work with state legislatures and others to see that the tide of plaintiff oriented legislation is defeated and to see that these and additional tort reform measures are brought before the legislature in January 2008.
Written by Stephen J. Trayner
Strong & Hanni has long been recognized as one of the top litigation firms in the State of Utah. Here are just a few examples of recent courtroom victories by Strong & Hanni attorneys:
1. No Cause in Low Impact Case
A "no cause" jury verdict in favor of client, the defendant in an auto-accident case filed in the First District Court. The plaintiff was rear-ended by the defendant near a traffic signal in Logan, Utah. The plaintiff alleged that she suffered severe personal injuries as a result of the accident. The defense conceded negligence, but argued that the force from the accident was insufficient to have caused the plaintiff’s injuries. Following a four day long trial, the jury returned a unanimous verdict finding that the defendant’s negligence was not the cause of the plaintiff’s injuries. For more information contact Paul M. Belnap and A.J. Sano.
2. No Cause in Auto-Pedestrian Case Involving a Child
Jury verdict in favor of client, the defendant in an automobile/pedestrian case in the First District Court. The case involved a seven year old child who ran on to a 50 m.p.h. highway and into the side of a trailer being pulled by the defendant. The child sustained a serious brain injury as a result of the impact. The plaintiff claimed that the defendant had plenty of time to see and avoid the child and that other drivers were able to avoid the accident. The plaintiff also claimed that the child lacked the ability to appreciate the risk of high speed traffic. The trial was bifurcated into separate liability and damage phases. Following three days of evidence on liability, the jury returned a unanimous verdict of no negligence on the part of the defendant, thereby ending the case before a second week of evidence on damages. For more information contact Paul M. Belnap and Andrew D. Wright.
3. No Cause in Trigeminal Neuralgia claim
Favorable arbitration ruling in a matter in which the plaintiff was struck from behind by the defendant in an auto-accident. The plaintiff alleged that the accident caused him to suffer a rare condition known as trigeminal neuralgia. The defense conceded negligence, but argued that the collision did not cause the plaintiff’s trigeminal disorder. The arbitrator determined that there was insufficient evidence to show the plaintiff’s condition was caused by the subject accident and awarded only minimal damages. For more information contact Paul M. Belnap.
4. No Cause in 2002 Olympic Accident
Jury verdict of no cause of action in favor of client, Anheuser Busch, in a trial involving a claim for head, neck and back injuries that were allegedly sustained by the plaintiff when he slipped and fell on the ice during a "score on the goalie" contest that was being held on the outdoor skating rink at Bud World at the Gallavan Center during the 2002 Olympic Games. The plaintiff claimed that Anheuser Busch had served him too much beer prior to his participation in the contest, and had hired an incompetent event manager who failed to provide proper instructions and adequate safety equipment for the contest participants. The defense responded with evidence showing that the contest had been properly managed, and that the plaintiff had not been served enough alcohol to make him intoxicated. The jury returned a unanimous verdict finding the plaintiff 75% at fault, and apportioned only 10% of the fault to Anheuser Busch. Based on the jury’s verdict, the court entered a judgment of "no cause" in favor of the defendants. For more information contact Peter H. Christensen
5. Summary Judgment for General Contractor on Personal Injury Claim of Subcontractor's Employee
Granted summary judgment in a case in which Strong & Hanni represented the defendant, a general contractor, in a claim by an injured employee of a subcontractor. The plaintiff was instructed by his employer in the past to not stand under loads which were being lifted by crane. The accident occurred when the plaintiff got underneath a load of truss joists which slipped and fell on him, severing his spine. The facts showed that the general contractor did not supervise, direct or control the work being performed by the framing subcontractor, including the crane operations which resulted in the plaintiff's injuries. The plaintiff argued that the general contractor's overall ability to control safety on the project was sufficient to impose a duty on the general contractor. The trial court disagreed, and ruled as a matter of law that the general contractor was not liable for the plaintiff's injuries. For more information contact Peter H. Barlow and Ryan P. Atkinson.
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