Santa’s 2018 Naughty & Nice List of Pacific Northwest Legal Developments

By Allen Eraut

Santa may moonlight as an insurance defense attorney during the off-season. Over a cup of eggnog, Santa shared his Naughty & Nice List for 2018

Naughty: Damages cap. Oregon had two significant damages cap decisions this year: Vasquez v. Double Press Mfg., Inc and Rains v. Stayton Builders MartVasquez found the $500,000 noneconomic damages cap under Oregon Revised Statutes 31.710(1) to violate Article I, Section 10 of the Oregon Constitution on an as-applied basis, as it would have reduced plaintiff’s recovery from $6,199,090 to $1,838,090.  Rains found the damages cap unconstitutional as applied as well, where the jury awarded $3.1 million in noneconomic damages. The court of appeals also ruled for the first time that spousal loss of consortium claims are protected by the remedy clause of the Oregon Constitution, finding a reduction from $759,000 to $500,000 to be unconstitutional.

Nice (mostly): Asbestos verdicts. Overall, it was a good year for asbestos verdicts in the Northwest, with two defense verdicts (Patrick Jack and Judd Metzger) and two plaintiff verdicts (Andrew Miller -- $1.1 million and James Clevenger -- $1 million). The Andrew Miller case verdict resulted in a net $0 judgment, as the verdict award was less than the setoffs.

Naughty: Oregon physician-patient privilege.  In Hodges v. Oak Tree Realtors, Inc., the Oregon Supreme Court held that – even after a plaintiff has filed a personal injury lawsuit – any and all communications between the plaintiff and his or her doctor remain shielded from discovery. Therefore, Oregon’s rule continues to run counter to most states, which generally allow discovery into patient-physician communications after the filing of a personal injury lawsuit.

Nice: No claim for bad faith claim processing in Oregon. In Bates v. Bankers Life, the Oregon Supreme Court ruled that a plaintiff does not state a claim under Oregon Revised Statutes 124.110(1)(b) for wrongful withholding of money or property where an insurance company allegedly in bad faith delayed the processing of claims and refused to pay benefits.

Naughty: Washington bad faith.  In Singh v. Zurich Am. Ins. Co., Division 1 of the Washington Court of Appeals clarified an insurer’s defense duties in cases involving multiple claimants that likely would exhaust policy limits. It held that if an insurance carrier has reason to believe that payment of a policy-limits settlement to one claimant would leave the insured exposed to defense costs for other claims, the carrier should explore potential methods to leave some amount of policy limits in reserve in order to preserve the defense duty. Failure to do so could result in bad faith damages.

Nice: “Each and every fiber” evidence.  In Barabin v. Scapa Dryer Fabrics, a federal trial court in the Western District of Washington rejected the “each and every exposure” and “cumulative exposure” causation theories often relied on by asbestos plaintiffs. The court’s decision is detailed and provides a good road map to exclude this type of evidence.


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