Sunday, July 31, 2011

Legislation Creates New Obligations for Insurance Companies to Disclose Policy Limits

New legislation is set to take effect October 1, 2011, which will directly affect tort claims concerning motor vehicle accidents.  The new legislation will allow a claimant, after filing a written tort claim, to obtain from the insurer documentation of the applicable limits of coverage in any insurance agreement under which the insurer may be liable to either satisfy all of part of the claim or indemnify or reimburse for payments made to satisfy the claim.

Before obtaining such documentation, however, the claimant must provide in writing several items to the insurer:

(1) The date of the vehicle accident;
(2) The name and last known address of the alleged tortfeasor;
(3) A copy of the vehicle accident report, if available;
(4) The insurer’s claim number, if available;
(5) The claimant’s health care bills and documentation of the claimant’s loss of income, if any,                                     resulting from the vehicle accident; and
(6) The records of health care treatment for the claimant’s injuries caused by the vehicle accident.

Furthermore, if the amount of health care bills and loss of income is at least $12,500, the insurer must disclose in writing the applicable limits of coverage in each written agreement under which the insurer may be liable.

There are separate and distinct requirements in the case of claims made by the estate of an individual or a beneficiary of the individual resulting from the death of the individual in a vehicle accident.  Under these types of claims the documentation may be obtained if the claimant provides in writing to the insurer:

(1) The date of the motor vehicle accident;
(2) The name and last known address of the alleged tortfeasor;
(3) A copy of the vehicle accident report, if available;
(4) The insurer’s claim number, if available;
(5) A copy of the decedent’s death certificate issued in the State or another jurisdiction;
(6) A copy of the letters of administration issued to appoint the personal representative of the decedent’s estate in the State or a substantially similar document issued by another jurisdiction;
(7) The name of each beneficiary of the decedent, if available;
(8) The relationship to the decedent of each known beneficiary of the decedent;
(9) The amount of economic damages, if any, claimed by each known beneficiary of the decedent, including any amount claimed based on future loss of earnings of the decedent;
(10) The health care bills for health care treatment, if any, of the decedent resulting from the vehicle accident;
(11) The records of health care treatment for injuries to the decedent caused by the vehicle accident; and
(12) Documentation of the decedent’s past loss of income, if any, resulting from the vehicle accident.

             Under either type of claim, the insurer has thirty days after the date of the request to provide in writing the documentation, regardless of whether or not the insurer contests the applicability of coverage to a claim.

The legislation also states that an insurer, its employees, or its agents may not be civilly or criminally liable for the disclosure of such documentation.  Further, documentation disclosed under this section will not constitute an admission or waiver and will not be admissible as evidence at trial.

The legislation, passed as House Bill 921 and Senate Bill 599, will be added to Title 10 of the Courts and Judicial Proceedings Article, as Sections 10-1101 – 10-1105 of “Subtitle 11. Pre-litigation Discovery.”

Article contributed by Andy Nichols

District of Columbia Raises the Threshold for a Complaint to Survive a Motion to Dismiss

The District of Columbia will now require, in order to avoid dismissal, that a complaint must provide amble and well-pleaded factual content, from which, the court can draw a reasonable inference of the defendant’s liability for the misconduct alleged.

In Mazza v. Housecraft, L.L.C., 18 A.3d 786, (D.C. 2011), the Court of Appeals for the District of Columbia adopted the two-prong heightened pleading standard articulated in Bell Atlantic v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009). On appeal, the Court of Appeals affirmed the trial court’s dismissal of Anthony Mazza’s (“Mazza”) complaint on res judicata grounds, and further held that the pleading requirements articulated in Twombly and Iqbal now apply in the District of Columbia.

In 2004, Anthony Mazza entered into a home improvement contract with Housecraft L.L.C. (“Housecraft”) for the purpose of renovating Mazza’s property. When Mazza failed to pay the final invoice, as stipulated in the contract, Housecraft filed a mechanic’s lien against the property. The trial court entered judgment in favor of Housecraft. Mazza failed to satisfy the judgment, and subsequently, the Clerk of the Superior Court issued a writ to enforce the mechanic’s lien on Mazza’s property.

On May 15, 2009, Mazza filed a complaint challenging the enforcement of the mechanic’s lien. Mazza challenged the validity of the home improvement contract and the resulting mechanic’s lien on the ground that Mazza himself had not signed that contract; instead, Mazza’s wife had signed. Housecraft filed a motion to dismiss Mazza’s complaint on res judicata grounds, because, in previous litigation, the court had found a home improvement contract existed as between Mazza and Housecraft. The trial court agreed with Housecraft, and granted the motion to dismiss. Mazza filed a notice of appeal. In a de novo review, the Court of Appeals for the District of Columbia affirmed the trial court’s decision to grant the dismissal, and, for the first time, considered whether to adopt the heightened pleading standards articulated in Twombly and Iqbal.

In Twombly, the Supreme Court held that a complaint must allege “enough facts to state a claim to relief that is plausible on its face.”  The Court in Iqbal elaborated on Twombly, requiring that pleadings, subject to this standard, demand “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” In Iqbal, the Supreme Court developed a two-prong test for determining whether a civil complaint is sufficient to survive a motion to dismiss for failure to state a claim; specifically, “(1) whether the complaint includes well-pleaded factual allegations as an initial matter, and (2) whether such allegations plausibly give rise to an entitlement for relief.”  By adopting the Twombly and Iqbal standards, the District of Columbia will now require that Plaintiffs provide well-pleaded facts and allegations in the Complaint to avoid a motion to dismiss. 

Article contributed by Andy Nichols

Thursday, July 21, 2011

Compliance with Appellate Rules – The Heit v. Stansbury Decision

           Inevitably, a litigator will be involved in a matter that is appealed to the Maryland Court of Special Appeals.  Unless that litigator specializes in appellate practice, he or she probably only has a vague familiarity with the appellate rules codified in Chapter Eight of the Maryland Rules of Civil Procedure.  Recently, the Court of Special Appeals rendered an opinion that confirms that trial attorneys in Maryland must become intimately familiar with the appellate rules or run the risk of jeopardizing their client’s case.

           In Heit v. Stansbury, 2011 WL 2135086 (2011), the Court of Special Appeals held that the appellant husband in a divorce action could not file a reply brief more than twenty days after the appellee wife had filed her brief.  Maryland Rule 8-502(a)(3) provides that an “appellant may file a reply brief within 20 days after the filing of the appellee’s brief, but in any event not later than ten days before the date of scheduled oral argument.”  The appellant husband had filed a reply brief more than five months after his wife had filed her brief, but more than ten days before the scheduled hearing.  As such, he argued that he was in compliance with the requirements of Rule 8-502(a)(3).

           The Court disagreed, holding that the word “may” reflected the fact that a reply brief was optional and did not qualify the time by which the reply brief must be filed.  Utilizing standard rules of construction, the Court held that appellant’s interpretation of the Rule would render superfluous the phrase “within 20 days after the filing of appellee’s brief” and that it would “not read a statute or rule so as to write out language that is not superfluous.”  Therefore, the Court of Special Appeals struck the appellant’s reply brief.

           There are many deadlines contained in the appellate rules and some of them are triggered by other events during the appellate process.  It is highly important that a litigator become familiar with the pertinent dates and deadlines of the appellate process and refresh his or her recollection when involved in an appeal.  Although, on rare occasion, the appellate courts have exercised discretion not to penalize a party on appeal for a minor violation of the rules, where filing deadlines are concerned, this discretion is rarely exercised.  Interestingly, the Court of Special Appeals signaled in Heit that it might have exercised its discretion, had it been requested to accept the late filed reply brief, noting that such a request had not been made.

           The Heit decision merely reemphasizes the fact that attorneys must know what they are doing when they handle an appeal and that this requires close scrutiny of and adherence to the appellate rules.  Deadlines should be ascertained upon the filing of an appeal, and the requirements for the content, style and form of briefs should be reviewed to assure compliance with those rules.  An attorney does not want to be in a position where he or she is asking an appellate court to exercise its discretion to permit the filing of a brief, or to overlook a violation of the requirements for content, style or form of a brief, as the favorable exercise of discretion may not be forthcoming.

Article Contributed by James Andersen