The new Comparative Negligence Bill Expected to Reform NC Contributory Negligence Law will have to wait until next year. The third version of the bill was sent to the Judiciary Committee on May 19, 2001 but failed to be heard during this year’s legislative session.
You might be surprised to learn who is behind the push to move North Carolina from a contributory negligence state to a comparative negligence state. It’s attorneys! Primary sponsors of the House Bill are Rick Glazier, an attorney from Cumberland County, John Blust, an attorney/accountant from Guilford County, Deborah Ross, an attorney from Wake County, and Bonner Stiller, an attorney from Brunswick County.
In North Carolina, the insurance contract controls whether insurance coverage exists. There are several variations in insurance policies that are directly bearing on the question of coverage in this type of situation. In order to determine whether there could be coverage a determination needs to be made as to whether the insurance policy contains “Any Person”, “Reasonable Belief” or “Permissive Use” language and whether the person driving the car (tortfeasor) was in “lawful Possession” of the vehicle.
Some insurance policies define the insured as “any person using your “covered auto”. This provision provides coverage to anyone using your car. It has no limiting language, so presumably even someone who has stolen the insured’s car would be an insured and the insurance company would likely have to provide coverage to that person.
The analysis used to determine whether the tortfeasor had “Lawful Possession” or “Reasonable Belief” that he could use the vehicle when the accident occurred is almost identical. In Nationwide Mut. Ins. Co. v. Baer, 113 N.C. App. 517, 520 (1994), the court held that the “Reasonable Belief” exclusion included in the Nationwide insurance policy was not in conflict with the N.C. Financial Responsibility Act. The court reasoned that the exclusion requiring a person have a reasonable belief that he was entitled to use the vehicle was simply another way of determining whether a person knows that he lacks the owner’s permission to use the vehicle. In previous cases, the court had concluded that the exclusion broadens the inquiry into whether the tortfeasor had a subjective, reasonable belief that he was entitled to use the vehicle.
However, some insurance policies particularly corporate policies contain a “Permissive Use” clause. These types of policies usually extend coverage to “any person while using the insured auto with the permission of the named insured provided his actual operation is within the scope of such permission”.
If the insurance policy in question contains the “Permissive Use” clause, the analysis of coverage is as follows:
- First, did the insured grant permission for the tortfeasor to use the vehicle? The permission can be either express or implied. If not there may not be coverage.
- Secondly, did the tortfeasor exceed the scope of the permission granted? The scope of the permission can be limited temporarily, geographically, and to limited purposes. N.C. courts follow the minor deviation rule, which provides that if the use of the vehicle by the permittee is not a gross deviation of the terms then coverage will apply.
The N.C. Financial Responsibility Act requires that the policy provide minimum coverage if the tortfeasor is in “Lawful Possession” of the vehicle. “Lawful Possession” basically means that the tortfeasor did not steal the vehicle. Most insurance policies do not include language regarding “Lawful Possession” however this does not prevent the insurance company from having to provide coverage if the tortfeasor was in “Lawful Possession” of the vehicle at the time of the accident. The statute will control in situations where the language of the statute and the language of the insurance policy are in conflict with each other.
Coverage analysis should begin with the insurance policy. If the policy contains “Any Person” language, there is almost certainly coverage regardless of the reason why the tortfeasor had possession of the vehicle. If the policy contains the “Reasonable Belief” language, the analysis is one-step. Did the tortfeasor have a “Reasonable Belief” that he was entitled to use the vehicle? If the answer is yes then he is likely entitled to full coverage. If the answer is no, he probably not entitled to any coverage.
If the insurance policy has a provision, regarding “Permissive Use” the coverage determination hinges on whether the individual had permission from the insured to use the vehicle and that he did not exceed the scope of that permission. If both of these elements are met, then the policy will likely provide coverage. If the individual did not have permission to the use the vehicle, you then must look the N.C. Financial Responsibility Act to determine if the individual was in “Lawful Possession” of the vehicle and therefore entitled to minimum limits coverage. For these types of analyses, you should also consult an attorney specifically one familiar with insurance law, insurance defense, and insurance coverage.
In a recent decision, Judge Dever III for the Eastern District of N.C. fined Cooperative Success Maritime S.A. $850,000 for illegally dumping waste into the ocean during its transatlantic voyages. The company will also have to pay $150,000 to the Fish and Wildlife Fund.
via USA CONFIDENTIAL
According to US Tort Liability Index: 2010 Report put out by Pacific Research North Carolina ranks 3rd just behind Alaska and Hawaii in tort costs and law. The Report attempts to measure which states have the highest and lowest tort liability costs. The worst? New Jersey with New York and Florida joining it in the bottom three.
The Report goes on to classify states as either saints, sinners, salvageable, or suckers based on tort litigation risks, lawsuit awards, and the strength of tort laws on the books.
The saints: Alaska, Kansas, Louisiana, Ohio, and South Carolina.
The sinners: Alabama, California, Illinois, New York, and Pennsylvania.
The salvageables: Colorado, Florida, Georgia, Mississippi, Oklahoma, and Texas.
The suckers: Idaho, Iowa, North Carolina, North Dakota, South Dakota, and Virginia.
Want to know more see the full Report at http://www.pacificresearch.org/docLib/20100525_Tort_Liability_Index_2010.pdf
Currently N.C. is a “Joint and Several” liability state. Simply put this law means that in a lawsuit where the plaintiff has sued multiple defendants and a jury has found for the plaintiff the plaintiff can recover the entire judgment from any one of the defendants. This rule often comes as a shock to defendants especially when the defendant paying the judgment was the least at fault but the only defendant with money. If HB 813 is enacted “Several” liability would become the new law in N.C., Under the “Several” liability doctrine a defendant would only be required to pay the amount he is specifically liable for.
HB 813 has now passed the House of Representatives and is pending in the Senate Judiciary I Committee. Should the bill pass it will be the end of contributory negligence in North Carolina. Currently only five jurisdictions including N.C. retain the doctrine of contributory negligence.
Under the contributory negligence doctrine, a plaintiff cannot recover from a defendant in a tort action if the plaintiff is even one percent responsible for his or her own injuries. Plaintiffs’ attorneys argue that the doctrine is unfair and that it only remains the law in N.C. due to heavy lobbying by the insurance companies who reap the rewards by not having to pay out claims. Insurance companies argue that changing from a contributory negligence state to a comparative negligence state will cause insurance premiums to go up stating that currently N.C. has the sixth lowest premiums of any state in the country. However, Scott Sexton points out in an article for the Winston Salem Journal that state Insurance Commissioner Jim Long has to approve any rate increases and that he is the real reason N.C. insurance rates remain among the lowest in the country not because the state is a contributory negligence state.
So how would negligence be apportioned if we do away with contributory negligence? Under HB 813 N.C. would become a modified comparative negligence state. Under a pure comparative negligence doctrine fault is directly apportioned based on the degree of fault for each party. For instance if in a tort action if the plaintiff is 90% at fault and the defendant is 10% at fault the plaintiff can still recover for the defendant’s 10% negligence. Under a modified approach, recovery is barred if the plaintiff is 50% or more responsible for his or her own injuries.