Damages for Intentional Tort Survive Bankruptcy

The Court of Appeal recently released a decision that looks at the interplay of tort law and bankruptcy.

In Dickerson v. 1610396 Ont. Inc. (c.o.b. Casey's Pub & Grill), 2013 ONCA 4955 (C.A.), a jury awarded the plaintiff damages against the defendant in excess of $1 million arising out of an assault.  The defendant punched the plaintiff once in the head, causing the plaintiff to lose consciousness, fall to the ground and sustain brain damage.  As a result of the judgment, the defendant declared bankruptcy.  The plaintiff brought a motion for an order that the award of damages survived bankruptcy, based on s. 178(1)(a.1) of the Bankruptcy and Insolvency Act, which provides:

178(1) An order of discharge does not release the bankrupt from 

 (a.1) any award of damages by a court in civil proceedings in respect of 

(i) bodily harm intentionally inflicted, or sexual assault or 

(ii) wrongful death resulting therefrom.

The motions judge held that although the jury found the defendant "deliberately punched the plaintiff in the head", the verdict did not provide a framework to assess whether it was an "intentional infliction of bodily harm". She dismissed the motion and the plaintiff appealed.

The Court of Appeal allowed the appeal, holding that s. 178(1)(a.1) will apply where there is direct proof of intentional infliction of bodily harm or where it can be reasonably inferred.  As long as there is intent, the section will apply; there is no requirement to show the circumstances were sufficiently offensive to social mores to justify withholding the protection of bankruptcy.

Still fighting to get releases of liability removed from Boston Public Schools permission slips

I have posted here, here, here, and here on my efforts to have releases of liability removed from field trip permission slips Boston Public School parents are required to sign.

This past Wednesday I returned to the Boston School Committee.  I spoke during the public comment period and pointed out that last February the BSC had requested that the BPS legal department report back to it on whether other school systems in Massachusetts require similar releases of liability.  That report has not happened yet.  I again requested that the releases of liability be removed from permission slips. 

The following is the handout I gave to the School Committee members (slightly redacted to protect the privacy of my children): 

 FOLLOW UP ON RELEASES OF LIABILITY IN FIELD TRIP PERMISSION SLIPS

 

THE ISSUE:  Boston public school permission slips require parents to sign a release of all rights if their child is injured on a field trip. 

 

The release includes “any acts of negligence or otherwise from the moment that my student is under BPS supervision and throughout the duration of the trip.” 

 

In the release, parents agree “to indemnify and hold harmless BPS and any of the individuals and other organizations associated with the BPS in this field trip from any claim or liability arising out of my child’s participation in this field trip.” 

 

PREVIOUS COMMENT BEFORE THE SCHOOL COMMITTEE, AND LACK OF PROMISED FOLLOW UP

 

I spoke during the public comment period on this issue at the School Committee meeting of February 27, 2013.

 

My written comments are attached. 

 

Schoolcommittee member Mary Tamer requested a report back from the legal department on what other school systems in Massachusetts are doing.

 

I sent a follow up email in the spring and was told by Chairperson O’Neill that the School Committee would reach the issue but not before the conclusion of the current (2012-2013) school year.

 

I sent another email a few weeks ago to which I received no reply.

 

I am therefore here to again request that releases of liability be removed from field trip permission slips.

 

WHAT DO OTHER SCHOOL DISTRICTS DO?

 

First, this is not the right question to be asking.  Boston is the largest and the best school district in Massachusetts, and has among the most resources to determine what is right.  We should lead other school districts, not follow them.

 

Second, there is a great deal of variation; however, I am not aware of any school district that has a release as comprehensive as Boston’s.  I have attached permission slips from Brockton and from Chicago, which contain no waiver of liability.  I have also attached a permission slip from New York City, which releases liability “except if due to the negligence of school officials.” 

 

MASSACHUSETTS LAWYERS WEEKLY ARTICLE

 

I have attached an article in Massachusetts Lawyers Weekly which covered the issue on April 18, 2013.

 

BPS spokesperson Lee McGuire was quoted in the article.  He made two statements with which I disagree.

 

First, he stated that Massachusetts courts have upheld school releases of liability.  That is incorrect.  The case he cites, Sharon v. City of Newton, 437 Mass. 99 (2002), upheld releases in voluntary afterschool activities -- in that case, cheerleading.  It specifically reserved the question of whether a release of liability would be upheld in the context of a required school activity.

 

More importantly, McGuire asserted that the waivers of liability allow the schools to continue to offer field trips.  That is simply the wrong approach.  The BPS and its students are best protected by insurance, which is a cost of doing business, not by a waiver which allows entities to avoid responsibility for their own negligence.  If a child is seriously injured on a field trip and liability has been released, then ultimately that child will be taken care of by taxpayers through public programs that assist people with disabilities.  In the meantime the child’s family has not only suffered as a result of the child’s injury but has possibly been bankrupted by the cost of care.  It is much fairer and better for everyone -- the BPS, the students, the parents, the taxpayers -- to simply require insurance. 

 

 

CONCLUSION

 

The release of liability should be removed from field trip permission slips.  Instead, the BPS should require that its partners have adequate insurance to protect students in the event that they are injured as a result of negligence.

 

REQUEST FOR RESPONSE

 

I request that the school committee get back to me with a response by December 1, 2013.

 

ABOUT ME

 

I am a lawyer who specializes in liability insurance issues (“insurance coverage”).  As such, I spend a lot of time thinking about the purposes served by insurance,  about how risk should be reasonably delegated, and about the devastating impact on individuals and families when risk is not delegated reasonably.      

Municipality Not Liable in Recreational Trail Case

Recently the Ontario Courts found a municipality not liable, under section 4(1) of the Occupier’s Liability Act, for the plaintiff’s fall off the edge of a ravine. In coming to this finding the court took an expansive view of when this section applied and indicated what is required to meet the lower standard of care under this section.

In Pierce v. Hamilton(City), 2013 ONSC 6485 (S.C.J.), the plaintiff entered the park on a marked recreational trail near the edge of the Niagara Escarpment, he then left the trail and proceeded on an unmarked dirt path and fell off the edge of the ravine sustaining physical injuries. The City of Hamilton acknowledged that they were the occupier of the premises, but asserted they had met the standard of care.  The trail itself qualified as a recreational trail and was clearly marked as such, but the issue was whether the dirt path also qualified.  The Court held that the standard of care was the same as if the plaintiff was on a marked trail, stating:

“If that owner is given the benefit of the lower standard of care in return for allowing the public to enjoy the recreational trail on the land, it makes no sense to saddle the owner with the higher standard of care the moment a hiker or cyclist or skier moves off of the recreational trail. Further, it makes no sense for two different standards of care to alternately apply as a trail user hops on and off of the recreational trail.”

Given this, the plaintiff was deemed to have willingly assumed all risks associated with the premises and the lesser standard set out in section 4(1) of the Occupier’s Liability Act applied.

The Court accepted the evidence of the representative of the City that they had not received any previous complaints of people falling into the ravine and thus had no information that would suggest there was an unusual danger on any dirt path in the park area.   Justice Henderson rejected the plaintiff’s argument that the City failed to meet the standard of care for failing to conduct inspections of the park, for failing to have warning signs and for failing to construct a protective fence.  Justice Henderson held that it would be impossible for the City to conduct regular inspections of the 3,000 acres of natural areas. Regarding the signage and fencing, the Court held:

“As to signage, clearly a specific warning sign was not warranted if the City was not aware of any specific danger... I find that the failure of the City to erect a more general warning sign, such as "Caution. Uneven Ground in the Woods" does not constitute a breach of its duty. Such a warning sign would in fact be a sign stating the obvious; that is, that the terrain in the woods is uneven and unpredictable... I also reject the plaintiffs' submissions that the City ought to have built a barricade or a fence near the drop-off into the ravine. The danger of a sharp drop in elevation in a wooded area that was near the edge of an escarpment should be obvious to anyone who entered the woods.”

This case builds on the Ontario Court of Appeal decision in the Schneider v. St. Clair Region Conservation Authority case regarding when section 4(1) applies and highlights the lower standard of care under this section.

Settlement mills and insurers

Tina Willis Law Blog has an article discussing a 2009 law review article called Run-of-the-Mill Justice, about so-called settlement mills, large-volume plaintiffs' personal injury firms that acquire most of their clients by advertising.

Towards the end of the law review article the author discusses the advantages to insurers of dealing with those types of firms.  The article posits that the insurers end up paying a lot of low-value cases for more than they are worth, but in exchange they are able to settle high -value cases at a steep discount.

I began my career as an insurance-defense attorney and I still do quite a bit of insurance defense work, most of it indirectly on a subcontract basis.  In the hundreds of cases I have defended or participated in defending over the years, only a small handful have been brought by the types of firms discussed in the article, although they certainly exist in this state.  My experience was that the attorneys that handled them were average:  certainly no standouts in their representation of their clients, but they knew what they were doing. 

Insurance defense attorneys tend to only see the more interesting cases:  cases that go into suit rather than settling pre-suit because there is a question over liability or the case won't settle for its reasonable value as perceived by the adjuster.

Nevertheless, the idea that insurance companies have a symbiotic relationship with plaintiffs' mills does not ring true to me.  I have worked with many adjusters and their supervisors, both on the side of the insurer/insured and on the side of the claimant.  I simply can't imagine any department settling low value cases for more than they're worth in the expectation of an easy settlement in a high value case.  That's the sort of allegation that I would expect the state attorney general to look into, as it would be a large volume unfair settlement practice.

Resolution of a third party case may entitle you to be paid additional money by OPM

In a small number of OWCP claims, the cause of the injury is due to the negligence of a third party. You cannot sue your employer and coworkers, but if your injury was caused by an entity outside of the federal government you might have a third party case. When your third party case is resolved, your lawyer will distribute the money that is recovered, including repaying OWCP for some or all of the wage loss payments you have received. When that occurs you are repaying the workers compensation payments that you previously received. If you are also approved for your regular or disability pension, repaying the workers compensation wage loss pay may trigger entitlement to a payment from OPM for that closed period of time that you have had to repay OWCP. This can add up to a significant amount of money. If you have settled a third party case, you may be entitled to a payment from OPM for the period that you repaid OWCP.

Leave Required for Refusals Motion After Set Down – Part II

We previously posted on the decision of Jetport v. Jones Brown, 2013 ONSC 2470 (S.C.J.), which held that leave is required for a refusals motion that is commenced after the action has been set down.  The Jetport decision has been followed in Hamilton v. Ontario(Minister of Transport), 2013 ONSC 4536 (S.C.J.).

In Hamilton, a representative of the defendant was examined for discovery on March 30, 2012.  In response to a status notice, the plaintiffs delivered a trial record and set the matter down for trial on January 22, 2013.  The plaintiff then brought a motion seeking answers to refusals on March 7, 2013.  The motion was dismissed by Master Haberman on the basis that the plaintiff had not sought leave for as required by rule 48.04 and the plaintiff appealed.

On appeal Firestone J. held that although there was disagreement in the case law on the issue of whether leave is required, Master Haberman was not in error when she chose the line of authority that appeared most persuasive.  The line of authority followed by Master Haberman and approved of on appeal was that of Jetport v. Jones Brown.     

Because leave was not sought, the Master was correct in not considering the issue of refusals. 

It may have been that the Master’s decision was meant to be a procedural slap on the wrist to the plaintiff.  The decision notes that the requirement for leave was neither sought nor addressed by the plaintiff in their original motion material.  The Master’s decision did not preclude the plaintiff from bringing a motion for leave to have their refusals motion heard.  Counsel should be cautious about setting a matter down if they wish to pursue refusals.  They should also seek leave of the court, and address this in motion materials when in doubt.  

1st Circuit holds that reasonable expectations doctrine does not trump unambiguous policy language

I posted here about the United States District Court case of Clark School for Creative Learning, Inc. v. Philadelphia Indem. Ins. Co., 2012 WL 6771835 (D. Mass.).  In that decision the court held that an exclusion for known circumstances revealed in a financial statement applied to a claim that a school had misused a donation.  The exclusion excluded claims "arising out of, directly or indirectly resulting from or in consequence of, or in any way involving" any circumstances disclosed in a financial statement that was attached to the policy.  The financial statement referenced the gift at issue.

 In Clark School for Creative Learning, Inc. v. Philadelphia Indem. Ins. Co., __ F.3d __, 2013 WL 57337339 (1st Cir.) the United States Court of Appeals has affirmed the ruling. 

The court held that the plain language of the exclusion excluded coverage because the loss "involved" the gift disclosed in the financial statement. 

The court rejected the school's argument that the reasonable expectations of the parties were that the exclusion would not apply to a lawsuit over the gift, but only to lawsuits over the school's financial difficulties discussed in the financial statement.  The court held that even if the school could have reasonably expected coverage, the reasonable expectations doctrine does not apply when policy language is unambiguous. 

Limitation Periods in Insurance Contracts

Can a one year limitation period in an insurance contract override the two year limitation period?

 The Ontario Court of Appeal says it can. In Boyce v.The Co-Operators General Insurance Company, 2013 ONCA 298, the Boyces owned and operated a boutique insured by the Co-Operators. A foul odour was discovered on October 30, 2010 and the Co-Operators took an off coverage position on the basis the smell was caused by a skunk.

The Boyces claimed that the business had been vandalized, a peril covered by the policy, and they filed a proof of loss claim in December 2010 and commenced an action in February 2012, more than one year, but less than two years after the incident. The Co-Operators moved for summary judgment, claiming that the action was time barred by a one year limitation period set out in the insurance contract.

The motion judge held that the one year limitation period in the contract did not override the statutory two year limitation period set out in s. 4 of the Limitations Act, 2002. The Co-Operators appealed.

A term in a contract purporting to vary an otherwise applicable limitation period under the Limitations Act has to comply with s. 22 of the Limitations Act. That section allows parties to vary or exclude, by agreement, the otherwise applicable statutory limitation period. The Co-Operators relied on s. 22(5) which applies only to business agreements.

The Court of Appeal stated at paragraph 20:

A court faced with a contractual term that purports to shorten a statutory limitation period must consider whether that provision in ‘clear language’ describes a limitation period, identifies the scope of the application of that limitation period, and excludes the operation of other limitation periods. A term in a contract which meets those requirements will be sufficient for s. 22 purposes, assuming, of course, it meets any of the other requirements specifically identified in s. 22.

In order for s. 22(5) to apply the contract must be a “business agreement” defined by the Limitations Act as “an agreement made by parties none of whom is a consumer”. The Court of Appeal found that the Boyces contracted with the Co-Operatos for insurance covering various risks related to the operations of their business and the contract was not for personal, family or household purposes. As such the contract was a “business agreement”. The appeal was allowed. 

New Cavalcade of Risk is up

See it here.