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Spring 2014 newsletter

Firm Happenings

The firm is pleased to report that its newest attorney, Carli Clowers, has successfully passed both the Indiana and Kentucky Bar Exams.  Carli is a May, 2013, graduate of the University of Louisville and is busily at work in the firm's litigation section.  Congratulations to Carli on clearing both of these hurdles!
 
We are considerably less happy about the departure of one of our attorneys, Gabrielle Paschall.  Gabrielle had been with the firm since first serving as an extern during the 2009-10 school year, and practiced in our litigation section. Gabrielle’s fiance, Justin Trott, was transferred to Asheville, North Carolina, and their family relocated in March. We will miss Gabrielle and wish her well on all her future endeavors.
 
The Indiana Jury Verdict Reporter, which has tracked Indiana trial verdicts since 2000, published its 2013 Year in Review publication in February.  The IJVR contained a list of the "most prolific" law firms and trial attorneys in 2013.  Out of all law firms statewide, Waters, Tyler, Hofmann & Scott, LLC ranked tied for third with seven jury trials conducted in 2013.  Notably, the other firms which ranked on the "leaderboard" are staffed by substantially larger numbers of attorneys.  Rodney Scott was tied for second in the state for having tried the most cases in 2013, with five jury trials.
 
Sally Carpenter and her husband, Scott, are proud to announce they are expecting their first child in August.  They are both very excited and ready to jump into their next stage in life.  Scott is also working toward a Master's degree in business at Indiana University - Southeast.
 
Teresa Summers is proud to announce that her daughter, Olivia, was accepted to Indiana University Southeast and was awarded an Excellence in Academics  scholarship.  Olivia will graduate from Silver Creek High School in June 2014 with 40 college credits, and plans to attend IUS in the summer of 2014, beginning her studies in Secondary Education with a focus on English and Journalism.
 
Rodney Scott was selected one of the 2013 "Top Lawyers in Indiana" by The Legal Network, recognizing his professionalism and ethics.  It is an honor well deserved and hard-earned, and nice to see a good person get such recognition.
 
Scott Tyler, Eric Eberwine and Rebecca Didat are current members in the Sherman Minton American Inns of Court, the local chapter of a national association of attorneys.
 
Rodney and Lisa Scott, Scott and Anne Waters, Scott and Alison Tyler, and John Hofmann all attended the annual Rotary Toast run by the New Albany Rotary Club. This year’s toast was in honor of a prominent local citizen who serves on the board of trustees of one of the firm’s clients. Scott Tyler is a former President of the Rotary Club.
 
John and Tricia Hofmann’s daughter, Madison Hofmann, has just advanced to the highest level of Champion Gymnastics’ pre-competitive program. Her sister, Casey Hofmann, is in her second year of competitive gymnastics, and scored several personal bests at the Kentucky State Gymnastics Meet.  Even though it is now technically the "off-season," practice goes year round and life in the Hofmann house involves the perpetual ratting of first-floor ceiling light fixtures from all the handstand, round-off and backbend practice in the girls’ upstairs bedrooms.
 
Rodney and Lisa Scott attended Emma Scott’s white coat ceremony at the University of Kentucky. They have hardly seen or heard from her since she barricaded herself in the medical school library.     
     
 
Teresa Summers’ daughter, Olivia, is the media correspondent for a youth-run organization, Miles for Merry Miracles, which was awarded the Nobel Prize for public and community service in September. The organization beat out 27 other groups nationwide to receive this award. Miles for Merry Miracles, a six-year old organization, facilitation the adoption of nearly 750 angels from the Salvation Army Angel Tree in 2013. The group conducts a 5k run/walk, at which participants adopt an angel in lieu of paying a monetary registration fee. More about the group and its efforts can be read at http://shar.es/i5LcX
 
Rebecca Didat's son, Kyle Didat, was a member of the Providence High School 2013 state championship runner-up soccer team.  They couldn’t be prouder of Kyle or his Pioneer teammates. Hopefully Providence will win it all next year, in his senior season.
 
Rodney and Lisa Scott supported Katie Scott in Denison University’s production of “Shakespeare’s Comedic Couples” in her role in act 1: “The Taming of the Shrew.” Katie is studying economics and literature at Denison.   
 
Casey Hofmann, daughter of John and Tricia, also plays keyboard and sings lead vocals in a "Rock School" band through Mom's Music in Louisville.  The band, tentatively named "Anonymous," covers a handful of popular songs and is getting ready for its second public performance in late May.   
 
Rodney and Lisa Scott went on a two (yes, I said two with a "w") week trip to Hawaii.  It was Rodney's first two-week vacation in 25 years of practice.  Let's hope he doesn't get used to that.  His assistant, Teresa Summers, may have a different opinion.  
 
Scott Tyler, Tricia Hofmann and Carli Clowers continue the firm's work with the Floyd County Teen Court program as mentors and attorney advisors.  This summer  will mark Teen Court's six-year anniversary, as well as our six-year involvement with the program.  Scott, Tricia and Carli preside over the teen court trials and train the teenage volunteer participants in their roles as prosecuting and defense attorneys.
 
Two attorneys in the firm are celebrating milestones in 2014.  Rodney Scott celebrates his 25-year anniversary of practicing law, and it has been twenty years since Rebecca Didat was licensed in her first state, Kentucky.  Congratulations to them both on these accomplishments!
 
Client Outcomes
 
Rodney Scott and Eric Eberwine tried the Estate of Opal Couch v. Sellersburg Volunteer Fire Department in the Clark County Circuit Court No. 2 in the summer of 2013.  The lawsuit arose out of a crash on July 4, 2009 at a traffic signal, controlled intersection in Clarksville, Indiana. Plaintiff was a 75-year-old female who was entering the intersection as the light changed green for her path of travel. Defendant’s 20-year-old driver was driving an ambulance with its lights and sirens in operation. He was approaching the intersection at around 40 mph when the light turned red for his path of travel and he encountered Plaintiff’s vehicle in the intersection. He veered left thinking she was stopping and, when she continued, struck her in the driver’s door. Opal Couch died at the scene. The accident was the subject of lots of local (and inaccurate) media reports at the time. The ISP accident reconstructionist made multiple mistakes (which he admitted at trial) in concluding that the ambulance was running at much higher speeds and that fault rested with the ambulance driver. Plaintiff’s relatively life-long husband died a few months later. Liability was the primary dispute at trial, since this was a case pursued under the ITCA and contributory fault was the applicable legal standard. Plaintiff’s cell phone was found in her left hand after the accident and the evidence clearly established that she had been talking to her husband at the time of impact. Her husband called her back multiple times after the accident without success. Gary Barnett testified as an accident reconstructionist for Defendant that the accident was the fault of Plaintiff for failing to yield the right-of-way to an emergency vehicle, most likely because she was distracted by her phone. Plaintiff relied on the ISP accident reconstructionist and training videos and materials for ambulance operators that recommended stopping at intersections – especially those with red lights – before proceeding through even when running with lights and sirens because of the special dangers created by them. The jury found for the Plaintiff and awarded $225,000.00. All wrongful death cases are uphill battles but Rodney and Eric were still hoping for a defense verdict. Plaintiff was represented by, among others, renowned Georgia attorney Carl Reynolds. 
 
Congratulations go out to our client, Wing Enterprises, Inc., manufacturer of the “Little Giant” brand ladder, on the dismissal with prejudice of Schroan v. Wing Enterprises, Inc., a product liability suit brought in the Jefferson County, Kentucky Circuit Court and defended by Scott Tyler. The plaintiff in Schroan was standing near the top of a 21’ MXZ Little Giant ladder attempting to change a light bulb in a church chandelier.  He claimed the ladder suddenly toppled over, causing him severe injuries which left him totally disabled.  Plaintiff sought damages of over $565,000.
After over three and a half years of litigation and just three weeks before trial, Schroan agreed to dismiss all of his claims against our client with prejudice.  In doing so, plaintiff admitted that his case had become untenable after Scott discredited the theory espoused by plaintiff’s expert about how the accident occurred.
 
John Hofmann received a favorable panel opinion in a difficult medical malpractice case involving a patient death in Gainous v. Floyd Memorial Hospital, et. al.  The medical review panel unanimously concluded that our clients, Floyd Memorial Hospital and the physician, met the established standard of care in their treatment of the patient.  Our clients prevailed on both standard of care and causation. 
 
Rodney Scott, Tricia Hofmann and Chad Smith received a favorable ruling from the Indiana Court of Appeals in the matter of State Farm v. Earl. This was an action for uninsured motorist (UM) benefits which was tried to a jury in November of 2012. Prior to trial, we filed extensive briefs supporting a motion to exclude evidence of the UM limits, as they are irrelevant to the sole issue to be determined by the jury (the value of the damage caused to Plaintiffs by the uninsured motorist) and unduly prejudicial to State Farm. Over the defense’s objection, the trial court allowed the jury to be presented with the amount of the Plaintiffs’ UM limits. During closing, Plaintiffs’ counsel asked the jury to award the full amount of the insurance limits, $250,000. The jury subsequently returned a verdict for that amount.
 
On appeal, we raised the same objections to the evidence – that it is irrelevant and prejudicial. The Court of Appeals, by a 2-1 margin, agreed. As a matter of first impression in Indiana, the majority held that UM limits are not relevant in a suit where the jury is tasked with assessing tort damages, and that the trial court’s admission of such evidence was prejudicial to State Farm. As this was reversible error, the Court of Appeals ordered a new trial. Plaintiffs filed a Petition for Rehearing, which the Court of Appeals denied. A Petition to Transfer the case to the Indiana Supreme Court is anticipated.
 
 
Scott Tyler and Eric Eberwine also prevailed before the Court of Appeals in a construction law case entitled Board of Commissioners of Jefferson County v. Teton Corporation.  In 2009, a fire destroyed the historic courthouse in Jefferson County, Indiana, resulting in over $6,000,000 in damage.  The County's insurance carrier initiated a subrogation action against the three contractors involved in the project, one of which was our client.  The contractors were awarded summary judgment on the basis that the "waiver of subrogation" provision contained in the AIA contract barred the subrogation claim in its entirety.  The County appealed, asking the Court of Appeals to follow an earlier Indiana case which limited the provision to "work", while permitting recovery for damage to "non-work" property.  The Court rejected the County's argument, joining a growing majority of jurisdictions which recognized a broader interpretation of the provision.  This was in contrast to an earlier Court of Appeals opinion which followed the minority position and distinguished between "work" and "non-work" as it relates to the waiver of subrogation.  To our surprise, the County did not seek transfer to the Indiana Supreme Court. 
 
 
Carli Clowers won her first Motion for Summary Judgment by submission from Plaintiff’s counsel in the case of Stewart v. Hardin and State Farm Mutual Automobile Insurance Company.  Plaintiff sued Hardin, alleging that he negligently caused a motor vehicle accident, and also sued her own underinsured motorist (UIM) carrier, our client, State Farm. There were no other claimants, and no other alleged tortfeasors involved. Notably, Hardin’s vehicle was insured with liability limits in an amount equal to that of Plaintiff’s UIM limits.  After reading Carli’s brief, Plaintiff’s counsel agreed that Hardin’s vehicle was not an “underinsured motor vehicle,” as defined by the insurance policy and under Indiana law.  Plaintiff’s counsel declined to file a response, and voluntarily dismissed Plaintiff’s UIM claim against State Farm.
 
John Hofmann obtained a favorable opinion from a medical review panel in Mezyk v. Floyd Memorial Hospital, et. al., related to a death claim.  The patient died in that case while hospitalized following a surgical procedure.  The panel unanimously found that Plaintiff failed to prove any negligence on the part of the Hospital.          
 
Rodney Scott tried Fryrear v. Kessans in the Clark Circuit Court no. 1 in August of 2013.  Both parties claimed to have the green light at a highly-traveled intersection in Clarksville, Indiana.  Plaintiff's Ford Escape was struck in or around the driver's door and was knocked on its side.  The investigating officer, over objection, testified that he attributed fault for the accident to Defendant.  He admitted he did so based solely on the disputed statements of the witnesses, primarily because Defendant could not tell him what the color of the light was when she went under it.  Plaintiff, at the scene, reported that she saw Defendant "flying" down the road before impact.  Plaintiff was transported to and treated in the local emergency room.  She then underwent significant chiropractic treatment.  She claimed more than $17,000.00 in medical expense and $400.00 per week in lost income for indeterminate number of months because the chiropractor never released her to return to work.  Defendant, a very youthful 75 year-old lady at the time of the accident, testified that she told the officer she did not know what the light was when she went under it because she (1) was under it and could not see it; and (2) was focused on Plaintiff's vehicle pulling out in front of her and trying to avoid the accident.  The jury found Defendant without fault and returned a verdict for the defense.  Mallery Waters, paralegal, provided valuable assistance at the trial. 
 
Tricia Hofmann secured summary judgment on behalf of an excess umbrella carrier in Thermo Pac v. Great American, et. al. in Vanderbugh County.  This was a coverage action in which approximately two dozen families filed suit against the manufacturer and distributor of a thickening agent used in baby formula which was administered to premature infants.  Although the product was distributed nationwide to thousands of infants without complication, two dozen infants died or became ill following their consumption of formula containing this agent.  Their families alleged that consumption of the formula is what caused the injuries, although that was disputed by the various defendants.  In the coverage action, the underlying insurance carrier alleged that the two dozen claims all arose out of a single "occurrence," triggering only a single "per occurrence" limit in one policy period.  Our argument, which was joined by the other parties, is that there were at least two occurrences in each policy period, triggering a higher aggregate limit, and that separate occurrences took place in each of the multiple policy periods at issue.  Several other coverage issues remain pending in the case.  Although the underlying insurance carrier attempted to pursue an interlocutory appeal, it has since withdrawn that motion.
  
Carli Clowers won a Motion for Summary Judgment in the case of Clift v. Schmaltz.  Plaintiff was a passenger in a car driven by our client when it was struck by the co-Defendant as the co-Defendant was backing out of his driveway.  At issue was whether Plaintiff met her prima facie negligence claim against our client.  Prior to hearing, counsel for both Plaintiff and co-Defendant admitted there were no grounds for liability against our client, and the Court granted our Motion for Summary Judgment.     
 
Scott Tyler and Tricia Hofmann presented an in-house seminar for Westfield Insurance Company in the fall, addressing primarily changes in Indiana's UM/UIM case law, as well as some premises liability-related issues applicable to both Indiana and Kentucky. Carli Clowers provided valuable assistance in preparing the Kentucky materials, while Tricia prepared those applying to Indiana law.      
 
Legal Updates
   
Underinsured Motorists Coverage
 
In our past newsletters, we have reported on several recent cases which have shifted the landscape of uninsured and underinsured motorist coverage. See our Summer 2012 newsletter, which discussed Masten v. AMCO Insurance Company, 953 N.E.2d 566 (Ind. Ct. App. 2011), and Lakes v. Grange Mutual Casualty Company, 964 N.E.2d 796 (Ind. 2012). The Supreme Court has since ruled on whether and to what extent a UIM carrier may take a credit or set-off for worker’s compensation payments in Justice v. American Family Mutual Insurance Company, 4 N.E.3d 1171 (Ind. 2014).
 
While in the course and scope of his employment, Justice was injured in a two-car accident caused by Wagner. Wagner’s insurance coverage had per-person liability limits of $25,000, which were tendered to Justice. In addition, Justice pursued a worker’s compensation with his employer’s compensation insurer. The sum of $77,469.56 was paid to Plaintiff or on his behalf in worker’s compensation benefits; by agreement, the ensuing worker’s compensation lien was reduced to approximately $5,000, leaving Justice’s net recovery on the worker’s compensation claim around $72,000. Justice also had his own insurance policy through American Family, which contained UIM coverage with per-person limits of $50,000. Justice conceded that American Family would be entitled to a set-off for Wagner’s payment, reducing the UIM exposure to $25,000, and demanded that amount. American Family denied Justice’s UIM claim, arguing that it was also entitled to a set-off for the worker’s compensation payments. Because the combined payments equaled or exceeded $50,000, there was a full set-off, and Justice was not entitled to anything further from American Family. This decision was based in part on language in the insurance policy which provided that “[t]he limits of liability of this coverage will be reduced by . . . [a] payment made or amount payable because of bodily injury under any workers’ compensation or disability benefits law or any similar law.”
 
After rulings favorable to American Family, the case ultimately reached the Indiana Supreme Court. The main thrust of Justice’s argument was that the worker’s compensation limitation was ambiguous, and that any set-off for worker’s compensation payments must be taken against the Plaintiff’s total damages, not against the UIM coverage limits. Since Justice’s damages were considerably higher than the $50,000 coverage limits, there would still be UIM coverage available. The Supreme Court rejected this argument based on the clarity of the clause prefacing the worker’s compensation limitation, which expressly indicated that reductions would be made from “[t]he limits of liability of this coverage.” This language is not ambiguous, and set-offs are to be taken from the American Family coverage limits, not from total damages. (As an aside, we note that a number of insurance companies have language which does not expressly provide a reduction from limits, and expect that Indiana courts would find set-offs in such circumstances to be assessed against damages.)
 
Having rejected Justice’s argument, the Court conducted a separate inquiry which was not raised by the parties – whether the worker’s compensation limitation violates public policy. It concluded that permitting a set-off under the facts of this particular case would violate Indiana public policy, as it would reduce Justice’s UIM coverage below Indiana’s $50,000 statutory minimum for such coverage. If American Family was permitted to reduce the UIM limits by the amount received by the claimant in workers’ compensation benefits, it would not be providing Justice the statutorily-required minimum amount.  Accordingly, the Court held American Family could reduce the underinsured limits by the $25,000 Justice received from Wagner, but not beyond that amount.  Justice was, under the Court’s analysis, entitled to recover $25,000 – the difference between Wagner’s liability limits and his own underinsured limits.
 
We have some concerns about the holding in Justice. Quite simply, Justice did receive an amount greater than the statutory minimum of $50,000. He received over $97,000 – the $25,000 from Wagner and the approximately $72,000 worker’s compensation net recovery. There was no remaining worker’s compensation lien which would have to be satisfied. The entire net recovery was for Justice’s benefit. Accordingly, even without any payment from American Family, the compensation Justice received exceeded the statutory minimum.
 
We are also troubled by two specific comments contained in the Court’s opinion that may foreshadow its future direction in these cases. First, it indicated that it believes the legislature intends to give insureds “the opportunity for full compensation for injuries” instead of the familiar understanding that the law was intended to put insureds “in the same position they would have been had the tortfeasor complied with our financial responsibility law.” This suggests that Indiana is well on its way to becoming a “make whole” state, contrary to past Indiana law.   Second, it unnecessarily made the following comment: “since the statute was enacted, insurers have tried to circumvent its minimum coverage requirement in various ways – but always unsuccessfully.” 
 
Of further concern, we do not believe there is anything in the opinion that would preclude it from being applied equally to other types of compensation payments to or on behalf of an insured, i.e., MPC or PIP payments.
 
 
Auto Liability
 
In Weist v. Dawn and State Farm Ins. Co., 2 N.E.3d 65 (Ind. Ct. App. 2014), the Indiana Court of Appeals was asked to revisit Indiana's "direct action" rule, as well as to determine whether the conduct of an insurance company extended the tort statute of limitation.  Dawn, a State Farm insured, struck Weist as he crossed the street. A State Farm claims representative called Weist and told him Dawn admitted liability, and that Weist was entitled to damages for lost wages, pain and suffering, and medical bills. Over the course of several months, Weist and the representative periodically communicated, and Weist continued treating for his injuries. Weist was not represented by counsel at the time.
 
Approximately one year and nine months after the accident, Weist made a formal settlement demand to State Farm. The letter quoted an attorney form letter he found on the internet, and advised that if settlement was not reached before the “statute of limitations expires on Sept 1, 2012,” he would pursue legal action. After receiving the letter, the representative requested documentation to support Weist’s lost wages claim, and told Weist she would attempt to complete her valuation of the case before the statute expired. State Farm subsequently denied the claim, after the statute had lapsed. Weist filed suit against both Dawn and State Farm two and one half months after the statute expired, and both defendants filed motions for summary judgment. The trial court granted those motions, and Weist appealed.
 
There were two issues in the case on appeal: 1) whether Indiana’s “direct action rule” prevented Weist from bringing a claim directly against State Farm; and 2) whether the communications between Weist and the State Farm representative precluded a statute-of-limitation defense.
 
The Court of Appeals noted that, while Indiana recognizes the direct action rule which prevents plaintiffs from suing an alleged tortfeasor’s insurer, there is one limited exception. A plaintiff may bring an action against the tortfeasor’s insurer if the suit “seeks declaration of the insurer’s responsibilities should the allegations against the tortfeasor prove true.” The exception did not apply because Weist was not seeking declaratory relief. To the contrary, he sought to recover damages from State Farm. Such an action is not permissible under Indiana law, and the dismissal of State Farm as a party was upheld.
 
With respect to the second issue, the Court applied a two-step analysis to determine whether equitable estoppel would apply to preclude a statute-of-limitation defense. In the first step, it inquired whether the insurer a) made a promise to settle; b) discouraged the claimant from filing suit; c) discouraged the claimant from seeking counsel; or d) engaged in otherwise egregious conduct. Finding the answer to the first step to be “yes”, it proceeded to step two:  determining whether the totality of the circumstances reasonably induced the claimant not to file timely action. The Court concluded that because State Farm’s representative allegedly told Weist “he was entitled to damages,” and “his claim would be settled” once he completed treating and submitted his bills and lost wage documentation, there was a question of fact whether equitable estoppel would apply. As such, summary judgment for Dawn was error. 
 
 
Premises Liability
 
 
In Mohr v. Virginia B. Smith Revocable Trust, 2 N.E.3d 50 (Ind. Ct. App. 2014), the Indiana Court of Appeals was asked to determine whether Plaintiffs were invitees or licensees at the time they were injured as they sat on a hammock on the Defendant’s property. The Plaintiffs entered Defendant’s lake-side property, which had a hammock strung between two trees. When they sat down, one of those two trees gave way and fell on Plaintiffs. One of the Plaintiffs died and the other was seriously injured. They sued the property owner, claiming that the property was generally open to the public, which made them invitees. Invitees, under Indiana law, are entitled to the greatest protection of any of the three categories used in premises liability law – invitees, licensees and trespassers. The trial court granted summary judgment for the landowner, finding that the Plaintiffs – at best – were licensees.
 
 The Court of Appeals affirmed, explaining that even though the owner allowed people to use her hammock, the mere act of hanging it near a lake did not constitute an open invitation to the general public to do so.  "Although [the owner] was aware that members of the public would occasionally enter her property to view or access the lake, [she] did not invite the public to enter her land.  Nothing in the record suggests that [she] desired, induced, encouraged, or expected the public to enter her property.  She merely permitted the public to occasionally enter her land, so long as they did not cause any trouble."
 
Consequently, the trial court's classification of the Plaintiffs as licensees was correct, and Defendant's only duty to them was to warn them of latent dangers of which she was aware.  Since there was no evidence to suggest that Defendant knew the tree was defective, summary judgment was proper.