The Rise and Fall of Personal Injury Law in Ohio by Steven P. Collier

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1 The Rise and Fall of Personal Injury Law in Ohio by Steven P. Collier You have to start somewhere so why not September 23, 1970? Woodstock and the summer of love had already passed. Neil Young had paid homage to the Kent State shootings with Four Dead in Ohio. And the Supreme Court of Ohio unanimously declared, In a tort action, the measure of damages is that which will compensate and make the plaintiff whole. Pryor v. Webber (1970), 23 Ohio St.2d 104, paragraph one of the syllabus. Moreover, a majority of the justices established the collateral source rule to ensure the concept of making the plaintiff whole was achieved. The rule precluded the introduction of evidence of compensation from collateral sources (e.g., wage reimbursement from employer) to diminish damages for which a tortfeasor must pay for a negligent act. This decision marked the beginning of a 30-year period of justice for injured tort victims in Ohio. The 1970 s continued to benefit Ohio tort victims. Prior to 1975, Ohio s guest statute (R.C ) generally prohibited a passenger in a motor vehicle from bringing a lawsuit against the negligent driver of a motor vehicle when there was not payment made for the transportation provided. In Primes v. Tyler (1975), 43 Ohio St.2d 195, the Court found this statute violated multiple constitutional provisions, including: (a) Section 2, Article I of the Ohio Constitution, because it denied equal protection and benefit of the law; (b) Section 16, Article I of the Ohio Constitution, because it denied a remedy by due course of law; and (c) the Fourteenth Amendment to the United States Constitution because it denied due process of law and equal protection to the people of the state of Ohio. The Court reasoned that the legislative fear of spurious claims did not justify a blanket exclusion of all claims by non-paying passengers. In the same year, the General Assembly created the Ohio Court of Claims pursuant to R.C , allowing certain claims against the state which previously were prohibited by sovereign immunity. Two years later, in Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, the Ohio Supreme Court expanded product-liability law in Ohio by formally adopting Section 402(A) of the Restatement of Torts 2d. By doing so, the Court imposed strict liability upon the seller of a unreasonably-dangerous product if the seller was engaged in the business of selling such a product and the product reached the consumer without substantial change in the condition in which it was sold. Thus, the focus shifted from the conduct of the manufacturer or distributor of the product, to whether the product itself was defective, either in design or manufacture. The beginning of the 1980 s ushered in perhaps the most significant expansion of tort law in Ohio. The absolute bar imposed by the contributory-negligence defense was addressed by the comparative-negligence statute, which became law on June 20, 1980, R.C As a result, a plaintiff who was found to be 1% at fault was no longer precluded from recovering from the tortfeasor. Instead, the statute allowed such a claim unless the plaintiff was more than 50% at fault. A few years later in 1983, in Anderson v. Ceccardi (1983), 6 Ohio St.3d 110, the Court

2 determined that the defense of assumption of the risk merged with the defense of contributory negligence and was thus no longer an absolute bar to a plaintiff s claim for recovery. New torts are not often created. However, that is what occurred in 1982 in Blankenship v. Cincinnati Milacron Chems. (1982), 69 Ohio St.2d 608, when the Court determined that an Ohio worker could sue the employer for damages outside the workers compensation system. This intentional tort claim against the employer required proof of more than just negligence, and a three-prong test developed in the case law over the ensuing years. If an employee could prove that (1) they were injured when working in an unreasonably dangerous condition, (2) they were required to work under that condition, and (3) working under that condition was substantially certain to cause great risk or harm to the worker, they could recover the typical damages in a tort case. The General Assembly was also at work in 1982, amending the wrongful-death statute to allow for compensation for non-economic losses. (R.C ). Prior to this change, the death of the young and elderly were not recognized as a significant loss unless one could prove the beneficiaries were economically damaged. This more realistic acknowledgment of the harm that a wrongful death could cause greatly expanded the potential for recovery of compensable damages in a wrongful-death case in Ohio. This was particularly true because Section 19(A), Article I of the Ohio Constitution prohibited legislative restrictions upon wrongful-death damages. The next year, intra-spousal immunity was abrogated in Prem v. Cox (1983), 2 Ohio St.3d 149. Also, the discovery rule in medical-malpractice cases was adopted in Oliver v. Kaiser Community Health Found. (1983), 5 Ohio St.3d 111. Charitable immunity was eliminated the following year pursuant to Albritton v. Neighborhood Centers Assoc. for Child Dev. (1984), 12 Ohio St.3d 210. In 1994, it was determined that a hospital is liable for the negligence of a physician under the theory of agency by estoppel if certain elements of proof were met. Clark v. Southview Hosp. and Family Health Ctr. (1994), 68 Ohio St.3d 435. In a situation where the physician did not have adequate coverage, this theory allowed for recovery against the hospital by greatly enhancing the collectability of any potential judgment. Finally, in 1999, one could argue that the beginning of the end occurred with the decision of Scott-Pontzer v. Liberty Mut. Fire Ins. Co. (1999), 85 Ohio St.3d 660. Scott-Pontzer sent shock waves through the insurance industry even though the decision was a somewhat simplistic analysis of the term you, a ubiquitous term in most insurance policies. The Court determined that when an uninsured motorist endorsement identified you as the named insured, and you referred to a corporation, coverage must be extended to an employee of the corporation even if they were outside the course and scope of employment. Essentially, the Court determined that 2

3 employers acted through the individuals within the corporation, and that lead to a broad coverage interpretation. In Ezawa v. Yasuza Fire & Marine Ins. Co. of Am. (1999), 86 Ohio St.3d 557, decided later that year, the Court held that the resident relative of an employee of a corporate policyholder was also an insured for purposes of uninsured motorist coverage. The legislative effort to limit tort recovery actually preceded the Scott-Pontzer case with the passage of a comprehensive tort-reform bill that was to become effective on January 27, 1997 pursuant to the passage of House Bill 350. However, in State ex rel. Ohio Acad. of Trial Lawyers v. Sheward (1999), 86 Ohio St.3d 451, the entire bill was found to be a violation of the separation-of-powers doctrine and the single-subject rule, and was determined to be unconstitutional in its entirety. The next millennium began differently. Senate Bill 97 became effective on October 31, 2001, and it eliminated the mandatory offering of uninsured/underinsured motorist coverage in Ohio with limits equal to the liability insurance coverage provided. In every personal-injury case, there must be sufficient liability, damages, and collectability in order to make pursuing the case worthwhile. The issue of collectability was dealt a significant blow with elimination of the mandatory offering of UM/ UIM coverage. The tide of tort reform continued to rise with the passage of Senate Bill 120, which rewrote the law on joint and several liability, and the adoption of a workers compensation subrogation statute that would eventually be determined constitutional. (R.C and ). Both of these legislative enactments became effective April 9, Two days later, Senate Bill 281 became effective which was known as the comprehensive medical malpractice reform bill. It included the following: A cap for non-catastrophic injuries at either $250,000 or three times economic damages to a maximum of $350,000 per plaintiff and a maximum of $500,000 per occurrence. These maximums increase to $500,000 per plaintiff and $1,000,000 per occurrence if the plaintiff suffered a permanent and substantial physical deformity, loss of use of a limb, loss of a bodily organ system, or permanent or physical injury that prevents self care; A provision allowing future damages to be made in periodic payments; Establishment of a four-year statute of repose. 3

4 By this time, the Supreme Court had closed the door on Scott-Pontzer by deciding that only those parties to the contract acting within the course and scope of their employment would be covered by uninsured-motorist coverage issued in corporate policies. Westfield Ins. Co. v. Galatis (2003), 100 Ohio St.3d 216. Significant legislative and judicial limitations continued through each year of the first decade of the new century. In 2004, the Ohio Supreme Court determined that insurance companies could put subrogation language in their policy to eliminate the make-whole doctrine. N. Buckeye Educ. Council Group Health Benefits Plan v. Lawson (2004), 103 Ohio St.3d 188. This effectively allowed insurance companies to pay medical bills related to the accident and recover dollar-for-dollar from a third-party tortfeasor the bills that had been paid by the insurer, even if it meant their insured would not have anything left over to pay any other aspect of damages. On April 7, 2005, House Bill 498 became effective, requiring an employee to prove that the employer deliberately intended to injure the plaintiff in intentional tort against employer cases. Thus, the tort that was created in Blankenship in 1982 was severely limited. April 7, 2005 also resulted in Senate Bill 80 becoming effective, establishing a comprehensive set of tort-reform measures for general tort cases in Ohio. The provisions include the following: A cap on non-economic damages of $250,000 (or three times economic loss, up to $350,000, with a $500,000 limit per occurrence). This cap is eliminated where a plaintiff suffered a permanent and substantial physical deformity, loss of use of a limb, loss of a bodily organ system, or permanent or physical injury that prevents self care; A cap on punitive damages at $350,000 for those who employ fewer than 100 employees; Elimination of the consumer expectation cap as means of approving defect in product liability cases; Establishment of a 10-year statute of repose for product-liability claims and improvements to real property; Additional hurdles to proving punitive damages. Ohio Civ.R. 10(D)(2) became effective July 1, 2005, requiring an affidavit of merit by a qualified expert in order to file a medical-malpractice case. This affidavit of merit requirement is unique to medical-liability claims. There is a provision in the rule allowing for a request for additional time to file the affidavit. 4

5 In 2005, the Supreme Court of Ohio decided Comer v. Risko (2005), 106 Ohio St.3d 185, and the potential impact of this case has still not been fully realized. Prior to Comer, it was established law that an injured plaintiff could sue the hospital or the hospital s agent, servant or employee and the hospital could still be held liable under the vicarious-liability or respondeatsuperior theory. However, in Comer, the Court held that an independent-contractor physician who was not named as a defendant in a medical-malpractice case against a hospital prevented the hospital from being liable, as the hospital could only be liable through its agent. The Court determined that a hospital itself cannot commit medical malpractice but it can only do so through its agents, servants or employees. Another potential hurdle to medical-malpractice recovery was fashioned by Theobald v. Univ. of Cincinnati (2006), 111 Ohio St.3d 541. In Theobald, the Court found that doctors who are state employees are personally immune from suit if their duties include teaching medical students and they were doing so at the time of the malpractice. The determination as to whether a doctor is a state employee acting in furtherance of the state is initially made in the Ohio Court of Claims. Id. at 547; see also State ex rel. Sawicki v. Lucas County Court of Common Pleas (2010), 126 Ohio St. 3d 198. The expansive definition of working in furtherance of the state in Theobald increases the number of situations in which doctors may be afforded immunity. Further, if the determination is not timely made or it is unknown whether a state actor was involved, the one-year statute of limitations could be easily missed, either by not timely filing or filing in the wrong court. Next, the collateral-source rule that existed relatively unscathed for 36 years was effectively eliminated by Robinson v. Bates (2006), 112 Ohio St.3d 17, when the Court allowed the introduction of write-offs by a health-insurance company for medical bills in a tort case as evidence of the reasonable cost of medical treatment. This decision was affirmed and expanded upon in the case Jaques v. Manton (2010), 125 Ohio St.3d 342. In 2007, the Supreme Court of Ohio, in Arbino v. Johnson & Johnson (2007), 116 Ohio St.3d 468, upheld the constitutionality of the damages cap in general tort cases in Senate Bill 80. The end of the decade did not offer any relief, as the Court in Snyder v. Am. Family Ins. Co. (2007), 114 Ohio St.3d 239, determined that in a negligence action where the tortfeasor is immune pursuant to political-subdivision tort liability, the insurer could escape uninsured motorist liability by including language in the policy defining uninsured motorist coverage not to include this situation even though it would be in conflict with R.C (B)(5). In Groch v. General Motors Corp. (2008), 117 Ohio St.3d 192, the Court also upheld the constitutionality of the statute of repose in product-liability cases that was established in Senate Bill 80. 5

6 In Nat l Union Fire Ins. Co. of Pittsburgh, PA v. Wuerth (2009), 122 Ohio St.3d 594, the principle that hospitals could not commit malpractice was extended to law firms, giving hope to hospitals that Comer may have a life beyond the facts of the case. Similarly in 2010, Kaminski v. Metal & Wire Prods. Co. (2010), 125 Ohio St.3d 250, resulted in a determination that Senate Bill 498 s rewriting of the employer-intentional-tort statute was constitutional even though it required proof of deliberate intent. Finally, to round out 2010, the Court in Erwin v. Bryan (2010), 125 Ohio St.3d 519, limited the use of John Doe defendants and the relation-back provision of Civ.R. 15(D) if the identity of the defendant doctor was known, even though it was not determined that there was alleged malpractice by the doctor until after the statute of limitations expired. So where do we go from here? The good thing about change through case law is that it happens slowly. The bad thing about change through case law is that it happens slowly. However, some steps could be taken by the courts and the legislature to address inequities in the current law and provide clarity and predictability for those affected by tort law. I propose the following suggestions: 1. The General Assembly should pass a fair subrogation and right-of-reimbursement statute taking into account that an injured tort victim should not have to pay 100% of the medical bills paid by an insurer back to the insurer, particularly when there is insufficient insurance coverage to make the victim whole and/or significant litigation fees and expenses were incurred. 2. The courts should clarify that vicarious liability/respondeat superior is still intact in Ohio and the agent, servant, or employee need not be named as a party in order to maintain a tort action against the principal, master, or employer. 3. The General Assembly should enact a provision for medical-malpractice cases as it has in general tort cases allowing for the caps on non-economic loss to be completely eliminated if there is sufficient proof of the severity of the injury. 4. A task force should be appointed to consider changes to Ohio Civil Rule 15 to allow for the effective use of John Doe defendants taking into account the difficulty of identifying the true identity of culpable defendants in a relatively short time frame. 5. The General Assembly should change the uninsured/underinsured motorist statute to prevent this coverage from being so easily eliminated through policy exclusions. 6. The problems with Theobald should be addressed to prevent the statute of limitations from running if it is later determined that the defendant doctor is, or is 6

7 not, a state actor. Filing in either the Court of Claims or a Court of Common Pleas should be sufficient to toll the statute of limitations. Other changes could also be made to more narrowly define what activity is considered acting in furtherance of the state s interests. 7. The General Assembly should increase the minimum financial responsibility limits for motorists in Ohio. The current minimum of $12,500 for an individual for bodily-injury liability was established in 1969 and an increase is long overdue. 8. The General Assembly should amend the statute allowing 180-day letters to be sent in medical-malpractice cases extending the statute of limitations so that certified-mail delivery to the address that the physician listed with the Ohio State Medical Board is considered sufficient service. 9. The General Assembly should enact a clearer process for determining the reasonable costs of medical services in general tort cases and medical-malpractice cases. 10. The statute of limitations in various cases should be reviewed along with the statute of repose in medical-malpractice cases. It has never made much sense that a person who is in a motor-vehicle accident generally has two years to file a lawsuit and a person who is the victim of medical-malpractice generally has one year to file. The person in the motor-vehicle accident clearly knows they were in the accident and the medical-malpractice victim may believe they just had a bad result. Additionally, it is only the medical-malpractice case that requires an affidavit in support by a qualified expert in order to file. A common sense approach to reviewing various statutes of limitations by a joint commission perhaps could lead to a fairer result and more predictability. While the above changes may not make the plaintiff whole as was the goal in 1970, it would at least assist in restoring some balance in the civil justice system in Ohio. 7

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