Arent Fox LLP Survey of Damage Laws of the 50 States including the District of Columbia and Puerto Rico Insurance & Reinsurance Elliott M. Kroll Practice Group James M. Westerlind Arent Fox LLP Survey of Damage Laws of the 50 States including the District of Columbia and Puerto Rico by Elliott M. Kroll and James M. Westerlind Copyright © 2012 Arent Fox LLP. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the written permission of Arent Fox LLP. Published by Arent Fox LLP 1050 Connecticut Avenue, NW Washington, DC 20036 Designed by Arent Fox LLP. Printed in the United States of America. ARENT FOX LLP washington, dc / new york / los angeles / arentfox.com Introduction Arent Fox LLP Survey of Damage Laws of the 50 States including the District of Columbia and Puerto Rico October 2011 We are pleased to share with you the Arent Fox LLP Survey of Damage Laws of the 50 States including the District of Columbia and Puerto Rico. Tort and business-related litigation is a fact of life for companies in the United States. Companies are under assault from employment-related suits, intellectual property suits, product liability suits, environmental claims and a host of tort and contract litigation. Tort reform is a frequent topic of legislative discussion, but it does little to limit the creativity of the plaintiffs’ bar. Businesses need to be able to operate with reasonable certainty concerning the nature and magnitude of the risks that they face. Our objective in this Survey is to provide guidance on some of these issues in a readily useable format. We also like to note that our partner Martin Cuniff has co-edited the authoritative text, Calculating and Proving Damages. In a prologue to this Suvery, Mr. Cuniff provides insights on Medical Monitoring. We hope that you find this book useful. Elliott M. Kroll Partner Chair, Insurance & Reinsurance Group Arent Fox LLP James M. Westerlind Associate Insurance & Reinsurance Arent Fox LLP ARENT FOX LLP survey of damage laws | i Introduction About the Authors Elliott M. Kroll represents clients nationally and internationally in all major areas of the insurance industry spanning the life and non-life areas including property and casualty, aviation/space, accident and health. In addition, he has in-depth experience with premium financing, captives, financial and structured reinsurance transactions and regulatory representation. Elliott has served as an officer and director for several major insurers and reinsurers and currently is corporate secretary and general counsel for a New York company. He has significant experience in the financial reinsurance arena and is intimately familiar with regulatory, tax and commercial components of complex insurance and reinsurance transactions and handling mergers and acquisitions. His practice includes the formation of insurers including protected cell captives, commutations, offshore captive arrangements, assumption- novation transactions, representation of agents and brokers, intermediaries, internal investigations, compliance and records retention protocols. Elliott M. Kroll In his 35 years of practice, Elliott has served as lead counsel in over Partner 100 reinsurance disputes including some of the most significant Chair, Insurance & Reinsurance industry issues. Prior reinsurance arbitration and litigation Arent Fox LLP experience has included insolvency issues, asbestos/environmental allocation and disputes involving managing agents and brokers. James’ practice focuses primarily on resolving insurance and reinsurance disputes. He also concentrates on legal issues relating to insurance and reinsurance coverage for policyholders and carriers and regulatory work for domestic, foreign and alien companies, including captives, brokers, agents and MGAs. James has substantial litigation experience in both state and federal trial courts within and outside of New York, representing plaintiffs and defendants in insurance and non-insurance disputes. In addition to insurance litigation, he has defended a number of prominent US companies in product liability actions involving allegations of serious bodily injuries, property damage and death claims. He has also defended toxic tort cases. James has represented both plaintiffs and defendants in a number of heated lawsuits involving allegations of fraud and wrongdoing, applications for emergency relief and evidentiary hearings for emergent relief and contempt motions. James has also taken the lead in a number of appeals James M. Westerlind in the New York State Supreme Court, Second Judicial Associate Department, and the Second and Eleventh Circuits. Arent Fox LLP James’ current focus is litigating matters in the emerging regulatory landscape of life settlements in the insurance industry, typically representing investors and secured lenders in disputes with life insurance companies over the validity of the subject life insurance policy(ies). In addition, he has devoted a substantial portion of his time to pro bono matters, including not-for-profit public interest endeavors and Family Court litigation. ARENT FOX LLP survey of damage laws | ii Table of Contents Contents Introduction i Maine 115 Rhode Island 243 Prologue iv Maryland 121 South Carolina 249 Alabama 1 Massachusetts 129 South Dakota 255 Alaska 7 Michigan 135 Tennessee 261 Arizona 13 Minnesota 141 Texas 267 Arkansas 19 Mississippi 147 Utah 275 California 25 Missouri 153 Vermont 281 Colorado 31 Montana 159 Virginia 285 Connecticut 37 Nebraska 165 Washington 291 Delaware 43 Nevada 173 West Virginia 297 District of Columbia 49 New Hampshire 179 Wisconsin 303 Florida 55 New Jersey 185 Wyoming 309 Georgia 61 New Mexico 191 Notes 315 Hawaii 67 New York 197 Idaho 73 North Carolina 203 Illinois 79 North Dakota 209 Indiana 85 Ohio 215 Iowa 91 Oklahoma 221 Kansas 97 Oregon 227 Kentucky 103 Pennsylvania 233 Louisiana 109 Puerto Rico 237 ARENT FOX LLP survey of damage laws | iii Prologue Developments in Damages: Medical Monitoring by Martin Cunniff1 Over the past several decades, a nontraditional remedy has emerged to Partner address plaintiffs whose injuries are latent but may manifest over the Arent Fox LLP long term. This remedy, known as medical monitoring, compensates plaintiffs for medical expenses they incur over time to periodically monitor their health for conditions that may develop as a result of a defendant’s conduct. It contrasts with the traditional rule which is that medical expenses are recoverable only when immediate, recognizable injury is present. Damages for medical monitoring, also called medical surveillance, have been recognized in an increasing number of states as an avenue for plaintiffs to recover damages for medical expenses. The cause of action grew out of asbestos litigation, which in the mid-1980s, began to see claims for emotional distress after asbestos exposure based on a fear of developing lung cancer, a type of cancer closely related to asbestos exposure. There were also asbestos-related claims to recover damages based on the increased probability that a plaintiff would develop lung cancer later in life. These claims eventually morphed into what we now consider damages for future medical monitoring. By definition, these claims are awarded solely to cover the cost of medical expenses incurred for periodic monitoring in order to detect any future manifestation of injury caused by previous exposure. Awarding damages for medical monitoring is often more palpable to courts than the previous asbestos-related iterations of these claims because a monetary award for doctors visits to run diagnostic tests is more concrete than an amorphous monetary award for the probability that a plaintiff may develop cancer twenty, thirty, or forty years down the road. A plaintiff who develops cancer or another illness later in life after previously being awarded damages for medical monitoring could be barred from further recovery by operation of the single controversy rule. This rule typically precludes plaintiffs from getting a second bite at the apple. However, some courts are bending the rule in these types of cases by not preemptively excluding the possibility of additional litigation if an illness later develops.2 Courts reason that imposition of the rule under these circumstances is illogical because it would “act as a deterrent to persons seeking early detection of catastrophic disease, and it would expose both plaintiffs and defendants to far more serious consequences should the disease later manifest itself in an advanced stage.”3 Medical monitoring claims are most commonly brought in environmental and toxic tort cases. For example, in Maryland, two separate juries recently awarded damages against Exxon Mobil, in part, for medical monitoring. In both cases, an underground gasoline tank at an Exxon Mobil station leaked gasoline, undetected, for 37 days into the plaintiffs’ groundwater wells, contaminating their drinking water. The jury in the first trial awarded the plaintiffs $150 million in compensatory damages, while the second jury awarded $495 [??] in compensatory damages, and $1 billion in punitive damages. Because the Maryland appellate courts have not yet addressed the issue of medical monitoring,4 Exxon Mobil is appealling the issue of whether Maryland law permits damages for medical monitoring. The first case, Exxon Mobil Corp. v. Ford, et al., is currently pending, en banc, before