Subrogation & Recovery Law Blog : Insurance Subrogation Lawyer & Attorney : Cozen O'Connor Law Firm : Property Damage & Insurance Commentary

When to draft an expert report is an area of disagreement amongst subrogation professionals, attorneys and experts. Typically the attorney will request that an expert wait to draft a report until discovery is complete and the deadline to designate testifying experts is on the horizon. Conversely, most adjusters ask for a report as soon as possible in order to finalize the claim. Luckily, the recent changes to the Federal Rules of Civil Procedure helps both the subrogation professional and adjuster achieve their goals.

In 2011, Rule 26(b)(4) (expert disclosures) was amended to “protect drafts of any report or disclosure required under Rule 26(a)(2), regardless of the form in which the draft is recorded.” Originally, drafts of an expert’s report were discoverable when the testifying expert was disclosed. The expert had one chance to draft a complete report. Any changes to the report that were suggested by counsel, however mundane, subjected the expert to a scathing cross-examination and an inference that the lawyer was telling the expert what to say. Now, all drafts are protected from disclosure by the work-product privilege. This permits the lawyer to work with the expert to craft a thorough report and avoid incomplete or lazy report writing that may provide opposing counsel the necessary ammunition to damage a case.

But the question is--what is a draft and what is a final report? Because the rule was only recently amended, the case law interpreting the rule has not yet developed. The only decision thus far is out of the Western District of Louisiana. Magistrate Judge Mark Hornsby denied the plaintiff’s request for a report that was drafted 5 months before counsel was retained and the lawsuit was filed. See Greenwood 950, LLC v. Chesapeake Louisiana, LP 2011 WL 1234735 (W.D. La). The opinion is unpublished and carries no precedential value, however, it may provide guidance to other district judges and magistrates that are confronted with this issue.

The Advisory Committee to the rule amendment noted that the work-product privilege was extended to draft reports because unlimited access to expert discovery has “had undesirable effects.” 2010 Notes of Advisory Committee ¶ 2. The Advisory Committee specifically noted that the changes to the rule were due to rising costs under the old rule and the old rule hindered the free exchange of information between the attorney and expert. Id. The notes from the Advisory Committee imply that the rule should be interpreted broadly. A court will likely consider whether the report was drafted in anticipation of litigation and when counsel was retained. Determining what is a draft report and what is a final report is yet to be settled, but we will be closely monitoring any new developments.

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Over the last several years, the insurance industry has experienced significant losses due to wildfires. In many instances, the wildfires resulted from the carelessness of a camper, or the criminal conduct of an arsonist. Wildfires have also been caused by damaged power lines, or fallen utility poles.

One other potential cause of large-scale wildfires involves situations where containment of a "prescribed" or "controlled" burn is lost. Although the terms are generally used interchangeably, prescribed and controlled burns are actually different. A prescribed burn is a fire set under specific weather conditions and with sufficient personnel and suppression equipment to achieve certain land management objectives. When utilized properly, a prescribed burn can enrich soil by adding nutrients and making the plant community healthy again. Conversely, a controlled burn is a fire set without specified weather conditions or vegetation management objectives. Common examples of controlled burns include burning brush piles or large quantities of trash.

Because of the inherent risk of either type of burn escaping, most states have enacted statutes governing liability for damages caused by an escaped fire. Many of the statutes actually recognize the importance of prescribed fires for wildfire risk mitigation, and provide specific instructions for ensuring that the burn is completed in a safe manner. Many of the statutes also have detailed procedures for notifying neighbors, applicable state agencies and local fire authorities before a burn is conducted.

In general, most states with prescribed burn statutes generally fall into one of two categories: those which follow the negligence rule, or those which adhere to a strict liability approach. For those states adhering to the negligence rule (and the vast majority do), it is necessary to show that the individual conducting the burn was negligent or failed to exercise the requisite degree of care to impose liability. Typical examples of acts and omissions that may constitute negligence include failing to properly utilize fireguards or barriers during the burn, attempting to burn at inopportune times, or failing to develop and follow a prescribed burn management plan ("PBMP").

Only four states (Connecticut, North Dakota, New Hampshire and Oklahoma) adhere to a strict-liability approach for prescribed burns. In general, those states impose liability on the landowner and/or individual responsible for the burn for damage from an escaped fire regardless of his or her efforts to safely implement or control the burn. For example, the prescribed burn statute in Oklahoma specifically imposes liability on the landowner who owns the land where the fire originated for actual damages sustained by third-parties. Essentially, if a fire escapes, negligence is assumed and the only remaining issue to determine is the amount of actual damages sustained by third-parties. Interestingly, research has shown that the frequency of escaped prescribed fires tends to be lower in those states with more stringent prescribed burn statutes.

If confronted with damages caused by a prescribed burn, it is essential to determine whether the state where the burn occurred has a specific prescribed fire law. When reviewing the statute, particular notice should be paid to whether notification requirements and/or prescribed burn procedures were followed. It should also be determined whether the state follows the negligence rule or adheres to a strict-liability approach. For those states that adhere to the strict liability approach, there will typically be statutory language

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In a recent opinion filed by the United States Court of Appeals for the Third Circuit in Liggon-Redding v. Sugarman, the Third Circuit decided that Pennsylvania Rule of Civil Procedure 1042.3, requiring the filing of a certificate of merit in malpractice cases, is substantive law that federal courts must apply under Erie v. Tompkins, 304 U.S. 64 (1938). Prior to the Third Circuit’s decision, several federal district courts had held that Rule 1042.3 is a substantive rule of law that applies in professional liability actions proceeding in federal court. The Third Circuit has now conclusively decided this issue in Pennsylvania.

Although the Third Circuit’s opinion involved a legal malpractice case against an attorney, Rule 1042.3 applies to claims against any licensed professional, including architects and engineers. Several other states, including Arizona, California, Colorado, Georgia, Maryland, Minnesota, Nevada, New Jersey, Oregon, Pennsylvania, and Texas, have enacted similar laws that require a plaintiff to file a certificate or affidavit from a third-party design professional declaring that the plaintiff’s claim against an architect or engineer has merit. The general purpose of such laws is to provide a basis for the trial court to conclude that the plaintiff’s claims have merit and to prevent needless waste of judicial time and resources which would otherwise be spent on claims that have no material basis or justification in fact or in law.

Malpractice or negligence claims against architects and engineers that seek recovery for property damages caused by design defects can be brought in or removed to federal court if there is diversity of citizenship between the parties and the amount in controversy exceeds $75,000. Pursuant to the United States Supreme Court’s decision in Erie v. Tompkins, a federal court sitting in diversity must apply state substantive law and federal procedural law. Since certificate of merit laws have been enacted by states, federal courts must determine whether a certificate of merit law is substantive or procedural. As noted above, the Third Circuit recently concluded that Pennsylvania’s certificate of merit law is substantive state law. Therefore, a plaintiff must comply with Pennsylvania’s certificate of merit law when filing a lawsuit against an architect or engineer in a federal district court in Pennsylvania.

Not all certificate of merit laws are written the same and the filing requirements, including the deadline to file the certificate, may vary depending on the state, so not all of the Third Circuit’s reasoning in Liggon-Redding v. Sugarman will be applicable in other states. Prior to this most recent opinion, the Third Circuit had previously determined that the New Jersey certificate of merit law is substantive state law that plaintiffs in diversity cases must comply with. On the other hand, federal district courts in Georgia have found that Georgia’s certificate of merit law is not applicable to actions filed in federal court, but the Eleventh Circuit has declined to decide the issue. Similarly, the Fifth Circuit has not determined whether Texas’ certificate of merit law is substantive or procedural, but at least one federal district court has determined that it is a procedural rule that does not apply in a federal diversity case, while other courts have assumed, without examination or explanation, that Texas’ certificate of merit law applies in a federal diversity case.

When faced with a claim for property damage caused by a design defect, it is important to determine whether state law requires a certificate of merit when filing a lawsuit against a design professional. If you intend to pursue the claim in federal court, the prudent practice is to retain a third-party design professional to review the facts and circumstances surrounding the loss and comply with the requirements of the applicable certificate of merit law.

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A mobile crane collapse can cause devastating results in terms of production, property damage and personal injury. Despite the potential for significant costs, a mobile crane collapse can provide recovery opportunities depending upon the circumstances of the accident. The following is a summary of things to do and issues to consider to maximize your recovery potential for a crane collapse claim.

1. Secure the Scene
As with most subrogation investigations, maintaining the accident scene in its post-loss condition until the scene can be properly documented and photographed is critical. Experts need to examine the condition and location of the cranes after the accident, the site conditions and load configurations as they existed at the time of the accident.

2. Locate the Witnesses-Obtain Statements
As soon as possible after the accidents, identify and locate all of the witnesses who may have knowledge regarding the activities taking place at the time of the collapse. Construction workers are notorious for being transient if they don’t have any ties to the community. Critical witnesses may disappear shortly after the accident occurs. As soon as possible, obtain detailed recorded or written statements from all witnesses who may have relevant knowledge regarding the activities taking place at the time of the accident while memories are fresh. Be prepared to provide a qualified interpreter. Avoid using the witness’s supervisor as an interpreter if possible.

3. Establish Relationships and Responsibilities
The use of a mobile crane on a construction site involves significant coordination between the crane owner, crane operator, crane user and lift director. Establish these relationships as soon as possible. Determine whether the crane owner is providing the crane as a service to the user or renting the crane to the user. Determine whether the crane operator is an employee of the crane owner or crane user. Obtain copies of the relevant contracts to determine whether the user was required to insure the crane and whether the contract contains a waiver of subrogation between the crane owner and crane user. Determine whether the crane operator was properly trained and certified on the type of crane involved in the accident. Also identify the lift director and site supervisor. The duties, responsibilities and qualifications for crane operators, site supervisors and lift directors are discussed in ASME B30.5, Mobile and Locomotive Cranes.

4. Examine the Lift Plan – Was This a Critical Lift?
The most frequent causes of crane accidents include instability caused by overloading, operating the crane on a site that is too soft or not level and a lack of communication between the crane operator, signalman and lift director. All of these causes can be attributed to improper planning or not adhering to a properly prepared lift plan.
 

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