No homeowner coverage for cost to comply with new code

By Timothy J. Repass

The language in a homeowner’s insurance policy providing coverage for repairs of “similar” or “equivalent” construction is unambiguous and does not contemplate coverage for additional costs for repair needed to comply with applicable building codes. Division III of the Washington Court of Appeals so held in Allemand v. State Farm Ins. Co., no. 28954-1 (Div. III, March 3, 2011).

The Allemands' house suffered severe fire damage. The house did not comply with current building codes. As a result, the governing municipality would not issue permits for repairs to the fire damage to the home unless the building was brought up to code.

The Allemands had homeowner’s insurance coverage with State Farm. That policy provided coverage for costs to “repair or replace with similar construction.” The Allemands also bought optional coverage that provided for coverage of costs resulting from building code enforcement, up to 10 percent of the policy maximum. However, the Allemands argued that the general policy language was ambiguous and should be read to cover all costs, including costs to bring the building up to code, regardless of the 10 percent limit provided in the optional coverage.

The Allemands sued for declaratory judgment and attorney fees. The trial court ruled in their favor, awarding the Allemands $37,001 under the policy and ordering State Farm to pay their attorney fees. State Farm appealed.

The Court of Appeals reversed. The court held that the language of the insurance policy was clear and did not include payment for required building code upgrades aside from the optional coverage purchased by the homeowners.

The court based its decision on the “well settled rules” of insurance-policy construction that cases among the divisions of the Court of Appeals dealing with the issue had followed. Division I of the Court of Appeals had previously held that policy language providing coverage “for like construction” and defining replacement cost as repairs or replacement “with new materials of like kind and quality” did not mean costs for building code compliance.

Similarly, Division II of the Court of Appeals had previously held that a policy defining replacement cost in terms of “equivalent construction” meant the same as “like kind and quality” and did not cover costs to bring the building within code compliance.

In deciding Allemand, Division III distinguished one of its previous decisions. In that earlier case, Division III had found coverage under a policy that specifically provided for payment of damages “on the basis of any ordinance of law that regulates the construction, repair or demolition of this property.” But no such specific language was contained in the Allemands’ policy. Therefore, the Allemand court refused to apply its previous decision and instead followed the holdings of the cases in Divisions I and II that provided that coverage for “similar” construction did not include coverage for costs necessary to bring a building up to code.

Accordingly, although “the ultimate controlling language is that found in the policy,” Allemand now brings Division III in accord with Divisions I and II that policy language providing for “similar” construction is clear and unambiguous to limit coverage for necessary building code upgrades.

Malpractice expert may testify to standards in different specialty

By Janine E. Leary

A physician in one specialty may testify that a physician in another specialty committed medial malpractice, the Washington Court of Appeals held in a case that liberalizes proof of malpractice.

In Leaverton v. Conroy, No. 28846-3 (March 10, 2011), plaintiff Leaverton suffered from the enlargement of her thyroid, which required subtotal thyroidectomy or removal of part of her thyroid gland. Dr. Conroy, a board-certified general surgeon, performed the surgery. The procedure involved dissection of nerves in the larynx with the use of an electrocautery device. Thereafter, plaintiff had a high-pitched harsh sound during respirations, which was determined to have resulted from vocal cord damage. Plaintiff alleged that Conroy negligently performed the surgery by using the electrocautery device too close to her left laryngeal nerve.

In support of her case, Leaverton called two expert otolaryngologists, physicians who specialize in the treatment of the ears, nose, and throat. Each testified that Conroy used the electrocautery too close to the laryngeal nerve. However, neither would express an opinion as to the “standard of care” for general surgeons for this procedure, and in fact, neither expert had ever performed subtotal thyroidectomies. Conroy moved for summary judgment, arguing that Leaverton could not meet her burden through these experts that Conroy violated the standard of care of a general surgeon, as neither would offer such an opinion. The trial court agreed and dismissed the complaint.

The Court of Appeals reversed. The appellate court reaffirmed the rule that the testifying expert’s knowledge, and not his or her specialty, is the “threshold question” of whether the expert’s testimony is admissible. So long as the physician has “sufficient expertise” with the procedure at issue in the action, he or she may express opinions outside his area of specialty. The Court of Appeals found that it did not matter that neither of plaintiff’s experts was a general surgeon, as it is not the “specialty” that governs.

In considering whether the experts had “sufficient expertise,” the Leaverton court found immaterial that neither performed the surgery at issue in the case, a subtotal thyroidectomy. Since each expert had performed total thyroidectomies, the court concluded that this gave them enough expertise to offer expert opinions concerning general surgical procedures used during any thyroidectomy, whether it is a total or subtotal thyroidectomy.

The court also rejected Conroy’s assertion that the experts could not testify as to the standard of care of a general surgeon because they did not know that specific standard of care.

First, the court held that experts are not required to use “standard of care” terminology in testifying. The focus must be on the substance of the allegations being made against the defendant doctor and what the particular experts “bring to the discussion.” It is necessary only that the expert’s opinions be based on general professional standards, and the lack of the formulaic “standard of care” language was not fatal.

Second, that a medical expert did not know the specific training in a particular medical specialty of the defendant was irrelevant, so long as the physician demonstrated “sufficient expertise” and “familiarity with the procedure” at issue. In Leaverton, each of plaintiff’s experts was familiar with thyroid surgery and testified that use of the electrocautery within .05 centimeters of the laryngeal nerve violated the standard of care for any surgeon. The Court of Appeals held that this was sufficient to submit the case to the jury regardless of the fact that neither expert was aware of the specific training for general surgeons.

By expanding the ability of a non-specialist expert physician to testify against a defendant-physician in a particular medical specialty, the courts continue to make it easier for plaintiffs to sue physicians for medical malpractice.

Around The Firm

David L. Martin and Marc Rosenberg won dismissal of a complex legal malpractice case in King County. In the underlying case, plaintiffs sought to rescind a gift of property to a charitable foundation and sought damages for malpractice against professionals who assisted in establishing the foundation. Dave and Marc’s client, along with other attorneys, represented plaintiffs in the first litigation. In plaintiffs’ later malpractice action regarding the handling of that litigation, the court granted three successive summary judgment motions Those orders dismissed claims that the clients had mishandled the plaintiff’s probate resulting in the loss of the claim against the foundation; limited potential damages and held that the client was not vicariously liable for another attorney’s work; and dismissed the negligence claim in its entirety due to plaintiffs’ failure to support their claim with competent expert testimony.

Marc Rosenberg obtained a Rule 12(b)(6) dismissal in a class-action lawsuit alleging violations of the Fair Debt Collection Practices Act (“FDCPA”) in the federal case of In re Cook. Marc’s client had represented a debt collector who prevailed in an action and requested attorney fees and costs. The court denied an award for certain costs, finding that they were prospective in nature and had not yet accrued. Plaintiff sued alleging that the costs sought were not authorized and violated the FDCPA. The court found that averments contained in pleadings submitted to a court were not “debt-collections activities” within the meaning of the FDCPA and dismissed plaintiff’s claim.

Joel E. Wright and Erin J. Varriano won summary judgment in Wolfgram v. Doe. Plaintiff attempted to bring multiple claims, including legal malpractice, against Ms. Doe who represented a party in guardianship proceedings. The court agreed that Ms. Doe did not owe a duty to plaintiff under any legal theory. The court dismissed the case and found plaintiff failed to set forth cognizable claims, thus entitling Joel and Erin’s client to an award of attorney fees and sanctions against plaintiff. … Joel Wright and Dan Von Seggern won summary judgment on behalf of their client, XYZ, in Trueblood v. Valeo. This products liability case involved an exercise ball that allegedly burst and injured plaintiff. XYZ purchased the exercise balls from co-defendant and resold them to the ultimate users. Joel and Dan successfully argued that their client was a pass-through seller, rather than a manufacturer, and had made no representations to plaintiff regarding the exercise ball. The court agreed and dismissed all claims.

Jeffrey P. Downer and Donna M. Young won an appellate decision in Zeco v. American Tradition Real Estate, Inc., Division 1, Court of Appeals. The parties signed a tolling agreement and a stipulated order of dismissal without prejudice, so that plaintiff could pursue an action against the seller in a real estate transaction. After judgment against plaintiff in that lawsuit, plaintiff re-filed its suit against Jeff and Donna’s client. The re-filed complaint was not identical to the first complaint as required by the tolling agreement. Instead, plaintiff argued that because American Tradition was a defendant in both suits, and both suits were based on the same negligence, the tolling agreement covered the second suit that was based on a different set of facts. The court rejected plaintiff’s dictionary definition of the term “cause of action” in favor of the definition given by the parties in the agreement, holding to the principle that resort to dictionary definitions cannot be made when the plain language of the agreement clearly indicates a different meaning. Thus, the appellate court agreed with Jeff and Donna that ordinary contract interpretation principles applied, and since the tolling agreement stated that the tolling period covered only claims asserted in the first complaint, no new claims would be protected by the tolling period.

Lee Smart is proud to announce that a firm-record six shareholders, David L. Martin, Joel E. Wright, Philip B. Grennan, Jeffrey P. Downer, Sam B. Franklin, and Michelle A. Corsi, all have been named “Superlawyers” for 2011 by Washington Law & Politics magazine. The designation results from their peers’ recognition of the attorneys’ great skill and the highest quality of legal representation. The Superlawyers’ peers evaluated them on 12 indicators of peer recognition and professional achievement.

Gregory P. Turner won a defense verdict in Pierce County in Tesch v. Costco. Tesch tore his bicep tendon while loading a 165-pound box at Costco, and he blamed the injury on the Costco employees assisting him. Costco appealed a $34,000 arbitration award in favor of plaintiff and obtained a unanimous defense verdict at trial. Plaintiff had asked the jury for $80,000.

Deborah A. Severson won summary judgment in Langone v. Sheppard in King County. Plaintiff was injured when a car driven by Jacob Sheppard, who was alleged to be intoxicated, crossed the center line. Plaintiff sued Jacob; his mother, who was the registered owner of the car; and two local bars for serving Jacob. The judge ruled that although Jacob’s mother had purchased the car she was entitled to dismissal as Jacob had repaid the loan in full and paid for all maintenance on the car, she did not use or have keys to the car, and there was no evidence that she knew or should have known that Jacob may have been intoxicated at the time.