McDowell & Osburn recently settled a case involving a two-year old child with severe burns to both feet. The two-year old was playing in the back yard of the duplex where his family rented an apartment. His mother’s boyfriend was watching him and his baby brother. When the boyfriend checked on the baby, the two-year old toddler ran over to investigate the remains of a bonfire in the back yard. The fire looked like it was fully extinguished and was not apparently hot. The toddler walked into the ashes and was seen by the neighbor’s relative and pulled out. Unfortunately, there were hot coals under the ashes and the toddler suffered severe burns to the bottoms of both feet. The toddler had toes amputated, skin graft surgeries and remains at risk of needing one or both feet amputated. Because of the burns, the toddler (now in elementary school) must wear special footwear and has trouble walking.
The neighbor had held a large party in the back yard of the duplex the night before the toddler was burned. He was also the manager/owner of a nearby bar. He advertised the party at his bar and had entertainment at the party that would normally have taken place at the bar. Over 100 people, many of whom were regular bar patrons, attended the cook-out/party. The neighbor/bar-manager referred to the party as his annual thank you to his bar customers and the local community. The bonfire burned until after midnight. Obviously, the host of the party never fully extinguished the fire as required by law.
The owner of the duplex who rented the apartments to the bar manager and the toddler’s family knew about the annual parties and bonfires. The owner did nothing to check on the party or the fire arrangements.
Suit was brought on behalf of the child against the neighbor, the bar and the owner. The case settled on a confidential basis favorably for the child that included the creation of a trust to help fund future medical needs for the child.
New Hampshire public entities, such as towns, cities, counties and school disctricts, are protected by various statutory immunities that limit when they can be sued for injuring someone. There are exceptions to these immunity statutes. RSA 507-B:2 allows claims against municipal entities for harms arising from the operation of “all motor vehicles”. The municipal entity must be at fault for the operation of the vehicle or “by fault attributable to” the municipal entity. New Hampshire public entities like to claim that the RSA 507-B:2 exception to immunity is limited to motor vehicles owned and operated by the public entity. This narrow reading of the statute, however, unfairly attempts to avoid claims which are allowed by the law.
In the case of Chatman v. Strafford County, 163 N.H. 320 (2012), the New Hampshire Supreme Court held that RSA 507-B:2 permitted recovery against a county for negligently supervising the loading of a trailer. The trailer and vehicle it was being attached to were not owned by the county. The victim claimed that a county supervisor was negligent in directing the work, resulting in serious injuries. The trial court dismissed the case based on the assumption that the harm did not fall under RSA 507-B:2. The New Hampshire Supreme Court reversed and specifically stated: “we hold that the plaintiff’s claims ‘arise out of the County’s … operation of a motor vehicle’”. Chatman, 163 N.H. at 326. While the court did not specifically address the importance of the fact that the vehicle at issue was not owned by the county, it implied that liability is proper under RSA 507-B:2 when the a government entity does not own the vehicle in question but does have control over it.
Given the context of the Chatman decision, liability for negligently entrusting an automobile under the control of a government/public entity along with other negligent acts might be the basis for a legal claim under RSA 507-B:2 even when the public entity does not own or operate the vehicle.
James McCutchen was in a motor vehicle accident and incurred $66,866 in medical bills. These bills were paid for by U.S. Airways’ self-funded ERISA plan. McCutchen hired an attorney and settled his claims for the maximum available insurance of $110,000. After paying his attorney fees of $44,000, McCutchen had $66,000 left. The plan then asserted it was owed the entire amount it previously paid, which would have left McCutchen $866 in the hole. He argued that the plan is limited to recovery of the amount of his settlement representing medical expenses and that the plan should have to share in his attorney’s fees. The plan disagreed.
On April 16, 2013, in U.S. Airways v. McCutchen, the United States Supreme Court rejected McCutchen’s argument that the plan was limited to the portion of his settlement representing medical bills because the language of the plan required full payment. However, the Court found that the plan had to share in the cost of his attorney’s fees because the plan language was silent on how to pay for the costs of obtaining the settlement (known as the “common fund” doctrine). The Court reasoned, “The rationale for the common-fund rule reinforces that conclusion. Third-party recoveries do not often come free: To get one, an insured must incur lawyer’s fees and expenses. Without cost sharing, the insurer free rides on its beneficiary’s efforts — taking the fruits while contributing nothing to the labor. Odder still, in some cases — indeed, in this case — the beneficiary is worse off by pursuing a third party.” See U.S. Airways v. McCutchen.
Following McCutchen, it will be even more important to carefully review the requirements of an ERISA plan to determine whether filing suit would permit a reasonable recovery, or whether it will permit a free ride to the insurer.