SB 589 Modifies provisions of law relating to civil actions for damages
Sponsor: Brown
LR Number: 4693S.02C Fiscal Note available
Committee: Small Business, Insurance and Industry
Last Action: 5/16/2014 - S Informal Calendar S Bills for Perfection--SB 589-Brown, with SCS, SA 2 & SA 1 to SA 2 (pending) Journal Page:
Title: SCS SB 589 Calendar Position:
Effective Date: August 28, 2014

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Current Bill Summary


SCS/SB 589 - This act modifies laws relating to civil actions for damages.

RESERVATION OF RIGHTS

Currently, case law has established that if an insurance company presents a reservation of rights to include reasons that may relieve them of a duty to defend or indemnify the insured, such reservation may be used as evidence as a breach of those duties. This act abrogates from those holdings to allow insurance companies to provide a statement of a reservation of rights to an insured without such statement being used as evidence in a civil action against the insurer (375.417).

When an insurer breaches its duty to defend, in the absence of a final adjudication of bad faith, the insurer shall not be liable for amounts exceeding the limits of liability of the insurance contract (375.418). In instances where an insurer offers or provides a defense to a lawsuit filed against its insured then the insurer shall have the unconditional right to intervene in the lawsuit (375.419).

This act also requires that in equitable garnishment actions against an insurer where the defendant to the primary action had contracted with the insurer against the losses leading to the garnishment, a judgment creditor must show that the insurer had an opportunity to defend against the loss or expressly declined to defend (379.200). This act also prohibits an insurer from being compelled to enter into contracts to limit recovery between its insured and any person with an unliquidated claim for damages against the insured (537.065).

These provisions are identical to SCS/SB 617 (2014) and HCS/HB 1344 (2014).

JOINT AND SEVERAL LIABILITY & CONTINGENCY FEES

Currently, in all tort actions when a defendant is found to bear fifty-one percent or more of the fault then the defendant is jointly and severally liable for the judgment amount. This act states that the liability of each defendant for compensatory or punitive damages shall not be joint. Each defendant is liable only for the amount of damages in direct proportion to the defendant's percentage of fault. The act also states that in an action for damages an attorney shall not collect a contingency of more than a specified percentage of the damages (537.067).

These provisions are similar to SB 830 (2014) and SB 846 (2014).

NONECONOMIC DAMAGES IN THE MEDICAL MALPRACTICE ACTIONS

Currently, Missouri follows the common law of England as of 1607, unless the General Assembly abrogates from the common law statutorily. This act excludes from the English common law claims arising out of the rendering of or failure to render health care services by a health care provider (1.010).

The act also creates a statutory cause of action for damages against health care providers for personal injury or death arising out of the rendering of or failure to render health care services (538.210).

These provisions are substantially similar to provisions contained HB 1173 (2014), SB 105 (2013), and HB 112(2013).

JESSICA BAKER