Articles Posted in Premises Liability

Google’s recent admission that no one sending communications to a Gmail account has any reasonable expectation of privacy raises the question whether a doctor, lawyer, accountant or any other professional charged with the duty of maintaining client confidentiality can ethically send confidential information through a Gmail account.

The Texas rules of ethics for lawyers imposes a duty to take steps necessary to maintain the confidentiality of certain client information. If an email service provider such as Google freely admits that communications via their service are not private then it stands to reason that any professional who sends information via Gmail may be waiving any privileges that would otherwise attach to information sent via Gmail.

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The TransCanada Pipeline Company cleared another of the many hurdles it has faced in connection with the construction of the Keystone XL pipeline. Michael Bishop, an East Texas landowner, previously contested TransCanada’s condemnation of his property. However, Bishop settled the condemnation issues because he could not afford the legal fees. Recently Bishop sought a restraining order against TransCanada based on his position that the tar sands that TransCanada plans to transport via the Keystone XL Pipeline does not constitute crude oil authorized to be transported by the pipeline agreement.

The tar sands start out as a near solid material and must be converted to a liquid form in order to be transport via a pipeline. Judge Jack Sinz issued an order allowing clearing for the pipeline to go forward. This is not the first nor will it be the last obstacle faced by TransCanada as it passes through East Texas.

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The U.S. Supreme Court has granted cert in E.M.A. ex rel Plyler v. Cansler in which the 4th Circuit Court of Appeals upheld the pro rata formula in Ahlborn. Under Ahlborn when Medicaid pays accident related medical expenses and the Plaintiff subsequently obtains a recovery Medicaid may recover a proportionate share of the recovery. In the typical situation the injured victim sustain medical expenses, property damage, lost wages and intangible damages. The Ahlborn formula prevents Medicaid in the all-too-common situation where there is a limited recovery due to insufficient liability insurance from taking all of the insurance proceeds and leaving the Plaintiff with nothing in consideration of the other damages. For example, if an injury victim sustains $100,000 in medical expenses paid by Medicaid, $100,000 in property damage, and $100,000 in lost wages and there is only $100,000 in liability insurance then Medicaid would receive one third of the recovery. In such a situation Medicaid would like to take all the available funds and is challenging the limitation on Medicaid’s right to take all the funds.

To allow one interest holder to take all of the available funds is simply bad public policy. In such situation the injury victim, who advance all of the time, effort and expense in hope of recovering their damages, would have no incentive to pursue a claim and in the long run Medicaid would receive less overall recovery. This is a classic case of pigs get fat and hogs get slaughtered. If Medicaid gets its’ way then the Medicaid hog will be on its’ way to the slaughter house.

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In City of Denton v. Paper the Texas Supreme Court raised the bar a little higher for users of the public streets to recover for injuries resulting from city construction defects. The City of Denton Waste Water Department cut a city street and made a repair to a sewer line. After completing the repair the City filled the hole, removed the barricades, and left. While the City claims to have repacked the hole, the surface settled over two inches in the first week. About a week later Robin Paper was riding her bicycle when she struck the sunken area, pitched over her handlebars and sustained serious injuries. She sued the City pursuant to the Texas Tort Claims Act alleging that sunken area constituted a special defect under the Act for which the City was liable.

The Texas Tort Claims Act severely limits the liability of governmental units. The liability of a governmental unit regarding a public roadway defect generally depends on whether the defect is a general premises defect or a special defect under the terms of the Act. The liability of a governmental unit for a regular premises defect is limited to the liability of a licensee under Texas law. A landowner has a general duty to a licensee not to willfully or wantonly injure the licensee and to warn of defects of which the landowner has actual knowledge and of which the licensee has no knowledge. If a landowner has no knowledge of a defect then it simply has no duty to a licensee.

The Texas Supreme Court summarized Texas law regarding ordinary premises liability stating, “The Tort Claims Act provides that, in an ordinary premises liability claim, the governmental unit owes only the duty “that a private person owes to a licensee on private property, unless the claimant pays for the use of the premises.” TEX. CIV. PRAC. & REM. CODE § 101.022(a). Under Texas law, a licensor of real property owes a duty not to injure the licensee by willful or wanton acts or omissions or gross negligence. State Dep’t of Highways & Public Transp. v. Payne, 838 S.W.2d 235, 237 (Tex. 1992). When the governmental unit has actual knowledge of a dangerous condition and the licensee does not, the government must either warn the licensee or make the condition safe. State v. Tennison, 509 S.W.2d 560, 562 (Tex. 1974).”

The Texas Supreme Court recently narrowed mental anguish coverage under insurance policies in Evanston Ins. Co. v. Legacy of Life, Inc. In Evanston, a family member of an organ donor learned that the organ donor charity was actually making money off of the donated organs and sued the charity for mental anguish. The organ donor charity demanded a defense and the insurance company denied coverage. The policy covering the charity covered “personal injuries”. In Texas, personal injury damages include damages for mental anguish. The charity sued their insurance company based upon their understanding that the policy covered the alleged personal injuries. The Texas Supreme Court held that the insurance policy provision providing coverage for a “personal injury” did not include coverage for mental anguish unless the mental anguish was related to physical damage or a disease of the claimants’ body. Since the family member that brought the original claim had not sustained personal physical damage no coverage was provided.

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The United States Supreme Court’s decision in Arkansas Department Of Human Services v. Ahlborn, 547 U.S. 268 (2006), has open the door for the made whole doctrine to be applied to Texas Medicaid subrogation. Historically, prior to the Ahlborn, Texas Medicaid largely refused to reduce their subrogation interest even if the interest absorbed most or all of the victim’s recovery.

In Alhborn, Heidi Alhborn was severely and permanently injured in an automobile accident and received $215,000.00 in medical care which was paid for by the Arkansas Department Of Human Services. The case settled for $550,000.00, an amount which all involved agreed was vastly less than the full value of the case. The Arkansas Department Of Human Services asserted a right to be reimbursed the full amount of their subrogation interest in spite of the fact that doing so would clearly result in Alhborn being inadequately compensated for her injuries. The parties stipulated that Alhborn’s claim was worth $3,040,000.00. The Trial Court held that ADHS was entitled to their full subrogation interest. The Eighth Circuit reversed the District Court holding that the ADHS could only recover that portion of the settlement that represented the recovery of medical expenses. The United States Supreme Court affirmed.

The Social Security Act, 42 U.S.C. 1396 et. seq., which create the Medicaid program, includes an anti-lien provision which prohibits a State Medicaid program from filing a lien for medical payments against the property of an individual prior to his death. The Supreme Court held that the anti-lien provision prohibited the State from attaching a lien to the non-medical portion of the recovery. The Ahlborn decision was based upon stipulated amounts. The appropriate procedure is a little less clear in situations where a case is settled without any stipulations or judicial findings as to how the settlement funds are allocated between the various elements of Texas personal injury damages. Many times Texas cases are settled for the amount of the available insurance policy limits even though all involved agree that the case is worth considerably more than the policy limits. Ahlborn gives rise to a persuasive argument that the Texas Medicaid subrogation interest should be limited to a proportional share of the recovery in a limited recovery situation.

Many Texans mistakenly believe that if they are injured on a commercial property that the owner of the property is automatically liable for their injuries and damages. Such is not the case. When a patron enters a business they become what is known as a “business invitee“. The owner or operator of a business owes certain duties to their invitees. The owner must make reasonable efforts to discover dangerous hidden defects and either correct the defects or warn customers of the defects. The business has no duty regarding “open and obvious” defects.

Regarding hidden defects the claimant may prove either actual or constructive notice. Regardless of the facts of the case a business owner rarely admits actual notice of a dangerous defect. Even when businesses create dangerous situations they often continue to deny knowledge of the dangerous condition. Thus notice is often proved by constructive knowledge. A premises owner or operator is charged with knowledge of any premises defect that a reasonably careful inspection would have revealed. Furthermore, the Texas Supreme Court has held that constructive knowledge of a defect may be established by a showing that the condition or defect had existed for a long enough period of time that the owner should have discovered the defect.

There is no case where it is more important than in a premises liability case to obtain immediate evidence regarding the condition of the scene of the accident. It is a common practice in the business world to correct a dangerous condition immediately following an accident and then deny that the condition ever existed. In a day when virtually everyone with a cell phone also has a camera premises liability victims would be well advised to have someone take pictures of the scene before the victim leaves the scene of the accident.

Texas law lags behind technology when it comes to addressing the problem of sexting. Thus far most of the attention has been focused, and rightly so, upon the need to address the problem of sexting among minor teenagers. Only two sections of the Texas Penal Code arguably apply to teen sexting. Section 43.26 of the Texas Penal Code makes it a third degree felony to possess a sexually explicit picture of a minor. This is a child pornography law that was designed to protect minors from predation by adults and is ill-suited to address the problem of teens texting nude pictures of themselves to others.

Teen sexting may be exceptionally stupid, damaging, and a crime, but it shouldn’t be a felony. There are measures in the works in the Texas legislature to address the problem of teen to teen sexting as a misdemeanor.

Section 43.23 of the Texas Penal Code dealing with obscenities may arguably be applicable to teen sexting. However, to qualify as an obscenity the text must depict a patently offensive representation of an ultimate sex act. The possession of an obscenity involving a child younger than 18 years of age is punishable as a state jail felony. It is unlikely that the vast majority of teen sexting would qualify as an obscenity nor should they be punishable as state jail felonies.

Texans who get injured as a result of the negligence of the owner or operator of a business premises find themselves having to overcome high hurdles in order to be compensated for their injuries. The victim must first prove that they were the “business invitee” of the Defendant. This requires proof that the injured person was on the business premises in furtherance of the business purposes of the business entity. Establishing that the injured was a business invitee is usually the least of the victim’s problems.

Next the injured customer must prove that they were injured by an unreasonably dangerous condition or “defect” in the premises and that the business knew or in the exercise of reasonable diligence should have known of the existence of the defect and failed to either correct the defect or warn its customers of the defect. Whether the condition constitutes an unreasonably dangerous defect turns on what the ordinary customer would reasonably expect and appreciate under the circumstances. For example, the ordinary customer would reasonably expect that the accumulation of ice on a sidewalk during a Texas ice storm would be slippery and thus the condition does not constitute a premises defect even though it is obviously dangerous. By contrast, invisible “black ice” may result in liability if the injured customer can show that the business owner was on notice of the condition.

Texas’ conservative courts have expanded the notion that ice may not constitute a premises defect to other accumulations of natural substances to the point that circumstances involving accumulations of mud and rainwater have been held not to be premises defects. The analysis of the condition of a business premises is complicated by the fact that a business owner owes no duty to correct or warn of an “open and obvious” defect. Thus injured customers find themselves arguing that the owner should have known of a condition or defect while at the same time arguing that it was hidden as far as the customer was concerned. Customers injured by malfunctioning equipment or the design of the premises are more likely to be successful. Customers injured by foreign substances such as spills may have a difficult time placing the owner on notice of the defect.

Chapter 55 of the Texas Property Code gives a hospital that provides emergency medical care to an uninsured accident victim a lien upon the liability insurance of any negligent individual who caused the accident and resulting injuries. Sounds good so far. If you show up at a Texas emergency room within 72 hours of an accident in need of emergency medical care the hospital must treat you regardless of your ability to pay for the accident related medical treatment. In exchange for this obligation to render emergency medical care to accident victims the hospitals received the right to file a Chapter 55 lien against applicable liability insurance. Still sounds okay. The problems arise from the affect of the lien on individual patients and the way in which some hospitals abuse the lien law.

Chapter 55 gives the hospital a lien in the amount of the “usual and customary” charges for the emergency medical services. Therein lies the source of the problem. Most hospitals “usually and customarily” charge several times the amount that most in the medical profession would consider reasonable. In fact, studies published in reputable medical journals have repeatedly concluded that hospital emergency rooms regularly charge approximately 250% of the reasonable amount. The problem is so rampant that the inflated rate has become the “usual and customary” rate. This results in a huge windfall to the hospital when it renders medical care to an accident victim whose circumstances are covered by liability insurance. The hospitals argue that they must recover this inflated amount when there is liability insurance to offset the many instances where they render emergency medical care without compensation. While this argument makes sense system wide it is small consolation to the Texas auto accident victim who is injured by a negligent driver covered by a Texas $25,000 minimum limits policy and receives $10,000 worth of emergency medical care only to see the hospital file an inflated hospital lien in the “usually and customary” amount of $25,000 and take the entire liability policy proceeds.

The problem is further aggravated by the practice of many hospitals to refuse to bill the private health insurance of auto accident victims in hopes of recovering inflated charges by filing a hospital lien. Chapter 146 of the Texas Practices and Remedies Code requires hospitals to bill the private health insurance of auto accident victims and provides penalties for the failure to do so. Nonetheless, many Texas hospitals knowingly continue to file their inflated liens and refuse to bill the private health insurance of auto accident victims with no excuse or justification other than naked greed. Only when the exasperated auto accident victim hires an attorney and presses the hospital will many hospitals release their inflated liens and file on the patients’ private health insurance as required by law.

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