UPDATESPosted On: Nov. 30, 1997 12:00 AM CST
N.Y. court extends the time keyboard claimants have to sue
ALBANY, N.Y. -- Plaintiffs will have three years from the time symptoms appear or the last time they used a keyboard they allege caused injuries to sue equipment manufacturers, New York's highest court has decided.
Last week's ruling overturns a lower court determination that lawsuits had to be filed within three years of when a person first used the allegedly offending keyboard.
The clock now will begin running from the time a claimant's symptoms appear or from the last time the claimant used an allegedly injury-causing keyboard, whichever is earlier, according to a unanimous ruling by the New York Court of Appeals.
Both rulings are in connection with the New York County Data Entry Worker Product Liability Litigation, a consolidation of more than 90 suits in state Supreme Court in Manhattan. The suits were filed against the nation's leading computer equipment makers: International Business Machines Corp., Apple Computer Inc., Unisys Corp., Honeywell Inc., Digital Equipment Corp., Compaq Computer Corp., Dell Computer Corp. and KeyTronic Corp.
Judge Richard Wesley, writing for the Court of Appeals, said it is unrealistic to use that first-use standard.
"It would be absurd to argue that a person who simply touches a keyboard sustains the type of trauma that will eventually lead to RSI," he wrote.
The appellate court also disagreed with the plaintiffs' argument that the state's "toxic torts" law, which extends the statute of limitations for suing for past exposure to toxic substances, should apply to keyboard injury suits.
"A keyboard is obviously not an inherently toxic or dangerous substance, and exposure to a keyboard is not a 'wrongful invasion' in the same sense as is exposure to a toxic substance," the court said.
The ruling sends the case back to the Supreme Court for trial.
Utah hurts PacifiCare results
SANTA ANA, Calif. -- PacifiCare Health Systems Inc. says it will report a fourth quarter loss because of losses in Utah and a restructuring.
Expected 1997 losses of $40 million to $50 million in Utah, where PacifiCare acquired operations through its acquisition of FHP International Corp. earlier this year, will mean fourth-quarter earnings of 30 cents to 40 cents per share, compared with analysts' estimate of 69 cents per share.
In addition, the company will take a pretax charge to earnings of $115 million to $145 million, or $2.25 to $2.80 per share, to write off good will and restructure the company's operations.
Including the charge, the company is expected to report a fourth-quarter loss of $85 million to $115 million.
PacifiCare reported $92.3 million in net income for the nine-month period, including $44 million in pretax charges.
A spokeswoman said Santa Ana, Calif.-based PacifiCare's problems in Utah included the closing or downsizing of four hospitals, which forced PacifiCare to use hospitals that charged higher per-diem rates; computer problems related to PacifiCare's change in how it tracked its 186,000 Utah members; difficulty in persuading doctors to accept its capitation rates; and competition from Salt Lake City, Utah-based Intermountain Health Care Corp., which dominates that market. As a result, it will sell its Utah operations.
PacifiCare operates in 11 states and Guam, serving about 3.8 million members. The company said that while it also has unprofitable operations in Washington, Ohio, Nevada and Oregon, it thinks it can still successfully compete in those markets.
Reinsurers' numbers improve
WASHINGTON -- Reinsurers' combined ratios continued to improve during the first nine months of this year, according to a report released in late November by the Reinsurance Assn. of America.
A group of 43 reinsurers posted an average combined ratio of 101.3% during the first three quarters of this year, an improvement of nearly two percentage points from the 103.1% combined ratio reported by a similar group of reinsurers for the first nine months of 1996, the RAA said.
Reinsurers' net written premium increased 6.7% to $15.07 billion for the first nine months of this year compared with $14.12 billion during the same period of 1996.
Lloyd's bans two brokers
LONDON -- Lloyd's of London last week permanently banned two brokers formerly employed by Bain Hogg Group for receiving more than $30,000 each as inducements to show favor to a third party.
Derek Hedgecock, a Lloyd's broker for 43 years, and Michael McPhilimey, a Lloyd's broker for 20 years, each admitted their offense. They were fined 10,000 pounds ($6,670) each and ordered to pay costs to Lloyd's of 5,000 pounds ($3,389).
Mr. Hedgecock admitted that in February 1996, when he was an executive director of Bain Hogg's reinsurance division, he received $35,000 from an agent for a third party to a proposed reinsurance deal.
Mr. McPhilimey, who was then an executive director in Bain Hogg's credit and political risk division, admitted accepting $33,333 from the agent.
Neither had told his employer of receiving the payments, and Bain Hogg had dismissed them both after its own internal investigation.
The permanent Lloyd's bans were decided after a hearing of the cases by Lloyd's Disciplinary Board, which has been taking a firm line on the regulation of brokers and intermediaries.
School to offer partner benefits
OAKLAND, Calif. -- Despite the lobbying efforts of Gov. Pete Wilson, the University of California Board of Regents voted 13-12 to extend health care benefits to same-sex domestic partners of university employees.
UC President Richard C. Atkinson proposed last July to offer medical, dental and vision benefits to same-sex domestic couples. He said it was necessary for the university system to compete with other universities that offer the benefits to their faculty and staff.
The UC system does not have the means to determine how many of its 126,000 employees receiving employer-provided health benefits will apply, according to a university spokesman. But based on the experience of other institutions and business, it expects its costs will range from $1.9 million to $5.6 million annually. It now spends about $400 million annually on employee benefits.
Gov. Wilson urged regents to vote against the measure and appointed a regent to the panel in the days before the Nov. 21 vote. He argued the measure would cost more than UC estimates because it will bring lawsuits from unmarried heterosexual couples wanting equal treatment. The governor also said the measure devalues the institutions of marriage and family.
Under the adopted plan, partners must file an affidavit with the university declaring they have shared a residence for 12 consecutive months, and they must provide proof of mutual financial support. A special enrollment period will be held in mid-to-late spring, the spokesman said.
Home operator to appeal verdict
HENDERSON, Texas -- Beverly Enterprises Inc. will appeal an $83 million Texas state court jury's verdict in a suit claiming the nursing home operator's negligence caused the death of an 84- year-old resident.
The verdict awarded to the family of Ruth Waites, who died in 1994 at a nursing home in Borger, Texas, consisted of $13 million in compensatory damages and $70 million in punitive damages.
Ms. Waites' family argued that the nursing home, then owned by Beverly, was understaffed and that staff members were insufficiently trained. As a result, Ms. Waites suffered from bed sores, dehydration, infections and eventually died, said David Marks, the plaintiffs' attorney. Also, plaintiffs claimed the company ignored numerous warnings from state regulators and the company's own consultants about the nursing home's poor conditions.
Mr. Marks, of The Marks Firm in Houston, said the jury found fraud. The large punitive damage award stemmed from that finding along with the nature of the injury and the warnings the lawyer said the company chose to ignore.
A spokesman for the Fort Smith, Ark.-based company said it will appeal, and that the verdict is not warranted by the facts.
The company spokesman would not say whether insurance covered any of the judgment, but he did say the company "has made provisions for this judgment and it will not have a material impact on Beverly's financial position."
A hearing to enter the judgment is scheduled for Dec. 4, at which time the verdict amount could be reduced, Mr. Marks said. A Texas statute could cap compensatory damages to $2.4 million in this case if the judge rules the law applies to this case. Mr. Marks added that a Texas statutory cap on punitive damages does not apply to this case because the jury found that Beverly acted intentionally.
Carbon monoxide not excluded
LOWELL, Mass. -- For the second time in less than a month, a state supreme court has ruled that the absolute pollution exclusion does not bar coverage for carbon monoxide poisoning claims.
In a unanimous decision, the Massachusetts Supreme Court on Nov. 10 overturned a Superior Court's summary judgment that Western Alliance Insurance Co. had no duty to defend or indemnify the owners of an Indian restaurant facing a carbon monoxide-related claim. A restaurant patron suffered brain damage after the restaurant's improperly ventilated kitchen caused the eatery's clay ovens to emit carbon monoxide.
The Illinois Supreme Court on Oct. 17 was the first state high court to rule the exclusion does not bar coverage for carbon monoxide claims (BI, Nov. 10).
Referring to passages in the absolute pollution exclusion, Associate Justice John M. Greaney wrote for the Massachusetts high court: "The exclusion should not reflexively be applied to accidents arising during the course of normal business activities simply because they involve a 'discharge, dispersal, release or escape' of an 'irritant or contaminant.' "
The exclusion is written in a fashion that "brings to mind" industrial operations that cause environmental contamination, and the exclusion must be "interpreted and applied in a common sense manner," Justice Greaney wrote.
Referring to the Illinois court's decision, Justice Greaney also wrote that the exclusion's drafting history indicates that insurers devised it to avoid covering environmental cleanup costs.
But, insurer attorneys said the Illinois court relied only on policyholders' version of the exclusion's drafting history.
A federal judge last week dismissed all but one allegation brought by a group of former Pan American World Airways employees who sought to remove the Pension Benefit Guaranty Corp. as trustee of the airline's underfunded pension plan. The three pension plans, which were underfunded by nearly $1 billion, represented the biggest termination handled by the PBGC. The only allegation U.S. District Court Judge Loretta Preska of the Southern District of New York left open concerns the timeliness of PBGC's notice of benefits to participants.