A case in Fairfax General District Court, heard before Judge Thomas E. Gallahue, underscores the need for the Virginia General Assembly to overhaul the Reckless Driving code section to explicitly include texting while driving. In the case Judge Gallahue dismissed the reckless driving charge against Jason Gage since the statute in question, VA Code section 46.2-852 et seq. This issue directly affects Virginia Subrogation attorneys, who routinely use the convictions or pleas of guilt to driving offenses as evidence in the case against defendant drivers.
The case in question arose from Jason Gage allegedly reading texts while driving, according to Gage’s cellular records, which show he received several text messages around the time of the accident. Kyle Alec Rowley, only 19 years of age, was fatally struck by Gage’s car when his car was parked in the right travel lane after ceasing to operate. Rowley’s hazard lights were illuminated and the car in front of Gage successfully navigated around Rowley’s vehicle, but Gage struck the rear of Rowley’s vehicle, killing Rowley.
According to police there were no signs of excessive speed or driving under the influence to account for Gage’s accident, which led them to investigate his cellular records. The police did not think to charge Gage under VA Code 46.2-1078.1, which levies a $20 fine for texting while driving. Since the reckless driving statutes do not include provisions proclaiming texting or talking on a cell phone “reckless” Judge Gallahue stated he had to dismiss the charge.
There is a strong argument that amending the reckless driving statutes to include a provision for texting while driving will send a strong message to Virginia drivers to cease texting while driving. There have been numerous studies demonstrating texting while driving exponentially increases the likelihood of an accident. For the Virginia Subrogation attorney having a clearly written, inclusive reckless driving statute makes prosecuting subrogation claims easier to prove in court, since a conviction or admission would demonstrate prima facie negligence on the part of the defendant.
New VA Evidence Rule 2:411 Affects Litigation
There is a long-standing doctrine at common law known as the “collateral source” rule. Virginia codified this in VA Code § 8.01-35, which states:
In any suit brought for personal injury or death, provable damages for loss of income due to such injury or death shall not be diminished because of reimbursement of income to the plaintiff … from any other source, nor shall the fact of any such reimbursement be admitted into evidence.
The collateral source doctrine arose to bar defense attorneys from raising the fact at trial that plaintiffs were compensated for their injuries or lost wages arising out of an injury. The public policy reason being that to do so could sway the jury and, in effect, punish the victim for carrying insurance and observing their social responsibility. The vast majority of the time the collateral source doctrine arises in personal injury actions or medical malpractice litigation. So how does the collateral source rule affect the Virginia subrogation attorney?
In the typical subrogation case involving an automobile accident the policyholder is the witness for the plaintiff (the insurance company) and the defendant is uninsured and testifying on their own behalf. The policyholder has been compensated for their loss and the vast majority of the time has nothing to gain or lose by the outcome of the case. They are merely acting as a witness. However, for the defendant the case can have major consequences, both financial and personal. Therefore, sometimes in a “he said, she said” case it can be prudent to point out to the trier of fact that the plaintiff’s witness has nothing to gain by their testimony, while the defendant has something to lose, sometimes a lot.
This can sometimes run into an objection by defense counsel if the opposing party is represented, citing the collateral source rule, or the judge, sua sponte , will express misgivings about bringing up the fact that one witness was compensated under an insurance policy. There is a strong argument that under current case law the collateral source doctrine does not apply to most property damage cases since the statute expressly refers to “suit brought for personal injury or death”, but there is a common misconception that the common law and the statute act as an absolute bar.
The new Virginia Rules of Evidence put any confusion to rest, however, in the text of Rule 2:411 “Insurance”:
Evidence that a person was or was not insured is not admissible on the question whether the person acted negligently or otherwise wrongfully, and not admissible on the issue of damages. But exclusion of evidence of insurance is not required when offered for another purpose, such as proof of agency, ownership, or control, or bias or prejudice of a witness.
When read in conjunction with VA Code § 8.01-35 it is clear that evidence of an insurance policy can be admitted into evidence to demonstrate the objectivity or bias of a witness. Therefore, the Virginia subrogation attorney can point out to the trier of fact that the policyholder has nothing to lose or gain by the outcome of litigation. Most of the time judges will make this connection on their own, but in close cases it can help to tip the scales to that crucial 51% needed for the “preponderance of the evidence” standard required.
We will continue to analyze the new Virginia Rules of Evidence to evaluate their impact upon subrogation litigation in Virginia, stay tuned.
"Sea Change" in Virginia Evidence
The new rules of evidence went into effect throughout Virginia on July 1st, and as one legal expert stated, it represents a “sea change” within the legal community. Virginia has relied upon a mixture of case law and common law to govern rules of evidence, but now there are rules. The biggest difference is that rules represent black and white mandates, whereas case law has gray areas allowing judges and lawyer room to argue and mold them to suit their purposes.
In a Fairfax Bar Association Seminar the following rules were selected as having the greatest impact:
- The contemporaneous objection requirement of Rule 2:103. The objection must be made with “reasonable certainty,” under the law.
- Character evidence allowed under Rules 2:404-405.
- Offers to compromise (Rule 2:408) this rule allows into evidence an admission as to liability or an admission concerning an independent fact pertinent to a question in issue. Attorneys often speak or write to each other in confidence and this rule could place these type of candid, often constructive, conversations on ice permanently.
- Evidence of repeated abuse of the defendant by the victim, Rule 2:409. The new rule allows evidence of psychological abuse, which some judges may have prohibited.
- Impeachment of witnesses, combination of Rules 2:607-609).
In short, the offers in compromise change alone warrants close examination by personal injury attorneys and underscores the importance of all attorneys at least perusing the Rules for any changes that could affect their practice.
Using Judicial Records as Evidence
Subrogation attorneys dealing with a high volume of automobile cases often have to litigate cases “on the fly.” Policyholders can be tough to reach and often all the attorney has going into trial is the adjuster’s notes, which range in depth and quality of description. However, occasionally the job is made easier by a traffic case having arisen out of the same incident. The internet provides the Virginia subrogation attorney with a powerful tool: online case records search. A quick search before trial will reveal whether the defendant plead guilty, or was found guilty, of a traffic offense. So what can the Virginia subrogation attorney do with the judgment? VA Code §8.01-389(A1) allows the introduction of said judgment as prima facie evidence. The statute requires the records be “authenticated” by the clerk of the court where it was preserved.
Practically, in most instances if the trial time gives the attorney some time to get into the clerk’s office before court then getting to court 30 minutes early or more will allow time to get a certified copy from the clerk. Most of the time the citation or case was litigated in the traffic court of the same jurisdiction in which the present civil case is being tried. Obviously, if it is a different court, or if trial time is first thing in the morning, counsel may have to go by court before he trial on another day or request it by mail if the clerk’s office obliges.
VA Ethics Panel Allows Legal Blogging
In a recent decision by a three judge panel, a Virginia disciplinary committee’s findings of misconduct under Rule 1.6, governing confidentiality of client information, was overturned. The case arose out of blog posts written by a Richmond criminal defense attorney, Horace Hunter, describing cases he “successfully handled.” However, the panel did uphold the committee’s finding that Hunter violated Rules 7.1 and 7.2, governing lawyer advertising. It required that Hunter place a warning on his blog that the results are not guaranteed and that every case is different.
This was an important case to come down and helps clarify the burgeoning role of legal-blogging as a marketing tool for solo-practitioners and small firms. As it stands today, the general consensus among legal bloggers seems to stand: do not identify cases or clients in ways that are may endanger client anonymity or breach confidences. Practitioners now have a clear mandate to warn potential clients that the results touted in blog posts cannot be reproduced and remind readers of the inherent uncertainty of litigation.
Virginia Subrogation Statute
Subject of the Subrogation Statute
One of the few codified mentions of subrogation in Virginia deals with medical services rendered arising out of negligence. VA Code § 8.01-66.4 allows for subrogation where “any person, firm or corporation who may pay the charges for which a lien is provided in §8.01-66.2 shall be subrogated to such lien.” The lien in question is one automatically created by Virginia law. The lien arises when one receives medical care arising from a negligent act. The provider of the services has a lien on the injured person’s claim against the negligent person or entity.
Covered Entities
VA Code § 8.01-66.2 includes the following:
- hospital, public or private
- nursing home
- physician
- registered nurse
- registered physical therapist in this Commonwealth
- receives medicine from a pharmacy
- ambulance service
Limitations on Recovery
Covered entities are limited to the ” just and reasonable charge for the service rendered, but not exceeding $2,500 in the case of a hospital or nursing home, $750 for each physician, nurse, physical therapist, or pharmacy, and $200 for each ambulance service.”
TX Shines Light for VA on Equitable Subrogation Principles
The Texas Supreme Court overturned the Austin Court of Appeals in Texas Health Ins. Risk Pool v. Sigmundik, 315 S.W.3d 12, 14 (Tex.2010) that ruled the “made whole” doctrine was inapplicable in a subrogation action where a contract clearly lays out a right to subrogation. This reversal is in line with a previous case, Fortis Benefits v. Cantu, 234 S.W.3d 642 (Tex.2007), standing for the same proposition.
Despite this clear line of case law, the Austin Court of Appeals erred on the side of the “little guy” in the situation where a trial court attempted to allocate the entirety of an $800,000.00 settlement in a negligence suit to the family of an individual who was injured in an oilfield explosion and spent 52 days in the hospital before eventually succumbing to his extensive injuries. When the insurance company intervened in the action and asserted a $330,000 lien on any recovery obtained by the family the trial court ruled that where subrogation claims work an injustice they should not be allowed. The court cited the financial hardship of the family and the solid financial position of the insurance company. The Austin Court of Appeals concurred with the trial court’s reasoning and affirmed. Ultimately, the Supreme Court overturned the ruling and cited its own cases to the contrary.
These cases are instructive for the Virginia subrogation counsel facing sympathetic trial judges who may be tempted to ignore the plain subrogation language in an insurance contract to “balance the equities.” As the Texas Supreme Court affirms, contracts are still held to be almost sacrosanct, no matter the outcome. This applies for subrogation, just like any other form of contractual agreement.
Contractual vs. Equitable Subrogation in Virginia
Equitable Subrogation in Virginia
Subrogation is the legal process in which an insurer can step into the shoes of their policyholder to recover damages from the third party responsible for the loss. Equitable subrogation is based on equity, or fairness, as defined by the Virginia Supreme Court in Xl Specialty Ins. Co. v. Dept. of Transp., 611 S.E.2d 356, 269 Va. 362 (Va, 2005):
Equitable subrogation is subrogation that arises by operation of law. It is not based on contract or privity of parties, but is “purely equitable in nature, dependent on the facts and circumstances of each particular case.” Centreville Car Care, Inc. v. North Am. Mortgage, 263 Va. 339, 345, 559 S.E.2d 870, 872 (2002) (quoting Federal Land Bank of Baltimore v. Joynes,179 Va. 394, 402, 18 S.E.2d 917, 920 (1942)). When a principal defaults on a contract guaranteed by a performance or payment bond and the surety performs on the bond, principles of surety law and the doctrine of equitable subrogation impose certain rights and duties running between the surety, principal, and obligor, and allow the surety to enforce such rights and duties. See Dickenson v. Charles, 173 Va. 393, 400, 4 S.E.2d 351, 353 (1939) (quoting Kendrick v. Forney, 63 Va. (22 Gratt.) 748, 749-50 (1872)); Fulkerson v. Taylor, 100 Va. 426, 432,41 S.E. 863, 865 (1902); Restatement (Third) of Suretyship and Guaranty § 27 (1996).
Equitable subrogation arises from the common law and can work against the insurer conducting business in Virginia. For instance, where the Virginia policyholder has uninsured losses and recovers a judgment against the tortfeasor that does not equal the amount of total loss suffered by the insured, then the insurer cannot recover against the third party.
Contractual Subrogation in Virginia
The key difference in Virginia between equitable subrogation and contractual subrogation is that judges ultimately decide the outcome of an equitable subrogation action, while the language and intent of the parties control the outcome in a contractual subrogation case. It is imperative for the parties to a subrogation case to understand the language of the insurance contract and how it affects subrogation rights. For instance, insurance contracts can be written to give the insurer first right of subrogation, which cuts off most equitable subrogation worries. Virginia subrogation attorneys would be wise to discuss contract provisions with clients operating in Virginia.
Editor:
Justin McLeod, Esq.
Associate
Chaplin & Gonet
Virginia Healthcare Subrogation
Virginia subrogation attorneys need to familiarize themselves with the ways HIPAA compliance and General District Court discovery, namely the subpoena duces tecum, interact and ultimately impact healthcare subrogation practices in Virginia. By addressing whether a subpoena duces tecum request is both served properly and is HIPAA compliant, the Virginia healthcare subrogator can avoid any ethical or procedural pitfalls.
Is There Proper Service?
It is imperative that Virginia healthcare subrogation counsel ensure that service of the subpoena duces tecum conforms to the rules of their state, the federal rules, and that of the state it was served from. If a request is received from another jurisdiction then the Virginia healthcare subrogation attorney need only Google search the jurisdiction’s rules to pull them up. Upon determination that the subpoena duces tecum does not conform to the applicable rules, then the Virginia subrogation attorney cannot legally respond to them.
Is the Subpoena HIPAA Compliant?
The Virginia subrogation attorney would be wise to double and triple check that the subpoena duces tecum conforms to HIPAA regulations. Violation of HIPAA carries stiff penalties, namely civil penalties up to $1.5 million in annual fines and criminal penalties of up to ten years imprisonment for “covered entities.” This leads to the next issue:
Are You a Covered Entity Under HIPAA?
45 CFR 160.103 defines covered entities as a “health plan, health care clearing house, or a health care provider who transmits any health care information in electronic form.” If you are a Virginia healthcare subrogation attorney you are likely considered a covered entity or an agent for a covered entity under HIPAA regulations.
Is There a Valid Authorization For Disclosure?
Under HIPPA, a “valid authorization” is one that contains expressed written consent signed by the patient or their legal guardian for a specified purpose. This consent must include a detailed description of what records are referred to and what purpose they are to be used.
Conclusions for the Virginia Healthcare Subrogation Attorney
Upon receipt of any subpoena duces tecum for health records the Virginia healthcare subrogation attorney need only remember two things: process and HIPAA. If both are complied with then it is safe to respond, if however, one or both are not complied with then the Virginia subrogation attorney cannot respond to the subpoena duces tecum.
Editor:
Justin McLeod, Esq.
Associate
Chaplin & Gonet
Medical Bills for Personal Injury in Virginia
Every Virginia subrogation attorney knows how important medical bills, and their introduction into evidence, are for their day-to-day practice. Often times in automobile subrogation the medical bills far exceed any damages to the car. This article confronts the confusing evidentiary “Venn diagram” of Virginia law concerning medical bills and their admission into evidence. Virginia subrogation attorneys need to understand how the differing statutes and case law overlap and be prepared for objections from opposing counsel. Each source of law will be examined in turn and then the article will conclude with a brief discussion of their overlap, interaction and trial strategies for the Virginia subrogation attorney bringing a personal injury action.
The Law
The first relevant statute is VA Code § 8.01-413.01 titled “Authenticity and reasonableness of medical bills; presumption.” The statute states:
A. In any action for personal injuries, wrongful death, or for medical expense benefits payable under a motor vehicle insurance policy issued pursuant to § 38.2-124 or § 38.2-2201, the authenticity of bills for medical services provided and the reasonableness of the charges of the health care provider shall be rebuttably presumed upon identification by the plaintiff of the original bill or a duly authenticated copy and the plaintiff’s testimony (i) identifying the health care provider, (ii) explaining the circumstances surrounding his receipt of the bill, (iii) describing the services rendered and (iv) stating that the services were rendered in connection with treatment for the injuries received in the event giving rise to the action. The presumption herein shall not apply unless the opposing party or his attorney has been furnished such medical records at least twenty-one days prior to the trial.
This code section closely mirrors the language in McMunn v. Tatum, 237 Va 558, 379 S.E.2d 908 (Va. 1989) (hereinafter McMunn v. Tatum), which allows parties to introduce medical bills into evidence by laying a foundation through a lay witness. On its face, this statute allows attorneys to get in records without dealing with reasonableness or authenticity objections as long as copies of the records are sent to opposing counsel 21 days before trial. For most cases, if the Virginia subrogation attorney gets the records to opposing counsel within the 21 days, then there are usually no issues at trial. However, with a careful reading of Mcmunn v. Tatum, opposing counsel can trip up a Virginia subrogation attorney with an authenticity objection. A brief look at the holding in McMunn v. Tatum will prove instructive before discussing its impact upon VA Code § 8.01-413.o1.
McMunn v. Tatum was an appeal from a malpractice suit brought against a dentist. The case examined two evidentiary issues: (1) whether a plaintiff’s testimony that he has received bills regular on their face and consistent with his testimony as to his injuries and treatment is sufficient to show that the bills “came from the sources claimed” and (2) that the introduction of bills of the kind described above is “some evidence” that they are reasonable in amount. The Supreme Court of Virginia held the following:
A plaintiff may offer medical bills through the plaintiff’s testimony alone if he lays a foundation showing (1) that the bills are regular on their face, and (2) that they appear to relate to treatment, the nature and details of which the plaintiff has explained. If the defendant challenges the authenticity of the bills, they will be insufficient in themselves to create a jury issue, and independent proof of authenticity will be necessary. If the defendant challenges only their quantitative reasonableness, a jury issue is created on that question. The jury may then consider the bills as “some evidence” of their quantitative reasonableness, to be weighed against such evidence as the defendant may present on that question. If the defendant contests their medical necessity or causal relationship and further represents to the court that the defense will offer evidence on those issues, the bills will be insufficient in themselves to create a jury issue, and expert foundation testimony will be prerequisite to their admission.
The majority opinion contains an important footnote tempering the above requirements: “The issues of medical necessity and causal relationship are substantially uncontested where a defendant who intends to offer no evidence on those issues merely objects to the medical bills for the purpose of “putting the plaintiff to his burden of proof.” This important footnote is an invaluable arrow in the Virginia subrogation attorney’s quiver. In Virginia General District Court cases, where neither party wants to spend money on expert witnesses, McMunn v. Tatum stands for the proposition that plaintiffs may introduce medical bills into evidence by testimony without much worry as to reasonableness nor medical necessity objections.
One could be forgiven for looking at both VA Code § 8.01-413.01 and McMunn v. Tatum and concluding between case law and the above-mentioned statutes Virginia subrogation attorneys have the process of introducing medical bills into evidence pretty much covered. However, there is another key statute dealing directly with the introduction of medical bills in General District Court (courts not of record) or Circuit Court, where the defendant appeals: VA Code § 16.1-88.2, titled “Evidence of medical reports or records; testimony of health care provider or custodian of records.” This code section predates the Supreme Court handing down McMunn v. Tatum, in fact, the Supreme Court cites VA Code § 16.1-88.2 in its majority opinion.
The relevant section of VA Code § 16.1-88.2 states:
In a civil suit tried in a general district court or appealed to the circuit court by any defendant to recover damages for personal injuries or to resolve any dispute with an insurance company or health care provider, either party may present evidence as to the extent, nature and treatment of the injury, the examination of the person so injured and the costs of such treatment and examination by a report from the treating or examining health care provider as defined in § 8.01-581.1 and the records of a hospital or similar medical facility at which the treatment or examination was performed. Such medical report shall be admitted if the party intending to present evidence by the use of a report gives the opposing party or parties a copy of the report and written notice of such intention 10 days in advance of trial and if attached to such report is a sworn statement of the treating or examining health care provider that: (i) the person named therein was treated or examined by such health care provider; (ii) the information contained in the report is true and accurate and fully descriptive as to the nature and extent of the injury; and (iii) that any statement of costs contained in the report is true and accurate. Such hospital or other medical facility record shall be admitted if attached to it is a sworn statement of the custodian thereof that the same is a true and accurate copy of the record of such hospital or other medical facility.
A careful read of VA Code § 16.1-88.2 reveals language that echoes both the verbiage in McMunn v. Tatum and VA Code § 8.01-413.01, but with one key difference: the foundation is laid by the treating health care provider(s) by sworn affidavit. By obtaining an affidavit from the treating health care provider(s) and sending a copy of the records and affidavit to opposing counsel 10 days before trial Virginia subrogation attorneys seem to be guaranteed their admission into evidence. Authenticity concerns are dealt with by requiring a sworn statement by the custodian that the bill(s) are a true and accurate copy.
What does it all mean?
If in General District Court the Virginia subrogation attorney would be best suited to follow the requirements of VA Code § 16.1-88.2. However, given the difficulty in obtaining timely responses from medical providers it may not be an option. Then, one can look to VA Code § 8.01-413.01 and McMunn v. Tatum to almost guarantee the admission of the required medical records. However, there is still one problem area facing both General District Court and Circuit Court plaintiffs traveling the path of VA Code § 8.01-413.01: authenticity. A defense attorney can raise an objection to authenticity, given the medical records are almost always copies, and possibly keep the records out. This last hurdle can be overcome by the diligent Virginia subrogation attorney who satisfies the requirements set out in VA Code § 8.01-413(A), which states the following:
A. In any case where the hospital, nursing facility, physician’s, or other health care provider’s original records or papers of any patient in a hospital or institution for the treatment of physical or mental illness are admissible or would be admissible as evidence, any typewritten copy, photograph, photostatted copy, or microphotograph or printout or other hard copy generated from computerized or other electronic storage, microfilm, or other photographic, mechanical, electronic or chemical storage process thereof shall be admissible as evidence in any court of this Commonwealth in like manner as the original, if the printout or hard copy or microphotograph or photograph is properly authenticated by the employees having authority to release or produce the original records.
In short, if the Virginia subrogation attorney can produce an affidavit from the custodian of records at the institution where the plaintiff received medical care that the copies are authentic, then they are admissible. The Virginia subrogation attorney can keep this all straight by remembering that whenever the absolute right to admissibility granted by VA Code § 16.1-88.2 is unavailable they should look to the protections offered by VA Code § 8.01-413.01 and McMunn v. Tatum for both reasonableness and necessity and VA Code § 8.01-413(A) to sew up authenticity issues. Medical bills rest upon a three legged stool in Virginia, the legs are: reasonableness, necessity and authenticity; if any one leg is missing your whole Virginia subrogation case may fall down.
Editor:
Justin McLeod, Esq.
Associate
Chaplin & Gonet