Author - Kacey R. Riccomini

1
Failure to Maintain Equipment “Integrally Related” to Medical Diagnosis or Treatment Resulting in an Injury is Professional Negligence Under MICRA and Therefore Subject to a One Year Statute of Limitations
2
CPAs’ Audit Report and Qualified Opinion Did Not Cause Company’s Or Investors’ Losses Where There Was No Evidence Of Reasonable Reliance
3
An Additional Insured’s Reasonable Expectations may be Different from the Named Insured’s and Must be Considered to Determine whether the Additional Insured is Entitled to Defense from the Insurer of a Commercial Excess & Umbrella Liability Policy

Failure to Maintain Equipment “Integrally Related” to Medical Diagnosis or Treatment Resulting in an Injury is Professional Negligence Under MICRA and Therefore Subject to a One Year Statute of Limitations

By: Kacey R. Riccomini
September 30, 2016

Recently, in Flores v. Presbyterian Intercommunity Hospital (2016) 63 Cal.4th 75, the California Supreme Court clarified whether and when the general negligence statute of limitations or, alternatively, the Medical Injury Compensation Reform Act’s (“MICRA”) special statute of limitations, applies to health care providers. Generally, a two-year statute of limitations for general negligence applies to personal injury actions. (Code Civ. Proc. §335.1.) However, under MICRA, claims for professional negligence against health care providers must be brought within the earlier of (1) “three years after the date of injury,” or (2) “one year after the plaintiff discovers, or…should have discovered, the injury.”  (Code Civ. Proc. §340.5.)

In Flores, the plaintiff was injured when one of the rails on her hospital bed collapsed. The rail had been raised per the doctor’s orders following a medical assessment of her condition. Almost two years later, Flores sued the hospital, claiming that it negligently failed to inspect and maintain the equipment. The hospital, Presbyterian Intercommunity Hospital (“PIH”), sought to dismiss the claim by way of a demurrer, arguing that the claim was barred by §340.5’s one-year statute of limitations since Flores knew about her injury when she fell out of her hospital bed over a year before filing suit. Flores, on the other hand, argued that PIH’s conduct was ordinary negligence, subject to the two-year statute of limitations under §335.1. The trial court agreed with PIH, and sustained the demurrer without leave to amend.

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CPAs’ Audit Report and Qualified Opinion Did Not Cause Company’s Or Investors’ Losses Where There Was No Evidence Of Reasonable Reliance

By: Kacey R. Riccomini
April 24, 2016

Accountants can breathe easier after Mosier v. Stonefield Josephson, Inc., CPAs (9th Cir., Feb. 23, 2016, No. 13-56453) 2016 WL 703104. Recently, the Ninth Circuit Court of Appeals, found that Stonefield, an accounting firm that was hired by PEMGroup and its related entities to audit financial statements, did not cause PEMGroup or its investors’ losses where there was no evidence the company or its investors actually or reasonably relied on the CPAs’ audit report, particularly when PEMGroup’s management defrauded investors and Stonefield issued qualified opinions of PEMGroup’s financial statements. Going forward, the Ninth Circuit’s decision will greatly impact professional liability suits against accountants, among others.

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An Additional Insured’s Reasonable Expectations may be Different from the Named Insured’s and Must be Considered to Determine whether the Additional Insured is Entitled to Defense from the Insurer of a Commercial Excess & Umbrella Liability Policy

Transport Insurance Company v. Superior Court (2014) 222 Cal.App.4th 1216.

By: Richard H. Glucksman, Jon A. Turigliatto, and Kacey R. Riccomini
June 4, 2014

The Second District Court of Appeal’s recent decision, Transport Insurance Company v. Superior Court (2014) 222 Cal.App.4th 1216, immediately affects builders and contractors (collectively “builders”) who are often named as additional insureds (AIs) to contractors’ general liability policies. The decision is an important tool for builders’ counsel because the builder’s reasonable expectations can alter the interpretation of ambiguous terms in policies issued to subcontractors. Essentially, the builder’s intent is relevant to the interpretation of policy terms because the subcontractor’s intent in requesting additional coverage depends on the agreement it made with the builder. The salient aspects of the facts, the Appellate Court’s reasoning, and practical considerations are discussed below.

Transport Insurance Company (Transport) issued a commercial excess and umbrella liability policy (Policy) to Vulcan Materials Company (Vulcan), naming R.R. Street & Co., Inc. (Street) as an AI for its distribution of a solvent. The Policy provided that Transport would indemnify and defend the insured for loss caused by property damage if (1) it was not covered by “underlying insurance” but was within the terms of coverage of the Policy, or (2) if the limits of liability of the “underlying insurance” were exhausted during the Policy period due to property damage. The Policy included a Schedule of Underlying Insurance (Schedule) that listed policies issued to Vulcan. Thereafter, Vulcan and Street were named as defendants in several environmental contamination actions (Underlying Actions).

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