SOUTH CAROLINA

Tort Reform Law Guts Joint & Several Liability in Favor of Proportionate Liability, Not Deepest Pocket

South Carolina enacted a bipartisan tort reform that overhauls joint and several liability to place fault on the responsible party instead of the deepest pocket. The law also caps bars and restaurants' liability in drunk driving cases. The key features are:

• The jury (or court) determines the fault of all parties involved, including claimants, defendants, and non-parties who contributed to the injury/damages
• Defendants can move to add parties to the verdict sheet, including settling defendants
• The plaintiff's share of fault is taken into account when determining the defendants' proportionate liability
• Joint and several liability only applies to defendants responsible for 50% or more of the fault
• Defendants responsible for less than 50% of the total fault are only liable for their proportionate share of damages (except certain circumstances like intentional or reckless conduct)
• Drops the required liquor liability insurance for bars and restaurants from $1M per incident to $1M aggregate
• Caps bars and restaurants' liability at 50% of the plaintiff's actual damages in drunk driving cases.

The law takes effect January 1, 2026, and applies to claims arising or accruing after that date. House Bill 3430.

GEORGIA

Georgia Enacts Tort Reform to Correct “Out-of-Balance Legal Environment”

We discussed this in the April issue of Claims Notes. Governor Kemp signed the bill into law, saying this law corrects "an out-of-balance legal environment." The right to a trifurcated trial took effect on April 21, 2025, and the new legal standard for negligent security claims applies to claims arising on or after that date. Senate Bill 68.

NEW YORK

New York’s Top Court Expands Tort Liability; Animal Owners Can Now Be Sued for Ordinary Negligence

For injuries caused by animals, New York imposes strict liability on an animal owner with actual or constructive knowledge of the animal's vicious propensities. This is commonly called the one bite rule. For many years, New York decisional law has held that no common-law negligence liability exists when a domestic animal causes harm. Liability would only be imposed if the plaintiff could prove the animal's vicious propensity, and violations of local leash laws were irrelevant to the liability analysis.

New York's top court reversed this long-standing rule after a postal carrier suffered severe injuries. New York animal owners can now be held civilly liable under ordinary negligence. Violations of local leash laws or any other evidence of an animal owner's negligence are now admissible and relevant to liability. This change aligns New York with most jurisdictions, including Alaska, Arizona, Arkansas, Hawaii, Indiana, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, South Dakota, Texas, West Virginia, Wyoming, Washington, Washington, D.C., and others. Decision.

WEST VIRGINIA

Auto Insurers Not Required to Offer UIM Coverage on Non-Owned Autos

The Court of Appeals for the Fourth Circuit certified the following question to the West Virginia Supreme Court of Appeals: Does West Virginia law "require an insurer, who issues a commercial automobile insurance policy to a named insured providing liability coverage for particular owned vehicles and a class of non-owned vehicles, to offer underinsured motorist coverage for non-owned vehicles?" The West Virginia Supreme Court of Appeals concluded that insurers are not required to offer UIM coverage on non-owned vehicles. In West Virginia, UIM coverage is not meant to provide insurance coverage "upon each and every underinsured vehicle to everyone." Instead, "the purpose of UIM coverage is uniquely for the benefit of the named insured and permissive users of the named insured's vehicle." Decision.

MICHIGAN

Lawsuit Against Pharmacist for Selling Counterfeit Medication Not Covered by CGL or E&O Insurance

Janssen sued a pharmacist for allegedly selling counterfeit Janssen-branded HIV medication. Janssen's causes of action were intellectual property (IP) infringement and unjust enrichment. The pharmacist sought coverage from its CGL and E&O insurers. Both disclaimed coverage without providing a defense. The CGL insurer denied coverage based on 

1. Bodily injury or property damage not alleged;
2. The expected injuries exclusion;
3. The professional services exclusion; and
4. The IP exclusion.

The E&O insurer denied coverage because its policy only covered claims brought by natural persons who received professional services and alleged bodily injury or property damage. The policyholder and insurers moved for summary judgment. The trial court granted the insurers' motions on various grounds and denied the insured's motion. The Sixth Circuit Court of Appeals ruled that the professional services exclusion in the CGL policy precluded all coverage. The E&O insurer did not owe coverage because a natural person did not bring Jannsen's suit. In addition, the E&O policy was not illusory because it covers claims brought by natural persons. Decision.

NEVADA

Custody, Care, or Control Exclusion Precluded Coverage for Damage to $5M Airplane 

A Las Vegas personal injury attorney, via an LLC, owns a $5 million turboprop airplane. He hangared the plane at the North Las Vegas Airport. The law firm’s employees went to the hangar to move the law firm's property and decided to move the aircraft. They removed the wheel chocks and used a power dolly to maneuver the plane under the hangar door. The hangar door crashed down on the aircraft, damaging it. The LLC sued the law firm for diminished value, and the firm sought liability coverage. The insurer denied coverage based on the care, custody, or control exclusion and filed a declaratory judgment action. The law firm contended the exclusion did not apply, arguing that the employees did not have legal control over the plane because an unwritten agreement existed between the LLC and the law firm not to touch the aircraft. The Ninth Circuit Court of Appeals rejected this argument, concluding that the employee’s maneuvering of the aircraft under the hangar door triggered the exclusion. As such, the insurer had no duty to defend or indemnify the law firm. Decision.