North Dakota

Automobile Total Loss Thresholds

Total Loss Threshold (75%).

Vehicle damage exceeds 75% of retail value of vehicle determined by NADA. Glass and hail damage are excluded. N.D.C.C. § 39-05-20.2; 11 N.C. Admin. Code 4.0418.

Deductible Reimbursement

Automobile and Property: No applicable statute, Administrative Code provision or case law exists. North Dakota’s Department of Insurance orally indicates generally, the insured is paid pro-rata amount based on the percentage recovered, but reimbursement is merely a courtesy to the insured.

Diminution of Value

First Party: No court decisions regarding recovery allowed for diminution in value of a damaged vehicle in a first-party claim.

Third Party: Section 32-03-09.1 states: “The measure of damages for injury to property caused by the breach of an obligation not arising from contract is presumed to be the reasonable cost of repairs necessary to restore the property to the condition it was in immediately before the injury was inflicted and the reasonable value of the loss of use pending restoration of the property, unless restoration of the property within a reasonable period of time is impossible or impracticable, in which case the measure of damages is presumed to be the difference between the market value of the property immediately before and immediately after the injury and the reasonable value of the loss of use pending replacement of the property.” Sullivan v. Pulkrabek, 611 N.W.2d 162 (N.D. 2000).

First Come, First Served: Subrogating Multiple Claims in Excess of Policy Limits

Interpleader is encouraged in cases involving exposure to multiple claimants. Kiker v. Walters, 482 N.W.2d 626 (N.D. 1992). It is a device for resolving multiple adverse claims in one proceeding. id. There is no case law dealing with the appropriateness of settling a liability claim with one of two or more claimants seeking recovery from limit third-party liability insurance limits.

Funeral Procession Traffic Laws

North Dakota law grants funeral processions the right-of-way at intersections without regard to any traffic control signal. The escort vehicle driver can direct the procession to proceed through an intersection or make any necessary movements despite any traffic control signals. This implies that the lead funeral escort vehicle can disregard a red traffic signal. Specifically, the law grants processions the right-of-way and allows a law enforcement officer leading a funeral procession to proceed through an intersection or direct traffic despite any traffic control device. The other vehicles in the procession can then follow the police officer, regardless of the traffic signal. Vehicles in a funeral procession must yield the right-of-way to emergency vehicles or if directed by a police officer. All vehicles in the procession must have their headlights lit, and their emergency lights flashing and must be as closely spaced as safely possible. Other vehicles may not drive between, join, pass on a two-lane road, or cross the path of vehicles in a funeral procession. N.D. Cent. Code § 39-10-72.

Imputing Contributory Negligence of Driver to Vehicle Owner

Imputed Contributory Negligence Law:  Contributory negligence of driver not imputed to owner-passenger suing third party for damages. Jasper v. Freitag, 145 N.W.2d 879 (N.D. 1966); Mertz v. Weibe, 180 N.W.2d 664 (N.D. 1970).

Also not imputed to owner who is not a passenger. Matteson v. Polanchek, 164 N.W.2d 54 (N.D. 1969).

However, even though it admits weight of authority is against doing so, court held that Family Purpose Doctrine imputes contributory negligence of driver to owner for purposes of owner’s suit against third party to recover for damage to his vehicle. Schobinger v. Ivey, 467 N.W.2d 728 (N.D. 1991), overruling Brower v. Stoltz, 121 N.W.2d 624 (N.D. 1963).

Vicarious Liability/Family Purpose Doctrine:  No Vicarious Liability Statute.

North Dakota recognizes the Family Car Doctrine. Whether the doctrine applies, depends on the totality of the circumstances. While ownership of the vehicle by the head of the household is a circumstance strongly favoring application of the family car doctrine, to be liable, the head of the household must furnish, but need not own, the vehicle for the use, pleasure, and business of himself or a member of his family. McPhee v. Tufty, 623 N.W.2d 390 (N.D. 2001).

Sponsor Liability for Minor’s Driving:  N.D.C.C. § 39-06-09: Joint and several liability imposed on parents when child commits negligent acts in operation of motor vehicle, such as negligent acts that harm people or property, and parent signed child’s application for license or permit.

Laws Regarding using Cell Phones/Headphones/Texting While Driving

Cell Phone/Texting:  The operator of a motor vehicle may not use a wireless communication device to write, read, or send a text message. This does not apply to cell phone calls.  N.D.C.C. § 39-08-23(1).

Any minor under the age of 18 with a Class “D” license, may not operate an electronic communication device in any capacity, except for emergencies or to prevent a crime.  N.D.C.C. § 39-08-24.

Other Prohibitions:  No Applicable Laws.

Comments:  Devils Lake, N.D. Code of Ordinances §§ 10.16.460 and 10.16.450 prohibit the use of a wireless cell phone from being used to send, receive, or write text messages while driving. Drivers under the age of 18 may not use a cell phone in any capacity.

Grand Forks, N.D. Code of Ordinances § 8-0528 prohibits an operator of a motor vehicle from using a wireless communications device to compose, read, or send an electronic message.  

Loss Of Use

Loss of Use: Yes. The measure of damages for injury to property is presumed to be the reasonable cost of repairs necessary to restore the property to the condition it was in immediately before the injury was inflicted and the reasonable value of the loss of use pending restoration of the property, unless restoration of the property within a reasonable period of time is impossible or impracticable, in which case the measure of damages is presumed to be the difference between the market value of the property immediately before and immediately after the injury and the reasonable value of the loss of use pending replacement of the property. N.D.C.C. § 32-03-09.1. No case law or statutory support for the recovery of loss of use damages without the actual rental of a substitute vehicle.

Lost Profits: Yes, damages for lost profits are recoverable where they are reasonable and not speculative. Leingang v. City of Mandan Weed Bd., 468 N.W.2d 397 (N.D. 1991). In cases where the amount of damages may be hard to prove, “the amount of damages is to be left to the sound discretion of the finder of facts.” Keller v. Bolding, 678 N.W.2d 578 (N.D. 2004).

Comments: Additional damage rewards for loss of use and lost profits are allowed if they “can be established by competent evidence.” Robert v. Aircraft Inv. Co., 575 N.W.2d 672 (N.D. 1998). Evidence of past profits is generally an appropriate method to calculate estimated future profits. However, there are many different methods that may be used, and whichever method is used must be reasonably accurate and provide a fair basis for calculating the damages. Langer v. Bartholomay, 745 N.W.2d 649, 660 (N.D. 2008).

Med Pay/PIP Subrogation

Med Pay: Coverage not applicable.

PIP: No right of subrogation of “Basic No-Fault Benefits” directly against another insured (“secured”) person. Can pursue “unsecured” person, and no release of rights by insured is effective against the subrogation rights of the no-fault carrier against an “unsecure” person without the carrier’s consent. N.D.C.C. § 26.1-41-16. There is a distinction between subrogating for basic no-fault benefits (no subrogation) and subrogating optional excess no-fault benefits (can subrogate if policy provides for it). A policy may provide for the subrogation of “Optional Excess No-Fault Benefits.” Section 26.1-41-04 provides: “The optional excess no-fault benefits of a basic no-fault insurer may provide for subrogation to the injured person’s right of recovery against any responsible third party.”

• No-Fault State. Monetary threshold. Enacted in 1976. No-fault carrier pays first $10,000 of medical expenses, but has opportunity to coordinate benefits with a workers’ compensation carrier, if applicable. If the no-fault carrier pays benefits above and beyond the $10,000 threshold, the no-fault carrier has the opportunity to coordinate benefits with other health carriers, and can look to the workers’ compensation carrier for primary coverage, if such a carrier is involved. N.D.C.C. §§ 26.1-41-13(3) and 26.1-44-13(1); Kroh v. American Family Ins. Co., 487 N.W.2d 306 (N.D. 1992). Insured cannot sue tortfeasor for non-economic damages unless there is “serious injury”. N.D.C.C. § 26.1-41-08.

Made Whole: Not applied in North Dakota.

• Subrogation against tortfeasor can be pursued only for benefits paid in excess of basic no-fault benefits. Imperial Cas. & Indem. Co. v. Gen. Cas. Co. of Wis., 458 N.W.2d 335 (N.D. 1990). There used to be “right of equitable allocation” of losses among insurers (i.e., loss transfer) by agreement or arbitration, but § 26.1-41-17 was repealed in 2005 and such allocation is no longer available, unless benefits began prior to 8/1/05. See N.D.C.C. § 26.1-41-17 (repealed).

Statute of Limitations: The six (6) year personal injury statute of limitations runs from the date of the insured’s accident. N.D.C.C. § 28-01-16.

No Pay, No Play Laws

Rule:  In any action against an insured driver arising out of an accident where the injured driver is uninsured, the insured driver may not be assessed for non-economic damages where the uninsured driver has at least one conviction of driving without insurance. 

Authority: N.D.C.C. § 26.1-41-20.

Owner Liability For Stolen Vehicles

Key In The Ignition Statutes: N.D.C.C. § 39-10-51.

Common Law Rule: Although the case was never officially completed, one case indicates potential support for a defendant being held liable for injuries suffered by a third party after a thief steals the defendant’s car and negligently causes injuries to the third party. See Roquette v. North Am. Van Lines, Inc., 187 N.W.2d 78 (N.D. 1971) (Where a truck was stolen after the driver had left the keys in the vehicle, summary judgment was inappropriate as genuine questions of fact existed as to responsibility of all involved parties. Case was remanded for trial but was never tried).

Payment of Sales Tax After Vehicle Total Loss

First-Party Claims:  No applicable statute, case law, or regulation governing recovery of sales tax. The payment on a total loss would be the ACV less the deductible. ACV is defined as an amount equivalent to the replacement cost of lost or damaged property at the time of the loss, less depreciation. https://www.insurance.nd.gov/consumers/insurance/auto

Third-Party Claims:  No applicable statute, case law, or regulation governing recovery of sales tax.

Pedestrian and Crosswalk Laws

Statute:

N.D.C.C. § 39-10-28: When traffic signal is not in place, vehicles must yield to pedestrian in crosswalk on vehicle’s half of road or close to it. Pedestrians must not step off curb and into path of vehicle when vehicle does not have time to stop.

N.D.C.C. § 39-10-28: Pedestrians must yield the right-of-way to vehicles when crossing outside of a marked crosswalk or an unmarked crosswalk at an intersection.

Summary: Even where they have the right-of-way, pedestrians and drivers are still expected to exercise due care. Clark v. Feldman, 57 N.D. 741, 224 N.W. 167 (1929).

Rental Car Company Physical Damage and Loss of Use Claims

Recovery From Renter: Renter’s personal auto policy must cover damage to vehicles rented for 30 days or less, unconditioned by fault. Carriers must notify insureds about this feature. N.D. Code § 26.1-40-17.1. Statute allows recovery for loss of use, but limits claims to 60% of the daily rental rate, not to exceed 15 days. N.D. Code § 26.1-40-17.1. Collision Damage Waivers not regulated.

Recovery From Third-Party: Nothing specifically speaking to car rental company’s right to recover loss of use. However, damages allowed include the reasonable value of the loss of use pending restoration of the property, unless restoration of the property within a reasonable period of time is impossible or impracticable, in which case the measure of damages is presumed to be the difference between the market value of the property immediately before and immediately after the injury and the reasonable value of the loss of use pending replacement of the property. N.D. Code § 32-03-09.1.

Rental Car Company’s Liability Insurance Primary or Excess

Summary: A car rental company’s liability coverage is secondary to the insurance of the renter. N.D. Stat. § 26.1-40-17(2). A federal case to the contrary suggests that the state applies only to garagekeepers’ policies and not car rental companies. Travelers Indem. Co. v. American Motorist Ins. Co., 766 F.Supp. 804 (N.D. 1991).

Slower Traffic Keep Right

Statute: N.D.C.C. § 39-10-08 (a), (b) and N.D.C.C. § 39-10-11.

Summary: Drivers must drive in the right lane and use the left lane for passing only. Drivers must drive in the right lane except when passing another vehicle; when an obstruction exists in the right lane; upon a roadway with marked traffic lanes; or upon a roadway restricted to one-way traffic. Slower traffic must keep right. Any vehicle proceeding slower than the normal speed of traffic must drive in the right lane. Except when overtaking and passing on the right is permitted, the driver of an overtaken vehicle shall give way to the right in favor of the overtaking vehicle on audible signal.

Sudden Medical Emergencies While Driving

Sudden Emergency Defense or Unavoidable Accident Defense. If suddenly faced with a dangerous situation the person did not create, the person is not held to the same accuracy of judgment as one would be if there were time for deliberation. Harfield v. Tate, 598 N.W.2d 840 (N.D. 1999).

North Dakota has not formally adopted a sudden medical emergency defense. However, an incapacitated driver may use the sudden emergency defense or unavoidable accident defense to argue that they were not liable for the accident.

Suspension of Drivers’ Licenses

Administrative Suspension: The Director may suspend a driver’s license for failure to report an accident as required under law. Within 90 days after receipt of an accident report, the Director will suspend the license of any driver unless he deposits the amount of security sufficient to satisfy any judgment. N.D.C.C. § 39-16-04; N.D.C.C. § 39-6-05. Suspension will last until uninsured driver deposits adequate security or one year has elapsed since the accident and no action for damages has been filed against him. N.D.C.C. § 39-16-07.

Judgment: Upon receipt of the certified judgment, the Director will suspend the driver’s license of the judgment debtor. N.D.C.C. § 39-16.1-04. The license will remain suspended until judgment or installment agreement is satisfied in full. N.D.C.C. § 39-16.1-04.

Contact Information: State of North Dakota, Department of Transportation, Driver License Division, 608 East Boulevard Avenue, Bismarck, ND 58505-0700, (701) 328-2600, https://www.dot.nd.gov/divisions/driverslicense/driver.htm

Use of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles

Authority: https://www.nd.gov/ndins/consumers/auto/

Summary: There is currently nothing in North Dakota law that requires the use of OEM parts when repairing a vehicle. Earlier bills that would have required non-OEM parts to be certified by a third-party rating agency was rejected by the North Dakota House of Representatives.

Municipal/County/Local Governmental Immunity and Tort Liability

Legal Authority: Political subdivision is liable (1) under circumstances in which the employee would be personally liable, or (2) caused by some condition or use of real or personal property.  N.D.C.C. § 32-12.1-03.

Notice Deadlines:  None.  Suit must be filed against political subdivision within three (3) years. N.D.C.C. § 32-12.1-10.

Claims/Actions Allowed:  City liable for light and power distribution but not for operation and maintenance of city water sewer system (where no statutes, regulations, or policies prescribing course of action for maintenance and operation). Olson v. City of Garrison, 539 N.W.2d 663 (N.D. 1995).

Comments/Exceptions:  No liability if: (1) Execution of statute; (2) Discretionary function (decision making, matter of choice or judgment); and (3) Public duty (unless special relationship). N.D.C.C. § 32-12.1-03(3).

Damage Caps:  $250,000 Per Person. $1 Million Per Occurrence. N.D.C.C. § 32-12.1-03.  Liability insurance or self-insurance pool may be obtained by political subdivision to cover liability in excess of statutory limits. Statutory limits then in applicable. N.D.C.C. § 32-12.1-05.

State Sovereign Immunity And Tort Liability

Tort Claims Act:  Claims Against The State.  N.D.C.C. §§ 32-12.2-01 to 32-12.2-18 (1995).

Notice Deadlines:  Suit against State must be commenced within three years. N.D.C.C. § 32-12.2-02.  Written notice must be presented in writing to the Director of the Office of Management and Budget within 180 days. N.D.C.C. § 32-12.2-04.

Claims/Actions Allowed:  State waives immunity for both tort and contract claims. State liable for an injury caused by:

(1) negligence of employee acting within scope of employment (including operating motor vehicles); or

(2) use or condition of tangible property, if employee would be personally liable if a private person would be liable under the circumstances.

N.D.C.C. § 32-12.2-02.

Employee cannot be personally liable. This includes operation of a motor vehicle. N.D.C.C. § 32-12.2-03.

Comments/Exceptions:  N.D.C.C. § 32-12.2-02(3) lists claims for which a State employee is not liable. (e.g., legislative, quasi-legislative, public duties, collection of taxes, environmental contamination, liability assumed under contract except for rental vehicles, etc.).

Damage Caps:  Recovery limited to a total of $250,000 per person and $1,000,000 for any number of claims arising from a single occurrence and prohibits punitive damages in actions against the State. N.D.C.C. § 32-12.2-02.

Anti-Indemnity Statutes

No Statute.

Contribution Actions

Modified Joint and Several Liability. Several liability, unless defendants are acting in concert. N.D.C.C. § 32-03.2-02; Pierce v. Shannon, 607 N.W.2d 878 (N.D. 2000).

Contribution allowed in underlying or separate action where tortfeasor pays more than his share of common liability. Contribution plaintiff only entitled to contribution if liability of contribution defendant was extinguished by a reasonable settlement. N.D.C.C. § 32-03.2-02 (1987); Pierce v. Shannon, 607 N.W.2d 878 (N.D. 2000). Must be brought by motion in pending suit or within one year of judgment. If settlement, must be brought within one year of payment.

Contributory Negligence/Comparative Fault

Modified Comparative Fault: 50% Bar. Damaged party cannot recover if it is 50% or more at fault. If 49% or less at fault, it can recover, although its recovery is reduced by its degree of fault. If plaintiff is negligent, the degree of fault will reduce his recovery, until it equals the fault of others, then it will be barred. N.D.C.C. § 32-03.2-02.

Dog Bite Laws

Dog owner will be liable for damages, if the victim can prove that the dog owner was negligent and negligence caused the injury. Sendelbach v. Grad, 246 N.W.2d 496 (N.D. 1976).

Economic Loss Doctrine

Majority Rule. North Dakota adopted the ELD in 1984. Hagart Farms v. Hatton Indus., Inc., 350 N.W.2d 591 (N.D. 1984). You can’t sue the manufacturer of a product for damage to the product alone where there is no accompanying personal injury or damage to “other property”. The ELD applies equally to commercial and consumer transactions. Clarys v. Ford Motor Co., 592 N.W.2d 573 (N.D. 1999). Under North Dakota’s ELD, economic loss resulting from damage to defective product, as distinguished from damage to other property or persons, may be recovered in cause of action for breach of warranty or contract, but not in tort action. Hanover Ins. Co. v. Ameribuilt Buildings, Inc., 2022 WL 2966504 (D.N.D. 2022).

Parental Responsibility

Property Damage. Liability imposed on parents when child willfully or maliciously destroys property. N.D.C.C. § 32-03-39.

The limit of liability is $1,000.00 plus costs. Child must be under 18-years-old.

Auto Liability. Joint and several liability imposed on parents when child commits negligent acts in operation of motor vehicle, such as negligent acts that harm people or property, and parent signed child’s application for license or permit. N.D.C.C. § 39-06-09.

There are no limits of liability. Child must be under 18-years-old.

Spoliation

Adverse Inference/Sanctions: Trial courts in North Dakota have the authority to sanction a party when key evidence is missing, “even where the party has not violated a court order and even when there has been a no finding of bad faith.” Bachmeier v. Wallwork Truck Ctrs., 544 N.W.2d 122, 124 (N.D. 1996). In sanctioning a party, the district court should at least consider “the culpability, or state of mind, of the party against whom sanctions are being imposed; a finding of prejudice against the moving party, and the degree of this prejudice, including the impact it has on presenting or defending the case; and, the availability of less severe alternative sanctions.” Id. at 124-25. Trial courts have the “duty to impose the least restrictive sanction available under the circumstances in the exercise of it’s inherit power.” Id. at 125. Sanctions can include dismissal, preclusion of evidence, or adverse inference. Id. at 126.

Statute of Limitations

Personal Property6 YearsN.D.C.C. § 28-01-16

Personal Injury6 YearsN.D.C.C. § 28-01-16(5)

Personal Injury/Wrongful Death2 YearsN.D.C.C. § 28-01-18(4)

Personal Injury/Medical Malpractice6 YearsN.D.C.C. § 28-01-16

Personal Injury/Medical Malpractice/Relief Accures2 YearsN.D.C.C. § 28-01-18

Breach of Contract/Written6 YearsN.D.C.C. § 28-01-16(1)

Breach of Contract/Oral6 YearsN.D.C.C. § 28-01-16(1)

Breach of Contract/Sale of Goods4 YearsN.D.C.C. § 41-02-104. (2-725)

Statute of Repose/Products/After Purchase Date10 YearsN.D.C.C. § 28-01.3-08*

Statute of Repose/Products/After Manufacture Date11 YearsN.D.C.C. § 28-01.3-08*

Statute of Repose/Personal Property10 YearsN.D.C.C. § 28-01-44**

Breach of Warranty/U.C.C.4 YearsN.D.C.C. § 41-02-104(1)

Workers’ Comp Third Party Case6 YearsN.D.C.C. § 65-01-09

Strict Product Liability6 YearsN.D.C.C. § 28-01-16(5)

Statute of Limitations Exceptions

*10 Years from initial purchase of useful consumption or 11 Years from manufacture date. N.D.C.C. § 28-01.3-08.

**10 Years for improvement to real property, but it does not apply to manufacturers or suppliers of products used in the improvement. N.D.C.C. § 28-01-44.

Health and Disability Insurance

Statute of Limitations: Medical Malpractice – 6 Years. N.D.C.C. § 28-01-16 (within 2 years after claim for relief accrues); N.D.C.C. § 28-01-18. Wrongful Death – 2 Years. N.D.C.C. § 28-01-18.

Subrogation of Medical and Disability Benefits are allowed. N.D.C.C. § 26.1-18.1-07(1)(c)(16). Made Whole and Common Fund Doctrines do not apply. Hayden v. Medcenter One, Inc., 2013 ND 46, 828 N.W.2d 775 (addressing hospital lien).

Admissibility of Expert Testimony

Admissibility Standards: N.D.R. Evid. 702

Case/Statutory Law:  State v. Hernandez, 707 N.W.2d 449 (N.D. 2005).

Comments:  N.D. R. Evid. 702 (more liberal than Federal Rule of Evidence 702). Daubert rejected. Court determines that method of proof is reliable as an area for expert testimony, then whether the witness is qualified as an expert to apply this method. It is not necessary that an expert be experienced with the identical subject matter at issue or be a specialist, licensed, or even engaged in a specific profession. Hernandez stated that North Dakota never has explicitly adopted Daubert or Kumho Tire; expert admissibility instead is governed by North Dakota Rule of Evidence 702.

Pre-Suit Disclosure of Liability Policy Limits in Third-Party Claims

Duty To Disclose: No.

Recording Conversations

One-Party Consent: It is not unlawful for an individual who is a party to or has consent from a party of an in-person or electronic communication to record and or disclose the content of said communication unless the person is doing so for the purpose of committing a tortious or criminal act. N.D. Cent. Code § 12.1-15-02.

Product Liability Law

Statute of Limitations/Repose:  6 years for personal injury. N.D.C.C. § 28-01-16. Wrongful death is 2 years. N.D.C.C. § 28-01-18(4). Discovery Rule applies.

Liability Standards: Negligence, Strict Liability, Warranty.

Fault Allocations: Modified Comparative.

Non-Economic Caps/Limits On Actual Damages: No.

Punitive Y/N and Limits: Yes (Limits).

Heeding Presumption?: Yes. Crowston v. Goodyear Tire & Rubber Co., 521 N.W.2d 401, 410 (N.D. 1994); Butz v. Werner, 438 N.W.2d 509, 517 (N.D. 1989).

Innocent Seller Statute: Yes. N.D.C.C. § 28-01.3-05

Joint and Several Liability: No. N.D.C.C. § 32-03.2-02.

Available Defenses: Assumption of Risk; Misuse; Alteration; Compliance With Government Standards.

Restatement 2nd or 3rd?: Neither.

“Matching Regulations” And Laws Affecting Homeowners Property Claims

Statute/Regulation: None.

Caselaw: None.

Condominium/Co-OP Waiver of Subrogation Laws

No waiver of subrogation required. N.D.C.C. § 47-04.1.

Damage to Property Without Market Value

Service Value:  No Case Law

Intrinsic Value:  No Case Law

Sentimental Value:  Can only recover reasonable cost of repairs and the reasonable value of the loss of use pending restoration of the property, unless restoration of the property within a reasonable period of time is impossible or impracticable, in which case the measure of damages is presumed to be the difference between the market value of the property immediately before and immediately after the injury and the reasonable value of the loss of use pending replacement of the property. N.D. Cent. Code Ann. § 32-03-09.1.

General Contractor Overhead And Profit Payments In First-Party ACV Property Damage Claims

Payment And Depreciation Of GCOP/Sales Tax: No applicable case law, statutes, administrative rules, or other guidance with regard to the calculation and/or depreciation of GCOP.

Landlord/Tenant Subrogation

A tenant’s liability to the landlord’s insurer for negligently causing a fire depends on the intent and reasonable expectations of the parties to the lease as ascertained from the lease as a whole. Agra-By-Products, Inc. v. Agway, Inc., 347 N.W.2d 142, 146-150 (N.D. 1984) (subrogation denied because lease required lessor to keep insurance and lessee to reimburse lessor for premiums).

Anti-Subrogation Rule

An insurer is not entitled to subrogation from its own insured for a claim arising from the very risk for which the insured was covered. American Nat’l Fire Ins. Co. v. Hughes, 658 N.W.2d 330 (N.D. 2003). Additionally, an insurer is not entitled to subrogation from entities named as insureds in the insurance policy or entities deemed to be additional insureds under the policy. Id. An entity not named as an insured in an insurance policy is an additional insured protected by the ASR when, under the circumstances, the insurer is attempting to recover from the insured on the risk the insurer had agreed to take upon payment of premiums. Id. Fraud or design can potentially allow subrogation against an insured party to proceed. Id. Subrogation is not prohibited against a subcontractor not named on the owner’s builder’s risk policy. Tri-State Ins. Co. of Minnesota v. Commercial Group West, LLC, 698 N.W.2d 483 (N.D. 2005). In Hughes, Hughes was the vice president of United Crane, a corporation owned entirely by Hughes’ parents. United Crane was insured by American National Fire Ins. Co. (“American”) when Hughes accidentally started a fire in the United Crane workshop by attempting to suck gasoline out of his snowmobile using a shop-vac. Hughes was not acting as an employee of the corporation at the time, but Hughes, his brother, and his father kept and worked on their snowmobiles in the United Crane workshop frequently. American paid $250k in damages to United Crane and then attempted to subrogate for that amount against Hughes. American’s subrogation attempt was barred by the court because the court found that Hughes was an implied co-insured under United Crane’s policy, and that allowing subrogation, given the circumstances, would be allowing subrogation by the insurer for the very risk they had agreed to assume under the policy.

Criminal Restitution

North Dakota statute allows a “victim” to recover restitution payments from criminal defendant due to criminal conduct. N.D.C.C. § 12.1‐32‐08; N.D.C.C. § 12.1‐32‐02. Related case law determined that an insurer who has indemnified their insured as a “victim” of criminal defendant’s conduct suffers an economic loss, and therefore, will become a “victim” for purposes of recovery of restitution. State v. Vick, 587 N.W.2d 567, 568 (N.D. 1998).

Made Whole Doctrine

North Dakota has not adopted the Made Whole Doctrine either for subrogation generally or with respect to the subrogation rights of health insurers and health Plans.

Medical Expenses, Insurance Write-Offs, and The Collateral Source Rule

Collateral Source Rule: CSR broadly applied to bar evidence of government benefits plaintiff has received. Nelson v. Trinity Med. Ctr., 419 N.W.2d 886 (N.D. 1988); Anderson v. U.S., 731 F.Supp. 391 (D. N.D. 1990). Medicare benefits set-off. Overton v. U.S., 619 F.2d 1299 (8^th Cir. 1980). Statute called “Reduction For Collateral Source Payment” says defendant entitled to reduction of economic damages to the extent they are covered by payment from a collateral source. A “collateral source” is any sum which need not be repaid by plaintiff. It doesn’t include benefit purchased by plaintiff.

Recovery Of Medical Expenses Rule: North Dakota has no reported decisions dealing with treatment of write-downs and write-offs regarding the proof and recovery of reasonable medical expenses in civil litigation. Plaintiff’s testimony can establish sufficient foundation that medical bills incurred as a result of a vehicle crash. Erdmann v. Thomas, 446 N.W.2d 245 (N.D. 1989).

Related Law/Comments: N.D.C.C. § 32-03.2-06 allows court to reduce damages post-verdict if economic damages are covered by payment from a collateral source. However, there is an exception for private insurance purchased by plaintiff, life insurance, death, or retirement benefits, or any collateral source with subrogation rights. Dewitz by Nuestel v. Emery, 508 N.W.2d 334 (N.D. 1993). No such exception for workers’ compensation and Social Security. Leingang v. George, 589 N.W.2d 585 (N.D. 1999); But see Krein v. Indus. Co. of Wyoming, 2003 WL 22415867 (D. N.D. 2003) (questioning Leingang).

Employee Leasing Laws

Both the employee leasing company and the client company are considered employers and immune from third-party actions when the two entities have secured the payment of compensation in accordance with North Dakota law. N.D.C.C. § 65-01-08.

Hospital Lien Laws

Statute: N.D. Stat. §§ 35-18-01 to 35-18-11. Hospital Lien.

Perfecting Lien: (1) Notice of intention to file a hospital lien statement must be served on the tortfeasor by registered or certified mail or personal service just as service of summons would be served in a civil action. § 35-18-02. (2) Within 30 days after services rendered file lien statement in the office of the clerk of the district court of the county in which services were rendered. Must include name address of injured person, tortfeasor and liability carrier, insurance company liable for insurance to patient, and itemized statement of services. Must also be signed by hospital/institution claiming lien by person authorized and with knowledge and verified that the facts are true to the best of the knowledge of person and that amount is due and unpaid. § 35-18-03.

Comments: Hospital has lien for the reasonable value of services rendered to a patient injured in an accident.  It attaches to all personal injury claims, settlements, etc. as well as to any “insurance or indemnity payable to the injured person by any insurer.” § 35-18-01. Clerk of court will charge a fee (§ 37-05.2-03(1)(d)), file-stamp lien statement, and keep indexed. §35-18-04. Filing of lien statement is constructive notice to all persons of the hospital’s claim against tortfeasor and its insurer, and no release is valid to release this claim. § 35-18-05. Hospital can enforce its lien by civil action against the tortfeasor and its insurer and even a judgment against them does not bar the hospital from collecting its lien unless they have already paid the hospital. § 35-18-06. Any judgment in action for damages must contain reference to the lien and hospital has 60 days to bring action to enforce lien thereafter. § 35-18-07. If patient has insurance policy/contract (non-workers compensation) providing for indemnity or compensation for hospital charges, the hospital also has a lien on such benefits, and the policy/contract can pay off the lien which constitutes a release of that party. § 35-18-08. Liable party can inspect hospital records. § 35-18-09. Action on lien must be filed within one year after filing lien. § 35-18-10.

OCIP/CCIP Subrogation In Workers’ Compensation Construction Cases

OCIP Law: No statute or case law specifically dealing with effect of OCIP/CCIP. (Monopolistic State Fund).

Statutory Employer Law: A general contractor must ensure that employees of subcontractors are covered. HB 1137, passed on August 1, 2017, extends a general contractor’s liability for the workers’ compensation coverage of workers employed by a subcontractor or independent contractor operating under agreement with the general contractor. If a subcontractor or independent contractor does not secure workers’ compensation coverage, the general contractor is liable for the payment of penalties as well as premiums, until such time as the subcontractor or independent contractor pays the amounts owed. N.D.C.C. § 65-04-26.2.

Comments: If a general contractor secures workers’ compensation benefits, it is protected by the Exclusive Remedy Rule. N.D.C.C. § 65-01-02(16)(c).

Recovery Of Increased Workers’ Compensation Premiums By Employer

Recovery For Increased Premiums? Undecided.

Statute/Case Law: No.

Rule Summary: There is no authority or precedent regarding the attempted recovery of damages for increased workers’ compensation insurance premiums by an employer from a third-party tortfeasor.

Which Workers’ Compensation “Benefits” Can Be Subrogated

There is no precedent or discussion in case law regarding whether nurse case management fees or other allocated costs which may benefit the employer and/or employee can be recovered in subrogation. Section 65-01-09 describes a workers’ compensation carrier’s subrogation lien as follows:

… the total amount the organization has paid or would otherwise pay in the future in compensation and benefits for the injured employee. N.D.C.C. § 65-01-09.

North Dakota is one of four remaining monopolistic states in the country. In North Dakota, a state organization known as Workforce Safety and Insurance (“WSI” – formerly known as North Dakota Workers’ Compensation but referred to simply as the “Organization”) manages and regulates an exclusive employer-financed, no-fault insurance system covering workplace injuries. WSI is the sole provider and administrator of the workers’ compensation system in North Dakota. The North Dakota Workers’ Compensation Act defines “medical services” as:

…a medical, surgical, chiropractic, psychological, dental, hospital, nursing, ambulance, and other related or ancillary service, including physical and occupational therapy and drugs, medicine, crutches, a prosthetic appliance, braces, and supports, and physical restoration and diagnostic services…

As of 2005, North Dakota requires compliance with ODG Guidelines. See the state of Kentucky and the Preamble above for an argument that the subrogated carrier can recover the “case manager’s” fee for development of a “treatment plan,” utilizing the ODG guidelines.

Workers’ Compensation Subrogation Waiver Endorsements

Subrogation Statute: N.D.C.C. § 65-01-09

Waiver Allowed? Unclear.

Effect Of Waiver Endorsement on Carrier’s Right To Assert A Lien On Claimant’s Recovery: North Dakota statutorily prohibits any reduction in the subrogation interest or lien by settlement, compromise, or judgment, though it is unclear if this prohibition also applies to waivers of subrogation prior to a loss. N.D.C.C. § 65-01-09.

Other Applicable Law: None.

Workers’ Compensation

Statute of Limitations:  6 Years. N.D.C.C. § 65-01-09.

Can Carrier Sue Third Party Directly:  Yes, after 60 days.

Right to Intervene:  Yes.

Recovery from UM/UIM Benefits:  Undecided.

Subrogation Against Medical Malpractice:  Yes.

Subrogation Against Legal Malpractice:  No.

Recovery Allocation/Equitable Limitations:  Up to 50% of third-party recovery.

Employer Contribution/Negligence:  No.

Attorney’s Fees/Costs:  25% / 1/3

Future Credit:  Yes.

Auto No-Fault:    Yes.

Workers’ Compensation Claims by Undocumented Employees

Y/N/U:  Y

Statute:  The statute expressly mentions “aliens” under the definition of employee. The statute does not touch on “legal” or “illegal” aliens. N.D. Cent. Code § 65-01-02-16(a)(2).

Case Law:  Undecided