Automobile Insurance SubrogationAutomobile Total Loss ThresholdsDeductible ReimbursementDiminution of ValueFirst Come, First Served: Subrogating Multiple Claims in Excess of Policy LimitsFuneral Procession Traffic LawsImputing Contributory Negligence of Driver to Vehicle OwnerKeep Right Traffic LawsLaws Regarding Using Cell Phones/Headphones/Texting While DrivingLoss Of UseMed Pay/PIP SubrogationOwner Liability For Stolen VehiclesPayment of Sales Tax After Vehicle Total LossPedestrian and Crosswalk LawsRental Car Company Physical Damage and Loss of Use ClaimsRental Car Company’s Liability Insurance Primary or ExcessSudden Medical Emergencies While DrivingSuspension of Drivers’ LicensesUse of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Federal , State, and Local Governmental EntitiesMunicipal/County/Local Governmental Immunity and Tort LiabilityState Sovereign Immunity And Tort Liability
General Tort Laws/StatutesAnti-Indemnity StatutesContribution ActionsContributory Negligence/Comparative FaultDog Bite LawsEconomic Loss DoctrineParental ResponsibilitySpoliationStatute of LimitationsStatute of Limitations Exceptions
Health Insurance SubrogationHealth and Disability Insurance
InvestigationAdmissibility of Expert TestimonyPre-Suit Disclosure of Liability Policy Limits in Third-Party ClaimsRecording Conversations
Product Liability SubrogationProduct Liability Law
Property Subrogation“Matching Regulations” And Laws Affecting Homeowners Property ClaimsCondominium/Co-Op Waiver of Subrogation LawsDamage to Property Without Market ValueGeneral Contractor Overhead And Profit Payments In First-Party ACV Property Damage ClaimsLandlord/Tenant Subrogation
Subrogation GenerallyAnti-Subrogation RuleCriminal RestitutionMade Whole DoctrineMedical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Workers’ CompensationEmployee Leasing LawsHospital Lien LawsOCIP/CCIP Subrogation In Workers’ Compensation Construction CasesRecovery Of Increased Workers’ Compensation Premiums By EmployerWhich Workers’ Compensation “Benefits” Can Be Subrogated?Workers’ Compensation Subrogation Waiver EndorsementsWorkers’ CompensationWorkers’ Compensation Claims by Undocumented Employees
Automobile Insurance Subrogation
Automobile Total Loss Thresholds
Total Loss Formula (TLF).
Insurer makes decision whether a vehicle (less than 10-years-old) is declared a total loss. Vt. Stat. Ann. Tit. 23, § 2001(14).
Automobile and Property: No applicable statute, Administrative Code provision or case law exists. Vermont’s Department of Insurance advises its policy is to require pro-rata distribution of recovered monies between the insurer and insured.
Diminution of Value
First Party: Absent specific policy language in a claim made by an insured to the contrary, a policy must pay for diminished value. When evaluating such diminished value claims, insurers must take into account all relevant information which would include, but not be limited to, all relevant information provided by an insured or third-party claimant regarding a claim for diminution in value. While the Department has not mandated a particular method for adjusting such claims, insurers must be able to articulate a fair and equitable process and standards for such an adjustment. VT Bulletin 164 (8-10-11).
Third Party: The usual measure of damages in cases involving property damage to an auto is the difference between market value of auto immediately before accident and its market value immediately afterwards. In determining the difference between value of auto before and after accident, or its depreciation as result of injury, evidence is admissible as to the reasonable cost of repairs made necessary thereby, and as to the value of automobile as repaired. Kinney v. Cloutier, 211 A.2d 246 (Vt. 1965). Measure of damages for damage to a vehicle is fair market value before the injury less fair market value after the injury. Wells v. Vill. of Orleans, Inc., 315 A.2d 463 (Vt. 1974). No other court decisions regarding recovery allowed for diminution in value of a damaged vehicle in a third-party claim.
First Come, First Served: Subrogating Multiple Claims in Excess of Policy Limits
Vermont does not appear to have any case law delineating whether a liability carrier can settle with one of multiple claimants arising out of a loss. However, liability carriers do not have a statutory duty to deal with tort plaintiffs in good faith in offering a settlement. Vt. Stat. Ann. Tit. 6 §§ 4721 – 4726.
Funeral Procession Traffic Laws
There are no state laws governing funeral processions.
Imputing Contributory Negligence of Driver to Vehicle Owner
Imputed Contributory Negligence Law: Contributory negligence of driver will not be imputed to an owner in owner’s action against third party for full value of damaged vehicle operated by permissive user. Purington v. Newton, 49 A.2d 98 (Vt. 1946).
Vicarious Liability/Family Purpose Doctrine: No Vicarious Liability Statute.
No Family Purpose Doctrine. Jones v. Knapp, 156 A. 399 (Vt. 1931).
Sponsor Liability for Minor’s Driving: No Sponsorship Liability Statute.
Keep Right Traffic Laws
Statute: Vt. Stat. Ann. Tit. 23 § 1031 (a),(b) and Vt. Stat. Ann. Tit. 23 § 1033.
Summary: Drivers must drive in the right lane except when passing another vehicle; when an obstruction exists in the right half of the roadway; on a roadway with three marked traffic lanes; or upon a roadway restricted to one-way traffic. Slower traffic must keep right.
Flow of Traffic: Drivers proceeding slower than the normal speed of traffic must drive in the right. Except when overtaking and passing on the right is permitted, the driver of an overtaken motor vehicle shall give way to the right in favor of the overtaking motor vehicle.
Laws Regarding Using Cell Phones/Headphones/Texting While Driving
Cell Phone/Texting: No driver shall use a portable electronic device while operating a vehicle. This includes cell phone use and texting. Drivers under the age of 18 cannot use a portable electronic device in any manner. Exceptions include headset for hands-free use and if it is necessary to use the device to communicate with law enforcement. Vt. Stat. Ann. tit. 23 § 1095b-b-1; Vt. Stat. Ann. tit. 23 § 1099-b-1.
Other Prohibitions: No Applicable Laws.
Loss Of Use
Loss of Use: Yes. 4-3 Vt. Code R. § 7 provides that loss of use damages may be recovered for the reasonably-incurred cost of transportation or for the reasonably-incurred rental cost of a substitute vehicle. If vehicle cannot be economically repaired, such expense for loss of use shall be paid until the claimant can reasonably obtain a replacement motor vehicle. Id. Plaintiff need not rent a replacement vehicle to recover loss of use. Id.
Lost Profits: No. unless expected profits are not too speculative, uncertain, and remote. Madowitz v. Woods at Killington Owners’ Ass’n, Inc., 93 A.3d 571 (Vt. 2014). Evidence of expected profits from a new business are considered too speculative. Id.
Med Pay/PIP Subrogation
Med Pay: Carrier is subrogated to all rights of the named insured against any party, as respects such loss or expenses, up to amount of such payment. 8 Vt. Stat. Ann. § 4203. Utica Nat’l Ins. Co. v. Cyr, 945 A.2d 361 (Vt. 2008).
PIP: Coverage is not applicable.
Made Whole: Recognizes subrogation as equitable – doesn’t appear to apply the Made Whole Doctrine.
Statute of Limitations: The three year personal injury statute of limitations runs from the date of the insured’s accident. 12 Vt. Stat. Ann. § 512(4).
Owner Liability For Stolen Vehicles
Key In The Ignition Statutes: Vt. Stat. Ann Tit. 23, § 1111.
Common Law Rule: No case exactly on point, but in Rivers v. State, 328 A.2d 398 (Vt. 1974), the state was found not liable after an inmate who was on weekend release stole a vehicle and killed two individuals in a subsequent accident. The court held that although questions remained as to whether the state was negligent in allowing the inmate out on weekend release, the act of the inmate stealing the car, getting drunk, and driving at a high rate of speed were superseding intervening causes in the deaths of the third parties.
Payment of Sales Tax After Vehicle Total Loss
First-Party Claims: Insurer may (1) offer a comparable motor vehicle including all applicable taxes, license fees, or other fees, or (2) offer a cash settlement based on the ACV of a comparable vehicle including all applicable taxes, license fees, or other fees. 4-3 Vt. Code R. § 7:8.
Third-Party Claims: Third-party insurers must follow the same rules as first-party insurers. 4-3 Vt. Code R. § 7:9; VT Bulletin 58, 1982.
Pedestrian and Crosswalk Laws
Vt. Stat. Ann. Tit. 23 § 1051(b): Vehicles must yield to pedestrian in crosswalk. No pedestrian may suddenly leave a curb or other place of safety and walk or run into the path of a vehicle which is so close that it is impossible for a driver to yield.
Vt. Stat. Ann. Tit. 23 § 1052: Pedestrians must yield to vehicles when crossing outside crosswalk. Pedestrians must use crosswalk at intersections with traffic control devices. Pedestrians may not cross diagonally.
Summary: Violation of § 1051(b) requires 3 elements: (1) “sudden” departure from the curb, (2) pedestrian must go into the “path” of vehicle, and (3) it must be “impossible” for the vehicle to yield. English v. Myers, 454 A.2d 251 (Vt. 1982).
Rental Car Company Physical Damage and Loss of Use Claims
Recovery From Renter: Recovery of physical damage and loss of use are not prohibited or otherwise regulated. Terms of rental agreement control. Collision Damage Waivers not regulated.
Recovery From Third-Party: No law specifically dealing with recovering loss of use for loss of rental vehicle. Loss of use for damage to a vehicle is recoverable. Wheeling & Harding v. Town of Townshend, 42 Vt. 15 (Vt. 1869); Lyman v. C. W. James, 87 Vt. 486 (Vt. 1914). Vermont’s Administrative Code specifically deals with third-party liability carriers’ duties when faced with loss of use claims. 4-3 Vt. Code R. § 7. Loss of profits are not recoverable unless expected profits are not too speculative, uncertain, and remote. Madowitz v. Woods at Killington Owners’ Ass’n, Inc., 93 A.3d 571 (Vt. 2014).
Rental Car Company’s Liability Insurance Primary or Excess
Summary: A car rental company is required to have liability insurance covering its rental vehicles. Vt. Stat. 23 § 800(a). A self-insured car rental company is not primary where the rental contract says it is secondary to other insurance. Champlain Casualty Co. v. Agency Rent-A-Car, Inc., 716 A.2d 820 (Vt. 1998).
Sudden Medical Emergencies While Driving
Sudden Emergency Doctrine. The motorist may be excused from liability if a sudden and unforeseen medical event that results in a loss of consciousness causes the accident. Simpson v. Rood, 872 A.2d 306 (Vt. 2005).
Only Vermont case using the Sudden Emergency Doctrine for a medical emergency.
Suspension of Drivers’ Licenses
Administrative Suspension: If operator fails to furnish proof within 21 days after notice, the Commissioner will suspend his driver’s license until such proof is furnished. Vt. Stat. Ann. Tit. 23 § 802. License suspended may be reinstated upon showing of proof of financial responsibility. Vt. Stat. Ann. Tit. 23 § 802.
Judgment: Upon giving notice and the opportunity for a hearing, the Commissioner will suspend the license of an operator against whom there is an unsatisfied judgment. Vt. Stat. Ann. Tit. 23 § 605. Based upon language of statute, once judgment is satisfied, there is no justification for suspended license. Vt. Stat. Ann. Tit. 23 § 605.
Contact Information: State of Vermont, Department of Motor Vehicles, Agency of Transportation, Driver Improvement Unit, 120 State Street, Montpelier, VT 05603-0001, (802) 828-2000, http://dmv.vermont.gov/.
Use of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Authority: http://www.dfr.vermont.gov/insurance/rates-forms/personal-and-commercial-auto-regulatory-requirements; https://legiscan.com/VT/text/H0362/id/760499.
Summary: Use of non-OEM parts are permissible so long as those parts are of like kind and quality to their OEM equivalent. Additionally, House Bill 362 was introduced to the Vermont State Legislature in 2013 and sought to introduce more thorough regulations to the use of non-OEM parts, but it did not pass.
Federal , State, and Local Governmental Entities
Municipal/County/Local Governmental Immunity and Tort Liability
Legal Authority: Common law immunity. Vermont Supreme court has held municipalities liable only where act is proprietary in nature and not governmental. Hillerby v. Town of Colchester, 706 A.2d 446 (Vt. 1997); Morway v. Trombley, 789 A.2d 965 (Vt. 2001).
Notice Deadlines: Notice of a claim against a town for insufficiency of a bridge or culvert must be within twenty (20) days. Vt. Stat. Ann. 19, § 987. Personal injury and property claims must be filed within three (3) years. Vt. Stat. Ann. 12, §§ 512(4) and 512(5). Small claims ($2,000 or less) actions against the State must be filed within 18 months. Vt. Stat. Ann. Tit. §32-932.
Claims/Actions Allowed: Municipality liable for proprietary function, but not for governmental function. One of the few states that retains the governmental-proprietary distinction.
Governmental Function: A weighing of the type of public policy considerations that would warrant shielding from liability.
Comments/Exceptions: Construction and maintenance of streets and sidewalks are governmental functions protected by doctrine of sovereign immunity, but maintenance of sewers is a proprietary function not protected. Dugan v. City of Burlington, 375 A.2d 991 (Vt. 1977). Municipal employee liable for operation of motor vehicle because of general duty to keep proper lookout and operate vehicle in safe manner. Morway v. Trombly, 789 A.2d 965 (Vt. 2001).
Damage Caps: Damages against a town for insufficiency of bridge or culvert is $75,000 or the limits of liability insurance, whichever is greater. Vt. Stat. Ann. 19, § 985. A municipality’s sovereign immunity to the extent of its insurance coverage. Vt. Stat. Ann. 29, § 1403.
State Sovereign Immunity And Tort Liability
Tort Claims Act: Vermont Tort Claims Act. Vt. Stat. Ann. 12, §§ 5601-5606 (1961).
Notice Deadlines: Small claims ($2,000 or less) against State must be filed within 18 months. Vt. Stat. Ann. 32, § 932(b). Agent for service is Attorney General.
Claims/Actions Allowed: State and its employees liable to same extent as private individual, unless exception listed in Vt. Stat. Ann. 12, § 5601(e). Exclusive right of action is against State not employee (except for gross negligence, willful act). Vt. Stat. Ann. 12, § 5602(a)(b). State employees liable for operating motor vehicle because source of their employment is unconnected to tort of negligent driving.
Kennery v. State, 38 A.3d 35 (Vt. 2011). Small claim (under $2,000) against State not otherwise allowed may be filed in Small Claims Court. Vt. Stat. Ann. 32, § 932(a).
Comments/Exceptions: Exceptions to waiver of immunity set forth in § 5601(e):
(1) discretionary function: (a) involves either an element of judgment/ choice or a statute or regulation prescribes a course of action, and (b) is it type of act protected by the exception (presumption can be rebutted)? Searles v. Agency of Transp., 762 A.2d 812 (Vt. 2000) (e.g., no liability for operating emergency vehicle pursuant to § 1015(a)(4) (with lights and siren);
(2) any claim arising from selection of or purposeful deviation from standards for planning and design of highways; and
(3) above exceptions do not apply if there is policy of insurance purchased by Commissioner of Buildings and General Services or if employee purchased policy covering gross negligence.
No subrogation claims against State.
Damage Caps: Maximum liability of the State is $500,000 to any one person and maximum aggregate liability is $2,000,000 to all persons arising out of each occurrence. Vt. Stat. Ann. 12, §§ 5601(b).
General Tort Laws/Statutes
Pure Several Liability. Several liability where the plaintiff is also at fault in some manner. 12 Vt. Stat. Ann. § 1036.
Vermont does not afford joint tortfeasors a right to contribution. 12 Vt. Stat. Ann. § 1036; Murray v. J & B Int’l Trucks, Inc., 508 A.2d 1351 (Vt. 1986).
Contributory Negligence/Comparative Fault
Modified Comparative Fault: 51% Bar. Damaged party cannot recover if it is 51% or more at fault. If 50% or less at fault, it can recover, although its recovery is reduced by its degree of fault. Plaintiff can only recover the amount of damages not attributable to his own negligence. Vt. Stat. Ann. Tit. 12, § 1036.
Dog Bite Laws
Dog owner will be liable to the victim for damages if it can be proven that the dog owner had knowledge (or should have known) of the dog’s prior dangerous behavior. Hillier v. Noble, 142 Vt. 552, 458 A.2d 1101 (Vt. 1983).
Economic Loss Doctrine
Majority Rule. In 1998, Vermont adopted the ELD to prohibit owners of a motor home from recovering, in a strict product liability action, purely economic losses consisting of reduced value of the motor home resulting from its defective wiring system and related problems. Paquette v. Deere and Co., 719 A.2d 410 (Vt. 1998). Absent some accompanying physical harm, there is no duty to exercise reasonable care to protect another’s economic interests – including damages to the product alone.
There is no duty to exercise reasonable care to avoid intangible economic loss “unless one’s conduct has inflicted some accompanying physical harm.” Gus’ Catering, Inc. v. Menusoft Sys., 762 A.2d 804 (Vt. 2000); O’Connell v. Killington, Ltd., 665 A.2d 39, 42 (1995). Plaintiffs may be barred from bringing tort claims that result in purely economic loss without accompanying physical harm. See Springfield Hydroelectric Co. v. Copp, 779 A.2d 67 (Vt. 2001). Economic loss is defined as “damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits—without any claim of personal injury or damage to other property.” Gus’ Catering, Inc., supra. In addition to limiting tort recovery in the absence of physical injury, the ELD plays a separate role in cases in which damage to property has occurred in the course of construction or repair. The general rule is that claims for damage to the property which is the subject of a contract between the parties are governed by contract principles. A tort claim is not permitted. The result may affect the applicable limitations period, the elements of proof, or the measure of damages. City of Burlington v. Zurn Indus., Inc., 135 F. Supp. 2d 454 (D. Vt. 2001) (ELD bars negligence claim because alleged negligence in the installation of a boiler caused damage only to the boiler). In Walsh v. Cluba, 117 A.3d 798 (Vt. 2015), damage to commercial rental space was governed by the terms of the parties’ lease, not by general principles of negligence. In addition, economic loss resulting from defects in the construction of a building are generally not recoverable on a claim for “contractor’s negligence.” Long Trail House Condo. Ass’n v. Engelberth Constr., Inc., 59 A.3d 752 (Vt. 2012); Heath v. Palmer, 915 A.2d 1290 (Vt. 2006) (holding “purely economic losses resulting from the reduced value or costs of repairs of the construction defects sounded in contract rather than tort”).
Willful Misconduct. Liability imposed on parents when child willfully or maliciously injures person or property. Vt. Stat. Ann. Tit. 15, § 901.
The limit of liability is $5,000.00. Child must be unemancipated and under 18-years-old.
The only Vermont case discussing destruction of evidence requires that a party must have reason or obligation to preserve evidence before a “presumption of falsity” will arise. Lavalette v. Noyes, 205 A.2d 413, 415 (Vt. 1964).
Statute of Limitations
Personal Property3 YearsVt. Stat. Ann. Tit. 12, § 512(5)
Personal Injury/Death3 YearsVt. Stat. Ann. Tit. 12, § 512(4)
Personal Injury/Wrongful Death2 YearsVt. Stat. Ann. Tit. 14, § 1492
Personal Injury/Medical Malpractice/After Discovery Date3 YearsVt. Stat. Ann. Tit. 12, § 521
Personal Injury/Medical Malpractice/After Discovery Date2 YearsVt. Stat. Ann. Tit. 12, § 521
Statute of Repose/ProductsN/AN/A
Statute of Repose/Property6 YearsVt. Stat. Ann. Tit. 27A, § 4-116(a)*
Breach of Contract/Written6 YearsVt. Stat. Ann. Tit. 12, § 511
Breach of Contract/Oral6 YearsVt. Stat. Ann. Tit. 12, § 511
Breach of Contract/Sale of Goods4 YearsVt. Stat. Ann. Tit. 94, § 2-275
Breach of Warranty/U.C.C.4 YearsVt. Stat. Ann. Tit. 9A, § 2-725
Workers’ Comp Third Party Case3 YearsVt. Stat. Ann. Tit. 21 § 624
Strict Product Liability3 YearsVt. Stat. Ann. Tit. 12, § 512(4),(5)
Statute of Limitations Exceptions
*Six (6) years after cause of action arises where “Common Interest Ownership community (condominium, planned community, or real estate cooperative) involved.” Vt. Stat. Ann. Tit. 27A, § 4-116(a).
Health Insurance Subrogation
Health and Disability Insurance
Statute of Limitations: 3 Years. Vt. Stat. Ann. Tit. 12, § 512(4). Wrongful Death – 2 Years. Vt. Stat. Ann. Tit. 14, § 1492. Medical Malpractice – Later of 3 years from incident or 2 years from discovery. Vt. Stat. Ann. Tit. 12, § 521.
Subrogation of Medical and Disability Benefits are allowed. Utica Nat. Ins. Co. v. Cyr, 2007 VT 134A, ¶ 8, 183 Vt. 564, 565, 945 A.2d 361, 363 (2008). Made Whole Doctrine does not apply. Common Fund Doctrine applies. Guiel v. Allstate Ins. Co., 170 Vt. 464, 469, 756 A.2d 777, 781 (2000).
Admissibility of Expert Testimony
Admissibility Standards: Daubert
Case/Statutory Law: State v. Brooks, 162 Vt. 26, 30, 643 A.2d 226, 229 (1993).
Pre-Suit Disclosure of Liability Policy Limits in Third-Party Claims
Duty To Disclose: Yes.
Failure To Disclose A Basis For Bad Faith: Vt. Stat. Ann. tit. 23, § 941(g) provides:
(g) Within 30 days of receipt of a written request by a person reasonably claiming the right to recover damages after a crash involving owners or operators of motor vehicles for bodily injury, sickness, or disease, including death, or for property damages resulting from the ownership, maintenance, or use of a motor vehicle, an insurer that may be liable to satisfy part or all of the claim under a policy subject to this chapter shall provide a statement, by a duly authorized agent of the insurer, setting forth the names of the insurer and insured, and the limits of liability coverage.
Comments: While appearing in “Subchapter 5: Insurance Against Uninsured, Underinsured or Unknown Motorists”, 941(g) references a “policy subject to this chapter.” “This chapter” refers to “Chapter 11: Financial Responsibility and Insurance” and would arguably apply to auto liability carriers.
There is no state statute that regulates the interception of telephone conversations. The case law is also lacking in this area and there has been no clear indication as to if Vermont is a one-party or all-party consent state. The state’s highest court has held that surreptitious electronic monitoring of communications in a person’s home is an unlawful invasion of privacy. Vermont v. Geraw, 795 A.2d 1219 (Vt. 2002). On the other hand, the state’s highest court also has refused to find the overhearing of a conversation in a parking lot unlawful because that conversation was “subject to the eyes and ears of passersby.” Vermont v. Brooks, 601 A.2d 963 (Vt. 1991).
Product Liability Subrogation
Product Liability Law
Statute of Limitations/Repose: 3 years for personal injury. Vt. Stat. Ann. Tit. 12, § 512(4). Wrongful death is 2 years. Vt. Stat. Ann. Tit. 14, § 1492. Discovery Rule applies. U.C.C. warranty is 4 years. Vt. Stat. Ann. Tit. 9A, § 2-725.
Liability Standards: Negligence, Strict Liability, Warranty.
Fault Allocations: Modified Comparative. Vt. Stat. Ann. Tit. 12, § 1036.
Non-Economic Caps/Limits On Actual Damages: No.
Punitive Y/N and Limits: Yes.
Heeding Presumption?: Yes, Rebuttable. Needham v. Coordinated Apparel Group, 811 A.2d 124, 129 (2002); Menard v. Newhall, 373 A.2d 505, 506 (Vt. 1977).
Innocent Seller Statute: No.
Joint and Several Liability: Yes. 12 Vt. Stat. Ann. § 1036.
Available Defenses: Assumption of Risk; Presumption; Misuse; Alteration; Learned Intermediary; Inherently Unsafe Products; State of the Art; Government Contractor Defense; Compliance With Government Standards; Alcohol/Drugs.
Restatement 2nd or 3rd?: Restatement 2nd
“Matching Regulations” And Laws Affecting Homeowners Property Claims
Statute/Regulation: If replaced items do not match adjacent items in quality, color, or size, the insurer shall replace such items to create a reasonably uniform appearance within the line of sight. Vermont Department of Financial Regulation Reg. I-1979-2 (Fair Claims Practices).
Condominium/Co-Op Waiver of Subrogation Laws
No waiver of subrogation required. Vt. Stat. Ann. Tit. 27 § 1325.
Damage to Property Without Market Value
Service Value: No Case Law
Intrinsic Value: The measure governing damages to personal property is the property’s “fair market value before the injury less fair market value after the injury.” Turgeon v. Schneider, 553 A.2d 548 (Vt. 1988).
Sentimental Value: No recovery of sentimental value for things like heirlooms or mementos. Goodby v. Vetpharm, Inc., 974 A.2d 1269 (Vt. 2009).
Vermont court measures available damages resulting from the injury or death of a pet as it would like damages to any other item of personal property: the property’s value before the injury less the value after the injury. Scheele v. Dustin, 998 A.2d 697 (Vt. 2010).
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.
Vermont finds the case-by-case approach to be the most consistent with Vermont law. In determining the rights of the parties to a lease, the court has consistently looked to the intent of the contracting parties as ascertained from the terms of the lease. Fairchild Square Co. v. Green Mountain Bagel Bakery, Inc., 658 A.2d 31, 33 (Vt. 1995); Lamoille Grain Co. v. St. Johnsbury & Lamoille Cty. R.R., 369 A.2d 1389, 1390 (Vt. 1976); Union Mut. Fire Ins. Co. v. Joerg, 824 A.2d 586, 590 (Vt. 2003).
An insurer cannot subrogate against its own insured. Travelers Indem. Co. of America v. Deguise, 914 A.2d 499 (Vt. 2006). This rule extends to both express and implied co-insureds. Id. Whether a party is a co-insured under a policy must be determined by looking at the agreement between the subrogor and the target. Travelers Indem. Co. of America v. Deguise, 914 A.2d 499 (Vt. 2006); Union Mut. Fire Ins. Co. v. Joerg, 824 A.2d 586 (Vt. 2003); Town of Stowe v. Stowe Theatre Guild, 180 Vt. 165 (Vt. 2006). In Town of Stowe, a town building suffered water damage after the negligent use of “flash powder” by the Stowe Theater Guild (“Guild”) resulted in the building’s fire suppressant system being activated. The Royal Insurance Co. (“Royal”) was the town’s fire insurer, and after paying the town for the damages to the building, sought to subrogate against the theater company. The Guild had an oral lease with the town where the Guild paid a nominal $1 a month rent and performed general maintenance and upgrades to their theater space, in exchange for the opportunity to use the space for performances. The Guild argued that they were a co-insured under the lease and, therefore, Royal should not be allowed to subrogate against the Guild. The court reasoned that the oral lease contained neither an implied nor express intent to have the Guild be a co-insured party under the town’s policy, therefore, subrogation was permissible.
According to Vermont’s statute on restitution, a court can require that a criminal defendant make restitution payments to the “victim” of their criminal conduct. Vt. Stat. Ann. tit. 28, § 252(b)(6). Case law clarifies that only direct “victims” can recover restitution, and an insurer is not such a direct “victim”; therefore, they are not eligible for restitution recovery. State v. Webb, 559 A.2d 658 (Vt. 1989). However, in State v. Bonfanti, 603 A.2d 365 (Vt. 1991), the court held that there does exist a limited circumstance in which an insurance company can be awarded restitution; when they are the direct victim. In other words, when subrogating, they are an indirect victim.
Made Whole Doctrine
Vermont is unique among states in that it defines “subrogation” as an equity called into existence for the purpose of enabling the insurer to be “made whole.” Norfolk & Debham Fire Ins. Co. v. Aetna Cas. & Sur. Co., 318 A.2d 659 (Vt. 1974). However, Vermont does not appear to adopt or apply the traditional Made Whole Doctrine for which an insurer may only seek subrogation rights if the insured has been made whole.
Medical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Collateral Source Rule: Common law CSR. Collateral sources do not reduce damages, even if plaintiff didn’t pay for the insurance or benefits. Bradley v. Buck, 306 A.2d 98 (Vt. 1973). Collateral sources not admissible. Hall v. Miller, 465 A.2d 222 (Vt. 1983).
Recovery Of Medical Expenses Rule:
Private Insurance: Undecided, with disagreement among lower courts. One trial court has suggested write-offs covered under CSR and, therefore, recoverable and not admissible. O’Bryan v. Hannaford Bros. Inc., 2008 WL 6825535 (Vt. Super. Ct. 2008). Another said that “…unless and until our Supreme Court explicitly holds that the amount(s) billed for medical treatment and services is the default measure of damages, as opposed to the amount(s) actually paid to, and received by the medical provider as full compensation and reimbursement, the court will stand by its ruling here that the latter is the applicable, and more appropriate standard.” McGowan v. Chase, 2009 WL 2969645 (Vt. Super. 2009); See also Bora v. Chittenden County Transp. 2006 WL 4660871 (Vt. Super. 2006).
Medicare/Medicaid: Utah courts have not yet addressed this issue. One trial court has said such payments should be covered under CSR and excluded from evidence. O’Bryan, supra.
Related Law/Comments: “Collateral sources” include insurance, pensions, employer-paid sick leave, uninsured motorist coverage, charitable donations, and tax benefits. Bradly v. H.A. Manosh Corp., 601 A.2d 978 (Vt. 1991) (uninsured motorist coverage); Coty v. Ramsey Associates, Inc., 546 A.2d 196 (Vt. 1988) (tax benefit); Houghton v. Leinwhol, 376 A.2d 733 (Vt. 1977) (pension benefits); D’Archangelo v. Loyer, 215 A.2d 520 (Vt. 1965) (allowing recovery of lost wages despite receipt of sick leave pay); Windsor School Dist. v. State, 956 A.2d 528 (Vt. 2008).
Employee Leasing Laws
Both the leasing company and the client company are immune from third-party actions based on the Exclusive Remedy Rule. Vt. Stat. Ann. Tit. 21, § 12-1037.
Hospital Lien Laws
Statute: 18 V.S.A. §§ 2251 – 2256. Lien for Services Rendered Accident Victims.
(1) Written notice containing name, address of injured patient, date of accident, name, location of hospital, and name of third-party tortfeasor, must be filed in office of clerk of town in which hospital is located before third-party settlement/payment.
(2) Mail copy postage prepaid along with statement of the date of filing to the injured patient and to tortfeasor or legal representatives.
(3) Mail copy to any insurance carrier for the tortfeasor. § 2252.
Comments: Lien applies to any recover from an accident not covered by workers’ compensation but does not attach to one-third of the recovery or $500, whichever is less. § 2251. Third-party carrier liable for one year from date of settlement/payment to the hospital for the amount of the lien, and hospital can, within that year, enforce its lien by civil action against third-party carrier or person making payment. After one-year lien is void. § 2253. Every town clerk must keep hospital lien docket properly indexed under name of injured patient. § 2254. Hospital/town must file a certificate of discharge within 30 days after lien is satisfied. § 2256.
OCIP/CCIP Subrogation In Workers’ Compensation Construction Cases
OCIP Law: No statute or case law specifically dealing with effect of OCIP/CCIP.
Statutory Employer Law: An owner or general contractor is contingently liable to employees of subcontractors for workers’ compensation benefits. Vt. Stat. Ann. Tit. 21, § 601(3) (1999); Ryan v. New Bedford Cordage Co., 421 F. Supp. 794 (D.C. Vt. 1976). Nonetheless, the owner or contractor may not be sued as a third party by an employee of the subcontractor. Vermont forbids lawsuits by subcontractors’ employees against general contractors.
Comments: King v. Lowell, 648 A.2d 822 (Vt. 1993) (holding that a general contractor was a statutory employer of the subcontractor’s employee and, therefore, owed benefits to the employee); King v. Snide, 479 A.2d 752 (Vt. 1984) (holding that amendments to Vermont’s laws were designed to create the statutory employer-employee relationship between a general contractor and a subcontractor’s employee in order to prevent “general contractors from relieving themselves under the Workers’ Compensation Act by doing through independent contractors what they would otherwise do through their direct employees”). Galeotti v. Cianbro Corp., 2013 WL 3207312 (N.D.N.Y. 2013).
Recovery Of Increased Workers’ Compensation Premiums By Employer
Recovery For Increased Premiums? Undecided.
Statute/Case Law: None.
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. Title 21, § 624 describes a workers’ compensation carrier’s subrogation lien as follows: … for benefits paid. Vt. Stat. Ann. Tit. 21, § 624.
Workers’ Compensation Subrogation Waiver Endorsements
Subrogation Statute: Vt. Stat. Ann. Tit. 21, § 624
Waiver Allowed? Nothing in the Vermont Workers’ Compensation Act or applicable case law prohibits the use or efficacy of a waiver of subrogation.
Effect Of Waiver Endorsement on Carrier’s Right To Assert A Lien On Claimant’s Recovery: The effect of a waiver of subrogation on the carrier’s rights, including its right to enforce its statutory lien, has not yet been decided.
Other Applicable Law: None.
Statute of Limitations: 3 Years. Vt. Stat. Ann. Tit. 21 § 624.
Can Carrier Sue Third Party Directly: Yes, after 1 year.
Right to Intervene: Yes.
Recovery from UM/UIM Benefits: Only if the plaintiff is made whole.
Subrogation Against Medical Malpractice: Undecided.
Subrogation Against Legal Malpractice: Undecided.
Recovery Allocation/Equitable Limitations: First dollar reimbursed to carrier, less pro-rata fees.
Employer Contribution/Negligence: No.
Attorney’s Fees/Costs: Pro-Rata.
Future Credit: Yes.
Auto No-Fault: No.
Workers’ Compensation Claims by Undocumented Employees
Statute: The statute is silent on illegal aliens being included as workers/ employees. Vt. Stat. Ann. tit. 21, § 601(14).
Case Law: Undecided.