HOUSE COMMITTEE ON JUDICIARY

 

 

July 01, 2003 Hearing Room 357

1:00 p.m. Tapes  229 - 231

 

MEMBERS PRESENT:            Rep. Max Williams, Chair

Rep. Gordon Anderson, Vice-Chair

Rep. Robert Ackerman, Vice-Chair

Rep. Jeff Barker

Rep. Bob Jenson

Rep. Jerry Krummel

Rep. Greg Macpherson

Rep. Floyd Prozanski

Rep. Lane Shetterly

 

STAFF PRESENT:                  Bill Taylor, Counsel

Craig Prins, Counsel

Ann Martin, Committee Assistant

 

MEASURE/ISSUES HEARD:            SB 59A Work Session

                                                SB 297A Public Hearing

 

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 229, A

004

Chair Williams

Calls the meeting to order at 1:07 p.m. Opens a work session on SB 59A.

SB 59A WORK SESSION

006

Rep. Ackerman

MOTION:  Moves to SUSPEND the rules for the purpose of RECONSIDERING the vote on SB 59A.

 

 

VOTE:  9-0

010

Chair Williams

Hearing no objection, declares the motion CARRIED.

017

Craig Prins

Committee Counsel. Introduces SB 59A which extends period during which forfeiture counsel must file criminal information or indictment for criminal forfeiture. Discusses the A6 amendments (EXHIBITS A & B).

047

Rep. Prozanski

Explains the A6 amendments.

067

Rep. Jenson

Says that he supports the A6 amendments.

069

Rep. Jenson

MOTION:  Moves to ADOPT SB 59A-6 amendments dated 07/01/03.

 

 

VOTE:  9-0

071

Chair Williams

Hearing no objection, declares the motion CARRIED.

075

Rep. Krummel

Asks about the selling of the forfeited weapons.

086

Rep. Prozanski

Refers to the formula on page 2 and 3, Section 4 of the A6 amendments.

 

115

Rep. Prozanski

MOTION:  Moves SB 59A to the floor with a DO PASS AS AMENDED recommendation.

 

 

VOTE:  9-0

120

Chair Williams

Hearing no objection, declares the motion CARRIED.

REP. JENSON will lead discussion on the floor.

130

Chair Williams

Closes the work session on SB 59A and opens a public hearing on SB 297A.

SB 297A PUBLIC HEARING

140

Bill Taylor

Committee Counsel. Introduces SB 297A which requires insurer to pay all sums covered by general liability insurance policy unaffected by other insurance that may provide coverage for same environmental claim.

150

Bill Wyatt

Executive Director, Port of Portland. Testifies in support of SB 297A.

289

Tom Gallagher

Schnitzer Investment Corporation. Submits testimony and testifies in support of SB 297A (EXHIBIT C).

TAPE 230, A

003

Gallagher

Continues his testimony in support of SB 297A.

035

Chris Herman

Attorney. Testifies in support of SB 297A.

038

Vice Chair Ackerman

Says he is trying to conceptualize how this bill works and that if liability has been established then is it a question of allocation of that liability among insurance companies.

043

Herman

Explains that there are two categories of liability.

050

Vice Chair Ackerman

Asks if adjudication of liability takes place in a judicial or administrative proceeding.

060

Herman

Answers that it can take place in either, but the hopes of the proponents are that litigation is not required.

069

Vice Chair Ackerman

Asks since liability has been established in a judicial forum then would it be likely that those insurance companies would have participated in those proceedings representing their insurers.

070

Herman

Answers, yes.

075

Vice Chair Ackerman

Asks if the allocation process can take place through the contribution method in court.

077

Herman

Answers, that it probably would take place in the same proceeding.

081

Vice Chair Ackerman

Says that on page 2, line 36 of the bill, there is a situation in which the insured has more than one insurance policy. Asks if multiple landowners or predecessors of interest are liable.

090

Herman

Responds that the bill does not attempt to allocate between the parties that are liable on the environmental liability.

097

Rep. Shetterly

Asks for clarification of the allocation process. Asks if it raises the risk that an insurer has to pay out on a claim in which coverage expired.

112

Herman

Explains that an insurer only would have to pay out for a claim that happened when the property damage occurred.

122

Gallagher

Discusses an environmental case in Portland.

136

Rep. Macpherson

Asks if all insurers would be responsible for a clean-up and do the insurers have the opportunity to go after other insurers.

151

Herman

Answers yes, explains.

166

Rep. Macpherson

Says that each of these potentially responsible parties (PRP’s) may have one or more insurers that are responsible for different periods. Asks if this bill extends to other co-insurers with respect to that PRP or does it extend to all the potential insurers or all the potential PRP’s.

178

Herman

Answers that it extends to other insurers of that insured.

181

Rep. Prozanski

Asks if there are nine states that have adopted this legislation. Asks if they now have less litigation.

185

Herman

Responds those states have not adopted this rule legislatively, but through the Supreme Court on its allocation rule. Explains that there is still litigation but the litigation is on other coverage issues and not so much on the allocation rule.

211

Rep. Prozanski

Asks if any of these states offer any other forms of mediation.

218

Herman

Says that he is not aware of any states that have special statutes of regulation that require mediation in this area.

234

Chair Williams

Asks Mr. Herman to discuss the shift of burden of responsibility to the carriers and how that will affect public policy.

260

Herman

Explains that insurance carriers accepted responsibility when they wrote the policies.

284

Chair Williams

Asks Mr. Herman for the legal costs of a case he would deal with on a regular basis.

294

Herman

Says that a typical clean-up site costs $2,000,000 to $5,000,000. Discusses the phases of litigation.

338

Wyatt

Points out that as an insured, the greatest fear that you have is that all the assets are consumed in transaction costs and you have nothing to work with when it comes to the clean-up.

361

Jack Munro

American Insurance Association. Testifies in opposition to SB 297A.

373

Shawn Miller

National Association of Independent Insurers. Submits testimony and testifies in opposition to SB 297A (EXHIBIT D).

387

Diane Pulcer

Attorney. Testifies in opposition to SB 297A. Discusses the “all sums” issue. Believes that they are going into uncharted territory.

TAPE 229, B

010

Pulcer

Continues her testimony in opposition to SB 297A.

065

Laura Foggan

Complex Insurance Claims Litigation Association. Testifies in opposition to SB 297A and discusses the “lost policy period.” Wants Section 3 to be deleted. Urges two amendments to the bill.

175

Rep. Prozanski

Asks what other states require sanctions where there isn’t fairness followed by either party.

180

Foggan

Answers that there are provisions in the Washington regulations relating to sanctions.

194

Rep. Prozanski

Discusses Schnizter case (Exhibit C) and the “lost policy” problem that is addressed in this bill.

215

Foggan

Says that she cannot sanction conduct in which a known document is withheld.

229

Rep. Prozanski

Asks what the current state of law is in regards to a “lost policy”.

233

Foggan

Answers that it is parallel with any lost instrument law and explains.

253

Pulcer

Adds that Oregon Law generally is a “clear and convincing” standard.

265

Chair Williams

Asks Ms. Foggan why she thinks we should keep the “clear and convincing” standard.

282

Foggan

Explains that there are a host of reasons supporting the clear and convincing standard for any lost instrument.

305

Chair Williams

Says that clear and convincing is a very high standard. Asks Ms. Pulcer how it’s decided which insurance company pays for the environmental clean up.

346

Pulcer

Explains how they decide who pays for the clean up.

357

Chair Williams

Points out that as the bill is currently written, Oregon Mutual’s exposure would be no greater than its maximum policy limits.

360

Pulcer

Answers, yes, plus defense costs.

369

Rep. Macpherson

Says that he works with health insurance companies and they have “coordination of benefits.” Asks if these insurance companies have anything developing like this to determine who pays and how much.

396

Munro

Says that most policies have that kind of language, but says we are mixing up a couple of different factual situations. Explains that a health situation occurs and can be sorted out unlike an environmental situation.

424

Rep. Macpherson

Asks about the Portland Super Fund site and how many insurers are obligated with respect to the clean up costs.

434

Munro

Says he cannot comment on that.

TAPE 230, B

019

Rep. Prozanski

Asks what the changes will be if they change the law to the “clear and convincing” standard.

027

Foggan

Answers that she finds the language a little confusing and explains.

040

Vice Chair Ackerman

Comments on the 1st page of the letter from Oregon Mutual Insurance Company (Exhibit D) and points out a misquote. Asks about 10-year period of pollution exposure with policy in effect for 1 year and if insurer has to pay for 10 years of pollution.

061

Foggan

Answers that she doesn’t think the statute says that. Explains.

070

Purcell

Talks about the obligation for the insurers to pay being established.

097

Munro

Comments on enforcement of insurance policies and multiple insurers.

151

John DiLorenzo

Attorney. Testifies in support of the A6 amendments to SB 297A (EXHIBITS E & F).

297

Mark Nelson

Oregon Metal Industries Counsel. Testifies on SB 297A.

360

Rep. Krummel

Asks if Mr. Nelson thinks that the bill puts the responsibility on the insurer.

374

Nelson

Says that discussion is in the question of lost policy and that it is in the interest of the insured to provide every piece of policy they have.

396

Rep. Shetterly

Talks about the lost policy issue.

TAPE 231, A

003

Rep. Shetterly

Asks what would show the policy limits in the absence of a policy.

005

Nelson

Answers that he is not sure, but thinks that some other reference to the policy limit would be acceptable.

015

Rep. Macpherson

Asks how many insurers are involved in the Portland Super Fund Site.

019

Herman

Says he thinks that there are about 10 carriers.

032

Rep. Macpherson

Asks how many are actively writing policies in Oregon today.

034

Herman

Responds that he doesn’t know, but pre-1986 general liability coverage is not being written by anyone in Oregon.

038

Chair Williams

Asks him to talk about what the bill would accomplish with the insurance carriers.

046

Herman

Says that there are two situations that they deal with factually. Explains one is a site in which the harm is visible and then talks about a situation when the harm is not visible.

079

Chair Williams

Asks about the lost policy issue.

081

Herman

Says that currently the Oregon law is being debated in front of the Oregon Court of Appeals. Adds that current state of law is that the standard is preponderance of the evidence.

094

Rep. Prozanski

Says that the trial court is applying “clear and convincing” and asks why they are using that higher standard.

102

Joan Snider

Attorney, representing Schnitzer. Says that the trial court did not give a rationale. Says that it is not clear that that issue will be resolved by the court.

108

Gallagher

Comments on the A5 amendments (EXHIBIT G).

120

Rep. Krummel

Asks for clarification on what Ms. Snider said.

129

Snider

Explains that what the judge said is that he thought the standard should be clear and convincing.

139

Rep. Krummel

Asks if the standard is explicit in the statute.

142

Snider

Says that the general rule in Oregon is to prove a contract through preponderance of evidence.

165

Foggan

Talks about the A5 amendments.

186

Taylor

Asks if Ms. Foggan has any suggested language.

187

Foggan

Says that she would work on some and be prepared to propose them.

201

Gallagher

Says that they have no disagreement with Ms. Foggan and are willing to look at their suggestions.

 

221

Chair Williams

Closes the work session on SB 297A and adjourns the meeting at 3:10 p.m.

 

 

 

EXHIBIT SUMMARY

 

A – SB 59A, A6 amendments, submitted by staff, dated 7/1/03, 3 pgs.

B – SB 59A, hand-engrossed bill, 8 pgs.

C – SB 297A, written testimony of Tom Zelenka, submitted by Tom Gallagher, 4 pgs.

D – SB 297A, written testimony of Micheal Keyes, submitted by Shawn Miller, 4 pgs.

E – SB 297A, written testimony submitted by John DiLorenzo, Jr., 4 pgs.

F – SB 297A, A6 amendments, submitted by staff, dated 6/27/03, 1 pg.

G – SB 297A, A5 amendments, submitted by staff, dated 6/27/03, 1 pg.