Norman, Hanson & DeTroy merges with Lewiston law firm ......of Bonneau & Geismar effective January...

We are delighted to announce themerger of Norman, Hanson & DeTroyand the preeminent Lewiston law firmof Bonneau & Geismar effectiveJanuary 1, 2008. This merger has beenmany months in the planning, andresults in a new full service law firmstill under the name Norman, Hanson &DeTroy, with offices in both Portlandand Lewiston. Our two new membersare John V. Bonneau and John W.Geismar.

John Bonneau, a Lewiston native,graduated from Bowdoin College in1967. He then graduated cum laudefrom Villanova Law School where heserved as a member of the law review.John began his law practice inPhiladelphia in 1971, and then returnedto Lewiston in 1975. He has practicedin Lewiston ever since. He is a memberof the bars of both Maine andPennsylvania. John concentrates hispractice in the area of estate planningand probate. He also represents numer-ous corporate and commercial interests,as well as individuals. John was electedFellow of the American College of Trustand Estate Counsel in 1991. He hasplayed an active role with many localnon-profit organizations. John current-ly serves as treasurer of the board ofJohn F. Murphy Homes, a social serviceagency, and is president of the friends ofthe Lewiston Public Library. John willbe heading up our trust and estate prac-tice group.

John Geismar has been practicinglaw in Lewiston since 1982. John is agraduate of Colby College and the New

Current developments in Maine law

Winter 2008

Vol. 22, No. 1

NORMAN,HANSON & DETROY, LLC

Norman, Hanson & DeTroy merges withLewiston law firm Bonneau & GeismarBY ROBERT W. BOWER, JR.

England School of Law, cum laude,where he served on the law review.John concentrates his practice in theareas of health care law, tax law (includ-ing practice before the IRS), pensionand welfare benefit law, corporate lawand commercial transactions. John islicensed to practice before the UnitedStates Tax Court. John is a member ofthe National Health Lawyers’Association. He serves on the St.Joseph’s School Board, the Boys andGirls Club Board, the Lewiston MillRedevelopment Finance Committee,

and chairs the Town of Minot PlanningBoard. John is general counsel toSisters of Charity Health System, Inc.,which owns St. Mary’s Hospital inLewiston.

In addition to our new members, wehave added three associates practicingout of our new Lewiston office, CharlesC. Hedrick, Kenneth J. Albert, III, andChristopher J. Knox.

Chip Hedrick has been practicingsince 1998. He is a Maine native andgraduate of Hebron Academy, St.Michael’s College and the University ofMaine School of Law. Chip served asresearch editor for the Maine LawReview. Chip is a 2001 recipient of theMaine Bar Foundation and VolunteerLawyers’ Project Pro Bono PublicoAward. Chip concentrates his practicein the areas of business law, corporatelaw, probate, trusts and estates andwills.

Ken Albert was admitted to theMaine and federal bars in 2003. Anative of Maine, Ken graduated fromCentral Maine Medical Center’s Schoolof Nursing in 1986. He holds a currentRN certification. After serving in vari-

NH&D merges with Lewiston LawFirm 1

Kudos 2

Foster v. Oral Surgery Associates 3

Workers' Compensation - Law Courtdecisions and Board Update 6

Reach and Apply action: A Primer 7

The Monaghan Decision 8

Two recent Law Court decisions 10

I N S I D E

JOHN V. BONNEAU JOHN W. GEISMAR CHARLES C. HEDRICK KENNETH J. ALBERT, III CHRISTOPHER J. KNOX

ous clinical and administrative positionswithin the healthcare arena, Kenreturned to school and graduated fromthe University of Southern Maine,magna cum laude in 1999. He thenattended the University of MaineSchool of Law where he served asresearch and technology editor of theMaine Law Review. Ken’s practiceconcentrates in healthcare law. Ken is adirector on the boards of trustees of twolocal not-for-profit agencies, and isactive in Scouting and local youth sportsorganizations.

Chris Knox earned his undergradu-ate degree in English from BostonCollege in 1996. After a number ofyears working in domestic and interna-tional trade in the seafood industry, heattended the University of MaineSchool of Law and graduated cum laudein 2007. While in law school, Chrisserved as a teaching assistant in the areaof contract law and worked as a taxintern at the accounting firm of Baker,Newman & Noyes in Portland. Chrisalso spent a semester as an extern at theUnited States Attorney’s Office,Bankruptcy Division. Chris concen-trates his practice in trusts, estates andtransactional law.

This historic merger adds signifi-cant fire power to our already deepbench of transactional and commercialattorneys led by Rod Rovzar, PaulDriscoll, Adrian Kendall, DanCummings and Jeff Herbert. In addi-tion, we will now be able to providemore robust tax and healthcare lawadvice to our many clients in need ofsuch services.

Most importantly, we have joinedwith another group of professionals whowe trust and who share our philosophyof providing the highest quality legalservices to our clients at the most rea-sonable price. You can reach our newfriends through our regular office num-ber, (207) 774-7000. Take the opportu-nity to pick up the phone and give ournew colleagues a call. You will be gladyou did. We look forward to many moreyears of service to you, our trusted andvalued clients.

KudosCHRIS TAINTOR was presented withan award from the Maine BarFoundation for having accepted themost family law case referrals amongCumberland County attorneys from theVolunteer Lawyers Project in 2007.

MARK LAVOIE has been appointed tothe Maine Civil Rules Committee by theLaw Court. Mark also recently spoke atsurgical grand rounds at the MaineMedical Center on the legal dimensionsof medical practice in Maine.

DAVE VERY spoke at a recent meetingof the Maine Coalition of HomeInspection Professionals in Augustaaddressing liability issues involvinghome inspection professionals.

STEVE HESSERT spoke at the 5thAnnual Workers’ CompensationInsurance ExecuSummit in New YorkCity on February 5 on the topic of“Psychological Injuries: Investigation,Development, Evaluation and Trial”.

JOHN VEILLEUX is serving his sec-ond term as the Initiation Director of theCasco Bay Hockey Association. Johnalso serves as a member of the Board ofDirectors of the Association.

NORMAN, HANSON & DETROY, LLC

is published quarterly to inform you of recent developments in the law, particularly Maine law, andto address current topics of discussion in your dailybusiness. These articles should not be construed aslegal advice for a specific case. If you wish a copyof a court decision or statute mentioned in this issue,please e-mail, write or telephone us.

Stephen W. Moriarty, EditorLorri A. Hall, Managing Editor

Norman, Hanson & DeTroy, LLCP.O. Box 4600, Portland, ME 04112Telephone (207) 774-7000FAX (207) 775-0806E-mail address: [email protected]: www.nhdlaw.comCopyright 2008 by Norman, Hanson & DeTroy, LLC

2 Norman, Hanson & DeTroy, LLC Newsletter / Winter 2008

For the past four years, DAVE VERYhas served as head coach of the PortlandSteelers youth football team, and in 2007the team was undefeated. The Steelerswere crowned 2007 Maine State YouthFootball champions following a 30-0 winover the Brunswick Dragons in the statechampionship game.

ADRIAN KENDALL and several fel-low hikers successfully climbed Baxterand Hamlin Peaks in Baxter State Park inJanuary.

The 2008 Edition of The Best Lawyers inAmerica, published by Woodward/White,Inc. of Aiken, South Carolina has includ-ed the following members of NH & D:BOB BOWER (workers’ compensationlaw), JON BROGAN (personal injurylitigation), PETER DeTROY (commer-cial litigation, non-white-collar andwhite-collar criminal defense, and per-sonal injury litigation), PAULDRISCOLL (real estate law), MARKDUNLAP (insurance law), STEVEHESSERT (workers’ compensationlaw), MARK LAVOIE (medical mal-practice law and personal injury litiga-tion), TOM MARJERISON, (personalinjury litigation), STEVE MORIARTY(workers’ compensation law), JIMPOLIQUIN, (appellate law and insur-ance law) and ROD ROVZAR (corpo-rate law and real estate law).

The Foster DecisionOn January 31st the Maine

Supreme Judicial Court, sitting as theLaw Court, decided Elizabeth Foster v.Oral Surgery Associates, a case withpotentially far-reaching consequencesfor medical malpractice litigation inMaine. Fortunately, the Court declinedthe plaintiff’s invitation to radicallyreformulate the standard of care forMaine health care professionals.

In Foster the plaintiff claimed tohave been harmed by the conduct of thedefendants, her oral surgeons, who hadinserted a teflon proplast implant toreplace the meniscus in her temporo-mandibular joint (TMJ). In essence, hertheory of liability was that the materialsused in the manufacture of the implantsmade them dangerous, and that the doc-tors knew or should have known of thatdanger. The case had a tortured proce-dural history. There were originallymultiple plaintiffs, multiple defendants,and multiple theories of liability, andthe case had been to the Law Court sev-eral times already. The cases broughtby several plaintiffs had been dismissedon statute of limitations grounds, andthe plaintiffs who remained had seentheir claims narrowed considerably. Bythe time Elizabeth Foster’s case wasready for trial, only two claimsremained alive. One theory of liabilitywas that the defendants had fraudulent-ly concealed their failure to warn her ofknown risks before embarking on thesurgery (the informed consent claimwould be barred by the statute of limita-tions unless the plaintiff could establishconcealment, which would toll thestatute). The other was that the defen-

dants, upon learning of new informationabout defects in the implants, had negli-gently failed to advise her that sheshould have them removed. As the LawCourt noted, “both claims necessarilyinvolve[d] the issue of informed con-sent.”

In support of these claims the plain-tiff offered no expert testimony from anoral surgeon. The only expert testimo-ny she offered was that of RonaldGreen, a Dartmouth College professorof bioethics who, by his own admission,was unfamiliar with the standards ofpractice actually observed by membersof the oral surgery community.Professor Green was aware of certainmedical literature that had been pub-lished before the plaintiff’s surgery,which suggested that there were risksassociated with the use of teflonimplants. He conceded, however, thathe did not have the expertise to assessthe validity of the scientific conclusionsdrawn by the authors of that literature.Dr. Green simply proposed to testifythat any medical professional – whetherit be an oral surgeon or anyone else –has an ethical obligation to inform his orher patient of the existence of data rais-ing significant questions about the exis-tence of a risk, even if the data areinconclusive and irrespective of whatother similarly-trained professionalsroutinely tell their patients.

Professor Green, who has experi-ence advising universities and otherinstitutions about their ethical obliga-tions in clinical research projects, alsotestified that the oral surgeons involvedin the plaintiff’s care had acquiredheightened duties by virtue of their own“research” endeavors. This research

consisted of a retrospective study, pub-lished in a peer-reviewed medical jour-nal, of a series of implant proceduresperformed in the defendants’ practice;the study discussed, among otherthings, various complications of theprocedure. According to Dr. Green, thefact that the implant procedure was“cutting edge” surgical practice using“novel” materials imposed upon thedefendants a heightened standard ofcare, superseding the ordinary medicalstandard of care. On the basis ofProfessor Green’s testimony the plain-tiff argued that she was not required todemonstrate what information oral sur-geons typically share with their patients,since the professional community as awhole might fall short of that higherstandard.

On the opening day of trial, counselfor the defendants invoked Maine Ruleof Evidence 705 to examine ProfessorGreen, out of the presence of the jury, toexplore whether the “facts or data” uponwhich he relied afforded a “sufficientbasis for expressing an opinion.” Afterhearing the basis for Professor Green’sproposed testimony, the trial judge ruled

Foster v. Oral Surgery Associates:The Law Court limits the admissibility of expert testimony equating ethical standards and standards of careBY CHRISTOPHER C. TAINTOR

Norman, Hanson & DeTroy, LLC Newsletter / Winter 2008 3

CHRISTOPHER C. TAINTOR

that it was inadmissible. And, becauseexpert testimony was essential to sup-port the plaintiff’s case, the courtordered that judgment be entered in thedefendants’ favor as a matter of law.

On appeal, NH&D filed an amicuscuriae (“friend of the court”) brief onbehalf of the Maine MedicalAssociation and in support of the defen-dants, arguing that the Law Court hasnever wavered, and should not nowdepart, from its insistence that the stan-dard of care applicable to medical pro-fessionals is determined by reference tothe actual practice of the profession.The amicus brief also pointed out thatthe plaintiff’s position – that whenever ahealth care practitioner is more familiarthan his colleagues with scientificadvances, or when he is engaged in“cutting-edge” work, he may be held toa heightened standard of care – is incon-sistent with other basic principles ofmalpractice law in Maine. Mostnotably, such a standard would conflictwith the “two schools of thought” or“respectable minority” rule, which pro-vides that “[e]ven if . . . an alternativetreatment would have been feasible, aphysician does not incur liability mere-ly by electing to pursue one of severalrecognized courses of treatment.”

The Law Court affirmed the deci-sion of the Superior Court. The Courtnoted that “Green did not intend to, andcould not, testify regarding the standardof care for informed consent for oraland maxillofacial surgeons under thesame or similar circumstances as OSAbecause he was not familiar with it.Instead, he planned to opine about whatthe standard should be, as dictated byethics.” Notably, the Law Court reject-ed the plaintiff’s argument that theSuperior Court had improperly read intothe law a requirement that one be amedical professional to testify about themedical standard of care. The Courtreasoned:

The Superior Court . . . didnot make that finding, rather itexcluded Green’s testimonybecause he purported to testify asan ethicist regarding what he

believed the standard should be,not what the legal standard appli-cable to OSA actually was, rela-tive to the relevant standards ofpractice among oral and maxillo-facial surgeons. The court didnot determine whether a non-medical expert who did haveknowledge of the applicablestandard could testify under [theinformed consent statute]. Inaffirming the Superior Court’sexclusion of Green’s testimony,we do not interpret [the statute]as requiring the testimony of amedical expert. We find onlythat the Superior Court did noterr in finding that Green wasunable to provide the requiredtestimony regarding the applica-ble standard of care.

Our ruling, moreover, doesnot preclude an ethics expertfrom testifying about informedconsent in another case. In thiscase, Green had neither the req-uisite knowledge of the extent ofthe defendants’ communicationswith the patient, nor an under-standing of the scope of informedconsent standards relied upon bysimilarly situated oral surgeons.

The decision in Foster is a soundone, which should be reassuring to med-ical professionals. Foster reinforces thenotion that there is no abstract, ideal“standard of care” that exists withoutregard to the way physicians practice inthe real world, and that expert testimonyshould be admitted only to the extent itis based upon a witness’s knowledge ofhow the professional community actual-ly practices. By the same token, a med-

ical professional is not held to the stan-dard of “the most highly skilled” or themost learned of his profession simplybecause he happens to have done morereading or performed more researchthan his peers. There is no “slidingscale” of due care, depending on a pro-fessional’s level of education or train-ing. Of course, this works both ways.Just as one cannot be held to a higherstandard on the theory that he is moreknowledgeable than his peers, so also amedical professional cannot plausiblyargue that he should be held to a morelenient standard of care if he has failedto keep abreast of scientific develop-ments in his field.

The Admissibility of EthicalTestimony After Foster

While it affirmed of the exclusionof Professor Green’s testimony inFoster, the Law Court left open the pos-sibility that testimony about ethicalstandards may be admissible in a differ-ent case. In recent years much has beenwritten about the conditions underwhich a court should receive purported-ly “expert” testimony offered by abioethicist. And there is some case law,albeit scant, addressing that question.These authorities may be helpful in pre-dicting how Maine courts will treat thissort of testimony after Foster.

Ethical testimony may be thoughtof as generally falling into different cat-egories, depending on the purpose forwhich it is offered. Testimony concern-ing ethics is characterized as “descrip-tive” when a witness “makes an empiri-cal claim about ethical beliefs or prac-tices” – that is, where he “purport[s] todescribe the ethical beliefs that a groupor profession either avowed or actuallypracticed.” Imwinkelried, ExpertTestimony by Ethicists: What Should BeThe Norm?, 76 TEMP. L. REV. 91, 96(2003). “Normative” ethical testimony,by contrast, addresses values rather thanobjective facts. “Descriptive testimonyanswers the question, ‘As a matter ofhistorical fact, what is the person’s orgroup’s belief or practice?” “Normativetestimony addresses a radically different



question, “What ought to be the prac-tice?” Id. at 98.

Assuming a witness is otherwisequalified, and that he is equipped tooffer testimony that is truly descriptiveand “fits” the facts of a case, it might beappropriate to allow him to testify. Hallv. Anwar, 774 So.2d 41 (Fla. App.2000), makes this point. In Hall, thecourt held that it had been in error to leta professor of bioethics testify that aphysician acted “appropriately” and“within the standard of care” when hediscontinued efforts to resuscitate a pre-maturely-born child. The court firstobserved that if the witness “had testi-fied solely as to whether it was moral orethical to resuscitate or terminate resus-citation of the infant, then his testimonywould have been irrelevant to the legalissue of negligence.” Id. at 43. Thecourt went on to reason:

We recognize that some medicalstandards of care are influenced bymedical ethics. A decision concern-ing the termination of resuscitationefforts is probably an example of anarea in which the standard of careincludes an ethical component. Thestandard of care, however, stillinvolves the level of care owed by asimilar health care provider and notthat owed by an ethicist. Underthese circumstances, it may occa-sionally be appropriate for a med-ical expert to testify about the ethi-cal aspects underlying the profes-sional standard of care. It is notappropriate to allow an ethicist totestify about the medical standardof care.

Id. (citations omitted).Hall supports the view that

descriptive ethical testimony maybe relevant, and therefore admissi-ble, to supplement, explain, or oth-erwise illuminate evidence estab-lishing the standard of care. It isnot, however, a substitute for suchevidence. See also Heinrich v.Sweet, 308 F.3d 48, 66 (1st Cir.2002) (testimony of bioethicist, tothe effect that “research should nothave been conducted” given

absence of benefit to patients, heldinadmissible in part because “it didnot state the standard of care or that[the defendant] had violated thestandard of care”). Pure normativetestimony, on the other hand, shouldvirtually never be admitted. This isso for several reasons.

Most fundamentally, the existenceof numerous and diverse schools of eth-ical thought – including “competingsystems of bioethics” – makes it impos-sible for anyone to offer normative ethi-cal testimony that can be said to beaccurate. Imwinkelried, supra, at 106-107. There is, in short, no such thing asa true “expert” on normative issues.“Trained ethicists have no superiorcompetence or knowledge on normativematters to qualify them specially asmoral arbiters. On such matters, theiropinion is no better than anyone else’s.”Id. at 108-109. Indeed, one court hasheld that testimony of this sort is notadmissible for the more fundamentalreason that Rule 702 permits only opin-ion testimony grounded in “scientific,technical, or other specialized knowl-edge,” and a witness’s “personal, sub-jective views” concerning “purportedethical standards” are not grounded in“knowledge” at all. In re RezulinProducts Liability Litigation, 309F.Supp.2d 531, 543 (S.D.N.Y. 2004).

The caution courts have shownwhen they have been asked to receiveexpert testimony concerning normativeethical issues is well-founded for anoth-er reason. Testimony that is cast as“ethical” in nature may be legal opiniontestimony in disguise. It is generallyestablished, in Maine and elsewhere,that expert witnesses should not beallowed to testify about the legal stan-dards that guide a factfinder’s decision.Normative ethical testimony is thus sub-ject to “the principle that expert opin-ions that would encroach on the role ofthe trial judge in instructing the jury asto the applicable law are inadmissible.”Id. at 544 n.36.

A third, related reason that norma-tive ethical testimony ought to beexcluded is that ethicists are essentiallyunaccountable for the opinions theygive in court. Increasingly, the medicalprofession has come to treat its members’ expert testimony as an element of their practice, and to subjecttheir testimony to peer review. See Turner, After The “Hired Guns”: Is Improper Expert Witness testimonyUnprofessional Conduct Or TheNegligent Practice Of Medicine?, 33PEPP. L. REV. 275, 282-84 (2006)(describing peer review of expert testi-mony undertaken by, inter alia, theAmerican College of NeurologicalSurgeons and the American College ofRadiology). Peer review of expert testi-mony is possible when opinions have tobe grounded in facts. When an expert’stestimony consists of pure opinion,however – as where an ethicist testifiesabout what a doctor “should” disclose toa patient when eliciting consent to sur-gery – no meaningful review is possible.And, more fundamentally, even ifreview were theoretically possible noforum exists in which it can occur. Nostate, including Maine, has a licensingboard for ethicists, and no national cer-tifying body decides whether an ethicistshould be allowed to give expert testi-mony.

ConclusionRecent and ongoing advances in

medical technology – advances affect-ing conception, quality of life, and death– make it increasingly likely that ethicalissues will take center stage in medicalnegligence litigation. In light of Foster,it is likely that bioethicists will be calledupon in these cases to give their opin-ions about the relationship between eth-ical standards and professional stan-dards of care. Whenever such testimo-ny is offered, it will be important toensure that courts adhere to the centrallesson of Foster – that health careproviders’ legal obligations are definedby standards of practice in the realworld, and not by abstract or academicprinciples of perceived morality.

Stacking PIIn Smith v. Hannaford Brothers

Company, 2008 ME 8 (January 15,2008), the employee sustained separateoccupational injuries in 1986, 1997, and2002, and a §312 examiner assessedwhole person PI resulting from theinjuries at 10%, 17%, and 2%, respec-tively. The Hearing Officer combinedor “stacked” all three assessments andfound that the employee had a com-bined level of 27% whole person PI.The employer claimed that the impair-ment from the first and second injuriesshould not have been stacked, and thatthe 17% assessment for the secondinjury was incorrect. The Law Courtaccepted only the stacking issue forappellate review, and by implicationaffirmed the Board’s acceptance of the17% figure.

Pointing out that 17% PI for thesecond injury was sufficient to give theemployee unlimited durational benefitsregardless of the stacking issue, theemployee argued that the appeal shouldbe dismissed because the stacking issuewas moot. Generally speaking, an issueis considered “moot” if it does notinvolve a real or substantial controversyor if no relief can be obtained. As amatter of practice the Court will gener-ally not address an issue that is found tobe moot, because to do so would beequivalent to issuing an advisory opin-ion. The employee argued that becauseher PI was above the threshold regard-less of the 1986 injury, there was nogenuine issue left to be resolved.

As is true with many court-madedoctrines there are exceptions that mayapply, and the employer argued that thestacking issue was a matter of greatpublic concern which required guidancefor the benefit of the workers’ compen-

Workers’ compensation – Law Court decisions and Board updateBY STEPHEN W. MORIARTY

sation system. The Court held that pub-lic interest did not justify a decision atthis point, and ruled that the issueshould be reserved until a claim arose inwhich a decision would have an actualimpact upon the entitlement and obliga-tions of the parties. Accordingly, theemployer’s appeal was dismissed.

Extension of BenefitsFor the first time in seven years the

Workers’ Compensation Board hasextended the durational limit of benefitsfor partial incapacity by an additional52 weeks. The Board adopted Ch. 2,§2(7) of the WCB Rules extending ben-efits to 416 weeks effective January 1,2007. Since 1999 the durational limithas been extended from five to eightyears, and pursuant to §213(4) of theAct, the Board has the authority to ulti-mately approve two additional 52-weekextensions, assuming that there is suffi-cient supporting actuarial data to do so.By statute the durational limit cannot beextended beyond 520 weeks.

Employers may wonder whether thebenefit extension applies to those indi-viduals who had received less than 364weeks of partial as of January 1, 2007.In Abbott v. S.A.D. #53, 2000 ME 201,762 A.2d 546, the Law Court ruled thatthe Board’s first extension of benefitsapplied to those whose entitlement topartial had not expired as of the effec-tive date of the extension. Therefore,injured workers who had received lessthan 364 weeks of partial benefits as ofJanuary 1, 2007 now have an additional52 weeks of entitlement. However, theAbbott Court made clear that a benefitextension does not either revive orrestore additional entitlement to thosewhose benefits have already expired.Therefore, this latest benefit extensionwill not apply retroactively to claimants

whose entitlement to partial had beenexhausted prior to January 1, 2007.

Settlements and Medical ExpensesThe Board has amended Ch. 12, §6

of the WCB Rules to require a HearingOfficer to make a determination ofanticipated future medical costs whenapproving a lump sum settlement. TheRules do not indicate what sort of evi-dence or information may be required,and Hearing Officers may very wellhave different individual preferences inthis regard. Conceivably, the Rulecould delay the process if a HearingOfficer determined that detailed consid-eration of past payment history was nec-essary to project future expenses.

Of greater concern is the possibilitythat an employee could seek to annul asettlement pursuant to §321(1) by alleg-ing a mistake of fact if medical expens-es following settlement turn out to besubstantially higher than the amountprojected by the Hearing Officer. Thereare no time limits that apply to the filingof a Petition to Annul. It is thereforerecommended that employers protectthemselves by including in the settle-ment documentation an acknowledge-ment that actual expenses may exceedthe figure determined by the HearingOfficer, and that the settling claimantaccepts that risk.

STEPHEN W. MORIARTY


Maine’s “reach and apply” statute1 isoften referenced, but not widely under-stood. This article is meant to give a briefoverview of the statute and applicablecase law so that insurance professionalscan better understand how its quirksaffect claims handling and case manage-ment. Section 2904 provides, in pertinentpart,

Whenever any person…recovers afinal judgment against any other per-son for any loss or damage…thejudgment creditor shall be entitled tohave the insurance money applied tothe satisfaction of the judgment bybringing a civil action, in his ownname, against the insurer to reachand apply the insurance money, ifwhen the right of action accrued, thejudgment debtor was insured againstsuch liability and if before the recov-ery of the judgment, the insurer hadhad notice of such accident, injury ordamage.

Maine law does not allow an injuredparty to sue the tortfeasor’s liabilityinsurer directly. Allen v. Pomroy, 277A.2d 727, 730 (Me.1971). Section 2904gives the judgment creditor, who is mostoften the plaintiff, the exclusive mecha-nism to collect insurance proceeds fromthe defendant’s insurer to satisfy a finaljudgment obtained against the insured. Itapplies to all types of casualty insurance.

There are a few notable require-ments of the reach and apply statute,most of which have been interpreted bythe courts and are worth exploringbriefly.

NoticeIn order for an insurer to be liable

under the reach and apply statute, it musthave been given “notice of such accident,injury or damage…before the recovery

of the judgment.” 24-A M.R.S.A. §2904. Notice is sufficient even if itoccurs after entry of default, but beforedefault judgment. There are a couple ofimportant Law Court decisions interpret-ing these clauses.

a) Michaud v. Mut. Fire, Marine &Inland Ins. Co., 505 A.2d 786 (Me.1986).

This case addressed whether aninsurer could be held liable underSection 2904 if it received first notice ofthe action after entry of default, butbefore a hearing on damages. In thiscase, the insurer learned of the originalclaim directly from the injured party. Theinsurer repeatedly attempted, unsuccess-fully, to contact its insured by mail. Evenafter the plaintiff served the insured witha complaint, the insured failed to notifyhis insurer or answer the complaint. Itwas only after the court entered defaultthat the insurer became aware of the law-suit. The insurer did not participate in thedamages hearing, despite having notice.The court entered default judgment andthe plaintiff subsequently commenced areach and apply action.

The Law Court held the insurerliable because, while default had beenentered, a default judgment had not, andtherefore the insurer had a proceduralopportunity to move for relief from thedefault, which would have been grantedupon a showing of good cause.Consequently, the Court held that theinsurer had “meaningful notice adequateto satisfy the requirements of dueprocess.” Id. at 790. This holding provid-ed the basis for the MacDowell holding,discussed below, and is a strongreminder to insurers to act affirmativelyto protect their interests when put onnotice at such a procedural stage.Insurers should also make every effort tobe sure that all possible insureds havecomplete contact information for theinsurer should a complaint be served.

b) MacDowell v. MMG Ins. Co., 2007ME 56, 920 A.2d 1044.

In this case, MMG had first notice atthe same procedural stage as in Michaud,after entry of default but before defaultjudgment, but here, MMG retained coun-sel and filed a motion to lift default, whichwas denied. After a hearing on damages,MMG unsuccessfully appealed the denialof the motion to lift default. A reach andapply action commenced and the courtawarded summary judgment to the plain-tiff. MMG appealed, arguing that its dueprocess rights were violated because ithad no meaningful opportunity to beheard on the merits. The Law Court, how-ever, agreed with the plaintiff and held,without much explanation, that dueprocess was satisfied by the simple exis-tence of the procedural right to file amotion to lift the default, regardless ofwhether it succeeded.

This decision underscores the impor-tance of supplying insurer contact infor-mation to every possible insured and tomaintain contact with such potentialinsureds should it appear that a complaintis forthcoming, even if there are coverageissues. It may also be wise to request thatthe claimant’s counsel agree to providethe insurer with a copy of the complaint,should one be filed or served, beforeentering into any settlement discussions.

Final JudgmentAs mentioned above, it is prohibited

in Maine to bring a direct action against


The Reach and Apply Action:A PrimerBY HANNAH L. BASS

HANNAH L. BASS

Recently, the Law Court issued itsdecision in Monaghan v. Jordan Meatset al., 2007 ME 100, 928 A.2d 786, andprovided the workers’ compensationsystem with a great deal of guidance indetermining when an injured employ-ee’s work search warrants an award of100% partial incapacity benefits underthe so-called “work-search rule.”Although the Law Court declined toprovide a bright-line rule or easyanswer, it did provide a comprehensive,easy to use roadmap for HearingOfficers and practitioners alike.

The underlying facts of Monaghanare far from unique in litigated cases.Ms. Monaghan injured both her kneeswhile working for Jordan Meats but shelater regained a full time work capacitywith modified duty restrictions. Shefiled a Petition for Award seeking 100%partial incapacity benefits. She sought

The Monaghan Decision:Court Clarifies Work Search RequirementBY C. LINDSEY MORRILL

to establish that work was unavailableto her in her community by presentingevidence that she had contacted 147employers regarding available work,but she did not secure employment.The employer submitted a labor marketreport identifying 50 advertised jobs inthe local labor market within Ms.Monahan’s restrictions. HearingOfficer Sue Jerome concluded thatalthough Ms. Monaghan continued tosuffer partial incapacity from the kneeinjury, she was not persuaded that workwithin Ms. Monaghan’s restrictionswas unavailable to her based on thework injury. Therefore, she awardedMs. Monahan ongoing partial benefitsbased on an imputed earning capacityof $300.00 per week.

Ms. Monaghan appealed this caseto the Law Court, specifically arguingthat her work search was adequate as amatter of law pursuant to the work

search rule. The Law Court took thisopportunity to discuss the work searchrule and the appropriate factors to con-sider when evaluating the adequacy ofan injured employee’s work search.The work search rule establishes that100 percent partial incapacity benefitsare appropriate if an employee canshow that, notwithstanding his or her

C. LINDSEY MORRILL

the tortfeasor’s insurer. Allen v. Pomroy,277 A.2d 727, 730 (Me.1971). In orderfor an injured party to reach and applyinsurance money, he or she must firstobtain a final judgment against theinsured. A court enters a final judgmentafter the rights of the parties and virtual-ly all matters in controversy (liability anddamages) are decided. Then and onlythen, can a reach and apply action becommenced under Section 2904.

CoverageDespite the doom and gloom men-

tioned above, an insurer maintains anyand all substantive coverage defenses ina reach and apply action. In Michaud, theLaw Court held that section 2904’s enu-merated defenses2 is an exclusive list. Itseems counterintuitive, but an insured’sbreach of a contractual condition will notbar an injured party’s recovery under thereach and apply statute. Nonetheless, an

insurer can prevail under section 2904 if itsuccessfully argues that the underlyingfacts fall within a policy’s substantivecoverage exclusion; for example, theexpected or intended injury exclusion.

Insurance professionals will benefitby reminding themselves and each otherabout Section 2904 and the defensesthereto, because until the legislaturerewrites the statute, vigilance after noticeis the insurer’s best protection.


1 24-A M.R.S.A. § 29042 1. Motor vehicle operated illegally or by one under age. When the insured automobile, motor vehicle or truck is being operated by any person contrary to law as

to age or by any person under the age of 16 years where no statute restricts the age; or

2. Motor vehicle used in race contest. When such automobile, motor vehicle or trust is being used in any race or speed contest; or

3. Motor vehicle used for towing a trailer. When such automobile, motor vehicle or truck is being used for towing or propelling a trailer unless such privilege is indorsed on the policy or such trailer is also insured by the insurer; or

4. Liability assumed. In the case of any liability assumed by the insured for others; or

5. Liability under workers’ compensation. In the case of any liability under any workers’ compensation agreement, plan or law; or

6. Fraud or collusion. When there is fraud or collusion between the judgment creditor and the insured.

partial work capacity, work in theemployee’s local community remainsunavailable as a result of the work-related injury. If the employee meetsthat burden, the employer is required toshow that it is more probable than notthat there is work available in the com-munity within the employee’s physicalability. As a practical matter, anemployee routinely presents a worksearch and the employer routinelyattempts to rebut the work search with alabor market survey. Whether the labormarket survey is sufficient to rebut thework search is often based on the qual-ity of the employee’s work search.

Ms. Monaghan specificallyrequested a bright line rule for evaluat-ing the number of inquiries necessaryto establish an adequate work search.She suggested that 25 inquiries shouldbe deemed adequate as a matter of law.The Law Court expressly rejected sucha bright line approach, rather statingthat the inquiry required taking a vari-ety of factors into consideration.Notably, each factor provided had beenset forth in prior decisions of the LawCourt. Monaghan, however, finallyprovided us with a user-friendly list asto the factors which must be consid-ered. The list includes:

1) the number of inquiries made orapplications submitted by anemployee;

2) whether the search was undertakenin good faith;

3) whether the search was too restric-tive;

4) whether the search was limitedsolely to employers who were notadvertising available positions orwhether the employee also madeuse of classified ads or otheremployment resources in thesearch;

5) whether the search was targeted towork that the employee is capableof performing;

6) whether the employee overempha-sized work restrictions whenapplying for jobs;

7) whether the employee engaged inother efforts to find employment orincreased prospects for employ-ment;

8) the employee’s personal character-istics such as age, training, educa-tion and work history; and

9) the size of the job market in theemployee’s geographic area.

The Law Court specifically notedthat this is a non-exclusive list and thata hearing officer’s task “is not to focuson any single aspect of the employee’sefforts, but to view the evidencethrough a broad lens to determinewhether the employee’s efforts todemonstrate that she was unable to findwork because (1) no stable market forthe kind of work she is able to performsexists in the local community; or (2) ifthere is such a market, that work isunavailable to the employee due to thepersisting effects of the work-relatedinjury.” The Board further noted that abright line test which simply looks intothe number of inquiries “cannot substi-tute for a thorough evaluation andweighing of all the factors bearing onthe reasonableness of her work search.”

The Law Court ultimately foundthat the Board’s decision did not pro-vide enough details with respect to thefactors considered in the HearingOfficer’s analysis. Therefore, the LawCourt remanded the case to the HearingOfficer for further review.

On remand, Hearing OfficerJerome expressly weighed every factorlisted by the Law Court. Her opinionas to the inadequacy of Ms.Monaghan’s work search did notchange. Specifically, she noted thatvery few of the employers who werecontacted were actually hiring at thetime. She found the work search to bevery unfocused. Ms. Monaghan’s pat-tern of work search was simply to go todifferent places without knowledge ofthe kind of work involved or whether

the employers were even hiring.Therefore, specifically based on factorsweighing the appropriateness of theinquiries and targeted nature of thework search, Hearing Officer Jeromefound that she could not establish on amore probable than not basis that workwithin her restrictions is unavailable toher as a result of her injury. TheEmployee did file a Motion for FurtherFindings of Facts and Conclusions ofLaw, which the Board denied. As theEmployee’s timeline for filing anappeal has not expired, the possibilityexists that she will again pursue reviewfrom the Law Court.

Although the Law Court’s decisionin Monaghan did not alter any existinglaw, it did provide much needed clarifi-cation which aids employees andemployers alike. No longer areemployees performing (and employerscritiquing) work searches without anytype of road map or basis for analysis.These nine simple factors have provid-ed clear guidelines to follow when ana-lyzing a work search to determinewhether 100 percent partial incapacitybenefits may be appropriate.


Definition of “bodily injury” in insurance contract and bystander emotional distress claims

A recent decision by the Law Courtreinforces the cardinal rule that onemust review the precise language of allof the insurance contracts involved inorder to appropriately adjust a claim.

In August of 2002, nineteen-month-old Daisy Ryder was tragicallystruck and killed by a vehicle driven byRobert Donath. The accident was wit-nesses by her mother Nettie and herbrother. Donath was insured under apolicy from Progressive with liabilitylimits of $50,000 for each person and$100,000 for each accident. Nettie alsohad UM coverage with USAA for$50,000 for each person and $100,000for each accident.

The Ryders filed a complaint in theSuperior Court asserting three claimsarising out of the accident: (1) wrong-ful death of Daisy brought on behalf ofher estate; (2) negligent bystander dis-tress to Nettie; and (3) negligentbystander distress to their son. TheRyders also brought a declaratory judg-ment seeking to establish the amount ofcoverage available under both theProgressive and USAA policies.

The Progressive policy defined the$50,000 “ each person” limit as includ-ing not only the “total of all claimsmade for bodily injury to a person” butalso “all claims of others derived fromsuch bodily injury, including, but notlimited to, emotional injury or mentalanguish resulting from the bodily injuryof another or from witnessing the bodi-ly injury to another.” Accordingly,Progressive policy’s “each person”limit explicitly encompassed theestate’s wrongful death claim andNettie and her son’s derivativebystander distress claims so that nomore than $50,000 of liability coveragewas available under the Progressive

Two recent Law Court decisionsBY DAVID P. VERY

policy. As a result, Progressive subse-quently settled the claim with a pay-ment of $50,000 and the Ryders agreedto dismiss all claims againstProgressive and Progressive’s insured.

The USAA policy’s UM coverage,on the other hand, insured against “bod-ily injury sustained by any person andany one auto accident.” As a result, ifNettie and her son’s bystander distressclaims constituted separate claims for“bodily injury” under the policy, thenthe $100,000 per accident limit wouldapply and there would exist $50,000 ofUM coverage available under theUSAA policy.

The USAA policy defined “bodilyinjury” as “bodily harm, sickness, dis-ease or death.” The Superior Courtdetermined that the term “bodilyinjury” as defined in the contract unam-biguously did not include a claim forbystander emotional distress. As aresult, the Superior Court determinedthat the Ryders’ liability claims weresufficient to trigger only the $50,000per person coverage limit of the USAApolicy, and not the $100,000 per acci-dent coverage limit. The Court there-fore entered summary judgment on allclaims in favor of USAA.

On appeal, in Ryder v. USAAGeneral Indemnity Co., 2007 ME 146(December 6, 2007), the Law Courtagreed that the majority of the jurisdic-tions that have considered this matterhave held that “bodily injury,” wheneither undefined or defined as “bodily”followed by a noun series, is unambigu-ous and encompasses only physicalharm. The Court stated that the defini-tions of “bodily injury” provided bythese insurance policies usually fallinto one of two categories: (1) “bodily”followed by the noun series: “injury (orharm), sickness, or disease,” or (2) thissame noun series with an additionalnon-restrictive clause such as “includ-

ing death resulting therefrom.” TheLaw Court noted that the reason courtshold this language to be unambiguousis because it conforms to the standardgrammatical rule that when an adjectivemodifies the first of a series of nouns, areader will expect the adjective to mod-ify the rest of the series as well (i.e.“bodily injury, [bodily] sickness, or[bodily] disease”).

The Law Court noted, however,that the USAA policy did not containthe same definition of “bodily injury”considered in the overwhelming major-ity of cases. Rather, it defines “bodilyinjury” as “bodily harm, sickness, dis-ease or death.” As a result, when thestandard grammatical rule is applied,the adjective “bodily” modifies notonly harm, sickness, and disease, butalso death. The Law Court held that thephrase “bodily death,” although rele-vant in the spiritual realm, carried littlemeaning in the secular world of insur-ance contracts. As a result, the Courtstated that it is unclear given the gram-matical structure employed in this defi-nition whether “bodily” is intended tomodify all of the nouns that follow it.The Law Court therefore found the pol-icy’s definition of “bodily injury”ambiguous. The Court concluded thatthe words “sickness” and “disease”were not modified by the word “bodily”in the policy and served instead toexpand coverage beyond “bodilyharm.”

DAVID P. VERY


The Court then turned to whether aclaim for emotional distress wouldinvoke UM coverage for “sickness” or“disease.” The Court first stated thatconditions pertaining to the mind areexpressly included within the definitionof sickness and disease. As a result, theCourt found that the language of theUSAA policy would extend coverage tosicknesses and diseases that are not cor-poreal. The Law Court, however, wenton to explain just what type of emotion-al distress is required in order to quali-fy for coverage for sickness and dis-ease. The Court held that as applied tothe UM coverage provided by theUSAA policy at issue in the case, theRyders must not only show that theysuffered emotional distress that wasserious, but they must also demonstratethat the distress constituted a “diagnos-able” sickness or disease in order forcoverage to exist. As a result, the LawCourt vacated the summary judgmentawarded to USAA and remanded thecase to the Superior Court to determinewhether Nettie and her son’s allegedserious emotional distress qualified as adiagnosable sickness or disease.

Of interest, the Law Court, in afootnote, indicated that the mental dis-order “must not be merely anexpectable and culturally sanctionedresponse to a particular event, forexample, the death of a loved one.”Instead, they must demonstrate “clini-cally significant impairment or dis-tress” in order to qualify for coveragefor sickness or disease. Finally, it isimportant to note that the Law Courtdoes not appear to take issue with thevast majority of case law across thecountry defining “bodily injury” andthat this decision would only apply topolicies containing the same or similarlanguage to the USAA policy.

“Regular use” exclusion in UM policies

In Pease v. State Farm MutualAutomobile Insurance Company, 2007

ME 134 (September 20, 2007), the LawCourt discussed the viability of the“regular use” exclusion in UM policies.

On Christmas day, 2002, JasonPease, a detective sergeant in theLincoln County Sheriff’s Office, wasdispatched to a reported disturbance.Pease drove his unmarked patrol vehi-cle to the scene. Upon arrival, Peasegot out of his vehicle, leaving theengine running. Michael Montagna,the individual causing the disturbance,got into the driver’s seat of Pease’svehicle. Pease was severely injuredwhile attempting to prevent the theft ofhis vehicle.

The Law Court had previouslydecided that Montagna’s auto coveragedid not apply because it did not coverhis unlawful possession of Pease’spatrol vehicle. As a result, Montagnawas uninsured. Further, LincolnCounty chose not to carry UM coveragefor its employees injured on the job. Asa result, Pease sought insurance cover-age for his injuries through the UMcoverage of his personal insurance pol-icy issued by State Farm.

The State Farm auto policy con-tained an exclusion which stated that anuninsured motor vehicle does notinclude a motor vehicle “furnished forthe regular use of you, your spouse orany relative.” State Farm argued thatthis exclusion prevented Pease fromrecovering from injuries he sustainedwhen struck by a vehicle furnished tohim for his regular use. State Farm fur-ther maintained that this exceptionapplied even though Montagna stoleand unlawfully operated the vehicle.

The Superior Court agreed andstated, “For State Farm to extend cover-age to a patrol car owned by theLincoln County Sheriff’s Departmentand used regularly by Pease for bothprivate and law enforcement purposes,it would be assuming a large, anduncompensated risk. Such risk is prop-erly assumed by the SheriffDepartment’s insurance carrier.”

On appeal, Pease argued that the“regular use” exclusion was invalid

because it contravened the UM statuteand was void against public policy.Although not addressed by either partyon appeal, the Law Court decided thatthe dispositive issue was to interpret thepolicy provision in light of the fact thatthe vehicle was stolen. The Law Courtheld that at the moment Montagna stolethe vehicle, it stopped being a vehiclefurnished for the deputy’s use, and wassimply a stolen vehicle. As a result, themajority of the Law Court construedthe policy to exclude vehicles stolenfrom the insured from the “regular use”exclusion. Thus, the majority of theLaw Court did not address whether the“regular use” exclusion is valid underMaine UM statute.

Justice Silver issued a separate con-curring opinion stating that he wouldfind that “regular use” exclusion violat-ed the UM statute. He stated that thepurpose of the UM statute is to permitan insured injured person the samerecovery which would have been avail-able had the tortfeasor been insured tothe same extent as the injured party.Justice Silver indicated that the statutedoes not refer to exclusions at all andthat the Court has previously said that itwould not sanction reductions in cover-age for which the legislature had notprovided. Thus, Justice Silver statedthat even if the exclusionary languagein State Farm’s policy was explicit andunambiguous, it could not prevail if itwas contrary to the UM’s statute orpublic policy.

Therefore, Justice Silver’s opinionnotwithstanding, at present, the regularuse policy exclusion remains validalthough perhaps in jeopardy.


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