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September 21, 2017 | Blog Post| The Rule of Sevens: Evaluating Claims Involving a Child

As subrogation professionals, we may be tasked with evaluating property loss claims where a child caused or contributed to the property damage.  For example, is a child playing with matches or a lighter liable for a fire loss?  Or, is a child liable for driving a vehicle into the neighbor’s home? In some instances, a parent may be held liable for the child’s acts.   As more fully set forth below, when evaluating a claim involving a child, it is important to evaluate the age and capacity of the at-fault party, and to be familiar with state specific statutes regarding parental liability. 

The applicable standard of care in evaluating a claim based on negligence is “the reasonable person standard.” That is, the person’s conduct is measured against the reasonable, ordinary and prudent person standard.  For an adult, this is measured objectively, taking into consideration the physical characteristics, the average mental ability, and the knowledge of an average member in the community.  When a child is involved in a loss, a majority of courts take the view that a child is required to conform to a standard of care of a child of like age, education, intelligence and experience. 

This analysis permits a subjective evaluation of these factors.  Generally, children over the age of 14 are presumed to be capable of negligence, and are evaluated by the subjective standards:  Evidence may include performance in school, peer review, and education and training.  Minors engaged in adult activities, such as flying an airplane, driving a motor vehicle or driving a motor boat, are held to the standards of an adult engaged in such activities. 

Many states apply the “Rule of Sevens.” Under this standard, a child under the age of seven is presumed to be incapable of negligence.  A child between the ages of seven and fourteen is presumed to be incapable of negligence, but the presumption may be rebutted by showing the child in question possesses the skill, capacity or understanding of the activity involved.  And a child over the age of fourteen is presumed to be capable of negligence.  Mississippi, North Carolina, Tennessee and Georgia adopted similar approaches based on the “Rule of Sevens.”  Other states, like South Carolina, take a case by case approach for evaluating the subjective standards of a child. Of course, the same standards applied in the case by case approach apply when evaluating the comparative fault of the child to other defendants. 

In certain instances, parents of the at-fault child may become the target, as the adults are likely the ones to carry insurance that may respond to a Plaintiff’s claim.  Importantly, parents are not uniformly held responsible for their child’s actions just by virtue of the relationship.  However, liability for the negligence of a minor child may be imposed on the parent if they know, or should have known, the child’s habits, tendencies or propensities toward the particular behavior, have the opportunity and ability to control the child, or have made no reasonable effort to restrain the child.  The parent may also be liable for directly aiding or encouraging the negligent act.

A number of states enacted legislation directed toward parents for the intentional conduct of their children.  “Parental Responsibility” legislation varies by state but often sets a monetary limit to be imposed against parents for willful or malicious acts of their minor children.  In the Southeast, statutory monetary limits imposed against parents vary greatly:  $1,000.00 in Alabama; $2,000.00 in North Carolina; $2,500.00 in Virginia; $5,000.00 in Mississippi and South Carolina; $10,000.00 in Georgia; and, actual damages in Florida and Tennessee.

Subrogation professionals face unique facts with every claim and the opportunity for subrogation should be carefully evaluated.  In many cases, especially those involving minors in large losses, consultation with legal counsel is recommended and can also be beneficial in pursuing recovery.  Obviously, each case is unique and should be evaluated independently.  This blog provides general background as to whether a minor or their parents may be held liable in the pursuit of recovery for a negligent or intentional act. If you have further questions, please contact zjett@butler.legal.

Zachary Jett

A Senior Associate at Butler Weihmuller Katz Craig LLP in Charlotte, NC. Zachary practices in our Subrogation & Recovery departments.

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Carmack claims are unique animals.  Carmack provides a shipper—or its subrogating insurance company—with the sole remedy for damages sustained when goods are shipped between states.  As the sole remedy, it’s imperative that a claimant strictly comply with Carmack’s notice of claim requirements and any additional notice requirements outlined in the bill of lading.  As subrogation professionals, when a cargo claim comes in, the bill of lading should be the first document reviewed to determine what needs to be done—in addition to the five items listed below—to provide proper notice of the claim to the carrier.  Failure to file proper written notice will bar the claim. 

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It took years of depositions and other discovery to realize that that most of my 2004-2005 hurricane condominium association claims were much simpler to defend than I thought.   The center of gravity of these claims was the proper calculation of Actual Cash Value (ACV).

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While confidentiality is usually destroyed when communications between an attorney and client take place in the presence of a third party or when work product is shared with others, those communications can remain protected if the common interest doctrine applies.

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The General Aviation Revitalization Act of 1994 (“GARA”) was a byproduct of aging aircraft, rising costs, and tort liability in the United States.  Congress was concerned that aircraft manufacturers were being devastated by liability costs for accidents occurring long after the planes left the manufacturer.  These liability costs drove up the price for aircraft beyond what the market would bear, and general aviation experienced a sharp decline.  The General Aviation Manufacturers Association reports the total U.S.-manufactured general aviation airplane shipments went from a high of 17,811 in 1978 to a low of 929 in 1994.  As a result many manufacturers stopped making certain model aircraft, including Cessna which ceased production of all piston aircraft in 1986. 

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August 15, 2017 Blog PostThe ABC's of ACV in Subrogation Claims

Oftentimes, during the course of a subrogation claim, third-party liability adjusters will refuse to pay the full amount of the “Repair Cost Value” (“RCV”) of the damages demanded, and contend that they only owe “Actual Cash Value” (“ACV”), regardless of the amount paid in the underlying first party property claim adjustment.   Oftentimes, this position is not necessarily predicated on a specific legal doctrine or theory, but rather a general “understanding” that is commonly used in the insurance context.   The true measure of damages, in the legal context, is always dictated by state law. 

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Hurricane season began June 1 st, and runs through November 30th.   However, we are about 30 days from approaching the peak of hurricane season, when the season becomes its most active.  Weather predictors are predicting an above-average number of storms this year, with 14 expected named storms.  As anyone who has worked “CAT” claims knows, when a hurricane hits, it’s “all hands on deck.”  This is true for subrogation professionals, as well.  There is a significant increase in the number of claims that must be triaged, with a goal of finding any claims that might have subrogation potential. 

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Practicing in both Florida and Texas I have seen the Economic Loss Rule evolve over the years, and its direct impact on the recovery potential for our subrogation claims appears to be moving in a positive direction. Recently, the Texas Supreme Court held in a per curium opinion in Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 2014 WL 4116839 (Tex. Aug. 22, 2014), that a claimant can now bring a tort claim (negligence, in this case) against a party, as well as a breach of contract claim. In doing so, the Court applied ...

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