STATE LAW SUMMARY Overview of the State of Utah

Updated 2013 Preparer: Heinz J. Mahler Kipp and Christian, P.C. Salt Lake City, Utah Table of Contents Overview of the Utah Court System

A. Trial Courts B. Appellate Courts

Procedural

A. Venue B. Statute of Limitations C. Time for Filing an Answer D. Dismissal Re-Filing of Suit

Liability A. Negligence B. Negligence Defenses C. Gross Negligence, Recklessness, Willful and Wanton Conduct D. Negligent Hiring and Retention E. Negligent Entrustment F. Dram Shop G. Joint and Several Liability H. Wrongful Death and/or Survival Actions I. Vicarious Liability J. Exclusivity of Workers’ Compensation

Damages A. Statutory Caps on Damages B. Compensatory Damages for Bodily Injury C. Collateral Source D. Pre-Judgment / Post Judgment Interest E. Damages for Emotional Distress F. Wrongful Death and/or Survival Action Damages G. Punitive Damages H. Diminution in Value of Damaged Vehicle I. Loss of Use of Motor Vehicle

Evidentiary Issues A. Preventability Determination B. Traffic Citation from Accident

C. Failure to Wear a Seat Belt D. Failure of Motorcyclist to Wear a Helmet E. Evidence of Alcohol or Drug Intoxication F. Testimony of Investigating Police Officer G. Expert Testimony H. Collateral Source I. Recorded Statements J. Prior Convictions K. Driving History L. Fatigue M. Spoliation

Settlement

A. Offer of Judgment B. Liens C. Minor Settlement D. Negotiating Directly With Attorneys E. Confidentiality Agreements F. Releases G. Voidable Releases

Transportation Law A. State DOT Regulatory Requirements B. State Speed Limits C. Overview of State CDL Requirements D. Motor Vehicle Event Data Recorders

Insurance Issues

A. State Minimum Limits of Financial Responsibility B. Uninsured Motorist Coverage C. No Fault Insurance D. Disclosure of Limits and Layers of Coverage E. Unfair Claims Practices F. Bad Faith Claims G. Coverage - Duty of Insured H. Fellow Employee Exclusions

Overview of the State of Utah Court System

A. Trial Courts Courts of general jurisdiction are Utah State District Courts. A request for jury trial must be filed with the initial pleading and the jury fee must be paid. There are eight jurors in civil trials. Six of eight must agree to reach a verdict. Utah Rules of Civil Procedure 38, 47. Utah Rules of Civil Procedure are similar to the Federal Rules, as are the Utah Rules of Evidence.

Mandate Mediation

Utah has adopted a Uniform Mediation Act and a Uniform Arbitration Act. See Utah Code Annotated § 78B-10-101-113 (mediation); Utah Code Annotated § 78B-11-101-131 (arbitration). Generally, the UUMA is to be applied when “parties are required to mediate by statute, court, or administrative agency rule or referred to mediation by a court, administrative agency, or arbitrator.” The UUAA is to be applied whenever arbitration is mandated. See Utah Code Annotated § 78B-11-104. There are several statutes requiring mandatory ADR (i.e. mediation in domestic cases, arbitration in cases of subrogation of PIP benefits between insurers, etc.).

B. Appellate Courts “An appeal may be taken from a district or juvenile court to the appellate court with jurisdiction over the appeal from all final orders and judgments, except as otherwise provided by law, by filing a notice of appeal with the clerk of the trial court within” the allotted time. Utah App. Proc., Rule 3. “An appeal from an interlocutory order may be sought by any party by filing a petition for permission to appeal from the interlocutory order with the clerk of the appellate court with jurisdiction over the case within 20 days after the entry of the order of the trial court, with proof of service on all other parties to the action.” Utah App. Proc., Rule 5. Under the Utah Rules of Appellate Procedure, an appellant generally must file its Notice of Appeal with the clerk of the trial court within 30 days after the date of entry of the final judgement or order appealed from. Utah App. Proc., Rule 4. There are two appellate courts in the State of Utah: the Utah Supreme Court and the Utah Court of Appeals. Each appellate court has its own unique jurisdiction. The Supreme Court has jurisdiction over most civil appeals. The Notice of Appeal should designate which court the matter is being appealed to. The Utah Supreme Court has the authority to transfer a case to the Utah Court of Appeals for decision. If the Appellant seeks an extension of time to file the Notice of Appeal, the request must be filed in the trial court. Only the trial court can extend the time to file the Notice of Appeal. In civil cases, the Appellant must also pay a cost bond of $300.00 to the trial court. Utah App. Proc., Rule 6. The Appellant must file a docketing statement with the appellate court within 21 days from the filing of the Notice of Appeal. A docketing statement includes a summary of the facts and a brief description of the legal errors the Appellant thinks the trial court made. Failure to file the docketing statement may result in dismissal of the appeal. See Utah R. App. P., Rule 9. If the court determines it has jurisdiction and that there is an appealable issue, then the case will proceed to briefing. The appellate court will send a written notice giving the

Appellant 40 days from the date of notice to file their brief. Thereafter, the Appellee’s brief is due 30 days after service of Appellant’s brief. Thereafter, the Appellant may file a reply brief which is due 30 days after service of Appellee’s brief. The parties may stipulate to extend these deadlines, but may not do so more than once for each deadline and each extension cannot be for more than 30 days. See Utah R. App., Rule 26. After briefing, the matter is placed on the court’s calendar and the court will notify parties if it schedules oral argument. After a decision is issued, a party may petition for rehearing within 14 days. Utah App. Proc., Rule 35. Generally, if there is no petition for rehearing the case returns to the trial court 15 days after the decision is issued. Procedural

A. Venue Courts of general jurisdiction are Utah State District Courts. A request for jury trial must be filed with the initial pleading and the jury fee must be paid. There are eight jurors in civil trials. Six of eight must agree to reach a verdict. Utah Rules of Civil Procedure 38, 47. Utah Rules of Civil Procedure are similar to the Federal Rules, as are the Utah Rules of Evidence. Venue generally lies in the county where a defendant resides or where the cause of action arose. If the defendant is a non-resident, venue is proper wherever plaintiff brings suit. Utah Code Annotated § 78B-3-307. Upon written motion, venue may be changed in the following cases:

(1) when the county designated in the complaint is not the proper county; (2) when there is reason to believe that an impartial trial cannot be had in the county, city, or precinct designated in the complaint; (3) when the convenience of witnesses and the ends of justice would be promoted by the change; (4) when all the parties to an action, by stipulation or by consent in open court entered in the minutes, agree that the place of trial may be changed to another county.

Utah Code Ann. § 78B-3-309 (West)

B. Statute of Limitations The statute of limitation for personal injury tort actions in the State of Utah is four years. See Utah Code Annotated § 78B-2-307. An action for recovery of damages for the wrongful death of another must be brought within two years of the death. See Utah Code Annotated § Section 78B-2-304. In tort cases generally, the statute begins to run at the time of the occurrence, i.e. accident. However, the “discovery rule” may apply in some cases which requires that a plaintiff must or should be aware of certain critical facts, including the occurrence of an

injury and a possible cause of action. See Atwood v. Sturm, Ruger & Company, 823 P.2d 1064 (Utah 1992). The statute of limitation for personal injury or wrongful death is tolled during the period of a plaintiff'’ minority or during a plaintiff’s mental illness or incompetence. See Utah Code Annotated § 78B-2-108 and Switzer v. Reynolds, 606 P.2d 244 (Utah 1980) and In re Estate of Garza, 725 P.2d 1328 (Utah 1986).

C. Time for Filing An Answer The Utah rules state:

Unless otherwise provided by statute or order of the court, a defendant shall serve an answer within twenty days after the service of the summons and complaint is complete within the state and within thirty days after service of the summons and compliant is complete outside the state. A party served with a pleading stating a cross-claim shall serve an answer thereto within twenty days after the service. The plaintiff shall serve a reply to a counterclaim in the answer within twenty days after service of the answer or, if a reply is ordered by the court, within twenty days after service of the order, unless the order otherwise directs.

Utah R. Civ. P. 12

D. Dismissal Re-Filing of Suit Generally, a lawsuit must be brought within the applicable statute of limitations in order to be valid in Utah. However, Utah has enacted a savings statute which allows a matter that has not been dismissed on the merits to be re-filed within one year, even if the statute of limitations ran before the re-filing. Utah Code Annotated § 78B-2-111. The savings statute, however, may only be invoked once. Liability

A. Negligence Utah is a “comparative fault” state. Under Utah law, each party is subject to a finding of fault by the court or jury. An award is then made based on the percentage of fault of each respective party and each party is only liable for that party’s proportion of fault. A plaintiff may only recover if his percentage of fault is less than 50% of the total fault. The defendant or defendants must be at least 51% at fault for the alleged injuries and damages in order for a plaintiff to recover. See Utah Code Annotated, § 78B-5-817 to 822.

B. Negligence Defenses Assumption of risk is a voluntary and unreasonable exposure to a known danger. The complete bar to recovery in an action for negligence, which assumption of risk has been historically, has been lifted by the Utah comparative negligence statute to avoid the harshness visited upon plaintiffs as a result of the all-or-nothing nature of the former rule of law. See Moore v. Burton Lumber & Hardware Co., 631 P.2d 865, 870 (Utah 1981). Utah courts have also interpreted the Utah comparative negligence statute to hold that secondary assumption of risk should be treated in a comparative manner as an aspect of contributory negligence. See Id. at 870-71(internal citations omitted).

The “last clear chance” doctrine has been abolished as a complete bar to recovery and such concepts, including claims of “open and obvious” are merely factors to be weighed in comparing fault among the parties. See Dixon v. Stewart, 658 P.2d 591 (Utah 1982); Donahue v. Durfee, 780 P.2d 1275 (Utah Ct. App. 1989); and Hale v. Beckstead, 74 P.3d 987 (Utah App. 2003). “It is only in a rare case that an instruction on unavoidable accident is applicable.” Such an instruction, is only applied where the evidence shows the accident occurred due to an unknown or unforeseen cause or in an unexplainable manner “which circumstances rebut the defendant’s alleged negligence.” Ames v. Maas, 846 P.2d 468, 472 (Utah Ct. App. 1993).

C. Gross Negligence, Recklessness, Willful and Wanton Conduct Utah courts have characterized gross negligence as “the failure to observe even slight care; it is carelessness or recklessness to a degree that shows utter indifference to the consequences that may result.” Berry v. Greater Park City Co., 171 P.3d 442, 449 (Utah 2007). Gross negligence is equated with reckless disregard. State Tax Comm'n v. Stevenson, 2006 UT 84, ¶ 25, 150 P.3d 521 (“Authorities have equated reckless disregard with gross negligence.”). Thus, “[r]ecklessness is subsumed in [Utah’s] definition of gross negligence.” Daniels v. Gamma W. Brachytherapy, LLC, 221 P.3d 256, 269 (Utah 2009).

D. Negligent Hiring and Retention To prevail on a claim of “negligent hiring,” a plaintiff must prove that the employer was negligent in hiring, supervising or retaining the employee. This claim is based on standard “negligence” principles of “reasonableness.” See Retherford v. AT&T, 844 P.2d, 949 (Utah 1992). [It should be noted that although several jurisdictions have held that if an employer admits that the driver was acting within the course and scope of his employment and that the trucking company is therefore vicariously liable for his conduct, that claims of negligent hiring or negligent entrustment are moot and therefore not allowed. At this time the State of Utah has not yet ruled on this issue.]

E. Negligent Entrustment A claim of “negligent entrustment” is based on the proposition that one who owns or controls a vehicle and negligently entrusts it to another, is liable for damages caused by the person to whom the vehicle was entrusted. Liability is found if the owner knows, or by the exercise of reasonable care should have known that the vehicle was entrusted to a driver that was incompetent, careless, reckless, inexperienced or intoxicated. Liability may also be found if an owner knows or should have known of the defective or unsafe condition of the vehicle. See Utah Farm Bureau v. Johnson, 738 P.2d 652 (Ut. App. 1987) and Lane v. Messer, 731 P.2d 488 (Utah 1986). It should be noted that leaving keys in a vehicle which is stolen, generally does not constitute negligent entrustment to the thief. However, if a plaintiff can establish foreseeability (i.e. previous thefts), a claim for negligence can be established. Rollins v. Petersen, 813 P.2d 1156 (Utah 1991); See Curz v. Middlekauf Lincoln-Mercury, 909 P.2d 1252 (Utah 1996).

F. Dram Shop

Any person who violates the Alcoholic Beverage Control Act, may found to be a prima facie party to the offense committed by another, and held liable as the principle offender. Utah Code Ann. § 32B-4-302. Such violations could include providing an alcoholic beverage to someone who is actually or apparently intoxicated, or a person whom the person providing alcohol knows or should know that the person is actually or apparently intoxicated. Utah Code Ann. § 32B-4-404. Businesses providing alcohol are required to obtain dramshop insurance of at least $1,000,000 per occurrence and $2,000,000 in the aggregate. Utah Code Ann. § 32B-5-201.

G. Joint and Several Liability Joint and several liability has been abolished in Utah since 1986. Utah is a “comparative fault” state. Under Utah law, each party is subject to a finding of fault by the court or jury. An award is then made based on the percentage of fault of each respective party and each party is only liable for that party’s proportion of fault. A plaintiff may only recover is his percentage of fault is less than 50% of the total fault. In other words, the defendant or defendants must be at least 51% at fault for the alleged injuries and damages in order for a plaintiff to recover. See Utah Code Ann. § 78B-5-817 to 822. The “last clear chance” doctrine has been abolished as a complete bar to recovery and such concepts, including claims of “open and obvious” are merely factors to be weighed in comparing fault among the parties. See Dixon v. Stewart, 658 P.2d 591 (Utah 1982); Donahue v. Durfee, 780 P.2d 1275 (Utah Ct. App. 1989); and Hale v. Beckstead, 74 P.3d 987 (Utah App. 2003). A person immune from such suit (such as an employer immune under worker’s compensation laws) may be named as a defendant strictly for the purposes of determining fault, although not subject to liability or recovery of damages. If fault allocated to the immune person is less than 40%, the court will then reduce the immune person’s fault to 0 and reallocate that percentage among all parties found to be at fault on a pro rata basis. If the immune person’s fault equals or exceeds 40%, no reallocation occurs and that portion of the verdict is unrecoverable by the plaintiff. See Utah Code Ann. § 78B-5-819; Ericksen v. Salt Lake City, 858 P.2d 995 (Utah 1993). It should be noted that the jury may not be advised of the effect of the “40%” rule or reallocation, but is only told that allocating fault to an immune party may reduce plaintiff’s recovery.

H. Wrongful Death and/or Survival Actions The wrongful death of a child is governed by Utah Code Annotated § 78B-3-102 which provides a cause of action for a parent or guardian for the injury of a minor child when the injury is caused by the wrongful act or neglect of another. The wrongful death of an adult is governed by § 78B-3-106 Utah Code Annotated, which allows the “heir” (not the “estate”) of a decedent to pursue a cause of action for wrongful death caused by the wrongful act or neglect of another. Section 78B-3-105 defines “heir” as the following: a. The decedent’s spouse;

b. The decedent’s children; c. The decedent’s natural parents or adoptive parents; d. The decedent’s stepchildren who are minors at the time of death

and are primarily financially dependent on the decedent; and

e. Any blood relative as provided by law under the Utah Probate Code if the decedent is not survived by any other “heirs” as outlined above. See Utah Code Annotated §§ 78B-3-102, 78B-3-105, and 78B-3-106.

Damages for wrongful death in Utah include loss of support, loss of assistance and services to family, loss of probability of inheritance, and loss of society and companionship. In the case of a child, loss of nurture, guidance, and training. Potential damages, therefore, include not only economic losses, but also “general” damages for loss of society and companionship which are open-ended.

I. Vicarious Liability Respondeat Superior Utah courts have long recognized the theory of respondeat superior holding an employer vicariously liable for the acts of employees if those acts are conducted within the scope of employment. “[W]hether one is acting within the scope of employment is a question to be determined by the finder of fact.” A three part test is used to determine if an act is within the scope of employment. The employee's conduct must (1) “be of the general kind the employee is employed to perform,” (2) “occur within the hours of the employee's work and the ordinary spatial boundaries of the employment,” and (3) “be motivated, at least in part, by the purpose of serving the employer's interest.” Further, an employer may also be responsible for the omission of an employee. Clark v. Pagan, 998 P.2d 268 (Utah 2000). Placard Liability There is no current Utah case law regarding placard liability. However, it is expected that Utah Courts are likely to rule in a manner similar to courts of surrounding jurisdictions (such as Colorado and Idaho) or Federal Courts (particularly the 10th Circuit), which have held that pursuant to federal regulations and lease agreements subject to 49 C.F.R. 1057.12, a lessee carrier whose DOT numbers are displayed on a vehicle is vicariously liable for the negligence of the operator of the leased equipment. See Schell v. Navajo Freight Lines, 693 P.2d 382 (Colorado App. 1984); Harvey v. F-B Truckline Company, 767 P.2d 254 (Idaho 1987); See also Canal Insurance Company v. Brogan, 639 N.E.2d 1219 (Ohio 1994); Rodriguez v. Ager, 705 F.2d 1229 (10th Cir. 1983). Under Dispatch

There is little Utah case law concerning bobtail/under dispatch/off duty coverage. Utah law merely mandates that all vehicles traveling on Utah roads maintain the statutory minimum amount of insurance coverage. See Utah Code Annotated § 31A-22-304. As such, bobtail insurance of some sort is typically required when a trucking-related policy does not cover non-work driving. Independent Contractor Law Under Utah law, “Independent contractor” is defined as “any person engaged in the performance of any work for another who, while so engaged, is: (A) independent of the employer in all that pertains to the execution of the work; (B) not subject to the routine rule or control of the employer; (C) engaged only in the performance of a definite job or piece of work; and (D) subordinate to the employer only in effecting a result in accordance with the employer’s design.” Utah Code Annotated § 34A-2-103. However, Utah courts have held that a driver of a truck under an agreement labeling him an independent contractor was nevertheless considered a statutory employee for workers’ compensation purposes, given that he was driving for the company in question. See Harry L. Young & Sons, Inc. v. Ashton, 538 P.2d 316, 318 (Utah 1975). At present, there is little Utah case law interpreting a driver’s alleged, or contractual, independent contractor status in light of the applicable federal regulations. Given the precedent from the Ashton case, it appears likely that Utah would follow the precedent set by courts across the country that the federal regulations render the distinction between “independent contractor” and “employee” meaningless as they relate to operators of commercial motor vehicles. See Consumers County Mutual Insurance Company v. P.W. & Sons Trucking, Inc., 307 F.3d 362 (5th Cir. 2002) (independent contractor status meaningless in light of definitions in applicable federal regulations defining employee as inclusive of independent contractors operating commercial motor vehicles); Perry v. Harco Nat’l Ins. Co., 129 F.3d 1072, 1074-1075 (9th Cir. 1997) (motion for summary judgment granted in favor of insurer based on employee exclusion, even though driver was independent contractor employed by another company while driving truck for insured; court held broad definition of employee was not intended to apply only in limited context and only as against motor carriers); Northland Ca. Co. v. Rocky Harrell, 2007 WL 2319863 (E.D. Ark. 2007) (holding that individual was statutory employee under section 390.5 of Motor Carrier Safety Act notwithstanding his claim to be independent contractor); White v. Excalibur Ins. Co., 599 F.2d 50 (5th Cir. 1979) (sole cause of action for deceased independent contractor operating vehicle for commercial carrier was workers compensation since deceased was a statutory employee under federal law and financial responsibility laws were for the benefit of the public, not employees); Holliday v. Epperson, 2003 WL 23407496 (W.D.Tenn. 2003) (Table case) (noting that “most courts have concluded as a matter of federal law that the regulatory scheme for [carriers] imposes an irrebuttable statutory employment relationship between the driver and the [carrier]”); Baker v. Roberts Express, Inc., 800 F.Supp. 1571 (S.D.Ohio 1992) (finding that a statutory employment relationship exists because the applicable federal statutes and regulations “create an irrebuttable

presumption of an employment relationship between a driver of a leased vehicle furnished by a contractor-lessor and a carrier-lessee”); Proctor v. Colonial Refrigerated Transp., Inc., 494 F.2d 89 (4th Cir.1974) (stating that “[t]he statute and regulatory pattern clearly eliminates the independent contractor concept from such lease arrangements”); Johnson v. S.O.S. Transport, Inc., 926 F.2d 516, 524 N. 20 (6th Cir.1991) (stating that an “operator’s status, whether it be as an independent contractor or employee of a carrier, is irrelevant [because the applicable law and regulations make no distinction]”).

J. Exclusivity of Workers’ Compensation Utah has adopted a Workers Compensation Act governing claims for injuries occurring while on the job. See Utah Code Annotated § 34A-2-101 et seq. Under this act, the right to recover compensation for injuries sustained by an employee, including death, is the exclusive remedy against the employer and any officer, agent, or employee of the employer. See Utah Code Annotated § 34A-2-105 (West). The employer is required to pay the cost of all work-related injuries suffered by its employees regardless of fault. However, in return for undertaking that burden of quasi-strict liability, the employer receives immunity from private personal injury lawsuits instituted by injured employees, so long as the injury was not intentional. The employee makes a similar trade as, in return for no fault guarantee of payment of damages, the employee sacrifices his or her right to pursue private litigation against the employer. An independent contractor or employee of a subcontractor controlled by, and/or performing work for the benefit of, an entity may be found to be the statutory employee of that entity. See Pinter Const. Co. v. Frisby, 678 P.2d 305 (Utah 1984). This has been applied to truck drivers in Utah. See Harry L. Young & Sons, Inc. v. Ashton, 538 P.2d 316, 318 (Utah 1975). Additionally, courts across the country have also held that the federal regulations render the distinction between “independent contractor” and “employee” meaningless as they relate to operators of commercial motor vehicles. See, e.g., Consumers County Mutual Insurance Company v. P.W. & Sons Trucking, Inc., 307 F.3d 362 (5th Cir. 2002) (citing 49 C.F.R. § 390.5). A workers compensation claim does not preclude suits against third parties who may be responsible for the injuries suffered and injured workers are entitled to bring actions for damages against other parties allegedly responsible for the work-related injuries. See Utah Code Annotated § 34A-2-106. Damages

A. Statutory Caps on Damages “Although punitive damages may be awarded in an appropriate case, the general rule is that only compensatory damages are appropriate and that punitive damages may be awarded only in exceptional cases.” Further, punitive damages should be awarded infrequently. Punitive damages are not meant as additional compensation for the Plaintiff so they may only be awarded to serve a societal interest of punishing and deterring outrageous and malicious conduct.

Utah case law has generally held that punitive damages may be awarded only on proof of “willful and malicious” conduct, or upon proof of conduct which manifests a knowing and reckless indifference toward the rights of others, especially where compensatory damages may be simply absorbed as a cost of business. Behrens v. Raleigh Hills Hosp., Inc., 675 P.2d 1179, 1186 (Utah 1983). There are no damage caps on general liability claims in the State of Utah.

B. Compensatory Damages for Bodily Injury Under Utah law a plaintiff is entitled to “general damages” for bodily injury. In considering general or “non-economic” damages, a jury will consider the nature and extent of the injuries, the pain and suffering, both mental and physical,the extent to which a plaintiff has been prevented from pursuing his ordinary affairs, the degree and character of any disfigurement, the extent to which a plaintiff has been limited in the enjoyment of life, whether the consequences of the injuries are likely to continue and for how long, and other issues relating to the effect of the injury upon the life of a plaintiff.

C. Collateral Source Under the collateral source rule, a tortfeasor is not entitled to a reduction in damages if the plaintiff has received or will receive compensation from an independent source. “The independent collateral source is most often the plaintiff's insurer, and the usual role of the collateral source rule is to prevent insurance payments of damages from reducing the wrongdoer's liability.” Gibbs M. Smith, Inc. v. U.S. Fid. & Guar. Co., 949 P.2d 337, 345 (Utah 1997); see also Suniland Corp. v. Radcliffe, 576 P.2d 847 (Utah 1978) (plaintiff's insurance premium was not paid to protect tortfeasor); Phillips v. Bennett, 21 Utah 2d 1, 439 P.2d 457 (1968) (insurance payments belong to plaintiff and are not credited to defendant).

D. Pre-Judgment/Post judgment Interest With regard to prejudgment interest on personal injury judgments, Utah Code Annotated §78B-5-824 states as follows:

It is the duty of the court, in entering judgment for plaintiff in that action, to add to the amount of special damages actually incurred that are assessed by the verdict of the jury, or found by the court, prejudgment interest on that amount calculated at 7.5% simple interest per annum, from the date of the occurrence of the act giving rise to the cause of action to the date of entering the judgment, and to include it in that judgment.

Utah Code Annotated § 78B-5-824 (2009) (emphasis added). Prejudgment interest on contracts, other than contracts specifically for the repayment of money, is dependent on the terms of the contracts and whether interest may be properly awarded under those terms. If interest is properly awarded, but no interest rate is specified by the contract, then Utah Code Annotated § 15-1-1 specifies a rate of 10%. Utah Code Annotated § 15-1-4 states that the post-judgment interest rate is to be paid as specified by the parties for contract actions. For nearly all other civil actions, Utah

Code Annotated § 15-1-4 sets the post-judgment rate at the applicable federal post judgment rate (28 U.S.C.A. § 1961) plus two (2) percent, which is established on the date of the judgment and remains the sane for the duration of the judgment.

E. Damages for Emotional Distress To be entitled to damages for intentional infliction of emotional distress, a plaintiff must establish that “the defendant intentionally engaged in some conduct toward the plaintiff, (a) with the purpose of inflicting emotional distress, or, (b) where any reasonable person would have known that such would result; and his actions are of such a nature as to be considered outrageous and intolerable in that they offend against the generally accepted standards of decency and morality.” Williams v. Jeffs, 57 P.3d 232, 237 (Utah Ct. App. 2002) “[A]n act is not necessarily outrageous merely because it is tortious, injurious, or malicious, or because it would give rise to punitive damages, or because it is illegal.” Franco v. The Church of Jesus Christ of Latter-day Saints, 2001 UT 25, ¶ 28, 21 P.3d 198. Zone of Danger Negligent infliction of emotional distress occurs when a party breaches a duty of care owed to other persons. Those other persons could be classified as victims or bystanders within the scope or zone of the defendant’s duty. People may be victims even if they incur no injuries themselves. Bystanders “are those persons outside the scope of the defendant's duty of care who may witness or be affected by the accident which has resulted from the breach.” In Johnson v. Rodgers, 763 P.2d 771 (Utah 1988), a majority of the court adoped the “zone of danger” theory of recovery for negligent infliction of emotional distress. The theory is also found in Restatement (Second) of Torts § 313 which states: (1) If the actor unintentionally causes emotional distress to another, he is subject to liability to the other for resulting illness or bodily harm if the actor

(a) should have realized that his conduct involved an unreasonable risk of causing the distress, otherwise than by knowledge of the harm or peril of a third person, and (b) from facts known to him should have realized that the distress, if it were caused, might result in illness or bodily harm.

(2) The rule stated in Subsection (1) has no application to illness or bodily harm of another which is caused by emotional distress arising solely from harm or peril to a third person, unless the negligence of the actor has otherwise created an unreasonable risk of bodily harm to the other. The scope of the defendant’s duty is limited to injuries that are a foreseeable result of his or her negligence. “While a defendant may be able to foresee the harm to direct victims if due care is not taken to prevent injury, he or she cannot foresee the extent to which bystanders or witnesses to an accident will react to the events. To place a duty upon a defendant to protect bystanders who are not in danger of bodily injury from purely emotional injury is to allow potentially unlimited recovery.” Hansen v. Sea Ray Boats, Inc., 830 P.2d 236, 239-40 (Utah 1992)

The adoption of the zone of danger theory aligns with the basic principle that a plaintiff may not recover for vicarious injuries: “’A plaintiff may only sue in his own right for a wrong personal to him, and not as the vicarious beneficiary of a breach of duty to another.’ A plaintiff in the zone of danger is already threatened with physical injury as a result of defendant's negligence. Once that initial breach of duty is established, the issue then ‘becomes merely a matter of the unexpected manner in which the foreseeable harm has occurred.’” Hansen v. Sea Ray Boats, Inc., 830 P.2d 236, 241 (Utah 1992).

F. Wrongful Death and/or Survival Action Damages Damages for wrongful death in Utah include loss of support, loss of assistance and services to family, loss of probability of inheritance, and loss of society and companionship. In the case of a child, loss of nurture, guidance, and training. Potential damages, therefore, include not only economic losses, but also “general” damages for loss of society and companionship which are open-ended.

G. Punitive Damages Punitive damages may be awarded pursuant to Utah Code Annotated § 78B-8-201, which provides that if a plaintiff can establish by clear and convincing evidence that the acts or omissions of the defendant are the result of "willful and malicious or intentionally fraudulent conduct, or conduct that manifests a knowing and reckless indifference toward and a disregard of the rights of others," then punitive damages may be awarded. Under Utah law, as to a judgment for punitive damages, fifty percent of the amount of the punitive damages in excess of $20,000 shall, after allowable deduction for the payment of attorneys fees and costs, be remitted to the state treasurer. In Campbell v. State Farm, the U.S. Supreme Court limited the scope and amount of punitive damage claims. See Utah Code Annotated § 78B-8-201 (1992) and also State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408 (2003), 98 P.3d 409 (Utah 2004). The Utah Supreme Court has also held that a plaintiff may be awarded punitive damages against an intoxicated driver if the plaintiff sustained general damages, even if that plaintiff cannot be awarded general damages due to the fact that she has not met threshold requirements under Utah’s No Fault Act. The Court found that even though general damages could not be awarded but were “sustained,” the jury could award punitive damages if it finds that the defendant operated a motor vehicle while voluntarily intoxicated. See C.T. v. Johnson, 977 P.2d 479 (Utah 1999). Pursuant to underwriting restrictions in the Utah Code, an insurer may not insure punitive damages. See Utah Code Annotated § 31A-20-101. It is difficult to perfect a claim for punitive damages vicariously against an employer, even if the employee’s conduct warrants punitive damages. In Johnson v. Rogers, the Utah Supreme Court discussed the “complicity rule,” indicating that an employer must authorize or have some complicit involvement in the wrongful act before punitive damages can be awarded. (Restatement §909). See Johnson v. Rogers, 763 P.2d 771 (Utah 1988); Straub v. Fisher & Paykel Health Care, 990 P.2d 384 (Utah 1999); and

Boucher v. Dixie Medical Center, 850 P.2d 1179 (Utah 1992). H. Diminution in Value of Damaged Vehicle

Utah allows recovery for the diminished market value of a vehicle by reason of an accident. The Utah Supreme court held that damages for diminished value were recoverable, where the defendant negligently ran into the plaintiff’s car, and the plaintiff’s vehicle had diminished in value after it was repaired. See Piper v. Eakle, 2 P.2d 909 (Utah 1931).

I. Loss of Use of Motor Vehicle For personal property, damages are based on the market value at the time of the taking or destruction. Market value is equal to the retail price. Ault v. Dubois, 739 P.2d 1117, 1121 (Utah Ct. App. 1987). “Consequential damages for the loss of use of converted property may be an appropriate substitute for the interest awardable as damages for conversion:

Where interest on the value of the property is awarded, the value of the use of the property from the date of the conversion may not be recovered in addition thereto, since damages for the use of the property are generally regarded as in lieu of interest. But in some cases, the value of the use of the property has been regarded as recoverable where such item of damages exceeds the amount of interest on the value of the property.

Henderson v. For-Shor Co., 757 P.2d 465, 470 (Utah Ct. App. 1988) (citing 18 Am.Jur.2d Conversion § 118 (1985) (emphasis added) (footnotes omitted)). See also Dennis v. Southworth, 2 Wash.App. 115, 467 P.2d 330, 337 (1970) (reasonable rental value of wrongfully converted tractor awarded in addition to fair market value where defendant knew at time of taking that such consequential damages would ensue). Evidentiary Issues

A. Preventability Determination Evidence is admissible if it is relevant and more probative than prejudicial. Utah R. Evid. 403. Evidence is relevant when (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.” Utah R. Evid. 401.

B. Traffic Citation from Accident Through 2005 citations based on violations of the motor vehicle code, including guilty and no contest pleas, were statutorily excluded under Utah Code Annotated § 41-6-170. This section was inadvertently repealed with Senate Bill 5, “Traffic Code Recodification and Revisions” of the Utah 2005 Legislative session. However, the Utah Supreme Court remedied this by enacting Utah Rule of Evidence, Rule 416 which states:

Evidence that a person was convicted under a provision of Utah Code Annotated Title 41, Chapter 6a, of an infraction or class C misdemeanor is not admissible on the issue of whether the person acted negligently or otherwise wrongly, or to impeach the person's testimony on those issues.

Utah R. Evid. 416 (2006). It should be noted that Utah Code Annotated § 41-6-170 and Rule 416 of the Utah Rules of Evidence both prohibit only violations of the motor vehicle code. The Utah Supreme Court has held that a guilty plea to a charge under the criminal code, albeit in the context of a traffic accident, maybe relevant and admissible in a related civil matter. See Dixon v. Stewart, 658 P.2d 591, 600 (Utah 1982). The Dixon court did, however, note that the plea does not constitute negligence per se and is merely one piece of evidence to be presented to the jury. Id.

C. Failure to Wear a Seat Belt Utah Code Annotated § 41-6a-1806 states as follows: The failure to use a child restraint device or to wear a safety belt:

(1) does not constitute contributory or comparative negligence on the part of a person seeking recovery for injuries; and

(2) may not be introduced as evidence in any civil litigation on the issue of negligence, injuries, or the mitigation of damages.

Although the legislative history indicates that the advisory committee forming this rule felt that the statute did not entirely prohibit evidence of seat belt use, there is little, if any, case law wherein any such evidence has been allowed in Utah.

D. Failure of Motorcyclist to Wear a Helmet Utah Code Annotated § 41-6a-1505 specifically states that

(5) The failure to wear protective headgear: (a) does not constitute contributory or comparative negligence on the part of a person seeking recovery for injuries; and (b) may not be introduced as evidence in any civil litigation on the issue of negligence, injuries, or the mitigation of damages.

E. Evidence of Alcohol or Drug Intoxication Utah Code Annotated § 41-6a-502 prohibits the operation of a motor vehicle

while impaired by drugs or alcohol. Accordingly, since the statute sets a standard of care, its violation constitutes negligence per se. The Utah Supreme Court has held that evidence of guilty pleas and convictions related to traffic citations, including drug and alcohol related traffic citations, are, themselves, not admissible as evidence in civil actions. See Utah Farm Bureau Ins. Co. v. Chugg, 315 P.2d 277, 280 (Utah 1957) (referring to previous iterations of what has now been codified as Utah Code Annotated § 41-6a-501 et seq.). Nevertheless, evidence relating to the intoxication of a driver is admissible in negligence actions. See, e.g., Fretz v. Anderson, 300 P.2d 642 (Utah 1956) (evidence taken from deceased without consent of estate admissible to show he was driving while intoxicated for purposes of negligence and proximate cause); Ellefsen v. Roberts, 1974, 526 P.2d 912 (Utah 1974) (evidence

showing intoxication admissible to establish wilful and wanton disregard for safety of others and that such was proximate cause of accident). Finally, “a person operating a motor vehicle in this state is considered to have given the person’s consent to a chemical test or tests of the person’s breath, blood, urine, or oral fluids for the purpose of determining whether” the person was driving while intoxicated. See Utah Code Annotated § 41-6a-520. A refusal to submit to a chemical test is admissible as evidence in related civil and criminal actions. See Utah Code Annotated § 41-6a-524.

F. Testimony of Investigating Police Officer Testimony of an investigating officer may be admissible if it is relevant and not more prejudicial than probative. See Erickson v. Sorensen, 877 P.2d 144, 150-51 (Utah Ct. App. 1994); State v. High, 282 P.3d 1046, 1063 (Utah Ct. App. 2012).

G. Expert Testimony Rule 702 of the Utah Rules of Evidence is slightly different from the revised federal rule relating to experts. Generally, if specialized knowledge will “help the trier of fact to understand the evidence or to determine a fact in issue” then a qualified witness may provide expert testimony subject to the requirement that proper methods be used. See Utah R. Evid. 702. So long as the requirements of Rule 702 of the Utah Rules of Evidence are met, a trial court may properly permit an investigating police officer to offer expert testimony. See Randle v. Allen, 862 P.2d 1329, 1337 (Utah 1993) (investigating officer permitted to offer expert opinion); Depew v. Sullivan, 71 P.3d 601, 615 (Utah App. 2003).

H. Collateral Source See Damages – C.

I. Recorded Statements Evidence is admissible if it is relevant and more probative than prejudicial. Utah R. Evid. 403. Evidence is relevant when (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.” Utah R. Evid. 401.

J. Prior Convictions A prior conviction may be admitted into evidence to attack a witness’s character for truthfulness if the crime was punishable by death or by imprisonment for more than one year. If the prior conviction is over 10 years old, the evidence is only admissible if “its probative value, supported by specific facts and circumstances, substantially outweighs its prejudicial effect; and the proponent gives an adverse party reasonable written notice of the intent to use it so that the party has a fair opportunity to contest its use.” Utah R. Evid. 609. If the conviction has been subject to a pardon, annulment, or a certificate of rehabilitation it may no longer be relevant. Utah R. Evid. 609

K. Driving History Evidence is admissible if it is relevant and more probative than prejudicial. Utah R. Evid. 403. Evidence is relevant when (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.” Utah R. Evid. 401.

L. Fatigue

Evidence is admissible if it is relevant and more probative than prejudicial. Utah R. Evid. 403. Evidence is relevant when (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.” Utah R. Evid. 401.

M. Spoliation Utah appellate courts have yet to specifically adopt the doctrine of “spoliation” whether as independent torts or otherwise. The Utah Court of Appeals stated that the doctrine of “spoliation of evidence,” holds that “where a party to an action fails to provide or destroys evidence favorable to the opposing party, the court will infer the evidence’s adverse content . . . and such an inference will be drawn where one party wrongfully denies another the evidence necessary to establish a fact in dispute.” Burns v. Cannondale Bicycle Co., 876 P.2d 415, 419 (Utah Ct. App. 1994) (internal quotations omitted). However, the Utah appellate courts, in Burns and more recently in Hills v. United Parcel Service, Inc., have stated that Utah has yet to adopt this doctrine or torts related to the doctrine. See Hills v. United Parcel Serv., Inc., 232 P.3d 1049, 1052 (Utah 2010) (refusing to issue an advisory opinion or otherwise resolve a purely academic matter regarding adoption of stand alone torts of first party and/or third party spoliation since the outcome would not affect the rights of the parties in the instant case). In Burns, a party brought suit against a bicycle maker and bicycle repairman for alleged defects in bicycle parts. 876 P.2d at 419. The plaintiff alleged spoliation because the repairman had allegedly thrown away the used parts after making repairs. Id. The court said spoliation would not apply where there was no indication that suit would be filed at the time that the repairs were made and there was no reason why the parts that were replaced should have been retained. In Hills, the defendant in the underlying tort action admitted liability, so the spoliation of liability evidence by third parties had no effect on the outcome and the court did not need to rule on the adoption of a tort for third party spoliation. See Hills, 232 P.3d at 1059 The Tenth Circuit (which includes Utah federal courts) has repeatedly considered issues of spoliation of evidence and, in doing so, has held that a spoliation sanction is proper where (1) a party has a duty to preserve evidence because it knew, or should have known, that litigation was imminent, and (2) the adverse party was prejudiced by the destruction of the evidence. See Burlington Northern and Santa Fe Ry. Co. v. Grant, 505 F.3d 1013; 1032 (10th Cir. 2007); 103 Investors I, L.P. v. Square D Co., 470 F.3d 985, 989 (10th Cir.2006). It appears likely that a Utah court, when faced with a properly presented spoliation issue would apply the doctrine and impose sanctions as discussed on the Tenth Circuit cases. As such, where a party to a case knows or should know that litigation is imminent and destroys evidence relevant to that case, Utah courts would most likely impose sanctions against that party which may include either the exclusion of evidence relating to the destroyed evidence or jury instructions relating to the presumed adverse content of the destroyed evidence.

Settlement A. Offer of Judgment

A defendant or plaintiff (as of 2006) may make an offer of judgment in writing at any time more than 10 days before trial, offering to settle the case with a plaintiff for a certain amount of money. If the offer is not accepted by the other party and if the plaintiff finally obtains a judgment in an amount that is less than what was offered in the offer of judgment or a defendant gets a less favorable result, the non-accepting party must pay costs incurred subsequent to the time that the offer was made. See Utah Rules of Civil Procedure, Rule 68.

B. Liens Compensation An attorney’s lien commences at the time of employment by the client. An attorney is entitled to have a lien for the balance of compensation due from a client on any money or property owned by the client that is the subject of or connected with work performed for the client. Utah Code Ann. § 38-2-7. Notice A lien claimant or the lien claimant's agent must send by certified mail a written copy of the notice of lien to the last-known address of the person against whom the notice of lien is filed no later than 30 days after the day on which a lien claimant or the lien claimant's authorized agent files a notice of lien with the county recorder, county clerk, or clerk of the court. Utah Code Ann. § 38-12-102.

Medical “Every hospital located within the state that furnishes emergency, medical, or other service to a patient injured by reason of an accident not covered by workmen's compensation is entitled to assert a lien upon that portion of the judgment, settlement, or compromise going or belonging to such patient.” Utah Code Ann. § 38-7-1.

C. Minor Settlement Under Utah law, the settlement of a minor’s claim over $10,000.00 requires court approval. See Utah Code Annotated §§ 75-5-401,75-5-409.

D. Negotiating Directly With Attorneys There is no prohibition from claim adjusters to negotiate directly with a plaintiff’s attorney. It is common practice for a plaintiff’s attorney, however, to notify defense counsel prior to contacting a defendant’s insurance adjuster.

E. Confidentiality Agreements In order to be enforceable any settlement agreement between the parties as a result of mediation must be executed in writing. Utah Code Ann. 78B-6-207; see also Reese v. Tingey Const., 177 P.3d 605, 609 (Utah 2008).

F. Releases “Releases are contractual provisions and should be interpreted according to well-developed rules of contract interpretation.” Ward v. Intermountain Farmers Ass’n, 907 P.2d 264, 267 (Utah 1995). Two statutory provisions govern releases: section 78B-5-

822 of the Liability Reform Act and section 15-4-4 of the Joint Obligations Act. Peterson v. Coca-Cola USA, 2002 UT 42, ¶ 19, 48 P.3d 941. “Section 15-4-4 of the Joint Obligations Act . . . provides that the release of one obligor does not discharge co-obligors against whom the obligee in writing expressly researches his rights.” Nelson re Hirschfeld v. Corp. of Presiding Bishop of LDS Church, 935 P.2d 512, 514 (Utah 1997); see also Utah Code Ann. § 15-4-4 (“Subject to the provisions of Section 15-4-3, the obligee's release or discharge of one or more of several obligors, or of one or more of joint or of joint and several obligors, does not discharge co-obligors against whom the obligee in writing and as part of the same transaction as the release or discharge expressly reserves his rights; and in the absence of such a reservation of rights shall discharge co-obligors only to the extent provided in Section 15-4-5”); Utah Code Ann. 78B-5-822 (“A release given by a person seeking recovery to one or more defendants does not discharge any other defendant unless the release so provides.”).

G. Voidable Releases Absent fraud or undue influence, see F above. Transportation Law

A. State DOT Regulatory Requirements With a few limited exceptions relating to intrastate motor carriers, Utah has adopted the FMCSA regulations. The exceptions merely ease the requirements for intrastate carriers regarding double trailers, minimum age (18 versus 21 in certain situations), and passenger transport. There are several other Utah-specific laws that have an affect on motor carriers. First, R912-76-3 prohibits the use of single tires by motor carriers due to concerns over rutting. The rule requires that all axles having a weight in excess of 10,000 lbs to be equipped with four tires per axles, or wide base single tires (14 inches wide or greater as indicated by the manufacturer’s sidewall rating–i.e. “super singles”). Also, under R912-14-3 trailers exceeding 53 feet will require a single trip permit and trailers exceeding 57 feet will require a special approval prior to entering the state.

B. State Speed Limits According to Utah Code Annotated § 41-6a-601 et seq. drivers are to maintain speeds reasonable and prudent under the circumstances. Additionally, subject to certain exceptions, Utah Code Annotated § 41-6a-601 states that the following speeds are lawful: (a) 20 miles per hour in a reduced speed school zone; (b) 25 miles per hour in any urban district; and (c) 55 miles per hour in other locations. Utah Code Annotated § 41-6a-602 requires the state Department of Transportation to set speed limits. While a posted speed limit may generally not exceed 65 miles per hour, there are exceptions for speed limits exceeding this for interstate, limited-access highways. Speed limits on Utah freeways are 75 miles per hour and in some limited areas, 80 miles per hour. For roads within municipalities and counties, Utah Code Annotated § 41-6a-603 permits these entities to determine the speed limits, subject to the limitations of section 602.

C. Overview of State CDL Requirements In order to obtain a Commercial Drivers License in Utah, an applicant needs to first provide (1) a valid driver license, with a minimum of one-year experience as a license driver, (2) a valid Social Security card (metal cards are not permitted), (3) proof of their

Utah residence address, (4) positive identification, and (5) a DOT medical card. The applicant must then pass the commercial driver license tests, which include knowledge tests and skills tests. Additional written testing is required to obtain the various endorsements, including passenger, school bus, hazardous materials, tank vehicles, double/triples, and tanker/hazardous materials. Additional skills tests are required for school bus and passenger endorsements. The written tests for hazmat and school bus endorsements must be retaken upon renewal. Drivers may be disqualified for issues such as ineligibility in other states, major driving violations (including DWI offenses), violation of out of service orders, or other serious violations.

D. Motor Vehicle Event Data Recorders The Motor Vehicle Event Data Recorders Act is located in sections 41-1a-1501 to 1504 of the Utah Code, and provides that data recorded by a vehicle event data recorder is the property of the vehicle’s owner. See Utah Code Annotated § 41-1a-1503. This data includes information such as the vehicle’s speed, brake and seatbelt performance, and whether a vehicle’s airbag deployed during an accident. Generally, this data may only be released on consent of the vehicle’s owner, and does not transfer to a new owner of the vehicle or to the owner’s insurance company if that insurance company takes title to an insured vehicle. However, the data may be used by law enforcement in connection with a criminal investigation. Additionally, the data may be obtained by a person who is not the owner if the data is subject to discovery in a criminal or civil claim. Insurance Issues

A. State Minimum Limits of Financial Responsibility Financial Responsibility of Motor Vehicle Owners and Operators Act is located at Utah Code Ann. § 41-12a-101 – 806. Minimum limits of financial responsibility are $25,000 per person, $50,000 per occurrence for bodily injury, and $15,000 for property damage.

B. Uninsured Motorist Coverage Uninsured Motorist Coverage provides insurance for covered individuals who are legally entitled to recover damages for bodily injury, sickness, disease, or death from owners or operators of uninsured motor vehicles. See Utah Code Annotated § 31A-22-305. Uninsured Motorist Coverage must provide at least the minimum bodily injury limits for motor vehicle liability policies which is currently $25,000.00 for bodily injury up to $500,000 per accident. Uninsured Motorist Coverage is not required by the Utah Insurance Code. If, however, an insured chooses to reject Uninsured Motorist Coverage, it must be done by an express writing to the insurer which provides liability coverage to the insured. Underinsured Motorist Coverage is similar to Uninsured Coverage. An underinsured motor vehicle is defined as vehicle which is covered under a liability policy at the time of an injury, but which has insufficient liability coverage to fully compensate the injured party for all special and general damages. See Utah Code Annotated § 31A-22-305.3. The minimum mandatory limits for Underinsured Coverage is $10,000.00 for one person in any one accident and at least $20,000.00 for two or more persons in any one accident. Underinsured Motorist Coverage cannot be set off against the liability coverage of the underinsured motor vehicle, but must be added on or stacked upon the liability coverage of the owner or operator of the underinsured motor vehicle.

Underinsured Motorist Coverage is not required, but an insured must reject such coverage by an express writing to the insurer.

C. No Fault Insurance No-Fault Insurance Act confers two privileges on party who has either insurance or other accrued security: first, he is granted partial tort immunity, and second, he is not personally liable for no-fault insurance benefits paid by insurer; he does, however, remain liable for customary tort claims not compensated by such benefits. Utah Code Ann. § 31A-22-309 (West); Allstate Ins. Co. v. Ivie, 1980, 606 P.2d 1197.

D. Disclosure of Limits and Layers of Coverage An insurer is obligated to disclose relevant policy limits in place for the alleged tortfeasor at the time of the accident and, if requested, provide a copy of the liability policy to the claimant’s attorney. Utah Admin. Code R590-190(12)(7).

E. Unfair Claims Practices Utah Code Annotated § 31A-26-303 is Utah’s Unfair Claim Settlement Practices Act. According to Section 2, the following acts are unfair claim settlement practices:

(a) knowingly misrepresenting material facts or the contents of insurance policy provisions at issue in connection with a claim under an insurance contract; however, this provision does not include the failure to disclose information;

(b) attempting to use a policy application which was altered by the insurer without notice to, or knowledge, or consent of, the insured as the basis for settling or refusing to settle a claim; or

(c) failing to settle a claim promptly under one portion of the insurance policy coverage, where liability and the amount of loss are reasonably clear, in order to influence settlements under other portions of the insurance policy coverage, but this Subsection (2)(c) applies only to claims made by persons in direct privity of contract with the insurer.

Section 3 states that the following are also unfair practices if done enough to constitute a general business practice:

(a) failing to acknowledge and act promptly upon communications about claims under insurance policies;

(b) failing to adopt and implement reasonable standards for the prompt investigation and processing of claims under insurance policies; (c) compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by those insureds when the amounts claimed were reasonably near to the amounts recovered;

(d) failing, after payment of a claim, to inform insureds or beneficiaries, upon request by them, of the coverage under which payment was made;

(e) failing to promptly provide to the insured a reasonable explanation of the basis for denial of a claim or for the offer of a compromise settlement;

(f) appealing from substantially all arbitration awards in favor of insureds for the purpose of compelling them to accept settlements or compromises for less than the amount awarded in arbitration;

(g) delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms which contain substantially the same information; or

(h) not attempting in good faith to effectuate a prompt, fair, and equitable settlement of claims in which liability is reasonably clear.

Section 5 specifies, however, that there is no private cause of action for the violation of the Act.

F. Bad Faith Claims A third party bad faith claim arises out of an insurance contract in which the insurer agrees to defend the insured against claims made against the insured by third parties and to pay damages on behalf of the insured pursuant to policy provisions and limits. Because the insured is entirely dependent on the insurance company to see that the insured's interests are protected, the insurance contract creates a higher fiduciary duty and trust relationship in favor of the insured which warrants tort remedies (as opposed to breach of contract claims under “first party” bad faith cases). The insurer must therefore be as zealous in safe guarding the interests of the insured as it is in looking after its own interests. One duty of an insurance company to its insured is to accept an offer of settlement within the policy limits when there is a substantial likelihood of a judgment being rendered against the insured in excess of those policy limits. However, the mere failure to settle within policy limits does not necessarily constitute bad faith, the test is one of “reasonableness”. Punitive damages are recoverable in third party bad faith cases. A Utah case on punitive damages was heard by the U.S. Supreme Court. In State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408 (2003), 98 P.3d 409 (Utah 2004), the Supreme Court set standards to limit the amount of punitive damages recoverable. In addition, consequential damages are also recoverable, including attorneys fees as an item of “consequential damages” flowing from the insurer’s breach. See Beck v. Farmers Insurance Exchange, 701 P.2d 795 (Utah 1985); Campbell v. State Farm, 840 P.2d 130 (Utah App. 1992); Ammerman v. Farmers Exchange, 430 P.2d 576 (Utah 1967); Moore v. Energy Mutual Insurance Company, 814 P.2d 1141 (Utah App. 1991); and Interwest Construction v. Palmer, 923 P.2d 1350 (Utah 1996).

G. Coverage – Duty of Insured Generally, “in a first-party relationship between an insurer and its insured, the duties and obligations of the parties are contractual rather than fiduciary.” Beck v. Farmers Ins. Exch., 701 P.2d 795, 800 (Utah 1985). Also, an insured is under duty to read his application before signing it and will be considered bound by knowledge of the contents of the signed application. See Theros v. Metropolitan Life Ins. Co., 407 P.2d 685 (Utah 1965). Thus, subject to several exceptions, the insured’s obligations will be defined by the terms of the insurance contract.

H. Fellow Employee Exclusions As part of the Worker’s Compensation Act, “fellow employees” in addition to “employers” are immune from suit, unless the injury was intentional. Utah Code Ann. § 34A-2-101, et. seq.