BILL ANALYSIS Ó
AB 234
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Date of Hearing: August 14, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 234 (Gatto) - As Amended: August 5, 2013
Policy Committee:
AppropriationsVote:
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill appropriates $20,750,000 (GF) to the Department of
Justice (DOJ) to pay two settlements. Any funds appropriated in
excess of the amounts required for payment of these claims
revert to the GF.
FISCAL EFFECT
One-time GF appropriation of $20.75 million to DOJ as follows:
1)$5,750,000 to pay the settlement in Thomas v. State of
California (CalFire), Alameda Superior Court.
2)$15,000,000 to pay the settlement in Amethyst Kirwin, et al.
v. Timothy McClelland, et al., San Bernardino Superior Court.
COMMENTS
1)Rationale. This bill is one of several bills carried by the
chairs of the Appropriations Committees each year to provide
appropriation authority for legal settlements approved by DOJ
and the Department of Finance (DOF). These settlements were
entered into lawfully by the state upon advice of counsel
(DOJ). They are binding state obligations.
2)Case Background
a) Thomas v. State of California (Department of Public
Health (DPH)), Alameda Superior Court.
This personal injury settlement arises from a December 9,
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2011 motorcycle/automobile collision. Plaintiff Eric Thomas
was riding his motorcycle on Doolittle Drive in San
Leandro, CA when he collided with a car driven by DPH
Inspector, Peter Yattaw. Mr. Yattaw was in the course and
scope of his employment for DPH at the time of the
collision. Mr. Thomas is paralyzed from the chest down as
a result of the accident. Mr. Thomas initiated suit
against the state.
The parties entered mediation with the agreement that Mr.
Thomas and Mr. Yattaw were equally at fault for the
collision. The agreement was based on accident
reconstruction analyses. The report of the San Leandro
Police Department concluded Mr. Thomas was speeding and Mr.
Yattaw failed to yield to an oncoming driver. At
mediation, the parties presented reports from medical
experts, life care planners and economists. After
negotiations, the state, represented by the Office of the
Attorney General, agreed to settle the lawsuit for
$5,750,000 with 40% ($2,300,000) to be used to purchase an
annuity to provide monthly payments for the medical care of
the plaintiff.
b) Amethyst Kirwin, et al. v. Timothy McClelland, et al.,
San Bernardino Superior Court.
On August 1, 2012, a three-car traffic accident occurred on
the I-210 freeway in San Bernardino. CalFire Chief Timothy
McClelland, who was driving a state vehicle within the
course and scope of his employment, rear-ended Gregory
Kirwin at 70 mph. Mr. Gregory Kirwin was fatally injured.
Plaintiffs Amethyst and Belle Kirwin, Mr. Kirwin's children
(ages four and seven at time of the accident), sued for
wrongful death negligence. The state, on its own behalf and
on behalf of Chief McClelland, settled this case for $15
million, most of which will be placed into a structured
settlement and special needs trusts for the support of Mr.
Kirwin's children.
3)The Motor Vehicle Insurance Account (MVIA) is essentially a
state insurance fund into which state departments pay a
premium, based on a five-year rolling average of the
department's costs, to cover the costs of vehicle accident
liability and settlements. For example, over the past three
years, including 2013-14 as projected, the MVIA averaged $38
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million per year in expenditures, and $45 million in revenue.
Generally accident settlements involving a state vehicle would
be paid from the MVIA. Due to the size of the two claims in
this bill, and a $15.6 million claim passed and chaptered in
SB 371 (De Leon) earlier this year, however, the Department of
Finance recommended these claims be paid from the GF since the
MVIA cannot bear the cost of these large settlements in one
year, and the impact of the claims on the premiums of the
affected departments - the Department of Public Health and
CalFire - would require a GF increase to its budget to cover
the drain on the MVIA.
4)Related Legislation .
a) SB 371 (De Leon), chaptered 2013, appropriated $15.6
million to pay for one settlement.
b) SB 1558, (Kehoe), chaptered 2012, appropriated $2.6
million to pay for one settlement.
c) SB 730 (Kehoe), chaptered 2012, appropriated $15.56
million to pay for six settlements.
Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081