BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 234 (Gatto) - Claims against the state: payment.
Amended: August 5, 2013 Policy Vote: N/A
Urgency: Yes Mandate: No
Hearing Date: August 26, 2013
Consultant: Brendan McCarthy
Pursuant to the committee's rules, the Suspense File rule does
not apply to the provisions of this bill as claims are
considered valid obligations of the state. Additionally, claims
may have time sensitivity.
Bill Summary: AB 234 would appropriate $20.75 million from the
General Fund to pay two settlements against the state. Any funds
appropriated in excess of the amounts required for payment of
these claims would revert to the General Fund.
Fiscal Impact: One-time appropriation of $20.75 million to the
Department of Justice from the General Fund.
Background: This bill is one of several annual bills carried by
the chairs of the Appropriations Committees to provide
appropriation authority for legal settlements approved by
Department of Justice and the Department of Finance. These
settlements were entered into lawfully by the state upon advice
of the Department of Justice. They are binding state
obligations.
The Motor Vehicle Insurance Account 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.
Over the past three years, the Motor Vehicle Insurance Account
averaged $38 million per year in expenditures and $45 million in
revenue.
Generally accident settlements involving a state vehicle would
be paid from the Motor Vehicle Insurance Account. 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, Statutes of 2013)
earlier this year, however, the Department of Finance
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recommended these claims be paid from the General Fund. The
Motor Vehicle Insurance Account 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 General Fund
increase to its budget to cover the drain on the Motor Vehicle
Insurance Account.
Proposed Law: AB 234 would appropriate $20.75 million from the
General Fund to pay two settlements against the state. Any funds
appropriated in excess of the amounts required for payment of
these claims would revert to the General Fund.
This bill is an urgency measure.
The settlements to be funded by the bill are:
Thomas v. State of California (Department of Public Health),
Alameda Superior Court.
This personal injury settlement arises from a December 9, 2011
motorcycle/automobile collision. Plaintiff Eric Thomas was
riding his motorcycle on Doolittle Drive in San Leandro, when he
collided with a car driven by Department of Public Health
Inspector, Peter Yattaw. Mr. Yattaw was in the course and scope
of his employment for the Department of Public Health 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.
Amethyst Kirwin, et al. v. Timothy McClelland, et al., San
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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.
Related Legislation:
SB 371 (de León, Statutes of 2013) appropriated $15.6
million to pay for one settlement.
SB 369 (de León) would appropriate $414,054.01 from the
General Fund and various special funds to pay state claims.
The claims are for 155 stale dated warrants. That bill is on
the Senate Floor.