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Covid-19: Assessing the Legal Risk of Infectious Diseases
Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) – better known as the coronavirus – has turned our world upside down in a matter of weeks. The infectious disease caused by this newly emerged virus, Covid-19, has taken thousands of lives and sickened hundreds of thousands. The resulting public health crisis threatens to become an economic catastrophe, as governments weigh the need for populations to shelter in place against the financial cost of shutting down most businesses. The risk of lawsuits due to exposure to this infectious disease may add to the economic difficulties businesses are now facing. This article assesses that risk based on principles developed in past infectious disease litigation and the known characteristics of the coronavirus.
Does a New California Case Intend to Pave the Way for Opening Policy Limits Without a Formal Demand?
One of the toughest challenges coverage counsel and carriers face is trying to figure out how much breadth should be given to a decision that a California Court of Appeal has actually decided to publish. That difficulty is compounded when the potential impact of the decision requires extrapolation based upon a series of hypotheticals. Under California law, the typical bad faith claim for a failure to settle occurs when: (1) a third party claimant makes a reasonable settlement offer within the policy’s limits; (2) the carrier rejects the offer; (3) the matter proceeds to trial, and (4) the trial results in a judgment against the insured for an amount greater than the policy’s limits. Under such circumstances, the carrier becomes liable for the entire judgment.
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Eleventh Circuit Delivers Victory for Businesses Beleaguered by ADA Website Accessibility Lawsuits
On April 7, 2021, the Eleventh Circuit Court of Appeals delivered a victory for businesses and retailers who have faced growing numbers of lawsuits alleging their websites violated Title III of the Americans with Disabilities Act ("ADA") because they are not accessible to those who are vision-impaired. In so doing, the Eleventh Circuit reversed a bench trial verdict obtained by a plaintiff in the Southern District of Florida. This decision could be "felt" beyond the Eleventh Circuit as it contradicts with decisions from other federal circuits, making this issue now potentially ripe for intervention from the United States Supreme Court, which just passed on addressing this issue a few years ago.
No License, No Problem – But Not Really
North Carolina law is well established that architects and engineers owe a duty of care to those who reasonably rely on their work. This duty runs in favor of a builder regardless of whether there is a contract with the design professional. North Carolina law is equally well established that an unlicensed contractor is barred from enforcing certain remedies under the “licensure defense.” The licensure defense is a court-created doctrine seeking to incentivize compliance with statutory licensure requirements and to protect the public from incompetent builders. These two maxims of North Carolina construction law collided in a recent North Carolina Court of Appeals case, Wright Constr. Servs., Inc. v. Hard Art Studio, PLLC, No. COA19-1089, 2020 WL 7906704 (N.C. App. Dec. 31, 2020).
WSHB Employer Alert: New Obligations Under Federal ARPA and California’s SPSL Law
On March 10, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (“ARPA” or “the Act”). Included in the Act are three major takeaways for employers that impact both small and large workplaces: (1) Tax credits for voluntarily extending and expanding paid leave under the FFCRA; (2) Employer-paid COBRA subsidies for six months; and (3) Additional unemployment insurance benefits. Employers must understand and act upon these new rules and regulations and update their policies and practices accordingly. For employers that do business in California, Governor Newsom also signed Senate Bill (SB) 95 into law on March 19, 2021, creating Labor Code section 248.2, which extends and expands requirements for employers to provide supplemental paid sick leave to employees affected by Covid-19.
California Court Grants Summary Judgment to Underwriters in $3.5 Million Bad Faith Case
On March 3, 2021, the Los Angeles County Superior Court granted Underwriters’ motion for summary judgment in a $3.5 million bad faith lawsuit. Underwriters were represented by WSHB’s insurance coverage team of Tracy Lewis and Ricky Zelonka. The case stemmed from an insurance coverage dispute arising out of a fire to residential real property in Hawaii in the summer of 2017. The Hawaii property was covered under a lender placed program issued to an international property management company. After Underwriters received the claim, the Company filed for bankruptcy and it was discovered that they engaged in a multi-year $1 billion Ponzi scheme. While Underwriters were adjusting the claim and considering the impact of the pending bankruptcy, the Company filed a bad faith lawsuit in California state court. Underwriters’ defense to the lawsuit was that the Policy was void ab initio due to the Company's concealment of the true nature of its business and representing itself as a commercial lender when it procured the Policy.