WSHB added another success to its trial scorecard for the Pennsylvania office late this evening. In a medical malpractice case involving one of its hospital clients, an arbitrator rejected outright the claim handing the victory to WSHB’s hospital client. This particular case involved a claim for wrongful death/survival. Led by esteemed trial partner Andy Kessler, WSHB’s legal team achieved an extraordinary outcome for our hospital client, marking a significant milestone in the pursuit of justice.
Inzunza v. Naranjo et al. (2023) __Cal.App.5th__[2023 WL 5344893], involved a wrongful death action initiated against a truck driver and his employer. The plaintiffs claimed that the truck driver’s negligence caused the death of the decedent. After a jury returned a verdict in favor of the plaintiffs, the trucking company employer appealed claiming that they were improperly precluded from bringing evidence to combat the vicarious liability claim against them as well as bringing evidence of comparative fault on the part of the decedent. In this recently published decision, the court reversed the judgment against the employer and remanded for a new trial. The Court based its finding for remand on the fact that deemed admissions of an agent employee-codefendant do not bind the employer as the principal in the same action, even when the claim involves vicarious liability.
- Hearing Daughter's Car Accident During Call Insufficient to Prove Negligent Inflict of Emotional Distress9.15.23
Can a mother who heard the injury of her daughter occur over a cell phone sustain a cause of action for negligent infliction of emotional distress against not only the driver causing the injury, but also against the City and homeowner for allegedly allowing a dangerous conditions that plaintiffs claim contributed to the crash? In Downey v. City of Riverside (2023) 90 Cal.App.5th 1033, the court found that liability for negligent infliction of emotional distress cannot be imposed for the consequences of allegedly harmful conduct when she was neither present at the scene of the accident nor did she have knowledge at the time of the accident of the connection between the defendants’ alleged negligent conduct and her daughter’s injuries. Although the court noted that Downey potentially had perceived the incident through the cell phone, she did not successfully establish a causal connection between the alleged dangerous condition and the emotional damages she suffered as a result of the accident.
On June 16, 2023, the Supreme Court of Texas issued an important decision in Chohan v. New Prime, Inc, following a petition for review from the Court of Appeals for the Fifth District of Texas, addressing the award of noneconomic damages in a wrongful death case and emphasizing the need for an actual nexus between the award of noneconomic damages and the evidentiary record.
On August 30, 2023 the United States Department of Labor announced a notice of proposed rulemaking that would extend overtime pay to an additional 3.6 million salaried workers. In a nutshell, the proposed rule guarantees overtime pay for previously exempt salaried workers who earn less than $1,059 per week, or about $55,000 per year. This proposed change revises section 13(a)(1) of the Fair Labor Standards Act (FLSA), which exempts minimum wage and overtime pay requirements for certain executive, administrative and professional employees. It also provides for an automatic updating mechanism that streamlines the process to update and accurately reflect current earnings data.
In a precedent-setting decision by California’s Third District Court of Appeal, the court clarified the reach of Code of Civil Procedure (“CCP”) section 998, California’s cost-shifting statute. (Madrigal v. Hyundai Motor America (2023) 90 Cal.App.5th 385, as modified on denial of reh’g (May 9, 2023), review granted (Aug. 30, 2023)1.) The case is noteworthy because it clarifies that a plaintiff who does not accept a section 998 offer, and later obtains a less favorable result through a stipulated settlement, rather than through a formal “judgment,” may still invoke the cost-shifting provisions of section 998. The court reasoned that a contrary interpretation would undermine the purpose of CCP section 998, as it would improperly benefit a party who did not accept a section 998 offer that proved to be reasonable based on the amount that party ultimately accepted through a stipulated settlement.
In Greenfield v. Dep't of Labor & Indus. of State, No.57156-1-II (Wash. Ct. App. Jun. 21, 2023), the court found that a intake counselor for the ACLU who worked on a volunteer basis for almost a year was not subject to the Washington Minimum Wage Law. As a volunteer working for a non-profit, he was exempt from the statute and the ACLU could not be held liable for refusing to pay him or offer him a future opportunity or employment.
The Supreme Court of Georgia recently delivered its highly anticipated decision in Ga. CVS Pharmacy v. Carmichael, S22G0527 (June 29, 2023), shedding light on the liability of proprietors and security contractors for injuries resulting from third-party criminal activity. While the ruling addresses various aspects of these claims, some unresolved questions remain.
In King County v. Walsh Construction Company, No. 83787-7-1 (July 3, 2023), the Washington Court of Appeals' discusses the effect of warranty language in construction contracts when design errors are implicated. Contractors should review the warranty language in their contracts to make sure they are not unknowingly agreeing that the design drawings are sufficient.
On July 23, 2023, California Senate Bill 652 was signed into law, changing the standard of proof required for admissibility of expert opinion testimony regarding alternative medical causation at trial. The new law, which was drafted in response to a California Court of Appeal decision that affirmed the existing standard of proof for admission of defense expert medical opinions at trial, imposes a higher standard of proof on defendants. This amendment to the California Evidence Code, under new section 801.1 goes into effect in 2024.
In its first comprehensive overhaul of the prevailing wage provisions of the Davis-Bacon Act in over 40 years, the Department of Labor (DOL) issued a new ruling that alters how prevailing wages for federally-funded or sponsored construction projects are calculated. On August 8, 2023, the DOL announced the issuance of the final rule entitled "Updating the Davis-Bacon and Related Acts Regulations." This final rule aims to redefine how prevailing wages and benefits are determined in federally-funded or assisted construction projects. This will vastly impact how construction workers are compensated.
In a head-spinning tale of battling court decisions and competing precedents, yet another important decision has hit the books on the question of standing under the Private Attorneys General Act of 2004 (PAGA). In Adolf v. Uber Techs., S274671 the court considered whether an aggrieved employee compelled to arbitrate induvial (July 17, 2023), claims under PAGA maintains standing to pursue PAGA claims arising out of events involving other employees. In an act of clear opposition to a recent U.S. Supreme finding on this topic, the California Supreme Court answered this question in the affirmative and found in favor of the plaintiff employee.
- Statute of Limitations Conundrum: Untangling Professional Malpractice Claims in the Construction Industry8.4.23
Professional malpractice claims in the construction industry present unique questions with respect to statute of limitations issues. One particular challenge practitioners often encounter is determining which statute of limitations applies to each claim. When problems occur on a construction site, owners and developers often involve their design professionals and expect that they will be held at least partially responsible for any legal losses.
In Dardar v. Farmers Auto. Ins. Ass'n, 2023 Ill. App. 5th 220357 (Ill. App. Ct. 2023), the Illinois Fifth District Appellate Court reviewed the lower court's dismissal of a plaintiffs' complaint demanding property insurance coverage for the destruction of a home that they had never lived in. It agreed that the term "reside" was not ambiguous as to the terms of plaintiffs' specific agreement with the insurance company. The fact that the word "reside" has multiple meanings did not in and of itself render the term ambiguous as to this contract.
- Rams Football Fan Learns that, In Order to Score in Court, He Must Establish Both Negligence and Causation8.1.23
Fan on fan violence was at the root of a lawsuit brought by Enrique Romero against the Los Angeles Rams (“Rams”); and against the Rams’ private security contractor, Contemporary Services Corporation (“CSC”). In Romero v. L. A. Rams, No. B310152 (Cal. Ct. App. Apr. 27, 2023). Romero alleged causes of action for negligence, premises liability and related torts after Romero was injured in an altercation with another fan during a Rams football game at the Los Angeles Coliseum.
In granting defendants’ motions for summary judgment, the trial court ruled that, even if defendants had a duty to protect plaintiffs and had failed to take the necessary steps outlined in plaintiffs’ complaint, these failures did not establish causation for Romero's injuries. On appeal, the court affirmed.
- Workers' Fall Through Access Door in Crawl Space Not the Responsibility of the Owner of the Building7.27.23
In Blaylock v. DMP 250 Newport Center, the court upheld the long-standing Privette doctrine. In its analysis it found that the employee of a contractor who failed to properly inspect the worksite in accordance with industry standards could not later recover from the owner of the building for his injuries sustained while performing his work.
In a recently released technical assistance document, titled “Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964,” the Equal Employment Opportunity Commission (“EEOC”) explained how employers can run afoul of the American’s with Disabilities Act (“ADA”) by using computer-based tools when making decisions about hiring, monitoring, compensation, and/or terms and conditions of employment. Building upon earlier advice, contained in the “Artificial Intelligence and Algorithmic Fairness Initiative,” published in 2021, the EEOC warned of possible adverse impacts arising from the use of AI in employment. This new article particularly focuses on the adverse impact of using AI for employment decisions.
The case of Cvejic v. Skyview Capital, LLC, No. B318880 (Cal.App. Jun. 28. 2023), explored the question of whether a party was entitled to withdraw from arbitration if the other party did not pay their arbitration fees on time. According to the California Code of Civil Procedure section 1281.98, the court found that the answer is yes. This case is illustrative of the importance of paying fees on time and not relying on the arbitrator in the case to provide extensions, or expecting the opposing party to simply go along with changing payment deadlines even if approved by the arbitrator.
When a federal district court denies a motion to compel arbitration, the losing party has a statutory right to an interlocutory appeal pursuant to 9 U. S. C. §16(a). In the case of Coinbase, Inc. v. Bielski, 22-105 (June 23, 2023), the Supreme Court of the United States considered the sole question of whether the district court must stay its proceedings while the interlocutory appeal is ongoing. The court answered in the affirmative and ruled that the district court must stay its proceedings.
In Stelzer v. Nw. Cmty. Hosp., 2023 Ill. App. 220557 (Ill. App. Ct. 2023), a hospital was vindicated when the court found that their consent forms clearly informed patients that the doctors performing surgery were neither employees nor agents of the hospital. A patient required emergency open heart surgery and signed several consent forms that clearly stated that the doctors performing his procedures were not employees of the hospital where the procedure was being performed. Despite this, he sued the hospital under a theory of apparent agency. The court denied his claim and granted the hospital partial summary judgment. Where the consent forms stated multiple times that the doctors were not employees and used bold and all capitalized font to express this fact, the plaintiff could not prevail.
- Is a Subsequent Purchaser Bound by the Arbitration Agreement Signed by the Original Purchaser of the Home?6.15.23
In this interlocutory appeal, the Supreme Court of Texas reversed in part the decision of the court of appeals in Lennar Homes of Tex. Land & Constr., Ltd. v. Whiteley, _S.W.3d_2023 (Tex. May 12, 2023). The high court found that Whiteley, a subsequent purchaser who claimed construction defects against Lennar Homes of Texas Land & Construction, Ltd. (“Lennar”) was bound by the arbitration clause contained in the purchase and sale agreement (“PSA”) between Lennar and the original owner of the home pursuant to the doctrine of direct-benefits estoppel. Despite the fact that Whiteley’s implied warranty claims against Lennar arise partly from common law, nonliability arises from the provisions of the express warranty between Lennar and the original purchaser because the express warranty was incorporated by reference into the original PSA. The court found that the warranty claims asserted by Whitely did not stand on their own, but instead relied on the existence of the original PSA containing the arbitration clause.
In Cothron v. White Castle System, Inc., 2023 IL. 128004 (Feb. 17, 2023), the Illinois Supreme Court examined the question of whether claims under section 15(b) and(d) of the Illinois Biometric Information Privacy Act (the Act) accrue each time a piece of biometric data is scanned or transmitted. In a much-anticipated decision, the high court found that businesses will be liable for each and every infraction; not only the first instance. The impact of this case is far-reaching in assessing potential liability for businesses collecting biometric data in violation of BIPA.
Get ready to take a swing at this golf course injury case! In Wellsfry v. Ocean Colony Partners, 2023 S.O.S. 1709, the court upheld the age-old doctrine of assumption of the risk, affirming the inherent dangers of teeing off. Despite a nasty trip on a tree root, the golfer was not entitled to recover for his injuries due to the primary assumption of the risk doctrine. This case sets a precedent for understanding the potential hazards of the sport and reinforces the importance of personal responsibility on the greens and potentially beyond.
Employers must post a separate appeal bond after an amount is awarded to an employee by the Labor Commissioner. That was the lesson learned in Adanna Car Wash Corp. v. Gomez (2023) 87 Cal. App.5th 642. In this case, the court found that an employer could not substitute the $150,000 bond it already had for the car wash it operated with an appeal bond. Labor Code section 2055, requires a bond as a condition of business licensure, but a separate bond is required under Labor Code section 98.2, which addresses bond requirements in regard to Labor Commissioner awards.
In a victory for LBGTQ+ rights, the 4th Circuit Court of Appeals in Richmond, Virginia, recognized gender dysphoria as a medical condition and determined that those suffering from it are entitled to protections under the Americans with Disabilities Act. Businesses should take note of this important legal development and the expanded protections under the ADA in the 4th Circuit as similar cases are sure to be adjudicated in halls of justice across the country.
The California Court of Appeal just dropped a bombshell for those defending cases involving bodily injury claims that implicate the right to conduct a mental independent medical examination. In Randy’s Trucking, Inc. v. Superior Court (Buttram) (2023) (“Randy’s Trucking”), the court tackled the thorny issue of whether an examined party can demand that raw test data and other confidential materials be sent directly to the party’s attorney, rather than to a licensed neuro-psychologist or equivalent professional (collectively, “neuro/psych expert(s)”). The decision has major implications for the defense community, as most neuro/psych experts refuse to participate in exams if forced to disclose test information to non-experts, due to ethical and copyright concerns. This is a major shift in the legal landscape, potentially preventing defendants from obtaining the mental examinations to which they are entitled as a matter of law, and it remains to be seen how the Supreme Court and/or Legislature will address the issue going forward.
Hold onto your hats, folks – the U.S. Supreme Court has agreed to hear an insurance coverage dispute in a rare case that could have major implications for policyholders and insurers alike. Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC, 47 F.4th 225 (3d. Cir. 2022), involves a maritime coverage dispute in which interested parties are watching closely to see how the Supreme Court chooses to handle the choice-of-law issue at its heart, in a decision which could potentially have far-reaching consequences. Basically, the case revolves around whether the “strong public policy” of a state can override the validity of a choice-of-law provision in a maritime insurance contract. While this may sound dull, it is actually a pretty big deal – different states have vastly different legal standards when it comes to determining whether an insurer has denied coverage in bad faith, and deciding which state’s law applies can be game-changing. So, buckle up – this one is going to be a wild ride.
In a closely watched insurance coverage action out of Washington State related to the big tunnel project in Seattle, the Washington Supreme Court provides a primer on the evolution and application of the related to spoliation of evidence. This case involved an insurance claim arising out of the construction of a tunnel in Seattle meant to replace the Alaska Way Viaduct. During the course of the relationship between the parties Seattle Tunnel Partners (STP) disposed of important evidence that was relevant to the determination of its insurance claim it filed after the tunneling mechanism failed. As a result of this loss of evidence, the trial court imposed spoliation sanctions and allowed an adverse jury instruction.
A tenant's risky decision to drop from the roof to his balcony was potentially within the scope of foreseeable dangers a landlord has the duty to protect tenants from. In the case of Razoumovitch v. 726 Hudson Avenue, LLC, the court reminded the parties that California law imposes a general duty on everyone, including property managers, to take reasonable care to keep others safe. In this case. the landlord did not successfully show that a public policy exception changed that duty. The court concluded that the granting of summary judgment was not proper because foreseeability may not be determined as a matter of law, but rather was a question for a jury to determine.
If the person suing can't afford to pay, defendants may be required to pick up the tab. Nursing home that successfully compelled arbitration proceedings with family of decedent client was required to pay for all fees and costs or waive arbitration, where the patient was indigent. Hang v. RG Legacy I, LLC, No. G061265 (Cal. Ct. App. Feb. 8, 2023).
- Design Immunity May Not Shield a Public Entity From Liability Where it Failed to Warn of a Known Danger5.5.23
Can a public entity rely upon design immunity where the public entity failed to warn of a design element that resulted in a dangerous condition of a roadway? In Tansavatdi v. City of Rancho Palos Verdes (S267453) 60 Cal. App. 5th 423, the California Supreme Court examined whether the design immunity found in California Government Code section 830.6 extends to claims alleging that the public entity failed to warn of a design element that resulted in a dangerous condition and held that public entities still "retain a duty to warn of known dangers that the roadway presents to the public."
Illinois lawmakers passed the Paid Leave for All Workers Act, which was signed by Governor Pritzker on March 13, 2023 and will become effective on January 1, 2024. This new legislation is significant because it requires employers to allow paid leave for any reason or no reason at all. The only other states in the nation with type of mandate so far are Maine and Nevada.
- California Appeals Court Carves Out Small Possibility for Businesses to Recover for Business Losses During COVID5.1.23
Amid nationwide hesitance by courts to extend business coverage to businesses that shut down during COVID, Coast Restaurant Group came closer to winning its case than most. In the case of Coast Rest. Grp. v. Amguard Ins. Co., No. G061040, 2023 Cal. App. LEXIS 269 (Ct. App. April 10, 2023), although the court agreed that the government shutdown qualified as a "direct, physical loss" under the policy, the existence of a virus exclusion as well as a clause specifically excluding coverage for loss caused by an ordinance or law foiled Coast Restaurant's hopes of getting Amguard to pay up. This ruling is significant because it effectively splits the opinion of the appellate courts on this issue and leaves more wiggle room for trial courts on this issue.
The Supreme Court of the United States in Bartenwerfer v. Buckley, NO. 21-908, Slip Opinion, 506 U.S. _(2023), resolved split opinions in the circuit courts regarding the fraud exception to the discharge of debts in the Bankruptcy Code. SCOTUS established a precedent favoring fraud victims by preventing those who not only perpetrated the fraud, but also those who benefited from it, from having the capability to discharge that debt in bankruptcy. In this case, a wife who was unaware of her husband's fraudulent activity in selling their home with known defects that he failed to disclose, was not permitted to discharge her portion of a judgment for damages against the couple in bankruptcy. The court found that to rule otherwise, would shield those who potentially benefitted from the fraud and allow them to escape liability.
- Insured Entitled to Coverage for Breach of Media Liability Clause in Violation of Illinois Biometric Information Privacy Act4.23.23
Biometric data is an emerging trend, and jurisdictions around the nation have been enacting statutory schemes. These statutes are now getting tested, and we are starting to see a growing body of case law. On March 31, 2023, the court held that an insured was entitled to coverage for claimed expenses it incurred in an Illinois Biometric Information Privacy Act (“BIPA”) class action lawsuit.
- 9th Circuit Asks Oregon Supreme Court for Guidance: Does Lost Business Income Caused by COVID Constitutes "Direct, Physical Loss"?4.21.23
It is the Oregon Supreme Court's turn to answer the question addressed in many courts across the country. Do losses related to COVID-19 constitute direct physical loss or damage to property under a commercial general liability insurance policy? Oregon Clinic PC v. Fireman's Fund Insurance Co. No. 22-35047 (9th Cir. 2023) tackled this question after the U.S. District Court in Portland granted the insurer's motion to dismiss finding that COVID did not qualify as physical loss under the insurance policy. On appeal, the court determined that it needed further guidance before coming to a final decision.
Can you sue a business for violations of the Americans with Disabilities Act even if you've never actually patronized it? Federal appellate circuits around the country have answered this question differently. To resolve this circuit split, the United States Supreme Court granted certiorari in the case of Laufer v. Acheson Hotels, LLC, 50 F.4th 259 (1st Cir. 2022). The case involves the question of whether or not a plaintiff has standing under the Americans with Disabilities Act ("ADA") to sue a hotel for failing to provide information regarding its accessible accommodations. The plaintiff – who never planned to stay at the hotel and never visited the property – claimed she had "standing," or the legal ability to file a lawsuit, because she qualified as someone who "tested" whether businesses around the country violated the ADA.
- Contractual Indemnitee Without AI Status Unable to Sue Contractor Insurer for Defense, Despite CGL Policy Clause4.12.23
The Third Appellate District Court of Appeal has issued a decision in which it found that an indemnitee defense clause contained within a general liability insurance policy affords the indemnitee mere status as an incidental third party beneficiary, and that such an indemnitee lacks standing to sue the carrier to provide a defense. LaBarbera et al. v. Security National Insurance Company, C093414 (Super. Ct. No. 34-2019-oo248873-CU-IC--GDS).
- The Louisiana Supreme Court Overturns Finding that COVID-19 is a Physical Loss Triggering Insurance Coverage4.10.23
COVID-19 business interruption claims have surged nationally since the beginning of the pandemic. The majority of these claims have been unsuccessful for policyholders. However, in Cajun Conti LLC v. Certain Underwriters at Lloyds, 2023 La. LEXIS 563 (La. Mar. 17, 2023), the Louisiana Fourth Circuit Court of Appeals found that COVID-19 constituted "a direct physical loss of or damage to" the insured's New Orleans restaurant. The insurer appealed the Fourth Circuit’s ruling to the Louisiana Supreme Court, who reversed and affirmed what most courts around the country have held – COVID-19 does not constitute physical loss or damage triggering insurance coverage.
In Williamson v. Evans Nail and Spa Corp., 2023 IL. App. (1st) 220084, the appellate court reversed the trial court's order granting summary judgment for the defendant-nail salon finding that plaintiff provided sufficient evidence to create an issue of fact on whether the failure of the defendant to provide: (1) a handrail was in violation of a local ordinance and (2) a sufficient slip resistant mat surrounding a pedicure pedestal created an unreasonably dangerous condition. The appellate court determined that the plaintiff had brought sufficient evidence to create a fact question regarding proximate cause in her slip and fall litigation.
Gig companies, Uber and Postmates, successfully obtained a revival of their claim in federal court alleging that California A.B. 5 unfairly disadvantages app-based ride and delivery services. The U.S. Court of Appeals in Olsen v. State of California, No. 21-55757, 2023 WL 2544853, at *2 (9th Cir. Mar. 17, 2023). found that the plaintiffs "plausibly alleged" that the main motivation behind A.B. 5 in the California legislature was to disadvantage companies like Uber, Postmates and similar gig-based businesses in violation of equal protection.
In Hoffmann v. Young, et. al, (2022) 13 Cal.5th 1257, the California Supreme Court held that a teen's parents were liable for injuries sustained by a guest while riding a motorcycle on the motocross track built on their property. The court found that the exception to the recreational immunity defense (Civil Code Section 846(a)) does not apply when the injured party was expressly invited by an agent of the landowner whom the landowner has properly authorized to extend invitations to enter the land on their behalf.
In Brianna Garza and Mario Garza v. Matthew Perry and American Family Insurance Company, No. 83377-4-I, the Washington Court of Appeals determined that an insurance company could not intervene in an action intending to nullify a settlement agreement involving a covenant judgment. The court denied the insurer's attempt to nullify the covenant judgment settlement because it was not a party to the agreement, and upheld the lower court's approval of the agreement through a reasonableness hearing.
In the case of River's Side at Washington Sq. Homeowners Assn. v. Superior Court, 3d. Cir. No.C095860 (2023), a homeowners association successfully argued that it had standing to sue for construction defects on behalf of individual unit owners. Under the Right to Repair Act, homeowner associations do not have standing to sue on behalf of members for construction defects within individual units, but may sue for defects in the common areas. In this case the court distinguished between claims brought under the Right to Repair Act and claims for breach of contract or fraud. If those claims qualify as representative actions, then the association may have standing to sue for issues in the common areas as well as the individual units pursuant to section 382 of the California Civil Code.
In the case of Tufield Corporation v. Beverly Hills Gateway, Case No. B314862 (2022), the court got back to basics in this landlord-tenant dispute. It found that a lease exceeding 99 years is void under the law as a suppression of California public policy encouraging the free exchange and development of land. The primary issue on appeal is whether a lease that violates Civil Code section 718 is void or voidable and is essentially an issue of first impression. The court held that the part of the lease exceeding 99 years was void.
What happens when an injury doesn't surface until fifty years later? The case of Ramirez v. Avon Products, Inc. (2023) Los Angeles County Super. Ct. No. 20STCV22671 Case No. JCCP 4674, discusses this conundrum. It analyzes how courts have dealt with the issue of witness testimony where few at the corporation ever had personal knowledge of policies and procedures regarding the disputed claim at the time the incident took place. Testimony of the "Person Most Knowledgeable” does not earn businesses a pass on the hearsay rules.
Under fee-shifting statutes, a trial judge must award fees to the prevailing party regardless if the prevailing party will actually be responsible for paying the fees. In Cell-Crete v. Federal Insurance Co. (2022) WL 4103354, the surety on a construction project argued that it was owed attorney fees and costs under the fee-shifting statute even though it did not actually pay any of the fees or costs. The Court of Appeals agreed and reversed the trial court's order to deny the surety's requests for those fees.
In Regan Heating and Air Conditioning, Inc. v. Arbella Protection Insurance Company, Inc., No. 2020-170-Appeal (Jan. 27, 2023), the Rhode Island Supreme Court, on the facts before it, expanded the obligations of insurers to examine potential policy ambiguities. In short, the Court found that "diversity of judicial thought" as to the meaning of insurance policy language is "proof positive of ambiguity." The implications for insurers are unclear at the moment, but at least on these facts – whether oil was a "pollutant" and thus losses arising from an oil spill were excluded – the Court has now determined that insurance policy contract language may be considered ambiguous where its treatment differs across various jurisdictions. This decision may now impose a duty on insurers to examine how other states treat relevant policy language before making coverage decisions.
Insurance companies may not automatically be off the hook when it comes to coverage for resulting damages stemming from faulty construction. In Gardens Condo v. Farmers Ins. Exch., No. 83678-1-I (Wash. Ct. App. Dec. 19, 2022), the court found that a resulting loss clause in an all-risk insurance policy may provide a condominium complex insurance coverage from damages caused to units by faulty construction of the roof. The resulting damages were covered perils and thus, potentially covered by the policy.
In a pivotal decision, the National Labor Relations Board in Thryv, Inc. and International Brotherhood of Electrical Workers, Local 1269 Cases 20-CA-250250 and 20-CA-251105, appears to have expanded the potential exposure for employers in actions brought claiming violations of the National Labor Relations Act (NLRA). Signaling a shift from prior agency interpretation, the National Labor Relations Board (NLRB) has now said that the NLRA's "make whole remedy" requires employers in violation of the law to compensate affected employees for all "direct or foreseeable pecuniary harms" suffered as a result of the respondent's unfair labor practices.
In the case of Norg v. City of Seattle, No. 100100-2 (Wash. 2023), the Supreme Court of Washington answered the question of whether the public duty doctrine insulates the City of Seattle from liability for a 911 response to the wrong address. The Court held that the City was not protected by the public duty doctrine where the harm was particularized and not related to general public duty.
Though attempts to contractually waive an employee's right to sue pursuant to the California Labor Code Private Attorneys General Act (PAGA) typically fail in court, a narrow, but important exception to this rule are collective bargaining agreements involving construction workers. In Oswald v. Murray Plumbing & Heating Corp., No.B312736, 2022 Cal. App. Lexis 752 (Ct. App. Sep. 2, 2022), the Court of Appeal found that because the collective bargaining agreement at issue addressed wage and hour provisions, working conditions, and grievance procedures, and specifically mandated arbitration of disputes regarding Labor Code violations, the denial of the plaintiff's right to sue under PAGA was warranted. Consequently, the Court of Appeal found that all employment claims, including those claims under PAGA, should have been submitted to arbitration for resolution in accordance with the provisions of the collective bargaining agreement.
In the case of Gulf Coast Center v. Curry, Case No. 20-0856 (Tex. 2022), the Supreme Court of Texas found that courts may not render a judgment that exceeds the statutory damage cap under the Texas Torts Claims Act and a plaintiff seeking recovery under the Act has the burden to prove which cap applies. The plaintiff failed to demonstrate that the trial court had jurisdiction to render a judgment exceeding the minimum statutory cap. The Texas Supreme Court reduced the $216,000 judgment finding that the Act requires lower courts to cap damages when the defendant is a local government or governmental unit, even if the issue wasn't brought during trial.
The Texas Supreme Court handed down an opinion on January 27, 2023 in Taylor Morrison of Texas, Inc. v. Skufca. A trial court denied a motion to compel arbitration that involved breach of contract claims brought by Jack and Erin Skufca, along with their minor children alleging construction defects with their new home. The Court of Appeals upheld the denial. In reversing, the Texas Supreme Court held "that the Skufcas' petition, which did not distinguish between the parents' claims and the children's claims, unambiguously reflects the children as joining their parents in asserting the breach-of-contract claim and that the children therefore may be compelled to arbitrate."
In Venema v. Moser Builders, Inc., 2370 EDA 2021 (Pa. Super. Ct. Aug. 29, 2022), the Superior Court held that the Statute of Repose was not tolled by repairs made several years after the certificate of occupancy was issued. Homeowners are not entitled to unilaterally dictate an extended window to file suit because a builder complies with the agreement in good faith and makes repairs years after the original purchase date.
The court in De Leon v. Juanita's Foods, Inc., No. B315394 (Cal. Ct. App., Nov. 23. 2022) made it clear that if a business or employer fails to pay its arbitration fees on time, it will be found in material breach of the arbitration agreement. Juanita's Foods paid its arbitration fees a few days late and despite its assurances that payment was coming and a subsequent payment in fact made, the court held that it was in material breach and refused to consider any other factors to mitigate the late payment. Following clear precedent, the clear language of the statute, and stated legislative intent, the court found that Code of Civil Procedure sections 1281.97 and 1281.98 provide a bright line rule that courts must follow to the letter.
In a case of first impression, the New Jersey Supreme Court in Norman International, Inc., and Richfield Window Coverings, LLC d/b/a Niem Made (USA), Inc. v. Admiral Insurance Company, 251 NJ 538 (2022) enforced a Designated New York Counties Exclusion included in a commercial general liability insurance policy issued by Admiral Insurance Company ("Admiral"). In so holding, the Supreme Court found that the policy's broad and unambiguous language did not require a causal relationship to trigger the exclusion. Rather, any claim "in any way connected with" the insured's operations in an excluded county fell within the exclusion. Additionally, Admiral had no duty to defend a claim that it was not obligated to indemnify. The determination of whether Admiral had a duty to defend was not determined solely by the allegations of the complaint. Instead Admiral relied upon facts adduced during discovery indicating that in certain instances an insurer may use extrinsic evidence to deny a defense to its insured. The Supreme Court recommended that going forward, in similar situations, courts should indicate when an issue requires consideration of facts beyond the complaint.
A New York City eviction court denied a motion for summary judgment, ruling that a tenant in a polyamorous relationship with the lease holder was entitled to the same eviction protections as those in two-person relationships. In its denial of summary judgment, the court found that the holdover tenant may be entitled to take the lease in his name after the death of his partner. What could the recognition of polyamorous relationships mean not only for property disputes in the future, but for employers and insurance carriers moving forward?
Washington state courts favor enforcing contractual arbitration clauses, and will strictly enforce an LLC operating agreement to arbitrate claims, including derivative claims, where agreement language is broad enough to include the same. Moreover, a contractual arbitration clause will be enforced absent evidence clearly indicating waiver of an intention to arbitrate.
Determining appropriate policy limits is no easy task. On one the hand, an insured has motivation to keep its retentions, deductibles and premiums down to a reasonable level. On the other hand, that fiscal interest is balanced against the security found in high policy limits designed to protect against a potential serious claim that requires a large payout. Often clients rely on the advice of a broker to help them select appropriate limits and policy terms. When claims come in the door, and the limits are insufficient to cover the damages, the broker may find themselves in the crosshairs of an angry client liable for damages not covered by their policy - and open the door for claims of professional negligence against the broker. Whether an insurer is obligated to defend and indemnify the broker against a claim of professional negligence is a question of policy interpretation recently addressed by the Ninth Circuit in Bliss Sequoia Ins. & Risk Advisors v. Allied Prop. & Cas. Ins. Co., No. 20-35890 (9th Cir. Oct. 27, 2022).
Courts must abide by the terms of arbitration agreements that invoke the governance of the Federal Arbitration Act (FAA), or contain a clearly written delegation clause. Terms that provide for an arbitrator to decide threshold issues may not be sidestepped or ignored by state courts. This is true even if the district court finds that the subject of the dispute is not within the scope of the arbitration agreement.
King County alleged that a judge was openly hostile to an attorney during a jury trial that resulted in the jury having negative feelings toward the defense. The court ruled that the audio recordings were not subject to disclosure as public records. The lack of transparency and accountability could make for a troublesome precedent.
- Attorneys on the Hook for Professional Malpractice After Obtaining Multi-Million Dollar Verdict for Med Mal Client10.27.22
An Illinois appellate court recently held that a patient's medical privacy rights were violated after the attorneys who secured him a $4.2 million verdict released details of his condition and medical history in the media after the trial concluded.
In quite a scolding for defense counsel, the court in Shapell Socal Rental Properties, LLC v. Chico's FAS, Inc., found on appeal that attorneys have both an ethical and statutory duty to notify opposing counsel of an intent to seek a default. The fact that one party failed to pay rent and pushed the envelope due to COVID closures did not change the obligation of professionalism between legal teams.
The Supreme Court of Washington found that the interruption of a dental office's business operations, caused by the COVID-19 shutdown and restrictions, did not constitute a physical loss under the property insurance policy. Although the dentists' argument that they should succeed under the "loss of functionality" theory was considered by the court, it still found in favor of the insurer because the dental office premises were not physically harmed and, in fact, the office was still functional and being used for emergency dental procedures. The policy also contained a virus exclusion. The efficient proximate causation theory did not assist the plaintiffs because the initial peril in the causation chain (the COVID-19 virus) was excluded under the policy.
New Orleans restaurant wins ground-breaking case in which an appellate court ruled that shut-downs and partial closures due to COVID-19 particles invading a restaurant's physical space may constitute direct physical loss sufficient to trigger coverage under an all-risks insurance policy that did not contain a virus exclusion.
When a property insurer pays for losses under a first-party property insurance policy, they are often paid at actual cash value. Actual cash value is calculated by taking the replacement cost, i.e., the amount it would cost to repair or replace an item of similar kind and quality, less depreciation, i.e., the decrease in the property’s value because of use, wear, obsolescence, or age. For an insurer, this often begs the question, what costs are depreciated when calculating actual cash value?
In a recurring issue of statewide importance, the Supreme Court of Arizona in Zambrano v. M & RC II, LLC, No. CV-21-0205-PR (Sept. 28, 2022) decided that it is against public policy to waive or disclaim the implied warranty of workmanship and habitability in a purchase agreement with a homebuyer. This rule extends to circumstances in which a builder simultaneously provides express warranties providing similar protections.