We know this, but many of our clients don't: coverage is tricky. There are aspects of an insurance contract which may cut against instincts and societal expectations. For example, there are coverage implications when an insured apologizes for a perceived mistake. Anything that potentially jeopardizes the defense, including anything that can be perceived as an admission of liability, may result in a coverage denial. Along those lines, a recent decision highlights the coverage implications of a guilty plea in criminal proceedings.
In Quality Sausage Company, LLC, et al v. Twin City Fire Ins. Co., Civil Action No. 17cv111 (S.D. Texas, Sept. 18, 2019), one of the plaintiff corporations (Plaintiff) fell victim to a fraudster who submitted fraudulent wiring instructions via email to Plaintiff on behalf of one of Plaintiff's clients. Per those wire instructions, Plaintiff improperly transferred $1 million from the client’s account to the account of a sham company. Uh oh.
Over the years, we've shared a bunch of posts regarding the nuances of Affidavit of Merit (AOM) requirements in professional malpractice actions. Of course, many states have enacted some version of an AOM requirement and we've discussed the significance and potential advantages from a defense perspective when a plaintiff fails to comply. By strict rule of law, the failure to timely submit an AOM should signal dismissal, but does it in practice? Does it seem like courts are a bit too lenient in permitting a malpractice claim to proceed despite a violation of the AOM requirements?
Many jurisdictions require some version of an affidavit of merit (AOM) in order to proceed with a malpractice claim. (Here's a helpful 50-state survey of AOM requirements LINK). In New York, CPLR §3012-a requires an AOM to accompany the complaint for all medical malpractice actions. Specifically, this affidavit has to declare that an attorney has reviewed the facts of the case, and has consulted with at least one physician, and that there is a reasonable basis for the commencement of the action. This requirement ensures that there is at least some legitimate basis for proceeding this the lawsuit, and can serve to reduce frivolous litigation.
Case management is such an important task for litigators. We must plan how best to utilize the allotted and often limited time provided for each case. Some courts set strict case management deadlines while others permit the parties to proceed at their own pace without much direction. We must budget our time in an efficient and reasonable manner. We must also balance our personal commitments with the needs of our clients and that is no easy task. Ultimately, all attorneys have faced scheduling conflicts due to personal commitments: vacations, appointments, and family obligations. What about the birth of a child? The Florida Supreme Court recently considered, and rejected, whether to adapt a policy to stay litigation during an attorney's parental leave.
Data is everywhere. We're being tracked in the car, in the grocery store, even when we're walking the dog. As I write this, I'm being monitored as well, through employee monitoring administered by my firm's I.T. department. This may help to prevent cyber-crime, as well as assisting with productive, employee locating and resources usage. Reportedly, effective employee monitoring systems can help productivity and therefore benefit the bottom line. However, it can also create problems with the employment environment. This is an important balance for all employers: to effectively monitor employee activity in a trusting and comfortable manner.
It's hot outside. The rising temperature has implications for employers, specifically the responsibility to monitor employee health. The ramifications of heat related employment issues span from loss of productivity and morale issues to injuries and even death. From a strict legal standpoint, OSHA has regulations governing occupational heat exposure. Moreover, there are risk management tools to consider for all employees exposed to extreme heat.
When facing a wrongful termination/retaliation claim, the organization and detail of an employer's files will be put to the test. In a recent decision, an employer maintained well-documented, detailed files which helped to prove that a termination was not retaliatory. In Lacey v. Norac, Inc., the Eighth Circuit Court of Appeals affirmed summary judgment to an employer in a retaliation claim under Title VII based on allegations that the employee was terminated for refusing to sign an affidavit on the employer’s behalf.
Attorneys know with a certainty that words matter in the law. But what about emojis? Reportedly, more emojis are showing up in court cases throughout the US. Thus, attorneys are left to argue about the interpretation of those characters and, apparently, courts are struggling to handle the nuances.
The settle-and-sue legal malpractice claim has been traditionally disfavored by courts across the country. Courts often cite to practical and legal concerns with the theory, to say nothing of the bind it puts on an attorney looking to resolve a case. In a recent decision from the New Jersey Appellate Division, settle-and-sue may not have been at issue, but that in itself causes some concern in a case remanded for trial to determine the difference between a verdict and what the plaintiff settled for prior to trial.
The Trump administration's immigration policies are reportedly impacting immigrants who are involved in the long-term care ("LTC") workforce. Specifically, the policies could make it harder to find workers for these jobs. According to a study published by Health Affairs, immigrants make up nearly one quarter of the LTC workforce, in a profession which struggles to retain labor. Immigrants make up 23.5 percent of the long-term care workforce, which includes family caregivers. Twelve percent of these immigrants are naturalized citizens, eight percent are legal non-citizens, and 3.7 percent are undocumented immigrants.
In June 2019, the Illinois State Legislature passed a bill to address nursing home staffing by vastly increasing funding for struggling long-term care facilities. Under the law, the 2020 fiscal year budget increases nursing home providers’ budgets by $240 million to be shared equally by the State and Federal governments, with $70 million allocated to assist facilities to meet staffing requirements. Arguably, there is a direct correlation between staffing and incidents that may give rise to litigation. Financial and staffing components often directly factor into the quality of care residents receive, and legislative action such as that undertaken by Illinois is critical to improve the care long-term care facilities provide.
The Ohio Board of Professional Conduct recently issued an advisory opinion concerning restrictions on an attorney's right to practice and solicit clients contained within settlement agreements. Of course, an effective settlement agreement attempts to eliminate all claims involving the settling parties. The goal is to put an end to the dispute, forever. But, what happens when a settlement agreement expressly prohibits the settling parties' counsel from pursuing similar claims through other clients?
In a recent decision, the Pennsylvania Superior Court clarified the application of the attorney work-product doctrine in the context of an e-mail exchange to a third-party consultant. The decision addresses the question of whether the work-product doctrine in Pennsylvania applies to otherwise confidential communications sent to a public relations company.
A New York court recently held that the termination condition in a fidelity bond applied to terminate coverage in respect of losses allegedly caused to an insured insurance company by the insured’s managing general agent. The Court found that termination was appropriate because the insured knew of the managing agent’s dishonest acts prior to applying for the bond.
You generally know the drill: a plaintiff has limited time to file suit. Generally, the statutory period begins when the plaintiff knows or reasonably should know that she has been harmed and that the defendant caused that harm. You also generally know that statute of limitations defenses are not nearly that simple. There are variables including the discovery rule and the gist of the action doctrine which may impact the argument. The continuous representation doctrine is another wrinkle that could affect whether a malpractice claim is subject to dismissal pursuant to the statute of limitations. In a recent decision, the Maine Supreme Court affirmed a dismissal of a legal malpractice claim on statute of limitations grounds and refused to apply the continuous representation doctrine.
Making fun of a co-worker’s weight may be rude, but is it illegal? A New Jersey court recently addressed claims of disability discrimination and hostile work environment by an employee complaining of comments made by co-workers about his weight.
Real estate transactions occur all the time whether in the residential or commercial context. Notwithstanding a familial transfer, the arms-length transaction includes a buyer, a seller, and sometimes a bank or private money-lender who finances the deal. In some of those situations, there is also an escrow agent whose role is simply identified in the contract to be the “holder of the funds” while certain conditions are met post-contract. The escrow agent often keeps a fee for the services rendered, and becomes a mechanism for the issuance of a title insurance policy.
In Lamps Plus, Inc. v. Varela, the U.S. Supreme Court held that an ambiguous arbitration agreement cannot provide the necessary contractual basis for compelling class arbitration under the Federal Arbitration Act. This decision reverses the Ninth Circuit’s decision that permitted an employee’s data breach class arbitration to proceed.
An alarming trend has emerged among the plaintiff’s bar in Long-Term Care litigation. Plaintiffs are alleging a right to recovery for death, or other injuries, under both the negligence/wrongful death standards (i.e. pain and suffering and pecuniary loss), and the Public Health Law (§2801-d). Historically, when there is a death resulting from negligence, the recovery is limited to pecuniary loss, but, now the plaintiff’s bar is arguing that when an elderly person who was a resident of a nursing home dies, as a result of a violation of the public health law, the recovery for death should be whatever a jury determines life is worth, even when there is no provable pecuniary loss.
One of the most difficult aspects of defending investor misrepresentation claims is that they naturally occur after a financial calamity. In retrospect, there is almost always an argument that a statement here, or omission there, was "misleading" in light of the company's ultimate fate. It is for this very reason that common law imposes a heightened standard for investors attempting to bring such a claim for what is essentially statutory fraud. In a recent decision from the Third Circuit, the Court reiterated this heightened pleading standard, and the policy for doing so, in dismissing a complaint at the pleading stage.
While the vast majority of states hold that an insurance broker cannot be absolutely shielded from his negligence in procuring coverage to the extent the insured failed to read the policy, there are still a few states where the "duty to read" can provide an absolute defense. One of those states is Mississippi. In a recent decision issued by the U.S. District Court for the Northern District of Mississippi, this rule was applied in a decision dismissing the case from federal district court based on fraudulent joinder.
Employment job descriptions serve many purposes: to attract talented applicants, to inform employees of expectations. In addition, job descriptions are often critical in disputes between employers and employees. A federal appellate court recently ruled on a case where the words in job description helped bolster the employer’s defense.
A measure that would shorten the statute of limitations for New Jersey malpractice claims against certain licensed professionals, including attorneys, from six years to two years, passed the Assembly Judiciary Committee on March 18 in Trenton. Although a small step, this is encouraging for many New Jersey professionals, and the attorneys who defend them.
The New York Legislature is considering whether to enact a statute of repose that would limit the time for filing a claim against builders and design professionals for construction defects. Assembly Bill A3595 would repeal Civil Practice Law & Rules (CPLR) § 214-d in its current form and reenact § 214-d to codify a statute of repose similar to a significant majority of states.
A recent NY Appellate Division decision serves as another reminder of the importance of carefully defining the scope of engagement in an engagement letter. This is because, under New York law, an attorney may not be held liable for failing to act outside the scope of their retainer.
Third-party litigation funders regularly argue before ethics committees, state bar associations and the media that this burgeoning field is a positive development in the practice of law. Primarily, some assert that their funding allows individuals and companies shut out of the court room by excessive litigation costs to "have their day in court" when they would otherwise have to bow out against the Goliath to their proverbial David. Of course, providing the necessary financial backing for a lawsuit is not done out of the goodness of funders' hearts. A portion of the proceeds from any settlement or award goes to the funder after the attorneys' fees and costs are paid. Although the latter is always negotiable, funders must therefore calculate at the outset the likelihood of victory, the amount expected in total, and what their hypothetical share would be.
The Due Process Clause of the Fourteenth Amendment to the US Constitution limits the authority of courts to exercise jurisdiction over non-resident defendants. Before a court can exercise personal jurisdiction over a party, the Constitution requires that the party have certain "minimum contacts" in the state where the court sits. Jurisdiction may be satisfied when the suit arises from the foreign person's activities in the forum state. Further, with respect to foreign companies, jurisdiction may be satisfied regardless of the nature of the lawsuit if the company has continuous and systematic contacts with the forum state or if it consents to jurisdiction there. Courts have been divided, however, as to what actions by a company constitute consent to jurisdiction in the forum state. For instance, does a foreign corporation's mere registration to conduct business in a state satisfy the constitutional threshold? In two recent decisions, the Pennsylvania Superior Court resolved that it does.
In less than 18 months of employment, Evangeline Parker received six promotions. Then rumors circulated that Parker’s precipitous rise through the ranks "must" have been because she was sleeping with her boss. When Parker complained about the rumors and confronted the employee who allegedly started the rumors, she was terminated. Reversing the district court’s dismissal of the lawsuit, the Fourth Circuit Court of Appeals, in Parker v. Reema Consulting Services, held that such rumors could form the basis of a sexual harassment claim in violation of Title VII.
The White House Office of Management and Budget ("OMB") is reviewing a final rule to reverse a 2016 regulation banning nursing home operators from entering into pre-dispute arbitration clauses with their residents as a condition of participating in Medicare and Medicaid. According to the OMB’s web site, the rule “removes provisions prohibiting binding pre-dispute arbitration and strengthens requirements regarding the transparency of arbitration agreements in LTC facilities.” Per the OMB, the rule facilitates “the resident’s right to make informed choices about important aspects of his or her healthcare” and eliminates unnecessary burdens on long-term care providers.
One of the most important aspects of working with corporate clients is understanding the businesses. From general business functions to the overarching models, this knowledge can be extremely valuable in both transactional and litigation work. However, client technology is becoming more industry specific, often making it infeasible for attorneys to learn. It is in these cases that a quality IT team working on behalf of the firm is not only the most efficient way to service a client, but also may be a litigation requirement.
On December 29, 2018, a 29-year-old woman in a vegetative and uncommunicative state gave birth to a baby boy. The woman had been in a vegetative state for at least a decade after a near-drowning incident which caused brain drainage. She had been a longtime resident of a healthcare facility in Phoenix. The employees of the nursing home only became aware that the resident was pregnant when she was found moaning and it was discovered that the resident was in active labor. Several news reports indicated that the resident required around the clock care and many individuals had access to her room. Since the incident, the facility has changed its policy regarding male employees entering a female resident’s room. It will now be required that a female staff member be present with a male staff member in a female resident’s room at all times.
What is an “adverse action”? In the workplace some may think that it is only when someone is fired. However, much more falls under the “adverse action” umbrella. What about denying an employee a training opportunity? A federal district court in New York recently analyzed this very issue. The case involved a longstanding employee that was placed into a different role but denied training opportunities that were offered to other employees. The plaintiff struggled in her new role and eventually commenced a lawsuit asserting many claims, including race discrimination.
The Alabama Supreme Court recently issued what could turn out to be an important decision on the duty to advise. The court in Somnus Mattress Corp. v. Hilson, 2018 WL 6715777 (Ala. Sup. Ct. Dec. 21, 2018) affirmed a decision dismissing claims against an insurance agent for alleged negligence in failing to advise a mattress manufacturer to purchase business interruption loss coverage. While the plaintiff manufacturer argued that the agent should be held responsible for the uninsured loss he suffered following a fire that destroyed his mattress factory, the Court held that an insurance agent/broker generally does not have a duty to advise and cannot be deemed to have assumed a duty to advise. The court laid out important exceptions to the rule: (1) the insurance agent/broker misrepresented the coverage in a manner that the insured could not have known from a reading of the insurance policy, or (2) the agent/broker and insured were in a "special relationship."
The Illinois Supreme Court recently issued an opinion which impacts the timing of suits against insurance agents. In American Family Mutual Insurance Co. v. Krop, the policyholders were denied coverage in a lawsuit brought against their son for cyber-bullying. They responded with an action against their insurance agent, alleging that he failed to procure coverage for certain intentional acts despite their request to do so. Although the policyholders sought to impose a heightened fiduciary duty standard, the Court instead viewed the claim as one for breach of contract.
The North Dakota Supreme Court recently affirmed the dismissal of a negligent failure to advise claim based on the failure to establish "special circumstances." The decision is a nice win for insurance agents and brokers.
Litigation funding has grown exponentially in the past few years. However, the NYC Bar recently issued an opinion drawing a line in the sand when it comes to third parties entering into agreements with attorneys. After issuing its opinion, some of the largest financiers of complex litigation responded with sharp criticism of both the substance of the opinion and its effect of stalling progress in this area. However, the opinion also provides an opening that could lead to the eventual change in ethical rules that underscore its conclusion.
A severance package is pay and/or benefits employers pay employees following a termination or layoff. Often, the employee's acceptance of the severance will include a release of any potential claims against the employer. Of course, severance packages are not required. In a recent decision, a court considered what happens when every departing employee is not offered a severance package. In Barbera v. Pearson Educ., Inc., the employer had a policy that provided severance pay for employees that were involuntarily terminated. The policy had certain exceptions, including when the employee was terminated as a result of a sale or merger and was offered employment by the purchasing company.
The contingency based fee agreement is a common form of representation. There are clear benefits to this arrangement for both attorney and client. Of course there are also risks. In a recent decision in New Jersey, the court concluded that attorneys must properly advise clients about the various billing options before proceeding with an engagement. In this case, despite a written fee agreement, the court struck over $280,000 in legal fees and costs.
A New Jersey appeals court recently ruled that a disbarred attorney cannot sue his former attorney for malpractice in connection with a fee dispute. In an unpublished opinion in the case of Schildiner v. Toscano, the Appellate Division upheld a decision from the Essex County Superior Court dismissing the lawsuit filed by the disbarred lawyer ("Lawyer"), against the firm he hired, ("Law Firm").
In a recent decision, a Federal District Court grappled with the definition of "direct loss" under a commercial crime policy. The court in CP Food & Beverage, Inc. v. U.S. Fire Ins. Co., concluded that “direct means direct” and an insured's losses from payment card charge-backs when certain employees made fraudulent charges on customers’ payment cards were only the “indirect” result of employee theft, and therefore not covered under the insured’s policy.
How reasonable must a reasonable accommodation be? Is moving an employee’s work location reasonable? Is providing an employee an aide reasonable? Of course, the answer depends on the circumstances and that's what makes ADA compliance often difficult for employers. Consider the recent example of Hill v. Assocs. for Renewal in Educ., Inc.
Attorneys practicing in mergers and acquisitions are familiar with the sensitive nature of their work and the potential for abuse of the information obtained. In addition to being restrained from trading on that information themselves, they must take extensive precautions to ensure that they do not allow that information to slip to friends, family members, or colleagues. Unfortunately, one cannot assume that others won't use that information to make trades that could ensnare both the attorney and firm in extensive criminal and civil litigation, regardless of intent. Accordingly, both formal and informal mechanisms are put in place to keep potential inside information from those who are not required to have it in their work.
According to our friends at CPA Gold, LINK, from a purely risk management perspective, bringing your insurer into the claims process is extremely prudent and can save you a lot of money. Here are the reasons you should contact your insurer or agent sooner, rather than later: involvement of counsel, denial of coverage, deductible concerns and risk management. Each of these factors, and others, were addressed by CPA Gold and are absolutely worth considering.
Advancements in technology and software can help employers track employee productivity. But what happens when an employee’s medical condition influences her ability to use an employer’s technology? In Larson v. Oregonian Publishing, an Oregon Federal District court denied summary judgment to an employer in a disability discrimination lawsuit under the ADA under what’s known as the “cat’s paw theory”.
Many legal issues are easier to articulate than they are to resolve. For example, suppose State Y does not recognize a testimonial privilege but a witness is called to testify from State X which does recognize the privilege. Can the witness who holds the privilege claim it during litigation pending in State Y? Due to differing legal constructs applied by state courts, it can be an onerous task for counsel to determine whether certain documents or communications are considered privileged or are discoverable in interstate litigation.
In the professional liability world, errors occur. To quote Forrest Gump, “*% happens!” These errors can carry great consequences, and can include payouts by insurers under E&O policies. However, what happens when there is a possibility to rectify the error and place the would-be plaintiff in a position where they were before? Also, how conceivable is it to utilize funds from other sources as a means to bring closure to claims.
There is a growing phenomenon of securities class action and shareholder derivative suits arising from the #MeToo movement. Specifically, these suits address the alleged failure of corporations to disclose in public filings and/or prevent sexual harassment by corporate officers and directors. Moreover, the suits allege a corporate culture permitting such conduct to be engaged in. The latest suit targets a well-known pizza chain.
On August 13, 2018, New York State Governor Andrew M. Cuomo signed an anti-hazing bill targeting student hazing at higher education institutions. The bill amends the New York Penal Code and prohibits certain physical contact as well as the physical activity requirements traditionally found in many student organizations’ initiation ceremonies, and which frequently result in serious injury, and sometimes in fatalities.
Unlike most licensed professions, the practice of law can significantly restrict an attorney's geographic mobility. If an attorney wishes to move to another state, it typically requires at least one year of planning before the move is possible. This may include studying for and successfully taking the new state's bar examination, re-taking the Multistate Professional Responsibility Exam, and going through another character and fitness review. However, the Uniform Bar Examination is now used in the majority of states and there appears to be significant momentum toward a more relaxed approach to attorney licensing. While a recent decision by the Ohio Board of Commissioners on Character and Fitness may appear to be a halt on this new trend, it will likely also serve as one of UBE proponents' key examples of an arguably archaic system that must be changed.