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Archive for the ‘E-Alert’ Category

Right of Contribution among Joint Tortfeasors is Still Viable in Georgia

Posted on: April 2nd, 2013

By: Bart Gary

Most believed that the right of contribution among joint tortfeasors (two or more persons whose negligence combine to cause injury or damage) was abolished in Georgia in 2005 when the tort reform legislation went into effect. On March 28, 2013, the Georgia Court of Appeal issued its opinion in Zurich Amer. Ins. Co. v. Heard, 2013 WL 124544, and held that the concept of contribution in negligence cases is not completely dead. The case involved a newly constructed hotel with mold and moisture problems. The hotel owner initiated an arbitration proceeding against the general contractor, whose insurers settled the claims, but the contractor did not acknowledge liability and the parties agreed that the settlement did not fully satisfy the owner’s claims. The hotel owner also filed a lawsuit against the designers (architect and engineers) for the hotel and settled with the designers for a relatively modest amount. The insurers of the general contractor sued the designers to recover in contribution and indemnity. The trial court granted summary judgment to the designers as to the contribution claim, but the Court of Appeals reversed that ruling, and held:

[J]oint liability and the right of contribution no longer exist when damages have been apportioned by the trier of fact under this subsection. Based upon this plain language, it cannot be interpreted to abolish the right of contribution between settling joint tortfeasors when there has been no apportionment of damages by a trier of fact. When enacting subsection (b) of OCGA § 51–12–33 in 2005, the Legislature left OCGA § 51–12–32 intact in its entirety and it remains valid law. This latter Code section provides:

(a) Except as provided in Code Section 51–12–33, where a tortious act does not involve moral turpitude, contribution among several trespassers may be enforced just as if an action had been brought against them jointly. Without the necessity of being charged by action or judgment, the right of a joint trespasser to contribution from another or others shall continue unabated and shall not be lost or prejudiced by compromise and settlement of a claim or claims for injury to person or property or for wrongful death and release therefrom.

(b) If judgment is entered jointly against several trespassers and is paid off by one of them, the others shall be liable to him for contribution.

(c) Without the necessity of being charged by an action or judgment, the right of indemnity, express or implied, from another or others shall continue unabated and shall not be lost or prejudiced by compromise and settlement of a claim or claims for injury to person or property or for wrongful death and release therefrom.

(Emphasis supplied.) Based upon the plain language of this statute, the right of contribution between joint tortfeasors has not been completely abolished by the Legislature’s enactment of OCGA § 51–12–33(b), and the trial court erred by holding otherwise. (Citations and footnotes omitted; emphasis by the court).

Settlements of negligence cases must account for the potential for contribution claims by or against a settling party, who is or may be a joint tortfeasor, as was the case before 2005.

Stranger Danger: Georgia Joins Minority View and Allows Assignability of Legal Malpractice Claims

Posted on: April 2nd, 2013

By: Dana Maine

Legal malpractice carriers be aware that you will now be on the hook for defending your insureds in actions brought by strangers to any attorney-client relationship. The Georgia Supreme Court just answered the question on the minds of Georgia attorneys and legal malpractice practitioners across the country – legal malpractice claims are assignable in Georgia, as long as they are not presented in the nature of a personal injury. Villanueva v. First American Title Insurance Company, 2013 WL 1092589 (March 18, 2013). A unanimous Georgia Supreme Court, with seemingly little difficulty, determined that Georgia’s assignability statute (O.C.G.A. § 44-12-24) unequivocally directed the outcome of this case.

The facts of the case are not unusual. The defendant-attorney, Derick Villanueva, began working with the Moss Firm in January 2007. Three months later, he opened a new firm, Moss & Villanueva, with his boss George Moss. Shortly thereafter, in May 2007, Villanueva acted as the closing attorney and settlement agent for a mortgage refinance. As part of that transaction, Villanueva signed closing instructions issued by Homecomings Financial, LLC, which was replacing two prior mortgages on the property, totaling almost $1.2 million. As part of the closing instructions, Villanueva acknowledged that he was to pay off the earlier mortgages.

As part of the closing activities, Homecomings wired the refinance funds to an escrow account used by Villanueva’s old firm, because the account for the new firm had not been established at the time of the closing. Unfortunately, a non-lawyer who had access to the escrow account withdrew funds from the account and the previous mortgages were not paid in full.

Homecomings’ title insurer, First American Title Insurance Company, paid off the balances on the previous mortgages. Thereafter, First American filed suit against Villaneuva accusing him of committing malpractice by failing to pay off the mortgages. First American based its malpractice claim on its right as assignee from Homecomings, which was included in the closing protection letter First American issued to Homecomings.

In reaching its decision, the Georgia Supreme Court cited to the general rule that permits assignment of a right of action “if it involves, directly or indirectly, a right of property,” while “[a] right of action for personal torts or for injuries arising from fraud to the assignor may not be assigned.” O.C.G.A. § 44-12-24. The Court held that the damage involved in the case involved financial loss which is akin to injury to property; therefore, the malpractice claims are assignable. Discounting the public policy concerns relied upon by the majority of state courts to bar the assignment of legal malpractice claims, the Georgia Court said the legislature has not seen fit to amend the Georgia statute to prohibit the assignment of these claims. Therefore, the Court saw no reason to read the prohibition into the statute.

The vast majority of legal malpractice claims involve financial loss and will now be assignable in Georgia. The pool of potential plaintiffs for legal malpractice claims has just expanded exponentially. Insurers can be expected to cover the increased risk with a corresponding increase in premiums. As a practical matter, in these difficult economic times, malpractice insurance now represents an additional source of funds from which a disgruntled litigant can seek recompense.

New FMLA Poster and Model Forms Issued

Posted on: March 8th, 2013

By Amy Bender

The Department of Labor (“DOL”) has issued a revised Family and Medical Leave Act (“FMLA”) notice poster that all covered employers are required post by March 8, 2013. This poster summarizes the major provisions of the FMLA and instructs employees how to file a complaint. It also references some of the recent changes to the FMLA regulations regarding military family leave and airline flight crews (see “DOL Issues Final Rule Implementing FMLA Expansions for Military Caregivers and Airline Flight Crew Employees,” February 6, 2013 post on FMG’s BlogLine for Employment Law). The poster must be displayed in a conspicuous place where employees and applicants can see it and must be displayed at all locations, even if there are no eligible employees.

In addition, the DOL has issued updated model forms. Although use of these forms is optional for covered employers, those who do use them should begin using the revised forms immediately. The forms expire on February 28, 2015. These forms do not contain any substantive changes, despite the recent military and airline crew revisions to the regulations.

Links to the revised poster and forms are below:

The Family and Medical Leave Act Poster

WH-380-E Certification of Health Care Provider for Employee’s Serious Health Condition

WH-380-F Certification of Health Care Provider for Family Member’s Serious Health Condition

WH-381 Notice of Eligibility and Rights & Responsibilities WH-382 Designation Notice

WH-384 Certification of Qualifying Exigency For Military Family Leave

WH-385 Certification for Serious Injury or Illness of Covered Servicemember — for Military Family Leave

WH-385-V Certification for Serious Injury or Illness of a Veteran for Military Caregiver Leave

For more information, contact Amy Bender at 770.818.1421 or [email protected].

Employers Must Act Now on Healthcare Law

Posted on: January 16th, 2013

By David Cole

This is a critical time for employers to be aware of their obligations under the healthcare law and begin taking steps needed for compliance. As just a brief reminder, some of the law’s key provisions for employers are:

  • Mandatory reporting of health benefit information on employee W2s;
  • Notice of exchanges due to employees by March 1, 2013;
  • Automatic enrollment of employees in employer-sponsored health plans; and
  • Required health benefits to employees by January 1, 2014, for employers with 50 or more full-time and full-time equivalent employees.

Although some of these requirements do not go into effect until 2014, each employer’s coverage by the statute will be determined based on its number of employees during the 2013 calendar year. In addition, employers should not wait until the last minute to determine their coverage by the statute and what they need to do to comply. Employers face stiff penalties for non-compliance, and we expect the Obama administration and the IRS to enforce the law strictly as it goes into effect.

Please contact David Cole at 770.818.1287 or [email protected] if you have any questions about your organization and the healthcare law. You also can hear Mr. Cole discuss the healthcare law live on the show Prime Time Lawmakers at 7:00 p.m. tonight, January 16th, on Georgia Public Broadcasting.

Georgia Court of Appeals: General Conditions Costs and Interest Cannot Be Included in Claim of Lien

Posted on: July 12th, 2012

By Kamy Molavi

On July 11, 2012, the Georgia Court of Appeals issued an opinion in the case of182 Tenth, LLC v. Manhattan Construction Company (2012 WL 2819414).  The Court ruled that “items of general conditions costs described in the payment applications were not lienable because they were not labor, services, or materials which actually went into and became a part of the property.”  The Court based its decision on an interpretation of prior case law to the effect that liens apply only to “work and material or machinery [which] have increased the value of the realty by becoming a part thereof.”  (more…)