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Posts Tagged ‘Florida’

Federal Court Finds Exclusions in HOA GL Policies Applicable to Wrongful Death Suit

Posted on: September 7th, 2018

By: Peter Catalanotti

Colony Insurance issued a commercial general liability policy to The Courtyards at Hollywood Station Homeowners Association Inc. (“HOA”) that operates an apartment complex in Florida. Great American Alliance Insurance issued an umbrella policy to the HOA.

Two tenants were killed in their sleep by carbon monoxide poisoning at a unit in the complex.

The mother of one of the tenants filed a wrongful death suit in state court alleging that the deaths were caused by a car fumes that traveled through the HVAC of the complex.

The insurance carriers filed a declaratory relief lawsuit in federal court arguing that they are not obligated to cover the wrongful death suit because of a total pollution exclusion.

Both policies contain an exclusion that the policy does not provide for coverage for “bodily injury which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants at any time.”

The exclusion contains an exception whereby it does not apply to bodily injury caused by “smoke, fumes, vapor or soot produced by or originating from equipment that is used to heat, cool or dehumidifier the building.”

The HOA argued that the exception should apply because the carbon monoxide seeped through the AC vents.

In July 2018, the Court granted plaintiffs’ motion for summary judgment.  The Court found that the complaint “only lists the motor vehicle left running in the garage as a potential source of the carbon monoxide, and the Court cannot infer any other sources to create a duty to defend” (emphasis added).

According to the Court,

Since the source is unknown, Defendants would have the Court find that the carbon monoxide may have been produced by or originated from the building’s heating, cooling, or dehumidifying equipment, so the Exception could potentially apply. However, Plaintiffs’ duty to defend Courtyards HOA cannot arise from an inference that the carbon monoxide could have been produced by, or originated from, equipment used to heat, cool, or dehumidify the Unit.

The Court ultimately found that the facts alleged do not fall within the exception. Therefore, the carriers had no duty to defend in the underlying wrongful death action.

Colony Insurance Co. et al. v. The Courtyards at Hollywood Station Homeowners Association Inc. et al., Case #17-62467, in the U.S. District Court for the Southern District of Florida.

If you have any questions or would like more information, please contact Peter Catalanotti at [email protected].

Don’t Get Bitten… Are You In Compliance With DOL’s COBRA Continuation Coverage Election Notice?

Posted on: August 21st, 2018

By: Pamela Everett

The United States District Court for the Middle District of Florida has certified a class action suit against Marriott International, Inc. for allegations that it failed to provide required notices of eligible terminated employees’ right to continued health care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).  The law suit was filed by Alina Vazquez, individually and on behalf of all others similarly situated, who alleges violations of the Employee Retirement Income Security Act of 1974 (ERISA), as amended by COBRA.  The Plaintiff asserted that after her termination as a covered employee and participant in Marriott’s health plan she was not provided with adequate notice of her rights to continued coverage under COBRA thus causing her to fail to enroll and incur excessive medical bills.

Marriott’s  plan provided medical benefits to employees and their beneficiaries, and is an employee welfare benefit plan within the meaning of 29 U.S.C. § 1002(1) and a group health plan within the meaning of 29 U.S.C. § 1167(1).  COBRA requires the plan sponsor of each group health plan normally employing more than 20 employees on a typical business day during the preceding year to provide each qualified beneficiary who would lose coverage under the plan as a result of a qualifying event to elect, within the election period, continuation coverage under the plan.  This notice must be in accordance with the regulations prescribed by the Secretary of Labor. To facilitate compliance with these notice obligations, the Department of Labor (“DOL”) has issued a Model COBRA Continuation Coverage Election Notice which is included in the Appendix to 29 C.F.R. § 2590.606-4.

Plaintiff alleged that, “Marriott authored and disseminated a notice that was not appropriately completed, deviating from the model form in violation of COBRA’s requirements, which failed to provide Plaintiff notice of all required coverage information and hindered Plaintiff’s ability to obtain continuation coverage”.  The  Model Notice also requires that notice shall be written in a manner calculated to be understood by the average plan participant.   Specifically, in her suit the Plaintiff asserted that Marriott’s Notice violated the following requirements:

a. The Notice violates 29 C.F.R. § 2590.606-4(b)(4)(i) because it fails to provide the name, address and telephone number of the party responsible under the plan for the administration of continuation coverage benefits. Nowhere in the notice provided to Plaintiff is any party or entity clearly and unambiguously identified as the Plan Administrator.

b. The Notice violates 29 C.F.R. § 2590.606-4(b)(4)(iv) because it fails to provide all required explanatory information. There is no explanation that a legal guardian may elect continuation coverage on behalf of a minor child, or a minor child who may later become a qualified beneficiary.

c. The Notice violates 29 C.F.R. § 2590.606-4(b)(4)(vi) because it fails to provide an explanation of the consequences of failing to elect or waiving continuation coverage, including an explanation that a qualified beneficiary’s decision whether to elect continuation coverage will affect the future rights of qualified beneficiaries to portability of group health coverage, guaranteed access to individual health coverage, and special enrollment under part 7 of title I of the Act, with a reference to where a qualified beneficiary may obtain additional information about such rights; and a description of the plan’s procedures for revoking a waiver of the right to continuation coverage before the date by which the election must be made.”

In her certification of the class, U.S. District Judge Mary S. Scriven also rejected Marriott’s argument that Vazquez’s claims were not typical because Vazquez could not understand English, could not  have understood the notice once it had been translated and could not afford COBRA continuation coverage.  Currently there is no requirement that the Notice be provided in any language other than English.  Perhaps this suit will change that requirement in a manner similar to some of the provisions in the Affordable Care Act.

Most importantly, this case highlights the importance of ensuring that your company complies with DOL regulations, and to the extent practicable, utilizes the forms provided.

If you have any questions or would like more information, please contact Pamela Everett at [email protected].

EEOC Settlement With Florida Hotel Is A Reminder To Be Careful In Implementing A Mass Termination Program

Posted on: August 1st, 2018

By: Jeremy Rogers

Recently, the EEOC announced a settlement in a lawsuit brought against SLS Hotel in South Beach.  The lawsuit, filed in 2017, followed an investigation into charges made by multiple Haitian former employees who had been terminated in April 2014. They worked as dishwashers in three separate restaurants located in the SLS Hotel.  They alleged that they had been wrongfully terminated in violation of Title VII of the Civil Rights Act on the basis of race, color, and/or national origin. All told, there were 23 dishwashers fired on the same day in 2014, all but 2 of which were Haitian.  On the date of termination, each terminated employee was called into a meeting with the HR department and fired.  When fired, they allege, they were told that they must sign a separation and final release in order to receive their final paychecks.  Prior to termination, they claim that they had been subjected to considerable forms of harassment including verbal abuse (they assert they were called “slaves”), being reprimanded for speaking Creole among themselves while Latinos were allowed to speak Spanish, and being assigned more difficult tasks than non-Haitian employees.

What makes this case interesting is that SLS had re-staffed these positions using a third-party staffing company. The new staff supplied by the staffing company were primarily light-skinned Latinos. The new staff also included at least one employee who had been terminated by SLS, but that individual was also Latino.  Articles about this case from when it was filed show that the EEOC took the position that SLS was attempting to hide their discrimination behind the use of the staffing company. SLS, for their part, asserted that they had made the decision to change to the use of a staffing company 2 years before the mass termination. Despite this, the district director emphasized once again, when the EEOC announced the settlement, that the EEOC will not allow companies to hide behind business relationships to engage in discriminatory practices.  This was, according to the EEOC, just such a case.

So how egregious did the EEOC believe this case to be?  They accepted settlement on behalf of 17 workers for the sum of $2.5 million, which works out to just over $147,000.00 per employee if split equally.

If you have any questions or would like more information, please contact Jeremy Rogers at [email protected].

Insuring Against Rule 68 Offers of Settlement

Posted on: June 28th, 2018

By: Matt Grattan

One tool defense lawyers in Georgia frequently use to induce settlements is an offer of settlement under O.C.G.A. 9-11-68.   Rule 68 allows either party to a tort action to serve a written offer to settle the claim, so long as the offer is made within a certain time and satisfies several other elements under the statute.  If a Rule 68 offer is properly made by a defendant and rejected, that code section allows a defendant to recover its post-rejection attorney’s fees and expenses from a plaintiff in the event the plaintiff does not recover at least 75% of the offered amount at trial.

It is easy to see how the fee-shifting provision in Rule 68 can provide defense attorneys with leverage during settlement negotiations.  Simply put, it forces plaintiffs to put some skin in the game.  Because paying the defendant’s attorney’s fees and costs can significantly reduce or even eliminate a plaintiffs’ award at trial (and in turn a plaintiffs’ attorneys’ fees), plaintiffs may be more inclined to settle rather than face such risks at trial.

The fee-shifting benefit from Rule 68, however, could potentially be diminished by companies like LegalFeeGuard.   Established in Florida in 2012 to combat that state’s offer of settlement statute, LegalFeeGuard has recently started offering insurance policies in Georgia that cover attorney’s fees and costs under O.C.G.A. 9-11-68.  LegalFeeGuard offers no-deductible policies with limits as low as $10,000 and as high as $250,000.   Policies are triggered by a judgment in a bench trial or the return of a verdict in a jury trial, and are available to plaintiffs and defendants for a wide array of cases, including personal injury, breach of contract, and intentional torts.

What does the availability of fee-shifting insurance mean for defense lawyers and their clients?  LegalFeeGuard recently launched in Georgia (and the author is unaware of any other similar companies), so it is tough at this point to determine what kind of impact fee-shifting insurance will have on litigation in Georgia.  But this is certainly a development for lawyers to keep an eye on (particularly since LegalFeeGuard claims on its website to have sold over 1,000 policies in Florida) as such insurance may persuade more plaintiffs to roll the dice and take their case to trial knowing the downside risk of paying fees and costs is reduced, if not altogether eliminated.

If you have any questions or would like more information, please contact Matt Grattan at [email protected].

Arbitration Agreement Litigation Wins Continue to Fall Like Dominoes for Pizza Hut

Posted on: June 26th, 2018

By: Tim Holdsworth

Following the Supreme Court’s opinion in Epic Systems that class and collective actions waivers in arbitration agreements are enforceable, a federal court recently granted a motion to compel arbitration to one of the nation’s largest Pizza Hut franchisees in a lawsuit in Illinois.

In Collins et al. v. NPC International Inc., case number 3:17-cv-00312, in the U.S. District Court for the Southern District of Illinois, drivers from Illinois, Florida, and Missouri filed a collective action under the Fair Labor Standards Act asserting that their employer had failed to reimburse them for vehicle expenses. In May 2017, the judge stayed the franchisee’s motion to compel individual arbitration pending the Supreme Court’s ruling in Epic Systems. The franchisee renewed that motion after the Supreme Court’s ruling, and the judge granted it.

The drivers will now have to bring their claims individually against the franchisee in arbitration, likely saving the franchisee expenses and time.

Epic Systems gave credence to arbitration agreements containing class and collective action waivers, and employers using them continue to reap the benefits. If you have any questions about the issues above or want to learn more about implementing arbitration agreements, please contact me at [email protected], or any of Freeman, Mathis & Gary’s experienced labor and employment law attorneys.