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Archive for the ‘Tort and Catastrophic Loss’ Category

State and Federal Motor Vehicle Exemptions related to COVID-19

Posted on: March 18th, 2020

By: Josh Ferguson

The Federal Motor Carrier Safety Administration (FMCSA) issued a national emergency declaration and in doing so provided a limited exemption from driver safety regulatory requirements.  The exemption applies “for motor carriers and drivers engaged in the transport of essential supplies, equipment and persons” that provide “direct assistance in support of relief efforts related to the COVID-19 outbreaks.”  The Emergency Declaration was effective March 13, 2020 and remain in effect until the end of the emergency or until 11:59 p.m. (ET) on April 12, 2020, whichever comes sooner.

The declaration defines “Direct assistance” as transportation and other relief services provided by a motor carrier or its driver(s) incident to the immediate restoration of essential services, such as medical care, or essential supplies such as food, related to COVID-19 outbreaks during the emergency.  These include transportation of the following:

  • Medical supplies and equipment related to the testing, diagnosis and treatment of COVID-19;
  • Supplies and equipment necessary for community safety, sanitation, and prevention of community transmission of COVID-19, such as masks, gloves, hand sanitizer, soap and disinfectants;
  • Food for emergency restocking of stores;
  • Equipment, supplies and persons necessary to establish and manage temporary housing, quarantine, and isolation facilities related to COVID-19;
  • Persons designated by federal, state or local authorities for medical, isolation, or quarantine purposes; and
  • Persons necessary to provide other medical or emergency services, the supply of which may be affected by the COVID-19 response.

Direct assistance does not include routine commercial deliveries or transportation of mixed loads that include essential supplies, equipment and persons, along with supplies, equipment and persons that are not being transported in support of emergency relief efforts related to the COVID-19 outbreaks.  Another important aspect is the exemption terminates when a driver or commercial motor vehicle is used to transport cargo or provide services not identified on the list.

Many states have issued public emergencies, and ultimately those emergency powers may include other exemptions for operators of commercial vehicles.  For example, in Georgia, in declaring a public health emergency Governor Kemp stated that the declaration would immediately be used to help some nurses from other states get temporary licenses to practice in Georgia and lift restrictions on commercial truck drivers to let them continue stocking stores with supplies.  Just how these emergency declarations and exemptions factor into tort and employment-related claims will be seen months and years down the road.

Additional information: 

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues every day for the next week. We will discuss the impact of Coronavirus for companies in general, but also for business in insurance, healthcare, California specific issues, cybersecurity, and tort. Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the Coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

Sticks and Stone Can Hurt People, But Disagreement Between NFL Players Is A Reminder That Words Also Can Hurt Us

Posted on: February 20th, 2020

By:  Jeffrey Hord

In the final minute of last November’s NFL game between the Cleveland Browns and the Pittsburgh Steelers, Browns defensive end Myles Garrett ripped off Steelers quarterback Mason Rudolph’s helmet and swung it at Rudolph, hitting him in the head. This attack drew national attention and resulted in an indefinite suspension for Garrett. Despite the shocking nature of the attack, some early speculation that Rudolph might sue Garrett for battery for the this on-field altercation showed no signs of spilling over into the courts…until now.

Last week, during an interview with ESPN’s Mina Kimes, Garrett repeated a claim that he first made in the days following the November brawl: specifically, that Rudolph had sparked the fight by calling Garrett a racial slur. Rudolph has emphatically denied the allegation and also notes that the NFL investigated Garrett’s allegation and concluded that there was “no evidence to support” his claim.

Now, Rudolph’s attorney has responded to Garret’s latest allegation by suggesting that his client may now sue Garrett for slander. In California – where the interview with Kimes took place – slander involves a false statement by one person about another person which tends directly to injure the victim with respect to his office, profession, trade or business. Rudolph essentially contends that his reputation has been damaged by the accusation that he used a racial epithet.

Interestingly, however, Rudolph may not prevail simply by proving that the allegation is false. Rather, if Rudolph is deemed a “public figure” in the eyes of the law, Rudolph then will have to prove that Garrett also acted with actual malice in making the allegation. Under California law, “actual malice” is a higher standard to meet as it must be proven that the false statement was made with actual knowledge that the statement is false or with reckless disregard for the truth. If the fight that started on the field leads to a legal fight off the field, it will be interesting to see if Garrett tries to push it into the NFL’s grievance system, what evidence Garrett relies upon in support of his allegation, whether a court finds that Rudolph is a “public figure” and how Rudolph may try and use the NFL’s report as evidence that he did not utter the alleged word.

If you have questions regarding defamation or other tort claims, feel free to contact Jeffrey Hord at [email protected].

I CAN’T GET NO, SATISFACTION – The Doctrine of Accord & Satisfaction

Posted on: February 12th, 2020

By: Stacey Bavafa

There are two conflicting statutes that govern the issue of Accord and Satisfaction in California: California Code of Civil Procedure §1526 and California Commercial Code §3311.

Enacted in 1987, California Code of Civil Procedure §1526 states that when a check is tendered by a debtor in furtherance of settlement of a disputed claim, and the words “payment in full,” or other words of similar meaning are noted on the check, the acceptance of the check does not constitute an accord and satisfaction if the party accepting the check crosses out the satisfaction language on the check prior to its deposit. In other words, a Claimant could cross out the satisfaction language, cash the check, then continue to bring a claim for the balance they believe is owed.

In 1992, the California Legislature enacted §3311 of the California Commercial Code which contradicts California Code of Civil Procedure §1526 in that it states:

(a) If a person against whom a claim is asserted proves that (1) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (2) the amount of the claim was unliquidated or subject to a bona fide dispute, and (3) the claimant obtained payment of the instrument, the following subdivisions apply.

(b) Unless subdivision (c) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

(c) Subject to subdivision (d), a claim is not discharged under subdivision (b) if either of the following applies:

(1) The claimant, if an organization, proves that (A) within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office, or place, and (B) the instrument or accompanying communication was not received by that designated person, office, or place.

(2) The claimant, whether or not an organization, proves that within 90 days after payment of the instrument, the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This paragraph does not apply if the claimant is an organization that sent a statement complying with subparagraph (A) of paragraph (1).

(d) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim.”

In essence, under California Commercial Code §3311, if a Claimant accepts and cashes a check marked with conspicuous language that the check was tendered in full satisfaction of the claim, the entire debt is discharged regardless of whether the Claimant had crossed out the satisfaction language on the check. The UCC defines conspicuous language as a “term or clause… so written that a reasonable person against whom it is to operate ought to have noticed it.”

So, which law controls?

A California Appellate Court – Woolridge v. J.F.L. Electric, Inc. (2002) 96 Cal.App.4th. Supp. 52, and a Federal District Court – Directors Guild of Am. v. Harmony Pictures, Inc., 32 F. Supp. 2d 1184, 1192 (C.D. Cal. 1998) acknowledged that when two statutes governing the same subject matter cannot be reconciled, the latter in time prevails. As such, both courts held that the provisions of §3311 supersedes §1526.

Therefore, when it comes to settling a claim, ensure the check itself or a written communication accompanying the check contains conspicuous language (e.g. “PAYMENT IN FULL”) to prevent any issues. Thereafter, if a Claimant accepts the check and cashes it, the entire debt is discharged. If a Claimant accepts the check, does not cash it, but instead holds onto it for a period of 90 days or more, the entire debt is discharged. If a Claimant wants to argue that they are still owed additional settlement funds, a remedy may be to file a Motion for Summary Judgment based on the Doctrine of Accord and Satisfaction, citing the statutes and case law above.

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

Undefeated Records: Good for Sports & Business

Posted on: November 1st, 2019

By: Brittany Kurtz

A contentious rivalry between divisional foes late in the season fueled a halftime bathroom brawl in December 2014 leading a Dallas Cowboys fan to file negligence claims against the Philadelphia Eagles organization and its security manager at Lincoln Financial Field. The Cowboys fan alleged a group of Eagles fans repeatedly taunted him, going so far as to grab his star-emblazoned hat and tossing it into a urinal, ultimately ending in an altercation with the Cowboys fan on the ground and surrounded by a handful of attackers. These attackers were never found, but the Cowboys fan alleged his injuries were caused by the Eagles organization and its security manager for failing to provide reasonable security within the bathroom.

Most surprising was the Cowboys fan’s favorable jury verdict in a Philadelphia courtroom. The Philadelphia Eagles organization appealed to the Superior Court as it believed the Cowboys fan failed to meet his burden of proving a duty owed by the organization regarding the security measures in place and was entitled to Judgement N.O.V.

The Superior Court acknowledged the Philadelphia Eagles organization held its property open to the public for business purposes and would be subject to liability for negligent or intentional harmful acts of third persons which it must take reasonable precaution against that which might be reasonably anticipated. Generally, individuals are not liable for the criminal conduct of another absent a preexisting duty. However, the Eagles organization voluntarily undertook a duty to protect its business invitees, including Cowboys fans, from fighting during football games at Lincoln Financial Field. Therefore, the Eagles organization had a duty to protect its invitees against third party conduct when it had reason to anticipate such conduct.

The Superior Court determined the Eagles organization and its security management team as a matter of law did not have notice of violent assaults regularly occurring in its restrooms during games, therefore it was reasonable to not have a stationed security guard at the restrooms. The security logs only demonstrated the Eagles organization was on notice that there were persons who became incapacitated because of intoxication in the restrooms, not violence.

The Cowboys fan also alleged negligent operation of the security program in place as it is known that wearing opposing team apparel to an Eagles’ game is dangerous. However, the security team employs undercover guards wearing the opposing team’s gear in order to identify those members of the convocation of Eagles who harass fans of the opposing team to be addressed. Therefore, the Court determined the Cowboys fan failed to demonstrate the security program was conducted without reasonable care and that the Eagles organization should have reasonably anticipated violent assaults occur in the restrooms and should have been monitored by security. The Court vacated the judgment entered in favor of the Cowboys fan and remanded to the trial court for entry of judgment in favor Philadelphia Eagles organization and its security management team. Pearson v. Phila. Eagles, LLC, 2019 PA Super. 304 (October 11, 2019).

Record keeping played a critical role as the Superior Court relied heavily upon the security logs and documentation of the security team to determine whether the Philadelphia Eagles organization had notice of prior instances of violence occurring in its restrooms during games. Documentation provides objective evidence to the courts and juries which helps to provide them a clearer picture and, in this case, clearly showing a property owner’s lack of notice for third party violence towards its invitees in the restrooms.

If you have any questions or would like more information, please contact Brittany Kurtz at [email protected]

Georgia Federal Judge Enforces Contractual Liability Limitation, Cuts Jury Verdict in Half

Posted on: September 19th, 2019

By: Jake Carroll

A federal judge in Georgia enforced a limitation of liability clause in a construction contract for engineering services—reducing the jury’s award from $5.7 million to just over $2 million. See U.S. Nitrogen LLC v. Weatherly, Inc., No. 1:16-CV-462-MLB, (N.D.Ga. Sept. 16, 2019).

The case arose from the design and construction of an ammonium nitrate solution plant in Midway, Tennessee. The project owner, US Nitrogen (“USN”), hired Weatherly to provide engineering services related to the construction, and entered into a written contract.

Constructing the plant cost more money and took longer than the parties initially anticipated—to the tune of $200 Million. USN attributed more than $30 million of cost overruns and delays to Weatherly’s design, and brought suit against Weatherly for breach of contract, breach of warranty, professional negligence, negligent misrepresentation, and bad faith.

Following discovery, Weatherly moved for partial summary judgment, arguing that the contract contained an enforceable limitation of liability provision which capped the damages USN could seek to fifteen percent (15%) of Weatherly’s contract price. Weatherly also argued that the terms of the contract prevented USN from recovering consequential damages.

The court agreed with Weatherly—finding that USN could only recover up to $2,203,800 of the more than $30 million it was seeking—and the case proceeded to trial for the jury to determine the amount of damages incurred by USN as a result of Weatherly’s breach. Although the jury ultimately awarded $5,755,000 in damages, the court reduced the award to $2,203,800, pursuant to its earlier findings, and consistent with the terms of the contract. However, the judgment is not final: either party may still appeal the decision to the Eleventh Circuit Court of Appeals.

While Georgia courts have long recognized limitation of liability clauses as valid and enforceable, this case is another example of how carefully drafted contract language can mitigate future risk. Typically, a party’s exposure can be limited to the amount of compensation under the contract, or even less in Weatherly’s case. Such clauses are most frequently seen in contracts for services such as agreements with design professionals and testing laboratories. Nonetheless, there is no reason that they could not be included in general contracts and subcontracts.

If you have questions regarding this decision, or any other contract drafting questions, Jake Carroll practices construction and commercial law as a member of Freeman Mathis & Gary’s Construction Law, Commercial Litigation, and Tort and Catastrophic Loss practice groups. Mr. Carroll represents business and commercial entities in a wide range of disputes and corporate matters involving breach of contract and warranty, business torts, and products liability claims.