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Posts Tagged ‘Court of Appeals’

Is An Employee’s Intentional Act An Employer’s “Accident”?

Posted on: July 10th, 2018

By: Rebecca Smith and Zach Moura

It may just be, according to the California Supreme Court’s recent decision in Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co., Inc. (June 4, 2018, No. S236765).  In Liberty v. Ledesma, the underlying lawsuit was brought by a minor who sought damages for molestation committed by an employee of a general contractor (“L&M”) while the employee was working on a long-term construction project at the minor’s school.  In response to this underlying suit and the tendering of the action by L&M to its carrier, Liberty Surplus Insurance Corporation and Liberty Insurance Underwriters (“Liberty”), Liberty filed a declaratory relief action seeking to adjudicate that they had no duty to provide coverage under a general liability policy.

The certified question presented to the Supreme Court by the 9th Circuit Court of Appeals was when a third party sues an employer for negligent hiring, retention and supervision of an employee who intentionally injured that third party, does the suit allege an “occurrence” under the employer’s general liability policy?  The Supreme Court responded that the answer turns on whether the injury can be considered “accidental” and concluded “it can.”

In reaching its decision, the Supreme Court acknowledged that the act of L&M in hiring the employee who later turned out to be the molester was intentional and that the employee’s molestation of the student was also intentional; however, held that because L&M did not “expect” its employee to molest a student, an accident transpired as required by the definition of “occurrence” in the Liberty policy.  The Court emphasized that the issue of whether an act constituted an accident for purpose of coverage MUST be viewed from the standpoint of the insured.  Explaining their decision, the Court stated that because the molester’s acts were unanticipated from L&M’s perspective, they were accidents in the context of providing insurance.  The allegedly negligent hiring, retention and supervision were independently tortious acts according to the Supreme Court, which form the basis of their claim against Liberty for defense and indemnification.  Further, the Court stated that the molester’s intentional conduct did not preclude potential coverage for L&M.

While the Supreme Court effectively wiped out a line of California Court of Appeal decisions which held that the unexpected consequences of an intentional act are not an accident, the Court pointed out that if the determination was justified in that if the insurer’s argument regarding the definition of occurrence and accident were accepted, it would leave employers without coverage for claims of negligent hiring, retention or supervision whenever the employee’s conduct is deliberate.  Such a result, the Court opined, would be inconsistent with California law, which recognizes the cause of action even when the employee acted intentionally.

It is expected that the opinion will lead to an increase in claims to insurers from employers facing negligent hiring claims.  It may also lead to an increase in litigation of coverage for liability claims based on intentional acts that result in allegedly unexpected injury, which would previously have been denied on the basis that the unexpected consequences of an intentional act are not an accident and therefore, not an occurrence under personal injury liability coverage.

If you have any questions or would like more information, please contact Rebecca Smith at [email protected] or Zach Moura at [email protected].

$10M Wrongful Death Verdict Against City of Albany Reversed on Sovereign Immunity Grounds

Posted on: June 26th, 2018

By: Wes Jackson

In a much-anticipated opinion, the Georgia Court of Appeals reversed a $10,640,000 trial verdict against the City of Albany on sovereign immunity grounds. Freeman Mathis & Gary attorneys Sun Choy, Jake Daly, and Wes Jackson represented the City as appellate counsel.

At trial, Sheryl Stanford and Wilfred Foster, as co-administrators of their son’s estate, argued that the City was partially responsible for the murder of their son at Brick City, a night club in Albany, after a fight that started in the club.  It was undisputed that, while Brick City was only licensed as a recording studio, the City allowed it to operate as an illegal nightclub even though it knew that the establishment was rife with drug use, illegal alcohol sales, and violence.  In an effort to overcome sovereign immunity, plaintiffs asserted the City maintained a “nuisance” by failing to shutter the illegal club.

After trial, a jury awarded the plaintiffs $15,200,000 in damages, apportioning 70% of the liability to the City. The jury only apportioned 10% of the liability to the owners and operators of Brick City, 13% to the actual murderer, and 1% each to seven participants in the brawl.

In reversing, the Court of Appeals concluded that plaintiffs cannot circumvent sovereign immunity by simply alleging that the City’s discretionary conduct amounted to the maintenance of a “nuisance.” While the plaintiffs may appeal to the Georgia Supreme Court, the case marks an important victory for the City of Albany and strengthens sovereign immunity protections for local governments in Georgia.

For additional questions about this matter or sovereign immunity under Georgia law, please contact Sun Choy ([email protected]), Jake Daly ([email protected]), or Wes Jackson ([email protected]).

Shortening the Statutory Limitations Period in a Residential Lease

Posted on: May 23rd, 2018

By: Jake Daly

Every state has statutes or rules governing the time within which various types of claims must be filed.  In Georgia, the general rule is that a personal injury claim must be brought within 2 years of the date the injury occurred.  Is this an immutable rule, or can it be changed by contract?  Thanks to a recent decision by the Georgia Court of Appeals, we know that a statutory limitations period may be shortened by a provision in a residential lease and that a contractual limitations period of 1 year is valid and enforceable.

The plaintiff in Langley v. MP Spring Lake, LLC allegedly tripped and fell on a crumbling portion of a curb in the parking lot of the apartment complex where she lived.  The incident occurred on March 3, 2014, and the plaintiff filed the lawsuit on March 3, 2016.  Under Georgia’s statute of limitations for personal injuries, the lawsuit would have been timely filed.  However, the lease contained a provision that required any lawsuit against the owner and/or manager to be filed within 1 year of the occurrence giving rise to the claim.  Based on this contractual limitations provision, the trial court granted summary judgment for the defendant, which was represented by Sun Choy and Jake Daly of Freeman Mathis & Gary, LLP.

The Georgia Court of Appeals affirmed the trial court’s decision on May 1, 2018.  The plaintiff’s sole argument on appeal was that a contractual limitations provision should not apply to claims that do not arise out of the contract.  Because the plaintiff’s claim was based on Georgia’s premises liability statute, not the lease, she contended that her claim was subject to the statutory limitations period of two years.  The Court of Appeals disagreed, holding that the absence of a relationship between the lease and the claim was irrelevant because the contractual limitations provision in the lease applied by its own terms to “any legal action.”  There being no statute or public policy prohibiting the shortening of a statutory limitations provision in a contract, the Court of Appeals concluded that the contractual limitations provision in the lease was valid and enforceable and that, therefore, the plaintiff’s claim was time-barred.

We know from this decision that a contractual limitations provision of 1 year is valid and enforceable, but the Court of Appeals did not address the limit of how short such a provision can be.  However, we believe that a contractual limitations provision of 6 months could be valid and enforceable because that is the statutory deadline in Georgia for providing ante litem notice of a claim for money damages to a municipality.  Regardless of where the limit will be drawn by future cases, owners and managers of residential rental property should consider including in their leases a contractual limitations provision of no longer than 1 year.  For assistance with drafting such a provision that will withstand scrutiny by the courts, as well as other provisions that may help limit liability, please contact Jake Daly at [email protected] or (770) 818-1431.

Winemakers Decan’t Warn a Consumer About Every Risk

Posted on: May 16th, 2018

A Pour Result for Plaintiffs’ Attorneys in California, but a Grape Win for Vintners

By: Robyn Flegal

In May 2018, the California Court of Appeals refused to revive a class action lawsuit claiming wines made by fifteen winemakers should contain an arsenic warning. The lawsuit was originally filed in 2015, alleging that these wines exposed consumers to arsenic in violation of California law. The panel of the California Court of Appeals held that the alcoholic beverage warning on these wines sufficiently notified customers about the potential risks associated with consuming the wine, despite the lack of a specific arsenic warning.

California’s Proposition 65—the safe drinking water and toxic enforcement act of 1986—protects the state’s drinking water sources from being contaminated with chemicals known to cause cancer, birth defects, or other reproductive harms. Prop 65 requires businesses to disclose exposures to such chemicals to Californians.

The appeals court held that the Office of Environmental Health Hazard Assessment requires companies to disclose one chemical for each health risk. Thus, because the alcoholic beverage warning alerted customers that wine could result in cancer and reproductive harm, the additional arsenic warning was unnecessary. The failure to provide a separate arsenic warning was therefore not a violation of the regulations.

Companies doing business in California should be aware of Proposition 65 and the labeling and disclosure requirements thereunder. For more information, please contact Robyn Flegal at [email protected] or any of FMG’s Commercial Litigation Professionals.

Antisocial Media: Court Critical of Cop Capturing Curious Citizen’s Cellphone

Posted on: April 23rd, 2018

By: E. Charles Reed, Jr.

The Eleventh Circuit Court of Appeals has held that a police officer violates clearly established law by seizing a bystander’s cellphone at an accident scene in the absence of exigent circumstances.

With the rise of social media and the availability of devices with cameras, newsworthy events and potential evidence of criminal or civil liability can be captured by citizens with fortuitous timing and cellphones. While the methodology of capturing potential evidence has changed, constitutional principles associated with law enforcement’s gathering of that evidence has not. One law enforcement official recently learned this lesson the hard way in Crocker v. Beatty, 2018 U.S. App. LEXIS 8290 (Apr. 2, 2018).

In May 2012, Deputy Steven Beatty arrived at an accident scene involving an overturned SUV.  By the time Beatty had arrived, several bystanders, including a citizen named James Crocker, had taken photographs and video of the scene with their cell phones. Crocker captured images of empty beer bottles, the overturned vehicle and emergency personnel, but no images of the persons involved in the accident. Beatty approached Crocker, took his cellphone and instructed him to leave the area and wait for instructions about when his phone would be returned. Crocker refused to leave and offered to delete the footage in return for his phone. Instead, Beatty placed Crocker under arrest for resisting an officer without violence.

On appeal at the summary judgment stage, the Eleventh Circuit affirmed the trial court’s denial of qualified immunity for Beatty. First, the court rejected the argument that Beatty’s seizure was justified by exigent circumstances because Crocker was a non-suspect bystander with no motive to delete any photographs. The fact that Crocker’s cellphone could later be lost did not create an exigency.

More importantly, the Court held that the right to be free from warrantless seizures of personal property was established with “obvious clarity” in May 2012 such that Beatty should have known his conduct violated federal law. “Our case law has sent a consistent message, predating 2012, about the warrantless seizure of personal property and how exigent circumstances may arise. The technology of the iPhone simply does not change our analysis. To hold otherwise would deal a devastating blow to the Fourth Amendment in the face of sweeping technological advancement. These advancements do not create ambiguities in Fourth Amendment law; the principles remain as always. Because of this, Beatty is not entitled to qualified immunity.”

The Court did not address, and may not have been presented with, the policy implications for agencies responding to mass-casualty or critical incidents in metropolitan centers – where hundreds of witnesses may be present, each with different video clips taken at different times and from different angles.  However, the takeaway from this case is while technology may push products further and further into the future, the prudent law enforcement officer will apply the legal authority of the past to minimize being held liable for his or her actions.

Charles Reed is member of Freeman, Mathis, & Gary’s Government Section and regularly defends government employees in in civil rights cases.  He can be reached at [email protected] or by phone at 678-399-6351.