Real Protection for Real Estate Assets: Court Ruling Reinforces Importance of D&O Insurance
October 01, 2024 —
Hunton Insurance Recovery BlogEarlier this month, an Illinois federal district court held that a liability insurer had no duty to defend or indemnify a property management company or its owner in lawsuits that included allegations of intentional conduct. The suits accused the owner of concealing financial information from and engaging in a scheme to increase tax liability and decrease profit distributions to a minority owner. This case reinforces the importance of maintaining D&O insurance as part of a comprehensive liability insurance program to protect against potential gaps in coverage that could result from allegations of intentional or knowing acts.
Background
The court in Old Guard Insurance Company v. Riverway Property Management, LLC et al., No. 1:23-cv-01098 (C.D. Ill. Sep. 6, 2024) was asked to determine whether Old Guard Insurance Co. was required to defend or indemnify Riverway Property Management LLC or its owner under two commercial general liability policies in relation to state court lawsuits. The lawsuits alleged that Riverway’s owner intentionally and improperly misappropriated funds and that the property management company knowingly and substantially assisted with this wrongful scheme.
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Hunton Andrews Kurth LLP
Nondelegable Duties
June 04, 2024 —
David Adelstein - Florida Construction Legal UpdatesHave you heard the expression “nondelegable duty”? The issue of a nondelegable duty comes into play when a party hires an independent contractor and the independent contractor commits negligence, primarily in the personal injury context. In other words, a plaintiff wants to hold a defendant liable for the injuries caused by the defendant’s independent contractor.
A nondelegable duty is one that “may be imposed by statute, contract, or the common law. In determining whether a duty is nondelegable, the question is whether the responsibility at issue is so important to the community that an employer should not be allowed to transfer it to a third party.” Garcia v. Southern Cleaning Service, Inc., 360 So.3d 1209, 1211 (Fla. 3d DCA 2023) (internal citation omitted).
When it comes to CONTRACTUAL duties:
[S]pecifically the principle that one who undertakes by contract to do for another a given thing cannot excuse himself to the other for a faulty performance by showing that he hired someone else to perform the task and that other person was the one at fault. In other words, where the contracting party makes it her or his duty to perform a task, that party cannot escape liability for the damage caused to the other contracting party by the negligence of independent contractors hired to carry out the task.
Gordon v. Sanders, 692 So.2d 939, 941 (Fla. 3d DCA 1997).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Is Your Website Accessible And Are You Liable If It Isn't?
January 06, 2020 —
Kyle Janecek and Jeffrey Dennis - Newmeyer DillionTo anyone who does business online - beware. While the ADA has been in play for years, it did not necessarily account for all the technological advances that have been made over time. Specifically, when it comes to accommodations - what accommodations can and should be made within a website, and whether accommodations should be made on all websites or just some. However, because of this, a new type of lawsuit has emerged, and is slowly becoming more prominent. Since the Supreme Court refused to clarify this particular area of law, we must turn to the recent Ninth Circuit Ruling in Robles v. Domino's for guidance.
What Happened in Robles v. Domino's?
As part of a spree of litigation, Guillermo Robles had sued Domino's Pizza due to the lack of accessibility for the Domino's smartphone application and website. Mr. Robles is blind, and neither the website nor application, which allowed users to order Domino's food for pickup or delivery, and offer exclusive discounts, were accessible to him. The Domino's website and application were both incompatible with his chosen software, prompting a lawsuit in 2016. After a short success in the trial court due to the lack of guidance given to websites and applications in how to accommodate for the ADA, the Ninth Circuit overruled the trial court, finding that: (1) the ADA applied to Domino's as there was a nexus between the Domino's website and app, and physical restaurants; and (2) the lack of guidance to Domino's did not violate its right to due process.
The ultimate effect of Robles v. Domino's found that businesses cannot necessarily avoid ADA litigation, even though the federal government hasn't given guidelines on how to make a website or mobile application accessible.
What Happened at the Supreme Court?
Back in June, Domino's appealed the Ninth Circuit decision, prompting a flurry of amicus briefs. This was done, in part, because there is a circuit split between the Sixth, Ninth, and Eleventh Circuits requiring that a website has a physical nexus to a place of public accommodation (i.e. a "brick-and-mortar" location), and the First, Second, Fifth and Seventh Circuits, which will rule that a website is a place of public accommodation if it does something a place of public accommodation would do (i.e. Netflix showing films). In addition, parties aside from Domino's have been looking for further guidance given the lack of comments from the Department of Justice and Congress. This is especially relevant because the Department of Justice has been considering the application of the ADA to the internet from 1996 to 2018, resulting in some inconsistent comments regarding the need for rule making.
This had pushed Domino's and others to attempt to end the ongoing regulation through litigation and furthermore, due to the decision in the Ninth Circuit, to avoid the Domino's holding from creating a "defacto" requirement.
How Do You Prepare?
While there is an off-chance that this kind of civil ADA litigation will resurface to the Supreme Court, these claims tend to settle relatively quickly, and ultimately may prevent courts from providing any solid or concrete guidance on accessibility until either the Department of Justice provides guidelines or Congress amends the ADA to specifically address website accessibility.
However, a determination of what is "accessible" may be put forward due to the new proposed regulations for the CCPA set forth by California's Attorney General. The proposed regulations specifically state that a privacy policy should be accessible to consumers with disabilities, and at a minimum, should provide information on how a consumer with a disability can access the notice in an alternative format. Importantly, this removes the arguments on whether or not the website would have to be a place of public accommodation. It is now widely applicable to every website. Given the CCPA is to be enforced by the Attorney General, this presents a possible situation where the state of California will determine what is accessible through enforcement actions.
In the absence of guidelines however, you have four actions you can take to protect your business.
- Learn the standards. There are unofficial accessibility guidelines such as WCAG 2.0AA that are treated as an industry standard. While this may not completely protect you from claims made by litigants, this will help your business move towards compliance.
- Know and negotiate. When dealing with third party service providers or developers, make sure that accessibility is brought up, discussed, and addressed before moving forward with using that service provider or developer. If the developer or service provider cannot assure that their product is accessible, be prepared to walk away. A business may be found liable for the inaccessibility of an online service provider used by the business to provide the business's services.
- Beta test often. As technology changes or websites are updated to be more device-friendly, new code or functions may make a website less accessible for accessibility devices and software. In addition, just because a website meets the WCAG 2.0AA, this may not account for all accessibility issues, so it would be prudent and beneficial to be thorough.
- Get help. Consider hiring third parties to help you evaluate a plan for accessibility and keep you up-to date for online accessibility issues.
Nonetheless, there is still a significant risk and uncertainty for anyone who does business online, as any business has to be aware of the current general framework of laws and industry accessibility guidelines to hope they meet the murky definition of "accessible."
Kyle Janecek is an associate in the firms Privacy & Data Security practice, and supports the team in advising clients on cyber related matters, including policies and procedures that can protect their day-to-day operations. For more information on how Kyle can help, contact him at kyle.janecek@ndlf.com.
Jeff Dennis (CIPP/US) is the Head of the firm's Privacy & Data Security practice. Jeff works with the firm's clients on cyber-related issues, including contractual and insurance opportunities to lessen their risk. For more information on how Jeff can help, contact him at jeff.dennis@ndlf.com.
About Newmeyer Dillion
For 35 years, Newmeyer Dillion has delivered creative and outstanding legal solutions and trial results that align with the business objectives of clients in diverse industries. With over 70 attorneys working as an integrated team to represent clients in all aspects of business, employment, real estate, privacy & data security and insurance law, Newmeyer Dillion delivers tailored legal services to propel clients' business growth. Headquartered in Newport Beach, California, with offices in Walnut Creek, California and Las Vegas, Nevada, Newmeyer Dillion attorneys are recognized by The Best Lawyers in America©, and Super Lawyers as top tier and some of the best lawyers in California and Nevada, and have been given Martindale-Hubbell Peer Review's AV Preeminent® highest rating. For additional information, call 949.854.7000 or visit www.newmeyerdillion.com.
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Rent Increases During the Coronavirus Emergency Part II: Avoiding Violations Under California’s Anti-Price Gouging Statute
April 06, 2020 —
Dan Schneider - Newmeyer DillionIn my earlier article, Profiting From Fear: What You Need to Know About Price Gouging During the Coronavirus Emergency, I discuss price gouging and how the anti-price gouging statute, California Penal Code 396 (“CPC 396”), protects buyers of goods and services deemed vital and necessary for the health, safety and welfare of consumers. Part II of the article provides guidance to landlords on the parameters applicable to acceptable price increases and focuses attention on the application of CPC 396 to rental housing and related issues.
California Penal Code 396
As it pertains to housing, defined as “any rental housing with an initial lease term of no longer than one year,” price gouging occurs when a landlord increases the rent of an existing or prospective tenant by more than 10 percent of the previously charged or advertised price following an emergency or disaster declaration for a period of 30 days.2 A residential landlord is only allowed to increase rent in excess of 10 percent if “the increase is directly attributable to additional costs for repairs or additions beyond normal maintenance that were amortized over the rental term that caused the rent to be increased greater than 10 percent or that an increase was contractually agreed to by the tenant prior to the proclamation or declaration” (CPC 396(e).) Further, landlords are prohibited from evicting a tenant and then re-renting the property at a rate that the landlord would have been prohibited from charging the evicted tenant under the statute (CPC 396(f).)3
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Dan Schneider, Newmeyer DillionMr. Schneider may be contacted at
daniel.schneider@ndlf.com
DE Confirms Robust D&O Protection Despite Company Demise
February 18, 2015 —
James Yoder, Michael Onufrak and Siobhan Cole – White and Williams LLPOn Feb. 5, 2015, the United States Bankruptcy Court for the District of Delaware, per Judge Brendan L. Shannon, entered proposed findings of fact and conclusions of law in favor of the former president and CEO of Ultimate Escapes Inc., James M. Tousignant, and its chairman, Richard Keith, after determining that Tousignant’s actions in negotiating and executing a controversial asset purchase agreement were protected by the business judgment rule, despite the demise of the company a short time later. The failure of a business strategy, in and of itself, does not create liability on the part of the former directors and officers of a bankrupt company.
Background
Ultimate Escapes was a luxury destination club that provided its members with access to high-end vacation residences around the world. Unfortunately, Ultimate Escapes’ business suffered greatly from the economic downturn that began in 2008, and on Sept. 20, 2010, Ultimate Escapes filed voluntary petitions for relief pursuant to Chapter 11 of the Bankruptcy Code.
Reprinted courtesy of White and Williams LLP attorneys
James Yoder,
Michael Onufrak and
Siobhan Cole
Mr. Yoder may be contacted at yoderj@whiteandwilliams.com
Mr. Onufrak may be contacted at onufrakm@whiteandwilliams.com
Ms. Cole may be contacted at coles@whiteandwilliams.com
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NYC Rail Tunnel Cost Jumps and Construction Start Pushed Back
October 10, 2022 —
Elise Young - BloombergThe cost of the New York City-area Gateway rail tunnel project climbed to $16.1 billion and the expected start of construction was pushed to 2024, its overseer said Wednesday. The plan is to seek more federal aid to cover the rising cost.
The new estimate, with finance charges, was 14% higher than last year’s projection to build a passenger rail tunnel between New York and New Jersey, and rehabilitate Amtrak and New Jersey Transit’s only existing link. The start of major construction, once proposed for mid-2023, now is expected in mid-2024, according to a statement from the Gateway Development Commission.
The tunnel is anticipated to be in service by 2035.
Half the cost was expected to be covered by the federal government, and the rest by New York and New Jersey, with contributions from Amtrak and the Port Authority of New York and New Jersey. The commission now will seek additional US funding under the 2021 Infrastructure Investment and Jobs Act. It expects a full funding grant agreement in early 2024, with construction starting later that year.
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Elise Young, Bloomberg
California Supreme Court Declares that Exclusionary Rule for Failing to Comply with Expert Witness Disclosures Applies at the Summary Judgment Stage
March 01, 2017 —
Bruce Cleeland & Michael J. Worth - Haight Brown & Bonesteel LLPIn Perry v. Bakewell Hawthorne, LLC, 2017 No. S233096, the California Supreme Court held that when a trial court determines an expert opinion is inadmissible because expert disclosure requirements were not met, the opinion must be excluded from consideration at summary judgment if an objection is raised.
Plaintiff Mr. Perry sued defendants Bakewell Hawthorne, LLC and JP Morgan Chase Bank, NA, alleging personal injuries after plaintiff fell at a property owned by Bakewell and leased by Chase. Defendant Chase served plaintiff with a demand for the exchange of expert witness information. Plaintiff made no disclosure. Thereafter, the trial date was continued. Defendant Bakewell subsequently filed a motion for summary judgment. In opposition, plaintiff submitted declarations of two experts opining that the stairs on which plaintiff fell were in disrepair and failed to comply with building codes and industry standards.
Reprinted courtesy of
Bruce Cleeland, Haight Brown & Bonesteel LLP and
Michael J. Worth, Haight Brown & Bonesteel LLP
Mr. Cleeland may be contacted at bcleeland@hbblaw.com
Mr. Worth may be contacted at mworth@hbblaw.com
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Construction Defect Claim over LAX Runways
October 22, 2013 —
CDJ STAFFThe city of Los Angeles is claiming that problems with the south runway at Los Angeles International Airport are due to construction defects. The city as filed a lawsuit against four of the firms involved in building the runway, CH2M Hill, R&L Brosamer, HNTB, and Tutor-Saliba Corp. The lawsuit also includes the possibility of naming up to 200 individuals or corporations.
The suit alleges that the firms incorrectly installed the concrete, leading to accelerated wear. As a result, renovation of the runway will likely have to be done earlier than anticipated. The runway was opened in 2007 as part of a safety improvement effort.
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