by KPMLAW | Jun 14, 2016 | KPMBlog, News, Uncategorized, Updates
Written by Gary Reinhardt, Esq. In Virginia, a material misrepresentation in an insurance application may render the insurance policy voidable. Who is an “applicant” is a question that an insurer must answer, particularly with small businesses set up as LLCs or corporations. In Jeb Stuart Auction Services, LLC v. West American Ins. Co., 122 F.Supp.3d 479 (W.D. Va. 2015), the Court ruled on who was the “applicant” when an individual completed an insurance application for an LLC. The person completing the application previously had been convicted of insurance fraud. The insurance application asked, “Has any applicant been indicted for or convicted of any degree of the crime of fraud . . .” The individual completing the application on behalf of the LLC answered “No” to this question. The individual then signed the application at the “Applicant Signature” location. Following a fire, the insurer voided the policy and denied coverage, claiming that the individual’s “No” answer to the fraud question amounted to a material misrepresentation in the application. The insured countered that the individual was not the “applicant.” Instead, the LLC was the “applicant” and the LLC had not been convicted of fraud, the LLC had not materially misrepresented facts on the application and, therefore, the LLC had coverage for the fire. The insurer responded that an LLC obviously cannot complete an application and must speak through its members. Further, in order to assess risk, the application must seek information about the party or parties that make up an LLC. The insurer argued that the failure to disclose the fraud conviction voided the policy. The Court sided with the LLC,...
by KPMLAW | May 24, 2016 | KPMBlog, News, Uncategorized, Updates
Written by Jessica Relyea, Esq. Edited by Brian Cafritz, Esq. With the ubiquitous nature of social media, more and more retail and restaurant establishments are requiring confidentiality clauses in settlement agreements to contain strong penalties that deter a breach. In an effort to streamline litigation should a breach occur, those provisions often contain liquidated damages clauses, which state the parties agree a breach of confidentiality would result in a return of all settlement proceeds. This begs the question, is this provision enforceable? If a plaintiff breaches confidentiality, can you get the settlement funds back? The Supreme Court of Virginia has held, and the Eastern District of Virginia has recently reaffirmed, that parties “may agree in advance about the remedy resulting from a breach, including damages, but only when (i) the actual damages contemplated at the time of the agreement are uncertain and difficult to determine with exactness and (ii) the amount fixed is not disproportionate to the probable loss.” Job v. Simply Wireless, Inc., 2015 U.S. Dist. LEXIS 171535, *11 (E.D. Va. Dec. 22, 2015). A breach in confidentiality would be a good example of when actual damages are unknown, as the facts surrounding the breach are also unknown at the time the release is negotiated and executed. The bigger question for a restaurant or retail establishment to consider is whether or not the amount of damages is proportional to the probable loss. To help answer that question, Virginia courts will allow discovery into a liquidated damages clause to determine if the “stipulated damages are grossly in excess of the actual damages suffered by the non-breaching party.” O’Brian...
by KPMLAW | Apr 25, 2016 | KPMBlog, News, Uncategorized, Updates
Written by Chris Wilson, Esq. Edited by Rachel Riordan, Esq. A recent unpublished opinion by the Virginia Court of Appeals provides important guidance on what a claimant must show to prove that an injury “arose out of” his or her employment. In United Airlines, Inc. v. Taylor, No. 1169-15-4, 2016 Va. App. LEXIS 72 (Va. Ct. App. March 15, 2016), the claimant’s work accident was found non-compensable despite the fact that he lost his balance and fell down several stairs while carrying items totaling around 35 pounds. This case should serve as a reminder that the claimant must show not only that he was injured at work, but that “a condition of the workplace either caused or contributed” to the injury. See Southside Virginia Training Ctr./Commonwealth of Virginia v. Shell, 20 Va. App. 199, 202, 455 S.E. 2d 761, 763 (1995). In other words, the fact that the claimant is carrying something at the time of his injury does not necessarily mean the accident is compensable. In Taylor, the claimant was employed as a ramp agent for United Airlines. His job duties included unloading baggage and other cargo from aircraft. On the day of the accident he was walking up a set of metal stairs while holding two strollers under his arms. Taylor estimated the stroller in his right hand weighed approximately thirty pounds, while the stroller in his left hand weighed about five pounds. As he was walking up the stairs his right knee “popped,” causing him to fall down the stairs and onto his back. His knee then popped back into place. Taylor admitted that the stairs...
by KPMLAW | Apr 25, 2016 | KPMBlog, News, Uncategorized, Updates
Written by Bryan Snyder, Esq. Edited by Chip Kalbaugh, Esq. Recently, the Supreme Court of Virginia was provided the opportunity to reconsider its position on whether or not it recognizes an independent claim for spoliation of evidence. Spoliation of evidence is typically defined as the intentional, reckless, or negligent withholding, hiding, altering, fabricating, or destroying of evidence relevant to a legal proceeding. Initially, the issue arose from a workers’ compensation case when Steve E. Johnson, an employee of Southern States Cooperative Inc. was badly burned by a space heater while working in a warehouse in Henrico County. His injuries occurred when his clothes were ignited as he attempted to start a propane heater on a cold February morning in 2013. Johnson pursued a workers’ compensation claim for both medical damages and lost wages. He claimed that the space heater was a product normally sold by Southern States Cooperative. In addition to his workers’ compensation claim, Johnson also intended to seek recovery on a possible product defect claim, and requested that Southern States preserve the propane heater as evidence. Later, when Johnson’s lawyers and experts requested to examine the heater, they learned that Southern States had thrown it away. In response, Johnson’s lawyers filed a $7.5 million lawsuit for spoliation of evidence arguing that Southern States “negligently interfered with Johnson’s right to pursue a products liability suit.” The elements of a claim for spoliation of evidence are: (1) pending or probable litigation involving the plaintiff; (2) knowledge on part of the defendant that litigation exists or is probable; (3) willful destruction of evidence by the defendant designed to disrupt plaintiff’s...
by KPMLAW | Apr 25, 2016 | KPMBlog, News, Uncategorized, Updates
Written by Gary Reinhardt, Esq. Glass Companies are battling insurers throughout the country claiming that the insurers’ glass claim programs amount to improper “steering.” One particularly active group filed a petition titled “National Right to Fair Trade Petition.” This petition argues that insurers’ glass programs may violate antitrust laws. In order to be ready for such claims, the insurer needs to act consistently and adhere to its insurance policy. A recent skirmish between a glass repair company and insurers resulted in an early win for the insurers. In Clear Vision Windshield Repair, LLC, as assignee of Star Davis v. Elephant Insurance Company (numerous companion cases accompanied this ruling involving Erie Insurance and First Liberty), the Henrico Circuit Court granted the insurers’ demurrer and dismissed Clear Vision’s cases, with prejudice. Clear Vision alleged that it performed windshield chip repair on windshields of each insured. Clear Vision attempted to gain an assignment of insurance benefits from each insured. As part of its contract for services, Clear Vision sought this assignment of insurance policy benefits and agreed not to pursue the insured personally for the cost of its services (costs were also disputed but the Court never reached that issue). All of this took place, including the alleged repairs, prior to the claim being reported to the insurer. Neither the insured nor Clear Vision obtained consent from the insurer for this attempted assignment. The insurers refused Clear Vision’s demand for payment under the policy. In response, Clear Vision sued each insurer in General District Court seeking not only $150 per insured for chip repair(s) but also bad faith double damages, costs and...
by KPMLAW | Apr 25, 2016 | KPMBlog, News, Uncategorized, Updates
The issue of transgender restrooms continues to evolve, and last week, the Fourth Circuit Court of Appeals in Richmond, Virginia became the first federal court to weigh in on the issue. The ruling comes in the case of G.G. v. Gloucester County School Board. The case has received a great deal of attention due to the recent controversial legislative enactments in North Carolina and other states, which have attempted to legislate which restroom transgender persons must use. G.G. was born female and when the vents of this lawsuit had taken place, had begun hormone therapy. G.G. legally changed his name to a traditionally male name and prior to his sophomore year, informed the school that he was a transgender boy. By all accounts, G.G. lived all aspects of his life as a boy. In late 2014, the Gloucester County School Board prohibited G.G. from using the male restroom in his high school. G.G. sued the School Board on the grounds that the school discriminated against him in violation of Title IX and the Equal Protection Clause of the Constitution, and he moved for a preliminary injunction to stop the school’s restroom prohibition. The District Court denied the injunction, holding that G.G. lacked sufficient evidence after it refused to consider hearsay expert testimony on the topic. It further held that using a unisex bathroom in the school was not unduly burdensome compared to the hardship to the other students caused by G.G’s presence in the men’s restroom. Finally, the District Court granted the School Board’s Rule 12(b)(6) Motion to Dismiss the Title IX allegations, claiming that requiring G.G. to use...
