All posts by Admin BoweDigital

| Selena A. Motley

Condo Association Took Proper Disciplinary Action

On February 16, 2023, the D.C. Court of Appeals upheld a decision that a condominium association’s failure to precisely comply with certain provisions of its bylaws may not deprive a member of due process rights.

In Rayner v. Yale Steam Laundry Condo. Ass’n, No. 21-VA-122 & 22-CV-58 (D.C. Cir. Feb. 16, 2023), the Association issued a written notice for a hearing to determine a violation of the bylaws after Appellant’s dogs jumped on a neighbor and tore his clothing. Contrary to the Association’s Enforcement Procedures, the Association failed to attach a copy of the neighbor’s complaint to the notice. Weeks later, Appellant’s dogs again approached the same neighbor who then filed another complaint. After the second incident, Appellant informed the Association that he was unable to attend the original hearing due to scheduling conflicts. A new hearing was scheduled. Although Appellant timely submitted written statements to the Association regarding his dogs, he failed to appear at the rescheduled hearing.

The Association later issued another written notice for a hearing regarding the second incident and attached the neighbor’s complaints. Appellant requested a continuance to the hearing alleging that the Association repeatedly violated Enforcement Procedures regarding the incidents. Appellant failed to attend the rescheduled second hearing that resulted in a fine being assessed against the Appellant related to his dogs’ behavior. Appellant sued the Association for breach of contract for failure to provide due process under its enforcement procedures, negligence, breach of fiduciary duty and retaliation.

The trial court held in favor of the Association stating that “Enforcement procedures do not require the Association ‘to undertake specific efforts during a preliminary investigation’” and that the Association’s “Enforcement procedures ‘provide latitude [] to carry out its duties’ as long as the Association provided due process.” The court reasoned that there was sufficient due process because Appellant received adequate notification of the hearings, submitted statements, and received video evidence of the incidents. The Court also stated that, because the Association attached the complaints to the notice for the second hearing, all procedural defects steaming from the first notice were remedied.

On Appeal, the Court affirmed the trial court’s decision, noting that the Association’s bylaws allow the for the Board to determine the specific manner in which the provisions are implemented as long as due process is afforded. The bylaws also contained a safe-harbor clause stating that “any inadvertent omission or failure to conduct any proceeding in exact conformity . . . shall not invalidate the result of such proceeding, so long as a prudent and reasonable attempt has been made to ensure due process according to the general steps set forth . . . .” The Court ultimately held that Appellant’s breach of contract claim regarding the bylaws failed because due process, outside of a constitutional matter, does not require perfect adherence to the procedure but a prudent and reasonable attempt to adhere to the bylaws and that the bylaws recognized such possible shortcomings. The Court also concluded that Appellant’s tort claims for negligence and fiduciary duty failed because such claims cannot survive independent of the parties’ contractual relationship. Appellant’s retaliation claim was also properly dismissed by the trial court because, at most, the Association’s fines were “unreasonable.”

Condominium associations could benefit from having their bylaws and rules reviewed in light of this recent case to ensure that the documents contain safe harbor provisions and are extensive enough to fully protect their boards from potential legal disputes.

If you have any questions about this case or laws impacting real estate in and around the Washington, D.C. region, feel free to contact us. Our Real Estate Litigation and Transactions Practice Group is ready to assist.

| Arthur D. Burger

Arthur D. Burger to present at 2023 MWELA Annual Conference

Arthur D. Burger, chair of Jackson & Campbell’s Professional Responsibility Group, will make a presentation at the Annual Meeting of the Metropolitan Employment Lawyers Association (“MWELA”) on March 3, 2023 on the topic of Ethics in Fee-Shifting cases at The Mayflower Hotel. For more details and to register, visit here. 

| Christopher A. Glaser

The Supreme Court of Virginia has reversed a trial court and upheld a prescriptive easement where the issue of permission was hotly contested in Kevin Horn v. James Webb

The Supreme Court of Virginia has reversed a trial court and upheld a prescriptive easement where the issue of permission was hotly contested. In Kevin Horn v. James Webb, the Court examined the issue of whether prescriptive rights could arise from a pre-1976 grant of permission by the servient estate which was never expressly revoked.

In Horn, adjoining lot owners created a 20-foot-wide easement across property owned by the Fidels for the purpose of providing lake access and the construction of a lakefront retaining wall. After construction of the retaining wall, the owners of the dominant estate, with the permission of the Fidels, tied a series of pontoon boats to the wall. The Fidels sold their interest in 1976 and the subsequent owners did not grant similar permission. Instead, the subsequent owners remained silent and acquiesced to the presence of the pontoon boats. Decades later, the Fidels’ ultimate successors in interest, the Webb family, demanded that the boats be removed and filed suit for trespass.  The dominant estate owners counterclaimed asserting that they had acquired a prescriptive easement.

The trial court held that the permission granted by the original owner continued indefinitely and negated any claim of hostility such that the usage could never ripen into ownership of an easement. The Supreme Court disagreed and noted that permission is personal to the grantor and that the sale of the servient estate to another constituted a change in circumstances and conditions which terminates the original permission. While the Fidels’ successor owners did not object to the usage, failure to object is mere acquiescence and is not the same as granting permission. As the permission was terminated upon the Fidel’s sale in 1976, hostility immediately began which could form the basis for a prescriptive easement.

Jackson & Campbell, P.C. represents title insurers and insureds in Maryland, Virginia, and Washington, D.C. and we strive to keep our clients and other title professionals up to date on various developments in the law. Additionally, we present no-cost in-house updates of the nation’s most noteworthy cases and national trends following the spring and fall American Land Title Association’s Title Counsel meetings.

If you have any questions about this case or laws impacting real estate in and around the Washington, D.C. region, feel free to contact us. Our Real Estate Litigation and Transactions Practice Group is ready to assist.

Chris Glaser.

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A Fond Farewell to Times New Roman: DEI Committees Recommend Changing to a Sans Serif for Accessibility

In May of 2020, Jackson & Campbell adopted a new policy for all firm communications: it replaced Times New Roman font with Calibri, a more accessible and easier-to-read font. If high-tech scanners had trouble reading Times New Roman font, chances were that some of the people reading our communications also found difficulty in reading that font. Earlier this month, the United States Department of State decided to make the same change that Jackson & Campbell made nearly three years ago. In an internal memo titled “The Times (New Roman) are a-Changin,” the State Department directed its personnel to phase out use of the Times New Roman font by February 6 and adopt the Calibri font for all its official communications and memos. The State Department adopted the policy at the recommendation of its office of diversity and inclusion because Calibri is easier to read for people with visual disabilities who use certain types of assistive technologies, as well as for those who have difficulty reading.  

Although the State Department may have had a more cleverly titled memo, its rationale for the change was essentially identical to Jackson & Campbell’s, i.e., to create a more inclusive environment by removing unnecessary barriers that create difficulties for people with disabilities. While this change sheds an important light on accessibility issues, which some may not immediately associate with the Diversity, Equity & Inclusion charge; Jackson & Campbell is proud of the changes it has made to create a more inclusive workplace and of its robust Diversity, Equity, and Inclusion committee for leading the way. 

| Christopher A. Glaser

District of Columbia Court of Appeals clarifies public easement rules

The District of Columbia Court of Appeals has clarified a pair of rulings from 1896 and 1899 as to how public easements may be accepted. In Kalorama Citizens Association v. SunTrust Bank Company, the Court held that a public easement, such as the disputed open plaza being used by vendors for a farmers’ market, may be accepted by either the government or by the public through general use.

The sole issue before the Court concerned the grant of summary judgment against two community organizations due to lack of standing. First deciding that both entities had constitutional and prudential standing, thus necessitating a remand, the Court took the opportunity to state that the entities must prove both an offer and acceptance of the dedication. For a public easement, the owner must intend to dedicate the land for public use as mere assent to use by the public is ineffective. However, the Court found no cases since 1899 as to whether the public may accept such a dedication and, if so, how it may do so.

The Court ruled that no single general rule was determinative of how the public may accept an offer of an easement. Nevertheless, actual occupation by the public and lengthy continued public use, even without acceptance by the government, may suffice.

On remand, the Kalorama trial court will determine whether a 1976 letter written by the owner during construction of the questioned open plaza stating that the disputed area was to be constructed “in such a way as to preserve its open quality, attractiveness and accessibility to the vendors that presently use it,” was sufficient to constitute an offer of dedication. The trial court will also determine whether the use by the vendors for more than 40 years constitutes acceptance or whether the practice of licensing the farmers’ market vendors to use the open plaza, as well as continued maintenance by the owner, is inconsistent with public acceptance.

Jackson & Campbell, P.C. represents title insurers and insureds in Maryland, Virginia, and Washington, D.C. and we strive to keep our clients and other title professionals up to date on various developments in the law. Additionally, we present no-cost in-house updates of the nation’s most noteworthy cases and national trends following the spring and fall American Land Title Association’s Title Counsel meetings.

If you have any questions about this case or laws impacting real estate in and around the Washington, D.C. region, feel free to contact us. Our Real Estate Litigation and Transactions Practice Group is ready to assist.

Chris Glaser

| Arthur D. Burger, Caroline Y. Lee-Ghosal

Jackson & Campbell attorneys Arthur D. Burger and Caroline Lee-Ghosal to teach D.C. Bar CLE on legal ethics on March 15, 2023.

On March 15, Arthur D. Burger and Caroline Lee-Ghosal will teach a D.C. Bar CLE course on legal ethics issues.

This course, a follow-up to one they taught in 2022, provides commentary on a series of video vignettes that present fact scenarios for ethical dilemmas that lawyers often face. The course will be presented in-person and will also be available through the D.C. Bar as a webinar. Please register here.

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Massachusetts Supreme Judicial Court Declines to Find Common-Law Duty for Insurer to Cover Mitigation Costs

In Ken’s Foods, Inc. v. Steadfast Insurance Co, Case No. SJC-13303 (Mass. Jan. 6, 2023), the Supreme Judicial Court of Massachusetts issued an opinion holding that there is no common law duty for insurers to cover mitigation costs incurred by an insured when the terms of the policy at issue are unambiguous and do not provide for such coverage. The Court was asked to address the following certified question from the United States Court of Appeals for the First Circuit: “To what extent, if any, does Massachusetts recognize a common-law duty for insurers to cover costs incurred by an insured party to prevent imminent covered loss, even if those costs are not covered by the policy?”

The matter arose from a malfunction of one of Ken’s Foods, Inc.’s (“Ken’s Foods”) wastewater treatment systems at its operating facility in McDonough, Georgia.  The malfunction occurred on December 20, 2018 and resulted in wastewater flowing into a Georgia tributary. Ken’s Foods cleaned up the wastewater pollution and also took actions to allow it to continue operations, including installing new equipment in order to implement a temporary wastewater treatment process. However, Ken’s Foods wastewater releases still exceeded acceptable levels of contamination and it entered into an agreement with governmental authorities to pay a predetermined schedule of governmental fines. Ken’s Foods estimated that it spent $2 million on these preventative measures in order to avoid suspension of its operations. It also alleged it would have lost $10 million per month in expenses and lost profits if it had not taken these mitigation measures.

Ken’s Foods sued its pollution liability insurer, Steadfast Insurance Company (“Steadfast”), , in an attempt to recover the $2 million it expended to avoid business interruption. Ken’s Foods argued that Coverage H of the Steadfast Policy covered mitigation costs to avoid suspension of its business operations. Coverage H of the Policy provided coverage for losses, such as lost income and expenses to reduce lost income, resulting from a new pollution event that caused a “suspension of operations” at an insured location. “Suspension of Operations” was defined as a “necessary partial or complete suspension of ‘operations’ at the ‘covered location’ as a direct result of a ‘cleanup’ required by a ‘governmental authority.’” The Policy also contained a mitigation of loss provision which required that Ken’s Foods mitigate loss of business income “as soon as practicable” “in the event of a suspension of operations”.

The Court determined that the Policy did not provide coverage for the mitigation costs.  The Court observed, “…there was no suspension of operations. Ken’s Foods was not ordered to discontinue operations, nor did it do so itself to avoid such an order. Rather, Ken’s Foods avoided a ‘partial or complete suspension’ by implementing process changes allowing for the pretreatment and release of wastewater, and negotiating pollution allowances and accompanying fines with the county authority.” The Court further noted that “[t]hese very measures showed that a partial or complete shutdown was not ‘necessary,’ albeit due to the creative response of Ken’s Foods and the flexibility of government regulators. Because there was never a suspension of operations, Steadfast was not responsible for the costs according to the express terms of Coverage H.” The Court additionally found that the mitigation loss provision in the Policy was inapplicable because no actual suspension occurred and did not require Ken’s Foods to prevent an imminent suspension of operations or require reimbursement of such costs.  The Court further relied on the Policy’s maintenance exclusion, which excluded coverage for “costs, charges, and expenses of maintenance, upgrades, or ‘improvement of…processes,’ ‘even if such maintenance, upgrade, improvement or installation is required…[b]y governmental authority;’ or… [a]s a result of ‘cleanup costs’” to support its holding.

Relying on the plain terms of the Policy, the Court also declined to recognize a common-law duty to reimburse costs of preventing an immanent covered loss. The Court began its analysis by acknowledging that the parties  are “sophisticated commercial parties” and that an insurance contract entered voluntarily by two private parties requires “‘the benefit of their stated bargain’ including their allocation of risks.” The Court also acknowledged prior Massachusetts case law which had already established that coverage rights cannot be expanded when a policy is plain and unambiguous. The Court stated that it would “not imply a common-law duty to fill in the gap of coverage” when the Policy only required that Steadfast to pay “costs of a ‘necessary’ suspension of operations, not one that could be avoided through preventative measures, as was done here; an unnecessary suspension would not have been covered. The Court further noted that “the [P]olicy also required reimbursement of only those mitigation costs incurred after a suspension of operations, showing that increased costs of operation were not intended to be covered.” In support of its decision, the Court commented that, “[t]o provide for recovery in these circumstances would be to rewrite the insurance contract and reallocate the risks negotiated by the parties.”

Contact our Jackson & Campbell associates at jackscamp.com today.

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Colorado Federal Court Finds No Coverage Under Claims-Made Policies After Insured’s Late Notice of Underlying Lawsuits

In National Union Fire Insurance Co. of Pittsburgh, PA v. Estate of Stephen Calendine DDS et al., No. 21-cv-1541, 2022 WL 17486796 (D. Colo. Dec. 7, 2022), the United District Court for Colorado held that the insured failed to meet the notice requirements of his two claims-made and reported policies and that the notice-prejudice rule did not apply to the policies at issue. Learn more here. 

| Christopher A. Glaser

Maryland and Virginia appellate courts issue decisions on statutory interpretation

In the Maryland case of Elsberry v. Stanley Martin Companies, LLC, the purchasers of a single-family home in Charles County filed suit alleging that the seller improperly imposed an amortized water and sewer charge for a period of thirty years after the date of the initial sale. The homeowners filed suit contending that Md. Code Real Prop. § 14-117 limited such deferred charges to a period not to exceed twenty years. The seller contended that the statute was limited to only properties within Prince George’s County and, as such, was inapplicable to Charles County properties. Read more about this case here.

| Crystal S. Deese

Dismissal – forum non conveniens: Foreign medical malpractice plaintiff’s choice to pursue a claim in D.C. outweighed by public and private interest factors in favor of the forum where alleged negligence occurred.

Attorneys Crystal Deese and Benjamin Harvey secured dismissal of a medical malpractice case from D.C. Superior Court on forum non conveniens grounds. Defendants’ motion was successful despite the fact that the defendant hospital system was incorporated in the District and its nurse employee was licensed in both the District and in Maryland. The court weighed the private and public interest factors and found Maryland to be an available alternative forum for Plaintiff’s action and assigned little deference to Plaintiff’s choice of forum because Plaintiff was a Pennsylvania resident. The court did not find a substantial difference in the private factors of convenience to the parties in proceeding in Annapolis, where the allegedly negligent conduct occurred, over the District. Instead, the court agreed with Defendants’ argument on public interest grounds – specifically that the litigation was a foreign controversy and each instance of alleged wrongdoing on behalf of Defendants occurred outside the District. The court noted that while the hospital system was incorporated in D.C., the public interest in care provided in Annapolis was less impactful than a lawsuit brought against a provider whose alleged negligent actions occurred in D.C. The court also agreed that it would be burdensome on the court to interpret and apply Maryland law to this case.

Plaintiff can re-file in Maryland within the statute of limitations. However, Defendants neutralized Plaintiff’s tactical advantage because Plaintiff must now comply with Maryland’s preliminary expert certificate requirements. Further, Plaintiff’s non-economic damages will be limited by the Maryland cap for this claim. The case serves as a reminder to consider a forum non conveniens motion in cases where plaintiffs seek jurisdictional advantage by filing suit outside their state of residence. Read Judge Heidi M. Pasichow’s full opinion here.

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Massachusetts Federal Court Upholds Denial of Coverage for Defense Costs Under an Excess Policy Because Insured Failed to Provide Timely Notice Under a Claims-Made and Reported Policy

In President & Fellows of Harvard Coll. v. Zurich Am. Ins. Co., Harvard University filed suit against Zurich American Insurance Company for defense costs under an excess claims made and reported policy. The United States District Court for Massachusetts sided with Zurich and found that the University failed to timely satisfy the notice requirements of the Policy.

Read more from Sara Rangiah, an Associate in our Insurance Coverage group, in the attached article. 

Introducing Jackson & Campbell, P.C.’s New President-Elect and Member of our Executive Committee

We are pleased to announce Marie VanDam as the newest member of Jackson & Campbell, P.C.’s Executive Committee, effective January 1, 2023. Marie will take the seat vacated by Dan Lynn, who has completed three full terms on the committee. We congratulate Marie and are grateful to Dan for his years of service. For the first time ever, our Executive Committee – the firm’s primary management group – is majority female.

We are also pleased to announce that as part of the firm’s continued effort to ensure its smooth succession, we have elected Christopher Ferragamo as President-elect who will step into the role of President after John J. Matteo, effective January 1, 2025.

This is a very exciting time for Jackson & Campbell, P.C. as we continue to grow and see the next generation of leaders stepping into these important roles. Marie and Christopher’s election is a sign of their colleagues’ faith and trust in them to lead us into the future.

 

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California Appellate Court: “Other Insurance” Dispute Resolved by Reference to Plain Meaning of Policy Terms

In an unreported decision issued on September 8, 2022, the California Court of Appeal resolved a priority of coverage dispute for an underlying settlement when it found that one excess carrier’s reference to the primary policy in its definition of Underlying Limits entitled another excess carrier with no such reference to equitable subrogation. Read about this case here: Western World Insurance Co. v. Federal Ins. Co. Article (11.11.22).

| Arthur D. Burger

Arthur Burger, Chair of Jackson & Campbell’s Professional Responsibility Practice Group, is quoted by Bloomberg Law in its October, 25, 2022 Litigation newsletter

Arthur Burger, Chair of Jackson & Campbell’s Professional Responsibility Practice Group, is quoted by Bloomberg Law in its October, 25, 2022 Litigation newsletter as a legal expert with respect to a ruling by a federal judge in Pennsylvania, sanctioning a lawyer for plagiarizing from an argument by opposing counsel in the same case.

| Sarah E. Godfrey

Lack of Standing: Failure to disclose dooms med-mal claim

Attorneys Crystal Deese and Sarah Godfrey recently secured a case law setting win on behalf of Northern Virginia Eye Surgery Center in the Circuit Court of Fairfax County when a shocking eve-of-trial discovery resulted in the suspension and ultimate dismissal of the entire case before opening arguments could even be heard.

When defense counsel uncovered a bankruptcy petition, filed by the plaintiff on March 24, 2022, just two and a half months earlier, the trajectory of the case changed dramatically. The plaintiff never disclosed this filing in discovery despite being asked to do so by the defendants. Because civil lawsuits are considered assets in Virginia, they are automatically transferred to the bankruptcy estate when a petition is filed. Thus, on March 24, 2022, plaintiff effectively transferred her own lawsuit to the bankruptcy estate and it became enforceable by only the bankruptcy trustee.  When the case went to trial on June 6, 2022, the lawsuit was not her own to bring and, thus, she had no standing to bring the claim.

Defense counsel brought the bankruptcy petition to the court’s attention the morning of trial and argued for dismissal. Judge Thomas Mann, now with the Virginia Supreme Court, suspended the proceeding to give plaintiff the opportunity to investigate the petition and controlling case law.  On October 17, 2022, after multiple rounds of briefing and oral arguments, Judge Richard Gardiner ruled in favor of the defendants.  Essential to Judge Gardiner’s ruling was that Plaintiff chose to conceal her pending lawsuit from the bankruptcy court.  Had she listed the lawsuit in her petition, the right to bring the claim could have been restored to her prior to the date of trial.  Given the lawsuit was unlisted, however, nothing, including restoration, could be done with it. Thus, as of the date of trial, the lawsuit was the property of the bankruptcy estate and Plaintiff had no standing.  As Judge Gardiner wrote, “an action filed by a party who lacks standing is a legal nullity…the case must be dismissed.”

Read Judge Gardiner’s full written opinion here. This win was also featured on the cover of the Virginia Lawyers Weekly

 

Celebrating Jackson & Campbell P.C.’s Best Lawyers in the 29th edition of The Best Lawyers in America®

Jackson & Campbell, P.C. is proud to have three lawyers named as Best Lawyers in the 29th edition of The Best Lawyers in America®. Congratulations to Arthur D. Burger (Ethics and Professional Responsibility Law), David H. Cox: (Litigation – Real Estate and Real Estate Law), and Roy L. Kaufmann (Real Estate Law).
 
Additionally, Arthur D. Burger was named “Lawyer of the Year” for Ethics and Responsibility Law. Join us in congratulating them!
| Arthur D. Burger

Jackson & Campbell’s Arthur Burger quoted by Bloomberg News regarding discovery sanctions in defamation suit by Bob Dylan

Arthur Burger, Chair of Jackson & Campbell’s Professional Responsibility Practice Group, was quoted by Bloomberg Law in an August 16, 2022 article regarding discovery sanctions that are being sought on behalf of Bob Dylan in a New York defamation suit. He is quoted as an expert in legal ethics regarding the duty of lawyers to ensure that their clients’ discovery responses are complete and accurate.

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Client Alert: New D.C. Law Narrows the Sweeping Ban on Non-Competes

Following harsh criticisms from the local business community, the D.C. Council has enacted an amendment to the near-total ban on non-competes that was set to go into effect.  The amended law, which goes into effect October 1, 2022, prohibits D.C. employers from imposing non-compete provisions on individuals who are not highly-compensated employees.  A more detailed look at the amendment is available here.

| Christopher A. Glaser

Court of Special Appeals of Maryland affirms quiet title dismissal and vacates public road decision

The Court of Special Appeals of Maryland vacated a trial court determination that a public road was not established where St. Mary’s County contended that it closed the roadway and no longer maintained the parcel. In Wilkinson v. Board of County Commissioners, the Court noted the trial court had “blurred” methods establishing public roads and clarified the requirements of a dedication. Additionally, the Court affirmed the dismissal of an intervenor’s complaint to quiet title for failing to add parties the intervenor claimed were unknown.

At issue in the trial court was ownership of 0.196 acres of unimproved land bordering the Chesapeake Bay.  The disputed property was part of a larger conveyance from 1945, the remaining portion of which was paved and maintained by the County. The County had erected a sign at the end of the paved portion stating, “End of County Maintenance,” with the disputed parcel being located beyond the sign.

The Wilkinson Family Living Trust initiated its action against the County asserting ownership over the disputed property. The County counterclaimed asserted that it owned the property in fee simple. The Aiken Family Trust intervened asserting a claim to quiet title to declare it as the fee simple owner subject only to an easement in favor of the County. The trial court granted summary judgment and held that the disputed parcel was not a public road as a matter of law as the County “established, built, paved and maintained” a road over only a portion of the grant but that the disputed parcel laid beyond and was not maintained. The trial court further dismissed the Aiken Family Trust’s claims for failing to join unidentified “other” interested parties.

Public roads may be created by condemnation by a public authority or by dedication, which requires an offer to dedicate land to public use and acceptance by the authority. Here, the offer to convey the disputed parcel “for a public highway” and the “laying out of said highway and/or bridge” was unequivocal and evidenced by the 1945 deed which encompassed the disputed parcel. The Court noted that the 1945 deed conveyed “ALL OF THE LAND” and acceptance by the county was in total and could not be piecemeal. Merely because each portion of the offered parcel was not maintained, the County’s acceptance was nevertheless established and there was a complete dedication.

After determining that the public road had been established by dedication, the Court turned to the Aiken Family Trust’s claim to quiet title. The Aiken Family Trust alleged that the “Wilkinsons and others have asserted a right to use” the disputed property and later asserted that it was unaware of any person making a specific claim of title but that it has been “subjected to rumors and general accusations by members of the community.” The statute mandates, however, that the plaintiff bears the burden of naming all persons known to the plaintiff or reasonably apparent from an inspection of the property. By asserting the existence of unidentified “others,” the Aiken Family Trust was obligated to follow the statutorily mandated procedures to name the unknown persons. Failing to do so—a relatively easy matter for trial counsel to correct—resulted in the dismissal of their claim and affirmance on appeal.

Jackson & Campbell, P.C. represents title insurers and insureds in Maryland, Virginia, and Washington, D.C. and we strive to keep our clients and other title professionals up to date on various developments in the law. Additionally, we present no-cost in-house updates of the nation’s most noteworthy cases and national trends following the spring and fall American Land Title Association’s Title Counsel meetings.

If you have any questions about this case or laws impacting real estate in and around the Washington, D.C. region, feel free to contact us. Our Real Estate Litigation and Transactions Practice Group is ready to assist.

| Christopher P. Ferragamo

Christopher P. Ferragamo elected as a Fellow in the American College of Coverage Counsel

Jackson & Campbell, P.C. is pleased to announce that Director Christopher P. Ferragamo has been elected as a Fellow in the American College of Coverage Counsel. The American College of Coverage Counsel, established in 2012, is comprised of over 370 preeminent coverage and extracontractual counsel in the United States and Canada, representing the interests of both insurers and policyholders. Mr. Ferragamo has been practicing in the insurance coverage field for over 20 years and is currently serving as the Co-Chair of Jackson and Campbell, P.C.’s Insurance Coverage Practice Group.

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A Legislative Solution for Conservation Easements

A Legislative Solution for Conservation Easements:  Jackson & Campbell’s Tax Chair, Nancy Ortmeyer Kuhn, provides insightful commentary on charitable conservation easements and the proposed tax legislation that caps charitable deductions for taxpayers.  She also discusses the Supreme Court’s recent decision in West Virginia v. EPA, and how that may impact Treasury Regulations.

Read more here: CE Legislation Article

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Massachusetts High Court Rules that a Business Owners Liability Policy Does Not Cover Attorney’s Fees Awarded under the Massachusetts Consumer Protection Statute

On July 6, 2022, the Supreme Judicial Court of Massachusetts determined that an award for attorney’s fees under the Massachusetts consumer protection statute, M.G.L. c. 93A (“Chapter 93A” or “the statute”), was not covered under a business owners liability policy because attorney’s fees awarded under the statute do not constitute damages “because of” bodily injury. The Court further rejected the insured’s argument that attorney’s fees awarded under Chapter 93A were payable under the subject policy’s Supplementary Payments provision, which provided coverage for “costs taxed against the insured”. 

In Vermont Mutual Insurance Co. v. Poirier et al., Slip Op. No. SJC-13209 (Mass. July 6, 2022), Vermont Mutual issued a business owners policy to Paul and Jane Poirier in effect from December 1998 to December 2001 for the operation of their cleaning business (“Servpro”). The policy stated in relevant part that Vermont Mutual will “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury.’” The policy’s Supplementary Payments provision also provided that “[i]n addition to the Limit of Insurance we will pay, with respect to any claim we investigate or settle, or any ‘suit’ against an insured we defend,” certain expenses related to the claim or suit covered by the policy. The policy set forth certain expenses covered under this provision including, “[a]ll costs taxed against the insured in the ‘suit.’”

In June 1999, the underlying claimants hired Servpro to clean out a sewage spill in their basement. One of the claimants later suffered from respiratory issues which she alleged were linked to exposure of chemicals used by Servpro during the cleanup. A lawsuit was brought against Servpro, and Servpro was found liable under Chapter 93A for breach of the implied warranty of merchantability. The trial court in the underlying litigation found damages for diminished earning capacity, medical expenses, pain and suffering, and loss of consortium. It also awarded attorney’s fees against Servpro pursuant to the attorney’s fee provisions under Chapter 93A. 

Vermont Mutual paid all of Servpro’s liability but refused to pay any attorney’s fees. It then subsequently filed a declaratory judgment action seeking a declaration that the attorney’s fee award was not payable under its policy since Chapter 93A treats damages and attorney fee awards as separate remedies and that the Vermont Mutual policy only insured damages “because of” bodily injury. The lower court found that the Chapter 93A award for attorney’s fees fell within the scope of the policy’s coverage for “sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’” and rejected the alternative argument that the policy’s Supplemental Payments provision authorized payment for attorney’s fees. Vermont Mutual appealed that the attorney’s fee award was payable under its policy and the Supreme Judicial Court transferred the case sua sponte.

Chapter 93A creates a private cause of action for any person injured by any unfair methods of competition or deceptive acts or practices during the course of trade or commerce. Chapter 93A, § 9 (3) addresses what a claimant can recover under the statute:

“[R]ecovery shall be in the amount of actual damages or twenty-five dollars, whichever is greater; or up to three but not less than two times such amount if the court finds that the use or employment of the act or practice was a willful or knowing violation of said [§ 2] or that the refusal to grant relief upon demand was made in bad faith with knowledge or reason to know that the act or practice complained of violated said [§ 2].

Chapter 93A, § 9 (4) further provides that once a violation is established under the statute, a claimant may “in addition to other relief provided for by this section and irrespective of the amount in controversy, be awarded reasonable attorney’s fees and costs incurred in connection with said action.”

In reversing the lower court’s decision, the Court examined the common meanings associated with “damages” and “attorney’s fees.” Relying on prior case law citing to Black’s Law Dictionary and Webster’s Third New International Dictionary, the Court found that “…damages caused by bodily injury refer to the physical injuries and the money damages required to compensate them.” Attorney’s fees, however, are different from damages because “they reflect the cost of bringing suit” and that “traditionally parties are responsible to pay their own attorney’s fees.”

The Court acknowledged that statutes like Chapter 93A contain fee-shifting provisions in which a court may award both damages and attorney’s fees against the person or entity responsible for the injury. The Court further noted that the language in Chapter 93A itself distinguishes between recovery of actual damages and awards for attorney’s fees, noting that the statute states that: “[R]ecovery shall be in the amount of actual damages or twenty-five dollars, whichever is greater….”, and “[I]n addition to other relief,” attorney’s fees may be awarded “irrespective of the amount in controversy.” Focusing on Chapter 93A’s own distinction between recovery of actual damages and awards for attorney’s fees, the Court concluded that the statute treats these types of recoveries separately. It also noted that damages and attorney’s fees serve two different purposes, one being to compensate for the injury and the other being to deter misconduct and the public benefit of bringing the misconduct to light. In so finding, the Court determined that attorney’s fees awarded under Chapter 93A are not insured damages under the Vermont Mutual policy since they were not awarded “because of” bodily injury under the statute.

The Court also held that attorney’s fees were not payable under the policy’s Supplemental Payments provision, which authorizes payments for costs “taxed” against the insured. The Court determined that this language conveyed a “narrower, technical meaning of court-related or nominal costs recoverable as a matter of course to prevailing parties” and that prior case law already established that such costs do not include attorney’s fees.

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Celebrating Pride Year-Round

Whether you are a member of the LGBTQ+ community, a friend or an ally, or someone who wants to know more about Pride, celebrating Pride in the workplace should not just be celebrated once a year, but something to honor year-round. June is a particularly important month for the LGBTQ+ community, as it marks what is historically considered the beginning of the gay pride movement in the United States. Pride is celebrated around the world in June each year, and in most places, it is meant to commemorate the riots that occurred at New York’s Stonewall Inn in June 1969. Members of the LGBTQ+ community, led by people of color and trans people, pushed back against police harassment and aggression. Violent protests lasted several days and resulted in the organization of activist groups with goals of establishing safe places where community members would not be harassed and advocating for equal rights.

For me, Pride means celebrating both our similarities and our differences. It means being my authentic self, both at home and at work. 

As this month comes to a close, it is important to remember the significance of celebrating Pride year-round, especially in the workplace. Celebrating Pride in the workplace is not only the right thing to do, it promotes awareness and equality at your company and helps to create a welcoming place for all. Providing educational opportunities for employees throughout the year also creates an increased understanding of issues faced by the LGBTQ+ community. 

Throughout the year, your company can show support for the LGBTQ+ community in several ways. 

Make LGBTQ+ Employees Visible

Recognize the achievements of LGBTQ+ employees. Further, invite them to provide feedback, and utilize their insights to inform your decisions about diversity, equity, and inclusion efforts in which your company is involved.

Use Inclusive Hiring Practices

Use inclusive language when you are trying to recruit, feature LGBTQ+ employees in marketing materials, and receive feedback from LGBTQ+ employees on your recruiting practices. 

Be Intentional When Donating to LGBTQ+ Organizations

Make sure you research local LGBTQ+ organization before donating to them. Consider donating to smaller local organizations in your community where a donation might have a more direct impact on your local community. Ask your employees to nominate organizations and include employees in the decision-making process.

Jackson & Campbell, P.C. is a proud ally of the LGBTQ+ community and embraces its LGBTQ+ employees and clients. As we end Pride month, Jackson & Campbell, P.C. embraces diversity, equity and inclusion, and is committed to working toward a more equitable and inclusive workplace. 

| Arthur D. Burger

When to Hang Up the Phone—Hazards of Talking to Prospective Clients

Arthur D. Burger, Chair of the Firm’s Professional Responsibility Practice Group, has an article published in today’s Bloomberg Law relating to legal ethics and law firm practices when communicating with “prospective clients.”

See attached in a BLaw Insight here.

 

Nancy Ortmeyer Kuhn on the latest development regarding charitable conservation easements

Is the Supreme Court likely to take up a tax case regarding a clear split between the 6th and 11th Circuits regarding conservation easements?

Read an analysis in this Bloomberg article written by our own attorney, Nancy O. Kuhn.

Conservation Easements: A Circuit Split on the Validity of a Treasury Regulation Adds to Uncertainty for Donors

 

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DC Council Extends Foreclosure Moratorium, Shortens TOPA Tolling Period

In October 2021, D.C. Council provided Mayor Bowser, under Act 24-178 1 , the power to extend the foreclosure moratorium from November 5, 2021, to February 4, 2022. 2 The purpose of this extension was to allow the Housing Assistance Funds (‘HAF”) Program to be implemented. The goal of the HAF program is to prevent mortgage delinquencies and defaults, foreclosures, loss of utilities or home energy services, and displacement of homeowners experiencing financial hardship, primarily due to the COVID-19 pandemic. 3

Delays in the implementation of the HAF program and the rise in the Omicron variant prompted the passage of the “Foreclosure Moratorium Extension Emergency Amendment Act of 2022” (the “Act&”), which extended the moratorium through June 30, 2022.

The continued moratorium applies to any 4 1) Residential foreclosure that may be initiated or conducted under section 539 5 ; 2) Sale may be initiated or conducted under section 313(c) of the Condominium Act of 1976 6 ; and 3) Judgment foreclosing the right of redemption shall be entered under D.C. Official Code§ 47-1378. The moratorium is further extended for residential foreclosures through September 30, 2022, if the “homeowner or their representative applies for financial assistance to cure a debt or default with funds from the Department of Housing and Community Development's Homeowner Assistance Fund (“Homeowner Assistance Funds”) or a similar government fund established to assist homeowners impacted by the COVID-19 public” 7 In order to gain this additional time, the homeowner must show certain proof and do so no later than 60 calendar days after July 1, 2022. 8

Though this emergency Act keeps the moratorium in place for all residential foreclosures, there are three exceptions under the Act.

First, the moratorium does not apply to buildings with more than five units 9.

Second, the moratorium does not apply to borrowers that are entities 10 , as opposed to individuals. But there is one important exception: if the underlying mortgage is guaranteed by an individual, the moratorium does apply.

Third, the moratorium does not apply to non-resident borrowers. 11 “This section shall not apply to a residential property at which neither a record owner nor a person with an interest in the property as heir or beneficiary of a record owner, if deceased, has resided for at least 275 total calendar days during the 12 months period immediately preceding October 1, 2021.”

In addition to extending the foreclosure moratorium, the Act also tolled tenant deadlines under the Tenant Opportunity to Purchase Act (“TOPA&”). TOPA provides that, before an owner may sell, demolish, or discontinue housing use of a rental accommodation, the owner must give tenants an opportunity to purchase and a right of first refusal to match a third-party contract. Tenants have the power to assign their opportunity to purchase to any party for any consideration a tenant deems acceptable in her sole discretion. 12

Although TOPA deadlines initially ceased to be tolled in August 2021, based on the Mayor’s Public Health Emergency Declaration coming to an end in July 2021, due to the omicron variant the D.C. Council approved a new emergency extension of TOPA, once again tolling the deadlines for renters through February 15, 2022. The Act specifically notes, “The running of the time periods under sections 410(1) and 411(I) for tenants and tenant groups to submit a written statement of interest and tenant organizations to register to exercise rights and the time periods under sections 410(2) and 411(2) for tenants and tenant organizations to negotiate a contract of sale shall be tolled from the applicability date of the Foreclosure Moratorium Extension Emergency Amendment Act of 2022, passed on emergency basis on January 18, 2022 (Enrolled version of Bill 24-612), through February 15, 2022.” 13 This emergency legislation is in place for 90 days, but the Council has already sent the “Foreclosure Moratorium Extension Temporary Amendment Act of 2022” to Mayor Bowser for review. This Temporary Act mirrors the Emergency Act, but if approved by Congress will be in effect for 225 days.

 

 

1 Foreclosure Moratorium Extension, Scheduled Eviction Assistance, and Public Emergency Extension
Emergency Amendment Act of 2021.

2 See D.C. Code 42-815.05.

3 https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-
governments/homeowner-assistance-fund.

4 Foreclosure Moratorium Extension Emergency Amendment Act of 2022 § 2(a)(I)(A-C).

5 D.C. Official Code§§ 42-815 and 42-81.

6 D.C. Law 1-89; D.C. Official Code § 42- 1903.13(c).

7 Foreclosure Moratorium Extension Emergency Amendment Act of 2022 § 2(a)(2)(A-D).

8 Id.

9 See D.C. Code § 42-815.01 (a), “the term “residential mortgage” means a loan secured by a deed of trust or mortgage, used to acquire or refinance real property which is improved by 4 or fewer single- family dwellings, including condominium or cooperative units…”

10 See D.C. Code § 42-815 (a) …”but shall not include debts incurred, and currently obligating solely, an entity, as defined by § 29-101.02(10). D.C. Code § 29–101.02 (10)(A) defines “entity” as “(i) A business corporation; (ii) A nonprofit corporation; (iii) A general partnership, including a limited liability partnership; (iv) A limited partnership, including a limited liability limited partnership; (v) A limited liability company; (vi) A general cooperative association (vii) A limited cooperative association; (viii) An unincorporated nonprofit association; (ix) A statutory trust, business trust, or common-law business trust; or (x) Any other person that has a legal existence separate from any interest holder of that person or that has the power to acquire an interest in real property in its own name. The term entity under this provision does not include an individual. See § 42–815.01 (Right to cure residential mortgage foreclosure default); See also § 29-101.02 (Entity does not include The term “entity” does not include: (i) An individual; (ii) A testamentary or inter vivos trust with a predominantly donative purpose, or a charitable trust; (iii) An association or relationship that is not a partnership under the rules set forth in § 29-602.02(c) or a similar provision of the law of another jurisdiction; (iv) A decedent’s estate; or(v) A government or a governmental subdivision, agency, or instrumentality.

11 Foreclosure Moratorium Extension Emergency Amendment Act of 2022 § 2(b).

12 TOPA now exempts single family dwellings from the Tenant Opportunity to Purchase Act of 1980
(TOPA) unless occupied by elderly or disabled tenants. TOPA also exempts single family dwellings with
an Accessory Dwelling Unit and a single rental unit in a condo, co-op or homeowners’ association. An
owner of such an exempted unit must give tenants notice within three calendar days of soliciting or
receiving an offer of sale. Elderly and disabled tenants who signed a lease to occupy such an exempted
unit by March 31, 2018, and took occupancy by April 15, 2018, will have a limited opportunity to
purchase or assign their rights. See TOPA Single-Family Home Exemption Amendment Act of 2017 (Bill
22-0315).

13 Foreclosure Moratorium Extension Emergency Amendment Act of 2022 § 510(b) (The Act initially
proposed tolling deadlines being extended through February 28, 2022, but were negotiated down to
February 15, 2022).