All posts by Troy Moody

Undisclosed Bankruptcy can be fatal to Plaintiff’s Medical Malpractice case

On June 6, 2022, Crystal Deese and Sarah Godfrey appeared in the Circuit Court for Fairfax County, Virginia, for Day 1 of what was supposed to be a 5-day jury trial.  Plaintiff had filed a suit against our client, a medical practice, claiming $2.3 million in past and future damages after a routine cataract surgery allegedly rendered her partially blind in one eye.  The evening before the trial, our law clerk, in the course of updating Plaintiff’s background check, located a Chapter 7 bankruptcy petition that Plaintiff had filed in March of this past year.  Plaintiff had not disclosed the bankruptcy filing in her sworn interrogatory answers and, more importantly, did not disclose the pending litigation on the bankruptcy petition, robbing her creditors of notice.

Before a jury could be empaneled, we presented the petition to the court and successfully argued that Plaintiff could not proceed to trial because, by filing for bankruptcy, she lost standing to bring her case.  Moreover, we argued that Plaintiff could not take a nonsuit (voluntary dismissal without prejudice) because, without standing, the claim became a legal nullity and must be dismissed with prejudice.  Plaintiff’s counsel, after being given the opportunity to review the controlling case law, challenged only the “authenticity” of the petition – even though it had been pulled from the federal docket and contained Plaintiff’s signature.  The Judge entered an order cancelling the trial and deferring our motion to dismiss for a hearing on July 8. 2022, to give both parties the opportunity to fully brief the matter.

 

California Governor Signs Legislation Raising Non-Economic Damages Cap on Medical Malpractice Awards

On May 22, 2022, California Governor Gavin Newsom signed into law Assembly Bill 35 (“A.B. 35”) resulting in major changes to the state’s Medical Injury Compensation Reform Act (“MICRA” or “the Act”). These changes include among other changes, an increase to the cap of noneconomic damages awarded to plaintiffs in medical malpractice lawsuits. Originally enacted in 1975, MICRA established a $250,000 cap on non-economic damages awards. The Act went into effect during a time when doctors were rapidly leaving California due to rising insurance premiums resulting from high medical malpractice awards.

With A.B. 35’s enactment, plaintiffs under MICRA will see a new non-economic damages limit. Starting on January 1, 2023, cases not involving a patient’s death will have a new limit of $350,000, with an increase over the next 10 years to $750,000. Meanwhile, cases involving patient death will have an increased limit of $500,000 with incremental increases over the span of 10 years to $1 million. Both patient death and non-patient death cases will see a 2% annual increase after the ten year mark to account for inflation. Other notable changes included with the signing of A.B. 35 is the creation of three separate categories for which non-economic damages could be awarded, including one for recovery against a medical institution, recovery against a medical provider, and another for recovery from an unaffiliated provider. The creation of multiple categories could result in a patient holding multiple parties liable and receiving more than $350,000 in a case not involving death. Notably, medical institutions and providers would each only be liable under one category.

A.B. 35 also make changes to plaintiff’s contingency fees with attorneys representing them in cases brought under MICRA. The legislation will also establish additional discovery and evidentiary protections for expressions of sympathy, regret, including statements of fault, made prior to the filing of a lawsuit or demand for arbitration.

Prior to A.B. 35, MICRA had been the subject of decades-long dispute among trial attorneys, health care providers and the insurance industry. It had also been the subject of multiple proposed amendatory legislation and constitutional challenges in the courts. In 1997, lawmakers introduced two separate bills to increase or even eliminate the cap under certain circumstances, but these bills failed to pass. Additionally, a 1999 bill that would have provided a cost-of-living adjustment to the cap and a similar bill introduced in 2014 also did not garner enough support to pass the legislature. MICRA has also seen challenges in the courts including, earlier this year in Lopez v. Ledesma, No. S262487, 2022 WL 553421 (Cal. Feb. 24, 2022), where the California Supreme Court ruled that the liability cap also applies to physicians’ assistants practicing under the supervision of a doctor.

Other than being hotly debated in the California legislature and the court system, interest groups have also sponsored ballot initiatives in an effort to amend MICRA. In California, ballot initiatives can be proposed by state citizens without the support of the governor or the state legislature. They are often used as a way of presenting specific issues and putting them to a vote. Ballot measures, such as those involving MICRA, have been noted to be extremely expensive particularly when there are competing campaign contributions from sophisticated interest groups and involve an issue that is continuously presented to voters. The most recent ballot initiative regarding MICRA was the “Fairness for Injured Patients Act” (FIPA), which was born out of negotiations among rival interest groups representing doctors, patients, and medical malpractice attorneys. FIPA would have increased the non-economic damages cap from $250,000 to $1.2 million and effectively would have removed the damages cap altogether if a patient died or suffered a catastrophic injury leaving them paralyzed or disfigured. FIPA was scheduled to go to California voters in November 2022. Prior to FIPA, MICRA also saw challenges in 2014 when a ballot initiative known as “Proposition 46” sought to increase the damages cap. A.B. 35 was introduced as a compromise to avoid the high campaign costs of competing interest groups lobbying for or against FIPA, and in an effort to avoid the $1.2 million cap that FIPA would have set. Given the signing of A.B. 35, FIPA will now be removed from the state-wide ballot in November.

Court of Special Appeals of Maryland finds ambiguity in easement and reversed trial court order to demolish dwelling

This week, the Court of Special Appeals of Maryland found an ambiguity in an open space and conservation easement and reversed a trial court’s grant of summary judgment. In Roxbury View, LLC v. Edward McCauley, the Court held that Maryland Environmental Trust’s victory at the trial court – mandating that a new residential dwelling be demolished within six (6) months –would be short lived as the agreement did not so strictly limit construction on 285 acres of open farmland in western Howard County.

The easement at issue provided that no “building, facility, or other structure” was permitted to be erected or constructed unless either: the structure replaces a pre-existing structure; or, if “such structure is a new structure which is necessary for and directly related to the continued agricultural use of the property.” Before the trial court, MET successfully argued that the agreement prohibited the owners from erecting any residential dwelling that is not a replacement dwelling. The Court of Special Appeal disagreed. While it was possible to read the easement in such a restrictive manner, the agreement did not compel such a reading.

Noting that a “residence” is a form of “structure” under the agreement, the Court looked at the trial record to determine whether a reasonable person could interpret the agreement to mean that an owner could erect a residence if it was “necessary for and directly related” to the use of the property. The servient property owners had proffered affidavits from farmers testifying that a farm manager’s round-the-clock physical presence was both “necessary” and “critical” to farming operations. As a residential dwelling could reasonably be viewed as a “structure” which is “necessary” to the continued agricultural use of the property, the Court concluded that the trial court erred in granting summary judgment and remanded the matter. The owners’ trial counsel served their clients well in making certain that the record contained sufficient evidence upon which the Court could rely in a proper review of the dispute.

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.

Short-Term Rental License – DCRA Extends Grace Period for Obtaining License.

The District regulates short-term residential rentals, such as “AirBNB”.

The regulations are found

The grace period for obtaining the license and endorsement is extended to June 9, 2022.

A Basic Business license is required, with two, alternative endorsements available.

Short-Term Rental Endorsement (Host is present during rental – such as renting out bedrooms).

  • Eligibility for License:
    • Must be within host/applicant’s primary residence.
    • Must have Homestead Tax Deduction per D.C. Official Code § 47-850. For the purposes of short-term rentals, accessory dwelling units, including English basements, are considered part of a host’s primary residence.
    • Only natural persons are eligible for short-term rental licenses; business entities such as an LLC or corporation are not eligible.
  • Requirements for Operation
    • Host is present during rental.
    • Occupancy limited to a maximum of eight (8) transient guests, or two (2) guests per bedroom, whichever is greater.
    • As long as the host is present, there is no limit on the number of stays allowed during a calendar year; however, each short-term rental stay is limited to 30 or fewer continuous nights.
    • Must have $250,000 liability insurance (which might be offered by the booking service).
    • Posting within Premises:
      • 24/hour emergency telephone number to be posted in premises.
      • Copy of Basic Business License and Endorsement
    • Provide cleaning and linen exchange between rentals.
    • Smoke and Carbon Dioxide Detectors
    • Fire Extinguisher
    • 2 years of record-keeping
  • Cost of License
    • 2-year fee is $104.50

Short-Term Rental: Vacation Rental Endorsement: (Host is not present – for example, a full home).  Same eligibility and requirements as above.

  • Limitation:
    • cumulatively, vacation rentals cannot exceed 90 nights in any calendar year
    • each rental is limited to 30 or fewer continuous nights.

Once the extended enforcement grace period ends on June 9, 2022, failure to comply with the District’s short-term rental requirements may result in fines of up to $250 for the first violation, escalating up to $1,000 for a third violation. Violations can be reported to the District of Columbia Short-Term Rental Hotline by calling 202-221-8550.

For further information and a list of Frequently Asked Questions visit dcra.dc.gov/shorttermrentals.

Summary judgment granted in premises case. Res ipsa loquitur inapplicable where mode of claimed injury required expert support.

Edward Sedlacek & Crystal Deese obtained summary judgment for their hospital client against a Plaintiff suing for premises liability and res ipsa loquitur.  Plaintiff claimed to have received an electrical shock forceful enough to fracture two different bones.  None of the medical experts agreed that electricity caused these twisting type fractures. The court rejected Plaintiff’s argument that a lay jury could find causation without expert assistance.  Further, res ipsa is an extraordinary theory that does not shift the burden of proof to the defense.  Neither does res ipsa apply to cases where expert witness testimony is needed to reach the inferences necessary to sustain a verdict.  Plaintiff’s lack of supportive expert testimony proved fatal to her case.

Using Intrafamily Loans to Transfer Wealth and Reduce Estate Taxes

With current interest rates at near-historic lows, intrafamily loans remain an effective way to shift wealth to the next generation while avoiding estate and income tax consequences. Such loans can be part of a complex estate planning strategy, including the transfer of a closely-held family business.  However, they can also be used as a simple mechanism to assist children with a major purchase or to help them pay down high-interest rate debt.  A properly structured and managed intrafamily loan has the following benefits:

  • Substantially lower interest rates than what would otherwise be commercially available;
  • Flexible repayment options that can be tailored based on the borrower’s and lender’s needs;
  • Interest payments made to family members rather than outside banks;
  • No borrower credit checks or reporting and
  • Reduced closing costs and associated expenses.

 

Rules and Requirements

In order for an intrafamily loan to be effective, it must be properly structured and documented  to ensure that the Internal Revenue Service (IRS) considers it a bona fide loan and not a gift in disguise.  The IRS takes the position that the transfer of money between family members is a gift unless the lender can show that he or she received full and adequate consideration in exchange for the transfer. The determination of whether a transfer is a gift or a loan depends on a number of factors.  However, an intrafamily loan generally must include a “market” rate of interest, a set schedule of payments or principal/interest, a fixed maturity date, and documentation maintained by the lender and/or borrower reflecting the transaction. At a minimum, the lender should utilize a promissory note containing the loan terms to memorialize the agreement.  However, the lender should also consider securing a pledge of collateral in the form of a deed of trust or a UCC-1 financing statement.

Applicable Interest Rates and Tax Considerations

To apply a “market” rate of interest, an intrafamily loan must require repayment using an interest rate at least as high as the Applicable Federal Rate (“AFR”), which the IRS publishes on a monthly basis under IRC Section 1274. There are three applicable AFRs used for 1) short terms loans of up to three years, 2) mid-term loans from three to nine years, and 3) long term loans of more than nine years. Notably, though the AFR is considered “market” rate, it is generally substantially lower than those charged by commercial lenders.  For example, as of the date of this post, the average 30-year fixed mortgage rate is 4.22%, while the long-term AFR is only 1.92%.

It is also important to note that an intrafamily loan has income tax consequences both parties. For income tax purposes, interest received by the lender is considered taxable income and reportable on the lender’s annual return. If the borrower is unable to repay, and the lender forgives any portion of the loan, the amount forgiven may be taxable income to the lender to the extent it is not covered by the lender’s annual $16,000 gift tax exclusion. Under certain circumstances, if the borrower uses the loan principal to buy a home, start a business, or make certain investments, the interest payments may be tax-deductible.

How It Works

To illustrate the mechanics of a an intrafamily loan, consider a hypothetical family business. Owner wants to pass a portion of the business to Child, but the transfer would be subject to gift tax and use a portion of the owner’s gift and estate tax exemption.  Instead, Owner obtains an appraisal for the business, then sells a portion of the business to Child, and takes back a promissory note guaranteeing payment at the current AFR.  The sales price is set at the fair market value and discounted for the minority interest and lack of marketability. Child uses the income from the business to pay back the principal and interest on the loan. Meanwhile, Child (who is in a lower income tax bracket than Owner) pays income tax on the income generated by the proportionate business share. After the loan term ends, the value of the business interest has appreciated, the loan is repaid in full, and the size of Owner’s taxable estate is substantially lower without depleting his gift and estate exemption.

Conclusion

In today’s low-interest rate environment, intrafamily loans are an effective way to help the younger generation while reducing future gift and estate tax burdens.  However, tax rules regarding intrafamily loans are complex, and can result in adverse and unintended tax consequences if not implemented correctly.  At Jackson & Campbell, P.C., we remain available to develop a comprehensive loan strategy and assist in its implementation and administration.

 

The information provided in this article does not, and is not intended to, constitute legal advice. All information is for general informational purposes only. No reader should act or refrain from acting on the basis of information in this article without first seeking independent legal advice.

No Jurisdiction in Medical Malpractice Plaintiff’s Home State

The Health Law Practice Group recently secured dismissal for a local hospital sued in Plaintiff’s home state on jurisdictional grounds.

The patient sued a facility with offices located in D.C., Maryland, and Virginia. Plaintiff filed suit in his home state of Pennsylvania claiming his injury manifested there.  However, the care at issue was rendered in Maryland weeks before any injury manifested.  Plaintiff claimed the Maryland provider’s failure to diagnose was exacerbated by subsequent events occurring in Pennsylvania.

In denying general personal jurisdiction over the provider, the Pennsylvania court found regular treatment of Pennsylvania residents at D.C., Maryland, and Virginia facilities did not constitute a continuous, systematic business in Pennsylvania.  The court also denied specific personal jurisdiction under the Pennsylvania Long Arm Statute which provides that personal jurisdiction may lie where a harm or tortious injury suffered in Pennsylvania is caused by an act or omission elsewhere. The court reasoned that the alleged misdiagnosis and failure to treat happened outside of Pennsylvania at the point of care.

The court agreed with J&C’s lawyers that the hospital lacked sufficient minimum contacts with Pennsylvania to satisfy Due Process. The court properly rejected Plaintiff’s claim that knowing treatment of patients living in Pennsylvania was a purposeful contact with the Commonwealth of Pennsylvania. The court cited public policy, observing “the idea that tortious rendition of medical services is a portable tort which can be deemed to have been committed wherever the consequences were foreseeably felt was wholly inconsistent with the public interest having services of this sort generally available.”

Texas High Court: Extrinsic Evidence Permissible in Limited Exception to Eight-Corners Rule

In a decision issued on February 11, 2022, the Texas Supreme Court, responding to a certified question from the United States Court of Appeals for the Fifth Circuit, held that extrinsic evidence can be considered in determining an insurer’s duty to defend in limited circumstances.

In Monroe Guar. Ins. Co. v. BITCO Gen. Ins. Corp., the United States Court of Appeals for the Fifth Circuit certified a question to the Texas Supreme Court concerning whether extrinsic evidence was permissible in evaluating an insurer’s duty to defend. No. 21-0232, 2022 Tex. LEXIS 148 (Tex. Feb. 11, 2022).  Underlying the dispute was an action brought by an owner of farmland who contracted with the drilling company insured to install a 3600-foot commercial irrigation well on his farmland. Id. at *2–3. Although the owner’s complaint asserted claims for breach of contract and negligence, contending that the improper installation damaged his land, it did not specify as to when the alleged damage occurred. Id. The drilling company subsequently demanded a defense from two of its commercial general liability carriers, BITCO and Monroe. Id. at 4. Although BITCO agreed to provide a defense under a reservation of rights, Monroe refused, contending that it had no duty to defend on the basis that any property damage occurred before its policy period began. Id.

As a result, BITCO filed an action against Monroe in federal district court seeking a declaration that Monroe also owed a defense to the drilling company. Id. The parties, while cross-moving for summary judgment, stipulated that the property damage occurred roughly ten months prior to the inception of Monroe’s policy. Id. Declining to consider the stipulation and applying Texas’ eight-corners rule, the court concluded that Monroe owed a duty to defend because the property damage could have occurred anytime between the formation of the drilling contract in 2014 and the filing of the owner’s suit, thereby potentially triggering coverage under either or both of the insurer’s policy periods. Id. at *5.  Monroe appealed, and the United States Court of Appeals for the Fifth Circuit certified questions to the Texas Supreme Court related to whether extrinsic evidence is admissible when considering an insurer’s duty to defend. Id.

The Texas Supreme Court, answering in the affirmative, clarified the Fifth Circuit’s decision in Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523 (5th Cir. 2004), which set forth a narrow extrinsic evidence exception to the eight-corners rule for fundamental issues of coverage. Id. at *9–10.  The Texas Supreme Court therefore held that extrinsic evidence can be considered when evaluating an insurer’s duty to defend when the evidence: “(1) goes solely to an issue of coverage and does not overlap with the merits of liability, (2) does not contradict facts alleged in the pleading, and (3) conclusively establishes the coverage fact to be proved.” Id. at *12.  Applying this test to the coverage dispute between BITCO and Monroe, the Texas Supreme Court determined that extrinsic evidence was not permissible. The Court reasoned that a dispute as to “when property damage occurs also implicates whether property damage occurred on that date, forcing the insured to confess damages at a particular date to invoke coverage, when its position may very well be that no damage was sustained at all.” Id. at *16–17.

Although Monroe provides some clarity to the decidedly-narrow extrinsic evidence exception in Texas, duty to defend coverage disputes will likely now center on whether the extrinsic evidence speaks solely to an issue of coverage, contradicts the facts alleged in the pleadings, or conclusively establishes the coverage fact at issue.

Mississippi Supreme Court Holds Pollution Exclusion Ambiguous

In a decision issued on January 20, 2022, the Mississippi Supreme Court held that a pollution exclusion contained in a general liability policy was ambiguous with respect to a claim for coverage by an insured for a damage caused by an explosion.  The court deemed the terms “contaminant” and “irritant” within an absolute pollution exclusion ambiguous in an insurance coverage dispute involving an explosion caused by welding a tank containing stickwater, a food manufacturing by product.

In Omega Protein, Inc. v. Evanston Ins. Co., the Mississippi Supreme Court was asked to decide whether stickwater, a byproduct of the fish meal and fish oil production process, was a “pollutant” within the purview of an absolute pollution exclusion contained in a commercial general liability policy (“CGL”). No. 2020-CA-01097-SCT, 2022 WL 178171, at *4 (Miss. Jan. 20, 2022). The underlying dispute arose from an explosion at a food manufacturing facility owned by the insured Omega Protein Inc. (“Omega”) where a contractor hired by Omega was performing welding and other fabrication work on a tank temporarily housing stickwater.  Id. at *2–4. The explosion resulted in one death and several injuries. Id. Omega sought coverage under the contractor’s CGL and umbrella policies as an additional insured after the decedent’s estate filed suit against Omega contending that the explosion was caused by the ignition of flammable gases inside the stickwater storage tank. Id. at *1. The contractor’s primary CGL carrier, Colony, filed a declaratory judgment action seeking a declaration of no coverage for bodily injury based on the pollution exclusion in its policy. Evanston, the excess umbrella carrier, intervened and denied coverage, based on among other things, a substantially similar pollution exclusion in its policy. Id.

Although Colony eventually resolved its dispute with Omega, Evanston continued to maintain that coverage was unavailable pursuant to its pollution exclusion, which precluded coverage for losses “arising out of or contributed to in any way by the actual, alleged or threatened discharge, dispersal, release, migration, escape, or seepage of pollutants.” Id. at *2.  The policy defined the term “pollutants” as “any solid, liquid, gaseous, or thermal irritant or contaminant including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste.” Id. The dispute centered on whether the gasses emitted by the stickwater were an “irritant or contaminant” under the pollution exclusion. Id.  The trial court ruled granted summary judgment in favor of Evanston and Omega appealed.

The Mississippi Supreme Court reversed the trial court’s ruling in favor of Evanston, holding that the pollution exclusion was ambiguous and, pursuant to Mississippi law, construed the ambiguity in favor of Omega. Id. at 3. Referring to dictionary definitions of the terms “contaminant” and “irritant,” the court determined that each were susceptible to more than one meaning. The court reasoned that while a substance can be an irritant or contaminant by its very nature, a substance may not necessarily be one “until it comes into contact with something and is actively irritating or contaminating it.” Id. Using crude oil as an example, the court observed that crude oil could be considered a contaminant not only by its nature, but also when it comes into contact with water or wildlife. Id. Accordingly, the court concluded the terms to be ambiguous and construed coverage in favor of Omega.  The court separately upheld the trial court’s determination that Omega qualified as an additional insured under Evanston’s policy. Id. at 4.

Association Liability for Crimes Committed by Third Parties

On February 3, 2022, a final order was issued in Letellier v. The Atrium Unit Owners Association, et al. (Case No. CL19001103-00). The case tested the duty owed by condominium associations when a third-party commits a crime against a resident.

On May 7, 2017, a man posed as a maintenance worker and entered the Atrium Condominium (the “Condominium”) in Arlington, Virginia. He entered the secured Condominium by following in after another resident. Once inside, he knocked on several units, claiming to be a maintenance worker. One resident opened her door and was sexually assaulted before the man fled the area.

The victim brought a civil action for personal injuries she sustained from the criminal assault committed by the third-party.

In preparing for trial, the Association filed a motion to strike, contending there was no special relationship with the plaintiff. The Association also argued there was no duty to warn or protect the plaintiff from a criminal act by a third-party. Arlington County Circuit Court Judge Daniel S. Fiore, II denied the Association’s motion and allowed the case to proceed to a jury. The jury was instructed to apply the ordinary standard of care. In arriving at this decision, the judge noted the man was seen trying to enter the Condominium at various entry points, and he was seen leaving some bushes he had been hiding in before slipping into the garage. The man eventually accessed the building through a door a resident exited. All of these movements were captured by the Association’s security camera, according to the judge’s opinion.

In Virginia, there are two general exceptions to the general rule of nonliability. The judge’s opinion noted these two exceptions are: (1) where a Defendant assumes a duty to protect from criminal harm; and (2) where a special relationship exists (and a duty is not assumed).

The judge’s opinion stated when there is circumstantial evidence of a special relationship. In concluding there was a sufficient factual basis to establish a special relationship, the judge’s opinion referred to the monthly Condominium fees paid by plaintiff each month, which included security measures. The judge also noted these security measures were within the exclusive control of the Association.

The Association also argued this crime was not foreseeable and that the heightened standard of imminent harm established in Thompson v. Skate Am., Inc., was not established. The judge rejected these positions as well. The judge’s opinion concluded there a was a reasonable belief a crime was in progress when there were reports from other owners that called the front desk and stated a maintenance man was trying to enter other units. The opinion also touched on the fact the front desk attendant told residents that there were no maintenance people on site because it was a Sunday.

Ultimately, the judge allowed the jury to consider whether the Association acted under an ordinary standard of care. The jury returned a verdict in favor of the Association.

In condominium associations, the board is responsible for assessing the security needs of residents within their individual units but also the entire community. Different communities will have different needs. Large communities within a city will have different needs than smaller communities in more rural areas. We can help associations assess potential risk within and outside the community.

This article is not intended to contain legal advice or to be an exhaustive review.  Zach Chapman is an Associate Attorney in the General Litigation and Real Estate Practice Groups. He counsels a variety of community associations and boards, helping them address their evolving needs in an ever-changing world. He can be reached at 202-457-1613 or via email at zchapman@jackscamp.com.

Court of Special Appeals of Maryland affirms expansion of general easement to allow for emergency vehicle use

Following seven years of litigation, and two appeals, the Court of Special Appeals of Maryland affirmed a circuit court’s widening of a general easement to effectuate the intent of long-dead parties. In Garrett v. Holloway, the Court added some measure of clarity to a 1903 conveyance which referenced a bisecting private road but did not expressly create an easement nor define the width of the entire private road.

In 1903, two separate landlocked parcels of a larger property were conveyed, surveys for which described an existing private road but were otherwise silent as to its usage. The owner of the servient parcel asserted that a 1904 survey showed the eastern portion of the private road as being 12-foot-wide and that this survey demonstrated the parties’ intent to limit the width of the entire private road. However, the servient estate had historically permitted use of a width in excess of 12 feet, even removing a temporary fence if the landlocked farmers needed additional space. The landlocked parcels used the private road for farming purposes and contended that they needed more than 12 feet in order to properly utilize the easement.

Recognizing that the western portion of the private road was a general easement, the circuit court had the power to look at the surrounding circumstances and conduct of the parties to resolve any ambiguity regarding its location and width. The Court noted that sufficient evidence was submitted at trial to establish that the intent of the parties was to create a useable right-of-way. The landlocked parcels had demonstrated that a 12-foot-wide easement was inadequate and unsafe for emergency equipment and it could not be drained or maintained unless expanded. The Court expanded the 12-foot-wide easement such that the central 12 feet remained as a roadway but included an additional three feet on each side to be maintained to ensure use for emergency vehicles.

Proper drafting can aid in describing parties’ intent at the time of creation—whether to allow for expansion of rights based on future usage or to limit the scope of an easement to a defined width—and to avoid, or at least narrow, future litigation.

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.

 

Recently Signed New York Law Sets New Mandatory Insurance Disclosures

[Update]

On February 25, 2022, Governor Kathy Hochul passed into law Senate Bill 7882 scaling back the Act’s most stringent requirements including, among other things, eliminating the disclosure requirements for defendants in litigation pending prior to the Act’s passage, extending the time to make disclosures from sixty days to ninety days after service of an answer, and removing from disclosures information about unrelated litigation and attorneys’ fees expended.

Also removed from mandatory disclosures is the requirement to provide the contact information of all persons and third party administrators involved in the claim. Now only the contact information (name and e-mail address) of the assigned individual responsible for adjusting the claim is required to be disclosed.

In an effort to be less burdensome, the amended Act now permits defendants to prove the existence and contents of any applicable insurance in the form of the insurance policy in place at the time of the loss, or if agreed by the plaintiff or party in writing, in the form of the policy’s declaration page. Previously, the Act required disclosure of even insurance applications. However, a plaintiff or party may revoke their agreement to accept a declaration page in lieu of the full copy of any insurance policy at any time, and the initial agreement to accept the declaration page does not waive the ability to receive any other information required to be provided under the Act. Upon notice of such revocation, any applicable defendant must provide a full copy of the insurance policy in place at the time of the loss.

The amendment also puts into place certain protections for defendants and insurers, namely, that disclosure of policy limits does not constitute an admission that any alleged injury or damage is covered by the policy.

[End of Update]

On December 31, 2021, New York State Governor Kathy Hochul signed into law the Comprehensive Insurance Disclosure Act. The Act amends CPLR §3101(f) of which addresses the scope of disclosures on the contents of insurance agreements. The Act calls for defendants to provide complete insurance information for any insurance agreement through which a judgment could be satisfied within 60 days after serving its answer. Information and documentation to be provided include:

  • all primary, excess and umbrella policies
  • complete copies of insurance contracts, including, but not limited to, declarations, insuring agreements, conditions, exclusions, endorsements, application for insurance etc.
  • contact information, including telephone number and e-mail address, of any person or persons responsible for adjusting the claim. Contact information for third-party administrators and persons within insuring entity to whom the third-party administrator is required to report is also required
  • the amounts available under any policy, contract or agreement to satisfy a judgment or to reimburse for payments made to satisfy the judgment
  • disclosure of any lawsuits that have reduced or eroded or may reduce or erode the amounts available to satisfy or reimburse a judgment, including: the caption of any such lawsuit, the date the lawsuit was filed, and the identity and contact information of the attorneys for all represented parties therein
  • disclosure of the amount, if any, of any payment of attorney’s fees that have eroded or reduced the value of the policy, along with the name and address of any attorney who received such payments

The Act’s amended version of §3101(f) also mandates an ongoing obligation to make reasonable efforts to ensure that the information disclosed remains accurate and complete. Additionally, defendants are required to provide updated information within thirty days of receiving information rendering the prior disclosure inaccurate or incomplete. This obligation exists during the entire pendency of the litigation and for sixty days after any settlement or entry of final judgment in the case inclusive of all appeals. However, disclosure of information related to insuring agreements are not by reason of disclosure admissible in evidence at trial.

The Act also adds a new section to CPLR §3122, a New York statute on the objections to disclosure, inspection or examination and compliance with discovery. CPLR §3122(b) now requires that information disclosed pursuant to §3101(f) be sworn in the form of an affidavit or affirmation by the defendant and defendant’s counsel that the information is accurate and complete, and that reasonable efforts have been and will be undertaken to ensure its accuracy and completeness.

The Act takes effect immediately and applies to all pending actions. Any information required that was not previously disclosed are now to be provided within sixty days from the Act’s effective date (March 1, 2022).

UPDATE:  On January 18, 2022, Senate Bill 7822 was introduced which, if passed, would scale back the Act’s most stringent requirements including, among other things, eliminating the disclosure requirements for defendants in litigation pending prior to December 31, 2021, extending the time to make disclosures from sixty days to ninety days after service of an answer, and eliminating from disclosures information about unrelated litigation and attorneys’ fees expended.  The Senate Bill remains pending in the legislature.

 

Now is the Time to Prepare for OSHA’s Enforcement of the Emergency Temporary Standard on COVID-19 Vaccination and Testing

On January 7, 2022, the Supreme Court heard argument on requests to stay enforcement of OSHA’s Vaccination, Testing and Face Coverings Standard, a workplace safety standard adopted to deter the spread of COVID-19.

OSHA previously announced that enforcement of the non-testing requirements would begin as soon as January 10, 2022, with enforcement of the testing requirements delayed until February 9, 2022.

Unless and until the Supreme Court intervenes, here is what employers of 100 or more need to know.

What is the Vaccination, Testing and Face Covering Standard?

It is a temporary safety standard issued under OSHA’s authority to address dangers in the workplace. The standard was enacted on an emergency basis without the usual public comment period and, as such, may be in effect for no longer than 6 months.

Importantly, despite its name the standard does not mandate vaccinations. The standard compels employers to adopt either (i) a mandatory vaccination policy, or (ii) a policy that requires employees to elect vaccination or regular COVID-19 testing and face covering.

Who is covered?

Private sector employers, with limited exceptions, which employ 100 or more at any time that the standard is in effect.

State and local government employees in jurisdictions with OSHA-approved occupational safety plans.

Which employers are exempt?

Workplaces covered by the Guidance for Federal Contractors and Subcontractors issued by the Safer Federal Workforce Task Force.

Settings where any employee provides healthcare services or healthcare support services subject to 29 CFR 1910.502.

Are any employees exempt?

Yes. There are three categories of employees exempt from the requirements of the standard: (i) employees who do not report to a workplace where other individuals are present; (ii) employees who work exclusively outdoors; and (iii) employees working from home.

Also, employees with medical conditions or disabilities may be exempted from some or all of the requirements of the standard.

What must employers do?

  1. Employers must establish and enforce a written policy that either (i) mandates that all non-exempt employees are fully vaccinated against COVID-19, or (ii) allows non-exempt employees to choose to be fully vaccinated or to provide proof of regular testing for COVID-19 and wear a face covering in the workplace. Fully vaccinated means an employee’s status 2 weeks after completing primary vaccination with a COVID-19 vaccine.

 

  1. Employers must determine and maintain a roster of the vaccination status of each employee, including whether the employee is fully or partially vaccinated, and require proof of vaccination from each vaccinated employee.

 

  1. Employers must require employees who are not fully vaccinated and who report to the workplace at least once every 7 days to secure a COVID-19 test at least once every 7 days and to provide documentation to the employer within 7 days of each test.

 

  1. Employers must ensure that each employee who is not fully vaccinated wears a face covering when indoors and when occupying a vehicle with another person for work purposes. The face covering must fully cover the employee’s nose and mouth, and must be replaced when wet, soiled, or damaged. Exceptions to the face covering requirements include when an employee is alone in a room with floor to ceiling walls and a closed door, and for a limited time when an employee is eating or drinking, or for identification purposes in compliance with safety and security requirements.

 

  1. Employers must provide support for employee vaccination, including (i) providing time to each employee for each primary vaccination dose with up to 4 hours paid time for employees to travel and obtain each dose, and (ii) reasonable time and paid sick leave for employees to recover from side effects experienced following any primary vaccination dose.

 

  1. Employers must require all employees, regardless of vaccination status, to notify the employer promptly when a positive COVID-19 test result or diagnosis is received.

 

  1. Employers must remove from the workplace any employee, regardless of vaccination status, any employee who receives a positive COVID-19 test result or diagnosis.

 

  1. Employers must report work-related COVID-19 fatalities and hospitalizations to OSHA within time periods set forth in the standard.

 

  1. Employers must make available to OSHA within time periods provided in the standard the employer’s written policy on COVID vaccinations required by the ETS.

 

  1. Employers must provide each employee the CDC document “Key Things to Know About COVID-19 Vaccines,” available at https://www.cdc.gov/coronavirus/2019-ncov/vaccines/keythingstoknow.html.

 

The standard may be found at 29 C.F.R. 1910.501 and in the Federal Register for November 5, 2021.

This summary is not intended to contain legal advice or to be an exhaustive review.  Employers with questions on how to craft and implement an ETS-compliant policy – and how to handle exemption and accommodation requests – should contact Erica L. Litovitz, Esq., John J. Matteo, Esq., or another member of Jackson & Campbell’s Employment Law Practice Group for more information.

 

DC to Mandate Proof of Vaccination Status at Indoor Establishments- UPDATE

UPDATE:

On Monday February 14, 2022, Mayor Bowser announced that, effective Tuesday February 15, 2022, DC will drop the requirement that patrons show proof of vaccination status before entering most businesses.

On December 22, 2021, Mayor Muriel Bowser announced, via executive order, that the District of Columbia would join other major cities including Los Angeles, New York, Philadelphia, and Chicago in requiring proof of partial vaccination for entry into certain indoor establishments. The partial vaccination requirement, set to take effect on January 15, 2022 (with patrons being required to provide proof of full vaccination by February 15, 2022), is being hailed as direct response to the recent surge in reported COVID-19 cases caused by the highly contagious omicron variant.

Section II (1) of the order states that specified establishments “shall not permit a guest, visitor, or customer over twelve (12) years old to enter their indoor premises without displaying proof of vaccination against COVID-19.” Specified establishments include “restaurants, bars and nightclub establishments; indoor entertainment establishments; indoor exercise and recreational establishments; indoor event and meeting establishments; and any other indoor establishment designated by the Director of the Department of Health.” Notably, the order carves out certain exemptions from the vaccine entry requirement for establishments and individuals. The exempted establishments include “houses of worship; grocery stores, farmer’s markets, and food service establishments providing charitable food services; pharmacies, medical offices, urgent care centers, or hospitals; Big box stores and retail establishments…; private meeting spaces in residences or office buildings; facilities relating to governmental regulation, licensing, administrative hearings, judicial proceedings, law enforcement, the provision of legal services, and the Department of Motor Vehicles; facilities relating to essential human services such as warming and cooling centers, day service facilities for homeless persons, shelters serving homeless persons or victims of domestic violence; polling places during elections; and such other facilities as exempted by the Department of Health.” Exempted individuals include those “individuals entering a covered establishment for a quick and limited purpose; or a person entitled by law to a reasonable accommodation due to a medical condition or a sincerely held religious belief.”

While the order is silent on mechanisms for enforcement and whether there will be a negative covid test-out option, it does state that the D.C. Department of Health “shall further specify the applicability of this Order and any reasonable accommodations that may be necessary including when a recent negative test may substitute for vaccination…” Furthermore, Deputy Mayor John Falcicchio has indicated that additional guidance will be issued by the end of this week. Jackson & Campbell continues to the monitor any developments in that regard and is prepared to advise on this important policy and related legal issues.

UPDATE:

On January 6, 2022, the Mayor’s office issued a health guidance that aims to clarify the specific establishments covered by the mandate and sets forth the requirements for obtaining a medical and/or religious exemption.  In addition to providing a negative PCR or antigen test within 24 hours, those seeking a medical exemption must show “[d]ocumentation of a medical exemption, such as a note from a medical provider; and those seeking a religious exemption must show “[d]ocumentation of a religious exemption, such as an attestation from the patron that they have a sincerely held religious belief.” While it is unclear at this time whether additional guidance will be forthcoming from the Mayor’s office,  Jackson & Campbell continues to the monitor any developments in that regard and is prepared to advise on this important policy and related legal issues.

This summary is not intended to contain legal advice or to be an exhaustive review. Individuals and businesses navigating the pitfalls of this vaccine mandate should contact Kamilah Mitchell, Esq., Erica L. Litovitz, Esq., or another member of Jackson & Campbell’s Employment Law Practice Group for more information.

SCOTUS Opinion: Court Permits Pre-Enforcement Challenge to Texas Abortion Law By Clinics, Not The Federal Government

The Court today resolved both challenges to Texas’ new abortion law, S.B. 8, which empowered private citizens to sue those who provided an abortion when a fetal heartbeat is detectable. In Whole Women’s Health v. Jackson, an abortion clinic sued a variety of defendants, seeking to enjoin enforcement of S.B. 8. The last time that case was before the Court, a narrow majority declined to enter an injunction because it was uncertain whether their claims could be maintained against any of the named defendants. On remand to the Fifth Circuit, the clinic sought certiorari to the Court before judgment, which the Court granted. Today, the Court ruled 8-1, in a majority opinion by Justice Gorsuch, that the clinics could maintain their action against state licensing officials who were empowered to enforce Texas’ Health and Safety Code, which included S.B. 8, even though the main enforcement mechanism of the law was through private action.

Justice Gorsuch ruled that the remaining defendants, including Texas state judges and court clerks, must be dismissed under the state sovereign immunity principles of Ex parte Young, 209 U.S. 123 (1908). Justice Thomas concurred, but argued that the claims against the state officials should have also been dismissed. Chief Justice Roberts, joined by Justices Breyer, Sotomayor, and Kagan, concurred as to the state officials, but dissented as to dismissal of the clerks and the state attorney general, arguing that neither enjoyed immunity. Justice Sotomayor, joined by Justices Breyer and Kagan, echoed the Chief Justice’s position, arguing that S.B. 8’s structure posed a “brazen challenge to our federal structure,” and faulted the Court for failing to “put an end to this madness months ago” by stopping enforcement of S.B. 8 until its constitutionality could be adjudicated. Meanwhile, in a per curiam decision, the Court dismissed the case of United States v. Texas as being improvidently granted certiorari, with only Justice Sotomayor dissenting, both without opinions.

A link to Whole Women’s Health is here: https://www.supremecourt.gov/opinions/21pdf/21-463_3ebh.pdf

A link to U.S. v. Texas is here: https://www.supremecourt.gov/opinions/21pdf/21-588_c07d.pdf

Estate Tax Considerations for 2022: How Clients Can Plan in an Uncertain Time

The Internal Revenue Service (“IRS”) has released annual inflation adjustments for 2022. These include increased gift, estate, and generation-skipping transfer (“GST”) tax exemptions (the “unified credit”), annual gift tax exclusions, and retirement account limits. The changes are as follows:

  • The unified credit will increase to $12.06 million for an individual (from $11.7 million in 2021). This means that a married couple will have $24.12 million of available exemption (up from $23.4 million in 2021) assuming portability is properly elected on the predeceased spouse’s federal estate tax return.
  • The annual gift tax exclusion will increase to $16,000 (from $15,000 in 2021). As a result, individuals will be able to give $16,000 per year ($32,000 for a married couple) to any number of persons (or trusts) tax free.
  • The annual gift tax exclusion for gifts to non-US citizen spouses will increase to $164,000 (from $159,000 in 2021). Note that gifts made to a US citizen spouse are not taxable in any amount whether made during the spouse’s lifetime or at death.
  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan will increase to $20,500 (from $19,500 in 2021).

However, the IRS also cautioned that legislation pending in Congress might affect 2022 tax returns and taxpayers should consult future IRS guidance to determine if the adjusted figures remain applicable in 2022.  Specifically, tax experts anticipated that two recent pieces of legislation – the Infrastructure Investment and Jobs Act (IIJA) and the Build Back Better (BBB) bill –  could have resulted in significant changes to federal estate and gift tax law.

The IIJA, which invests in the nation’s infrastructure, was signed into law by President Biden on November 15, 2021. However, it failed to include any of the initially proposed and anticipated changes to the current estate tax regime. Notably, the IIJA does not:

  • Reduce the unified credit, which was expected to drop to $5 million per person as of January 1, 2022;
  • Increase the federal estate tax rate, which remains at 40% in 2022;
  • Eliminate the step-up in basis at death in favor of carry-over basis;
  • Recognize income tax realization at the time of a transfer event (i.e. by gift or death) rather than sale (“deemed realization”);
  • Disallow valuation discounts for closely-held entities holding nonbusiness assets; or
  • Reduce the availability of intentionally defective grantor trusts as estate tax reduction vehicles.

The BBB bill, a social spending bill which addresses childcare and affordable housing, passed in the House of Representatives on November 19, 2021 and is now being debated in the Senate. Although the BBB bill contains some changes to the federal income tax, it also does not include any significant adjustments to estate and gift tax laws.

What does this mean for your estate planning? Although it appears any immediate changes are on hold, you should not be complacent. If your assets are significant enough to constitute a taxable estate, year-end planning has even more significance in 2021. First, the BBB bill has not yet passed. As the IRS warns, the bill – which has already undergone significant revisions – could be renegotiated and signed in a different form. Second, the unified credit (which was doubled by the 2017 Tax Cuts and Jobs Act) is scheduled to drop to $5 million per person on January 1, 2026, unless Congress acts sooner. When this happens, taxpayers who have not used the “extra” exemption will lose it forever. Therefore, clients should consider additional gifting, especially because the IRS has already confirmed that there will be no “clawback” for use of the increased exclusion amount if a taxpayer dies after the unified credit has been reduced.  In addition, the current low interest rate environment makes certain estate tax planning strategies increasingly attractive. These strategies, which include sales to intentionally defective grantor trusts, intra‑family loans, and grantor retained annuity trusts, may not be available in the future, as signaled by the Biden administration. Given what is expected on the horizon, it is important that all estate plans be reviewed for any potential impact.

At Jackson & Campbell, P.C., we remain available to develop comprehensive gift and estate tax strategies and help clients navigate the ever-changing tax landscape.

SCOTUS Opinion: Equitable Apportionment Doctrine Applies To Interstate Aquifers

Typically in cases where states have a dispute over water use, usually involving water flowing above ground in a river or lake, the Court uses the doctrine of equitable apportionment to allocate the water resources between the states. In Mississippi v. Tennessee, Mississippi originally sued the City of Memphis for drawing too much water from the Middle Claiborne Aquifer, which resides beneath both Mississippi and Tennessee, and asked for damages in federal court. The district court and the Fifth Circuit both held that since water flowed over state lines underground in the aquifer, like an aboveground river, then the case was really a water use dispute between the states subject to the equitable apportionment doctrine, and not damages. Mississippi re-filed its suit, adding Tennessee as a defendant, and again asked for damages instead of equitable apportionment, arguing that underground interstate aquifers should not be subject to the doctrine. The Court, in a unanimous ruling by Chief Justice Roberts, disagreed, holding that underground interstate aquifers should be treated as interstate rivers, especially where, as here, the water in the aquifer flows from one state to another. While Mississippi undoubtedly has sovereign ownership of the water within its boundaries, it has no such ownership over waters that pass over its boundaries that would afford it a claim for damages. Since Mississippi did not seek equitable apportionment, as would be the only available remedy, the case was dismissed. A link to the decision is here: https://www.supremecourt.gov/opinions/21pdf/143orig_1qm1.pdf

New Video: The Women’s Initiative

Attorney Sarabeth Rangiah discusses the efforts of Jackson & Campbell’s women attorneys to support one another in a legal world predominantly still run by men.

Jackson & Campbell, P.C.’s attorneys are among the most respected in Washington, routinely winning national awards and high rankings from organizations like The Best Lawyers in America, Super Lawyers, Who’s Who in America, and many others. Dependability is the cornerstone of a successful attorney-client relationship. We take particular pride that our clients depend on our advice to address what is often their most important decisions – wills, family trusts, generation wealth transfers, real estate transactions, business transactions, professional negligence, and all types of dispute resolutions from arbitrations to jury trials. The firm traces its roots to 1887, making it one of the oldest law firms in Washington, D.C. We pride ourselves on more than a century of service to our clients and our community.

This video is not intended to contain legal advice or to be an exhaustive review. If you have any questions about the contents of this video, please contact us directly at https://www.jackscamp.com.

Business Practice Group Spotlight: Vaccine Mandates

Firm President John J. Matteo discusses vaccine mandates & the efforts made by Jackson & Campbell’s Business Law Practice Group to advise clients on evolving guidelines from the CDC. Follow our new YouTube channel for more video content from our attorneys!

Jackson & Campbell, P.C.’s attorneys are among the most respected in Washington, routinely winning national awards and high rankings from organizations like The Best Lawyers in America, Super Lawyers, Who’s Who in America, and many others. Dependability is the cornerstone of a successful attorney-client relationship. We take particular pride that our clients depend on our advice to address what is often their most important decisions – wills, family trusts, generation wealth transfers, real estate transactions, business transactions, professional negligence, and all types of dispute resolutions from arbitrations to jury trials. The firm traces its roots to 1887, making it one of the oldest law firms in Washington, D.C. We pride ourselves on more than a century of service to our clients and our community.

This video is not intended to contain legal advice or to be an exhaustive review. If you have any questions about vaccine mandates or vaccine mandate policy, please contact John J. Matteo at Jackson & Campbell, P.C.

Trusts & Estates Practice Group | Video Overview

Attorney Jamie K. Blair outlines the ways in which the Trusts & Estates Practice Group has helped residents of Maryland, Virginia, and the District of Columbia prepare their end-of-life documents for generations of families.

Jackson & Campbell, P.C.’s attorneys are among the most respected in Washington, routinely winning national awards and high rankings from organizations like The Best Lawyers in America, Super Lawyers, Who’s Who in America, and many others. Dependability is the cornerstone of a successful attorney-client relationship. We take particular pride that our clients depend on our advice to address what is often their most important decisions – wills, family trusts, generation wealth transfers, real estate transactions, business transactions, professional negligence, and all types of dispute resolutions from arbitrations to jury trials. The firm traces its roots to 1887, making it one of the oldest law firms in Washington, D.C. We pride ourselves on more than a century of service to our clients and our community.

Jackson & Campbell Joins YouTube!

 

Firm President John J. Matteo introduces the viewer to Jackson & Campbell P.C., one of Washington, D.C.’s oldest and most respected law firms. Jackson & Campbell can now be found on YouTube! Subscribe to our channel here.

Jackson & Campbell, P.C.’s attorneys are among the most respected in Washington, routinely winning national awards and high rankings from organizations like The Best Lawyers in America, Super Lawyers, Who’s Who in America, and many others. Dependability is the cornerstone of a successful attorney-client relationship. We take particular pride that our clients depend on our advice to address what is often their most important decisions – wills, family trusts, generation wealth transfers, real estate transactions, business transactions, professional negligence, and all types of dispute resolutions from arbitrations to jury trials. The firm traces its roots to 1887, making it one of the oldest law firms in Washington, D.C. We pride ourselves on more than a century of service to our clients and our community.

High Court Puts Abortion Cases On Fast Track

Without waiting for rulings on the merits by the Fifth Circuit, the Court today granted certiorari before judgment in both of the cases challenging the Texas Heartbeat Law (otherwise known as S.B. 8), which permits civil lawsuits to be filed by anyone against those who provide an abortion after a heartbeat is detectable. Both Whole Women’s Health v. Jackson and United States v. Texas were set for oral argument on November 1, 2021.

The issue in the second case was limited to whether the United States could enjoin all of Texas and private parties from enforcing S.B. 8. The Court did not, however, stay enforcement of the law. Justice Sotomayor concurred with the accelerated schedule to hear the cases, but dissented from the decision not to stay the law in the meantime, arguing that “every day the Court fails to grant relief is devastating, both for individual women and for our constitutional system as a whole.”

Links to the orders are available here (https://www.supremecourt.gov/orders/courtorders/102221zr_986b.pdf) and here (https://www.supremecourt.gov/opinions/21pdf/21a85_5h25.pdf).

Blount v. Padgett’s Impact on Property Held as Tenants by the Entireties

The District of Columbia Court of Appeals has clarified a 45-year-old decision regarding the effects of a divorce on liens against property held as tenants by the entireties. In Blount v. Padgett, the Court of Appeals refined its 1976 holding in Travis v. Benson that an entry of a final divorce decree converts property to a tenancy in common allowing the court to later apportion the property.

In Blount, a judgment creditor of Mr. Padgett recorded a lis pendens against property held by Mr. and Mrs. Padgett as tenants by the entireties. Mr. and Mrs. Padgett had been separated—but not divorced—for almost two decades at the time of recordation. The Padgetts’ divorce subsequently became final by a judgment of final divorce which incorporated a property settlement agreement wherein title to the marital property was transferred solely to Mrs. Padgett.

The judgment creditor relied on the Travis decision and alleged that the divorce decree first converted the property from a tenancy by the entireties to a tenancy in common and then, separately, conveyed the tenancies in common to Mrs. Padgett. If correct, the judgment creditor’s lien would have attached to Mr. Padgett’s interest before passing to Mrs. Padgett.

The Court of Appeals disagreed. The married parties were free to determine between themselves how to equitably divide the property and there existed no obligation that the distribution be equal. As the property settlement agreement was incorporated into the divorce decree, there was no interim or intervening period in which the property became a tenancy in common. The property transitioned directly from a tenancy by the entireties to Mrs. Padgett’s sole property. The judgment lien never attached to Mr. Padgett’s tenancy in common interest as no such interest ever existed.

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.

Supreme Court Reinstates Qualified Immunity Claims By Police Officers

In two unanimous per curiam opinions today, the U.S. Supreme Court indicated that qualified immunity for police officers was alive and well despite recent attacks on its propriety. In Rivas-Villegas v. Cortesluna, the Court reversed a ruling by the Ninth Circuit that denied qualified immunity to an officer responding to a violent domestic dispute who put his knee on an arrestee’s back for eight seconds while another officer removed a knife from the arrestee’s pocket.

The Ninth Circuit reasoned that the conduct was prohibited under LaLonde v. County of Riverside, 204 F.3d 947 (9th Cir. 2000), where an officer deliberately dug his knee into an unarmed arrestee’s back while responding to a noise complaint. The Court stressed that LaLonde was readily distinguishable, and did not put the officer in Rivas-Villegas on notice that his brief use of his knee to restrain a prone arrestee was excessive force, thus entitling him to qualified immunity.

A similar result was reached in City of Tahlequah, OK v. Bond, where two officers shot and killed a man who refused to obey their orders, armed himself with a hammer, and began approaching the officers with the hammer raised. The Tenth Circuit denied the officers qualified immunity because it decided the officers potentially created the situation by cornering the man in his garage. The Court held that none of the cases relied on by the Tenth Circuit “comes close to establishing that the officers’ conduct was unlawful[,]” finding none to be relevant to the factual situation presented, and thus granted the officers qualified immunity.

A link to the opinion in Rivas-Villegas is here: https://www.supremecourt.gov/opinions/21pdf/20-1539_09m1.pdf

A link to the opinion in City of Tahlequah is here: https://www.supremecourt.gov/opinions/21pdf/20-1668_19m2.pdf

Attorney James Markels to Present “View from the Bench” CLE for Fairfax Bar Association

On October 26, 2021, Attorney James Markels will participate in a CLE titled “Annual Ultimate View from the Bench” for the Fairfax Bar Association. Mr. Markels will moderate the final panel of the event, “Issues in Civil, Criminal, and Family Practice” from 6:30-7:30PM. The list of speakers for the program, along with a link to register for the event, are below.

PROGRAM AGENDA

4:30 PM – 5:30 PM: Practice and Procedure 

The Hon. Penney S. Azcarate, Chief Judge, Fairfax Circuit Court

The Hon. Lisa A. Mayne, Chief Judge, Fairfax General District Court

The Hon. Todd G. Petit, Judge, Fairfax Juvenile & Domestic Relations District Court

Moderator: William B. Porter, Esq., Blankingship & Keith, P.C.

5:30 PM – 6:30 PM: Professionalism & Ethics 

The Hon. Jonathan D. Frieden, Judge, Fairfax Juvenile & Domestic Relations District Court

The Hon. Tina L. Snee, Judge, Fairfax General District Court 

The Hon. John M. Tran, Judge, Fairfax Circuit Court 

Moderator: Bernard J. DiMuro, Esq., DiMuroGinsberg PC

6:30 PM – 7:30 PM: Issues in Civil, Criminal, and Family Practice 

The Hon. Penney S. Azcarate, Chief Judge, Fairfax Circuit Court

The Hon. Lisa A. Mayne, Chief Judge, Fairfax General District Court

The Hon. Jonathan D. Frieden, Judge, Fairfax Juvenile & Domestic Relations District Court

The Hon. Todd G. Petit, Judge, Fairfax Juvenile & Domestic Relations District Court

The Hon. Tina L. Snee, Judge, Fairfax General District Court 

The Hon. John M. Tran, Judge, Fairfax Circuit Court 

Moderator: James N. Markels, Esq., Jackson & Campbell, P.C.

 

Registration Details:

3.0 MCLE (1.0 Ethics) Credits (Pending)

Cisco Webex

*Registration for this CLE will close on October 25th @4:00 PM

$105 FBA Attorney Members/$150 Attorney Non-Members

$75 FBA Young Lawyer Members/$120 Young Lawyer Non-Members

https://www.fairfaxbar.org/events/EventDetails.aspx?id=1525495&group= 

Arthur D. Burger Will Speak at Panel During Legalweek 2022

On February 3, 2022, Arthur D. Burger, Chair of Jackson & Campbell’s Professional Responsibility Practice Group, will speak in New York City at “Legalweek 2022,” Law.com’s annual conference, on a panel titled, “New Rules & New Realities: Ethically Managing Remote Work.” Joined by speaker Deborah Winokur, Esq., Professional Responsibility & Compliance Counsel at Cozen O’Connor, they  will spotlight ethical challenges that arise from remote work by lawyers and address safeguards law firms should consider.

Virginia Supreme Court Authorizes Removal Of General Robert E. Lee Statue In Richmond

A large statue of Confederate General Robert E. Lee has stood for over 100 years on Monument Avenue in Richmond, along with statues of other Confederate notables. Times changed, and calls to remove the statues intensified. Governor Ralph Northam authorized the removal of the statues, but two lawsuits were filed by private individuals to protect Lee’s monument. In both cases, the circuit court sided with the Governor, but stayed their rulings until the appeal was resolved. The Virginia Supreme Court today unanimously affirmed both rulings, permitting Lee’s statue to be removed. In Gregory v. Northam, a descendent of Bettie and Roger Gregory, who originally owned the land where Lee’s statue stood, claimed that the bequest gave him the right to preserve the status quo. Although the deed to Virginia contained a “guarantee” that Virginia would “faithfully guard . . . and protect” Lee’s monument, the Court held that the descendent did not have any property right to enforce. Such a right would only arise under an easement in gross, and such an easement must be plainly given on the face of the document. No such language was present here, so the descendant’s claim failed.

The other case, Taylor v. Northam, was filed by owners of nearby land who also cited to a joint resolution passed in 1889 that authorized the Governor to acquire the land for the monument, and promised to “hold the said [monument” perpetually sacred to the monumental purpose to which it has been devoted.” The Court noted that such a restrictive covenant must be in keeping with public policy, and while the public policy back in 1889 might have favored the monument, that was then, this is now. Historians testified on behalf of the state opining that the original purpose of the monument was to support the Confederacy’s “Lost Cause” ideal of defending their pre-Civil War way of life, including slavery—notions that run directly counter to modern public policy. Today’s Virginia was not bound by the declarations of its ancestors, and so the injunctions barring the removal of Lee’s statue were “immediately dissolve[d.]”

A link to the opinion in Gregory v. Northam is here: http://www.courts.state.va.us/opinions/opnscvwp/1201307.pdf

A link to the opinion in Taylor v. Northam is here: http://www.courts.state.va.us/opinions/opnscvwp/1210113.pdf

SCOTUS Opinion: Bare Majority Of Court Allows Texas Abortion Law To Go Into Effect

The Texas Heartbeat Act created a private right of action to sue anyone who performed or assisted in performing an abortion after a heartbeat had been detected in a fetus—generally after about six weeks from conception, but well before the viability benchmark established in Roe v. Wade, 410 U.S. 113 (1973). Abortion providers sued a state court judge, a state court clerk, various state officials including the Texas Attorney General, and a pro-life activist, seeking to stop the Act from going into effect. The Fifth Circuit declined to enter an injunction staying the Act from going into effect on September 1.

In Whole Woman’s Health v. Jackson, a five-member majority denied the request for an injunction, noting the “complex and novel antecedent procedural questions” raised by the decision to sue state actors without there being a private cause of action before the Court. The majority stressed that their decision “was not based on any conclusion about the constitutionality of Texas’s law.” Chief Justice Roberts, joined by Justices Breyer and Kagan, dissented, arguing that the consequence of permitting the Act to proceed in such circumstances, “as a model for action in other areas,” counseled for an injunction to preserve the status quo until the matter could be fully briefed. Justice Breyer, joined by Justices Sotomayor and Kagan, filed a dissent arguing that allowing the Act to go into effect threatened “imminent and serious harm” to abortion providers.

Justice Sotomayor, joined by Justices Breyer and Kagan, called the majority’s decision “stunning,” arguing that it “rewards tactics designed to avoid judicial review” and allows Texas’s “flagrantly unconstitutional law” to cause “significant harm” on women. Justice Kagan, joined by Justices Breyer and Sotomayor, lodged the last dissent, arguing that the majority’s decision on the Court’s “shadow docket” diverged from “the usual principles of appellate process” despite being of “great consequence.”

A link to the opinion is here: https://www.supremecourt.gov/opinions/20pdf/21a24_8759.pdf

Considerations for Employers Mandating Vaccines in a Post-EUA World

The FDA’s recent approval of the Pfizer-BioNTech COVID-19 vaccine has ushered in a new wave of employer vaccine mandates.  Private employers had the right to impose such mandates even when the three vaccines available in the U.S. – Pfizer, Moderna, and Johnson & Johnson – were available only under emergency use authorization (EUA).  This was made clear by a memorandum issued by the Department of Justice on July 6 and by the handful of court cases that addressed that issue. However, with a number of vaccine skeptics staking their arguments on the vaccines’ EUA status, many employers were hesitant to impose mandates – and potentially expose themselves to litigation (meritless as it may be) – until the vaccines were fully approved.  That day has come and, unsurprisingly, so have a flurry of employer vaccine mandates.

As more and more employers begin contemplating and adopting mandatory vaccine policies, they should be mindful of a few key issues.

  1. Booster Shots

The first issue is what it means to be “fully vaccinated” as the FDA moves toward authorizing booster shots.  If employers are adopting policies that require employees to be fully vaccinated, it’s important that the phrase be clearly defined.  According to the CDC, a person is fully vaccinated two weeks after his or her second dose of a two-dose series (Pfizer or Moderna) or two weeks after a single-dose vaccine (Johnson & Johnson).  However, the FDA has issued an EUA for booster shots of Pfizer and Moderna for certain categories of immunocompromised people, and the CDC has encouraged such individuals to receive a third dose.  There is an argument, then, that immunocompromised individuals who received one of the mRNA vaccines are not considered fully vaccinated until they have received the booster shot.

Although the CDC has not recommended booster shots for any other persons at this time, the Department of Health and Human Services has announced a plan to begin offering them to the broader community in fall of 2021.  Once the FDA issues an EUA for booster shots of Pfizer and Moderna for non-immunocompromised individuals, employers may wish to modify their vaccine mandates to require employees to obtain the third shot.

  1. Exemptions from Vaccine Requirements 

Mandatory vaccine policies must allow exceptions for employees who cannot be vaccinated due to a sincerely-held religious belief or because of a medical condition for which the vaccine is contraindicated.  The former are exempt under Title VII of the Civil Rights Act of 1964 (Title VII) and the latter are exempt under the Americans with Disabilities Act (ADA).  If an employee claims he/she cannot be vaccinated for one of those reasons, the employer is required to engage in an interactive process with the employee to determine whether there are any reasonable accommodations that would enable the employee to safely perform his or her job duties.  If there is a reasonable accommodation that would not impose an undue hardship on the employer, the employer must provide that accommodation.

  1. Frequent Testing as a Reasonable Accommodation

What constitutes a reasonable accommodation is fact-dependent and will vary from one employer (and one employee) to another.  However, a quick review of the vaccine mandates adopted by some of the country’s largest employers suggests that weekly testing is the most popular form of reasonable accommodation.  Specifically, those who cannot be vaccinated because of a sincerely-held religious belief or medical condition for which the vaccine is contraindicated are typically required to undergo weekly COVID-19 testing (and provide management with proof of a negative result); and wear masks and practice social distancing while on-site or performing work-related duties.

Large companies may choose to offer on-site testing for those who cannot be vaccinated to minimize the cost and inconvenience.  However, providing on-site testing may not be a viable option for smaller employers with only a handful of unvaccinated employees.  In those cases, employees typically undergo testing on their own time and at a location of their choosing.  The question, then, is who pays for that testing?

Most insurers will not cover the cost of ongoing testing that is mandated by employers in asymptomatic individuals.  Thus, either the employee or the employer is going to have to eat the cost.  If the employer has made vaccination or regular testing a condition of employment, and an employee is exempt from the vaccination requirement under Title VII or the ADA, then the employer must cover the cost of that employee’s COVID-19 tests. Under such a policy, most employees have the option of being vaccinated at no cost.  Those who are exempt due to a religious belief or medical condition were effectively foreclosed from the vaccination option.  The ADA prohibits employers from discriminating against a qualified individual with a disability with regard to the terms and conditions of employment, and Title VII prohibits discrimination on the basis of religion.  Requiring certain employees to pay for weekly testing because of their religion or medical disability would violate these laws.

On the other hand, if an employer’s policy allows employees to choose between vaccination and regular testing, and some employees declined to be vaccinated for non-exempt reasons, the employer has a much stronger argument for requiring those employees to absorb their testing costs. Of course, this could create tension between employees undergoing testing for exempt reasons and those who simply preferred frequent testing over vaccination. For that reason, employers may find it preferable to create policies that do not permit testing as an alternative except for employees who are exempt from vaccination requirements.

Finally, employers that offer frequent testing as a reasonable accommodation for employees who cannot be vaccinated should consider whether they must compensate those employees for the time spent undergoing testing. The Fair Labor Standards Act requires employers to compensate employees for time spent performing tasks required for the job, and state and local laws may impose even stricter requirements.

Jackson & Campbell is prepared to advise employers on these important policies and to handle accommodation requests.

This summary is not intended to contain legal advice or to be an exhaustive review. Employers navigating the pitfalls of vaccine and testing mandates should contact Erica L. Litovitz, Esq. or another member of Jackson & Campbell’s Employment Law Practice Group for more information.