Archive - May 10, 2016

1
Primary Defense Obligations Inescapable Despite Escape Clauses According to California Court of Appeal
2
$100 Million Uber Settlement Maintains Classification of Drivers as Independent Contractors
3
Execution Of An Undisclosed Settlement Agreement Is An Invalid California Code of Civil Procedure § 998 Term

Primary Defense Obligations Inescapable Despite Escape Clauses According to California Court of Appeal

By: Ravi R. Mehta and Katherine J. Flores
May 10, 2016

In general, insurers are permitted to limit the risks they assume through provisions within the policy terms.  For example, many policies attempt to preclude coverage in instances where another insurance policy providing for defense is available to the insured. California courts generally disfavor these types of “other insurance” or “escape” clauses based on public policy concerns.  In two recent decisions, the California Court of Appeal found such clauses unenforceable.

In Underwriters of Interest Subscribing to Policy Number A15274001 v. ProBuilders Specialty Insurance, Co. (2015) 241 Cal.App.4th 721, Plaintiff, Underwriters of Interest Subscribing to Policy Number A15274001 (“Underwriters”), insured Pacific Trades Construction & Development, Inc. (“Pacific Trades”).  Additionally, ProBuilders Specialty Insurance Company (“ProBuilders”) insured Pacific Trades.

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$100 Million Uber Settlement Maintains Classification of Drivers as Independent Contractors

By: Chelsea L. Zwart
May 10, 2016

Rideshare providers, such as the increasingly popular Uber and Lyft services, have been embroiled in employee misclassification lawsuits over the past few years, questioning whether their drivers are properly classified as employees or independent contractors.

It is not always clear when an individual is an employee or independent contractor in California. Rather, a variety of factors are analyzed in determining the appropriate classification, including: whether the individual (1) has the right to control how he/she performs the employment contract, (2) is customarily engaged in an independently established business, and (3) has control over the time and place the work is performed, supplies the tools used in the work, and performs work that requires a particular skill not ordinarily used in the employer’s scope of work. O’Connor v. Uber Technologies, Inc. (2015) 82 F.Supp.3d 1133, 1138-39.

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Execution Of An Undisclosed Settlement Agreement Is An Invalid California Code of Civil Procedure § 998 Term

By: Zachary P. Marks
May 10, 2016

A statutory offer to compromise can be a very effective tool in settling a case or devising a litigation strategy in preparation for trial. Codified at California Code of Civil Procedure (“C.C.P.”) § 998, the primary purpose of the statute is to encourage the settlement of disputes prior to trial or arbitration. The statute operates by enabling either party to propose a settlement offer, in writing, no less than ten (10) days before trial. If the offeree rejects the offer, and subsequently fails to obtain a judgment at trial that is more favorable than the offer amount, then the offeror is entitled to recover its post-offer costs, including filing fees, attorney’s fees, and in some cases, expert witness fees. Such fees could potentially amount to hundreds of thousands of dollars, thereby incentivizing the offeree to thoroughly evaluate the offer. This dramatic cost-shifting provision is the driving force behind a § 998 offer.

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