Archive - 2016

1
Top Dollar for the White Collar: Obama Administration Increases Salary Thresholds for White Collar Overtime Exemptions
2
Viability of Contractor’s Express Indemnity Claims are Not Dependent on Allegations In Underlying Third Party Actions
3
Distinguishing License Bonds From Insurance: The Contours of California Contractor License Bonds
4
Don’t Fall Into the Hole: Potential Exposures for Construction Owners
5
The Advancement in “Smart TV” Technology has Serious Implications on the Concern for Consumer Privacy
6
Primary Defense Obligations Inescapable Despite Escape Clauses According to California Court of Appeal
7
$100 Million Uber Settlement Maintains Classification of Drivers as Independent Contractors
8
Execution Of An Undisclosed Settlement Agreement Is An Invalid California Code of Civil Procedure § 998 Term
9
Total Transportation Gets Hauled Away
10
Private Mediations Do Not Toll The Five-Year Prosecution Statute

Top Dollar for the White Collar: Obama Administration Increases Salary Thresholds for White Collar Overtime Exemptions

By: Ashley Verdon and Neil Eddington
September 30, 2016

With a regulation sure to invite both praise and condemnation, the Obama Administration announced new salary thresholds for the Fair Labor Standard Act’s (“FLSA”) overtime exemptions. The new thresholds will bring overtime eligibility to millions of previously-exempted white collar workers. Under the new guidelines, executive, administrative, and professional employees earning $47,476 per year or less will be entitled to overtime pay, doubling the previous federal threshold of $23,660.

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Viability of Contractor’s Express Indemnity Claims are Not Dependent on Allegations In Underlying Third Party Actions

By: Chelsea L. Zwart
September 30, 2016

On August 16, 2016, the First District California Court of Appeal held in Aluma Systems Concrete Construction of California v. Nibbi Bros. Inc. (2016) 2 Cal.App. 5th 620 that a general contractor’s demurrer to a subcontractor’s indemnity claim was erroneously sustained because (1) the allegations of underlying third-party lawsuits were not determinative of liability and (2) the subcontractor’s underlying claim for a worker’s compensation offset did not obviate the subcontractor’s indemnity claim.

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Distinguishing License Bonds From Insurance: The Contours of California Contractor License Bonds

By: Ravi R. Mehta
September 30, 2016

A commonly overlooked potential for recovery when a claim arises is the license bond.  Distinct from insurance, a license bond is intended to respond to liability related to a contractor’s violation of Contractors State License law.  It is mandatory for all California contractors to procure a license bond, or alternatively to place a cash deposit with the Contractors State License Board (“CSLB”). The license bond requirement is currently $15,000.00.  However, in the event of license suspension or revocation, the CSLB may require a separate disciplinary bond in an amount between $15,000.00 and $150,000.00. The types of claims to which a license bond may be subject, as well as the types of persons who are eligible to submit a claim against a license bond, are limited.  However, if a claimant’s circumstances fit within the confines of the following limitations, a license bond claim may be better suited to provide redress as compared to an insurance claim.  The following list contains the most common types of allowable license bond claims.

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Don’t Fall Into the Hole: Potential Exposures for Construction Owners

By: Grace A. Nguyen
Published by AmWINS – Download Article
June 9, 2016

As always with construction projects, it is important that owners of new developments understand insurance coverage to ensure that there is adequate insurance to address any potential risks during and after the construction of the project. While most owners maintain commercial general liability policies or rely on project-specific policies, these policies may not fully protect the owner against any and all risks that they may face during and after construction. This article addresses two unique areas in which owners should take special note to ensure that they are covered for these particular risks: third party action over claims and products-completed operations coverage.

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The Advancement in “Smart TV” Technology has Serious Implications on the Concern for Consumer Privacy

By: Brian D. Kahn and Alexandra R. Rambis
June 7, 2016

TV and video privacy concerns began decades ago and revolved around an individual’s video rental habits. Over time, as Blockbuster and corner video rental stores went away, they were soon replaced by video streaming services, such as those provided by Netflix, Hulu, and Vudu. The latest evolution of this technology is the newest generation of Smart TVs, which are now equipped with built in “digital assistants,” similar to Apple’s Siri or Amazon’s Alexa device. These “digital assistants” can offer features such as voice, face and gesture recognition. However, in order to provide such services, these Smart TVs must be constantly listening or watching users, which has sparked serious concerns regarding consumer privacy.

Some of the information collected by Smart TVs, such as channels watched or videos rented and accessed, is data we, as consumers, expected these TVs to have collected. Yet many Smart TVs also collect very personal information including a user’s zip code, email address, IP address, and for Smart TVs that provide voice, face or gesture recognition, they even collect voice and video recordings of users. Further, Smart TVs that are connected to an individual’s Wi-Fi network will extract data from any other devices that are also connected to that network, which may include personal files located on a computer, website history on a computer or cell phone, and even text messages. Additionally, this information can be collected by these Smart TVs irrespective of whether the TV or functionality has been turned on or off.

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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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Total Transportation Gets Hauled Away

How Worker Demands are Changing the Transportation Industry

By: David A. Napper and Neil A. Eddington
April 24, 2016

Total Transportation Services, Inc. (“TTSI”), a prominent drayage hauler out of the Los Angeles and Long Beach ports, recently filed for Chapter 11 bankruptcy. The bankruptcy filing is the direct result of workers’ demands for employee designation.1

For many years, drayage hauling – the short-distance transport of goods from local ports –functioned primarily through an “owner-operator” business model where drivers contracted to perform services using trucks they either own or lease. As a result, the drivers had always been characterized as independent contractors not employees. However, in 2010, after the IRS ruled a single TTSI driver was an employee, other TTSI drivers began to resist the model, filing their own suits to garner employee designation.2  For companies like TTSI, litigation expenses have piled up and led to bankruptcy; for the drayage hauling industry, the viability of its business model is in doubt.

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Private Mediations Do Not Toll The Five-Year Prosecution Statute

By: Zachary P. Marks
April 24, 2016

If you thought private mediation could toll the five-year period for case prosecution – think again. In a recent decision handed down by the Second District Court of Appeal, the court unequivocally held that voluntary, private mediations do not toll the five-year period before dismissal for failure to bring an action to trial.

California Code of Civil Procedure section 583.310 sets forth the applicable rule: “[a]n action shall be brought to trial within five years after the action is commenced against the defendant.” Section 1775.7(b) clarifies this rule, stating that the five-year period can be tolled if it is “submitted to mediation” within the final six months of the five-year period. However, the Code is silent with respect to the effect of tolling on public versus private mediations.

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