There is no doubt that the pandemic caused by the novel coronavirus impacted everyone in 2020.  The year saw a huge change in employment due to the shutdowns ordered in many states and the limitations on business activity resulting from the reactions to the COVID 19 illness caused by the virus.  While it is still early, some information is now available on the impact on workers’ compensation claims.

The Chairman of the Georgia State Board of Workers’ Compensation has reported that overall claims were down 9% in Georgia in 2020.  Initially, all hearings were briefly suspended to allow the State Board of Workers’ Compensation to transition to virtual hearings.  Hearing requests were only down 10%, but the number of hearings actually held decreased by 40%.  The majority of those were held virtually over Zoom.  Mediations continued initially by telephone but very quickly transitioned to a virtual environment using Zoom.

The Workers’ Compensation Research Institute (WCRI) reports that the impact of the pandemic has varied widely among the states it studies.  In the first quarter of 2020, compared to the first quarter of 2019, WCRI reported that lost time claims varied from a decrease of 23% in Minnesota to increases of 1% in Florida and 4% in Tennessee.  For first quarter 2020, Georgia was reported as having a 2% decline in lost time claims.  For all claims, WCRI reported a 3% decrease in Georgia for first quarter 2020 over first quarter 2019.  For non-Covid claims, the changes ranged from a 20% decrease in Connecticut to a 2% increase in Arkansas in first quarter 2020.  Georgia was reported as having the second lowest drop of the 27 states studied at a decrease of 4%.  The first quarter of 2020 was only partially impacted by the pandemic because it began during the quarter.  In addition, different states imposed lockdowns at different times, some beginning earlier than Georgia which began in mid-March.

By the second quarter of 2020, all states had imposed significant restrictions, although some states loosened restrictions toward the end of the second quarter.  WCRI reported significant decreases in all claims for the second quarter of 2020, as compared to the second quarter of 2019, ranging from a decrease of 38% in Louisiana to a decrease of 15% in Massachusetts, with Georgia in the middle with a 29% decrease. 

WCRI has not released any information on its study of workers’ compensation claims for the second half of 2020 saying it is still too early for evaluation. In its study, however, it also reported that for the first half of 2020, the distribution of the medical conditions for the claims filed in the states it studied was similar to the distribution found in prior studies. The study report, The Early Impact of COVID-19 on Workers’ Compensation Claim Composition, is available from WCRI, www.WCRI.org, if you want more information about the results.

Featured In This Article:

C. Wade McGuffey, Jr.

Founding Partner

Atlanta Office, Orlando Office

Obtaining summary judgment in state court in Florida has long been more difficult than in Federal Courts.  Florida courts have required the party seeking summary judgment to prove a negative and “conclusively disprove” the other side’s theory of the case in order to eliminate any issue of fact.  One treatise on Florida law has also noted that “any competent evidence creating an issue of fact, however credible or incredible, substantial or trivial, stops the inquiry and precludes summary judgment, so long as the ‘slightest doubt’ is raised.” 

However, on December 31, 2020, the Florida Supreme Court amended Florida’s Summary Judgment Standard in Florida Rule of Civil Procedure 1.510, effective on May 1, 2021, to adopt the summary judgment standard articulated by the United States Supreme Court in Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986); and Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986). The Florida Supreme Court felt it was time to join the “supermajority of states that have already adopted the federal summary judgment standard.”

The effect of this change will move away from the Florida standard referenced above.  No longer will the party seeking summary judgment have to disprove the opposing party’s factual claims.  Courts hearing summary judgment arguments can rely on record evidence and not accept assertions that contradict that record evidence.  Further, parties opposing summary judgment cannot prevail just by creating the ‘slightest doubt’ in the factual record.

The previous high burden of proof on a party seeking summary judgment has long foiled insurers seeking summary judgment in liability and coverage cases with little to no factual disputes.  The new standard will now permit entry of summary judgment when there is an absence of evidence to support the case of the party not seeking summary judgment.

As stated above, this change should help insurers obtain summary judgment more readily, saving costs on brining cases to trial or re-litigating motions for summary judgment that were previously denied based on the inability to eliminate all issues of fact raised by a party contesting summary judgment.  It should also stifle litigation by claimants with factually weak cases.

The Florida Supreme Court will accept comments to this proposed change through March 2, 2021.

In Fireman’s Fund v. Holder Construction Group, LLC, Fireman’s Fund Insurance Company (State Court of Cobb County; 17-A-3479-1), the property insurer for a hotel located in downtown, filed a property damage subrogation lawsuit against Holder Construction Company and two of its subcontractors.  In the Complaint, Fireman’s Fund asserted a variety of contract and tort-based claims, seeking recovery of damages exceeding $1.0 million dollars in damages for business interruption and property damage/remediation.  Fireman’s Fund alleged that the coiling coil a roof-top air handler unit on the roof of the hotel froze and burst, and Fireman’s Fund alleged Holder and/or its subcontractors were responsible for the loss. 

Holder and its subcontractors initially obtained summary judgment on all contract based claims and the claim for simple negligence, relying on the waiver of subrogation clause in the construction contract.  After the trial court’s initial ruling, only one count for gross negligent remained. 

The Parties completed discovery, and then Holder and its subcontractors filed a second motion for summary judgment and sought to exclude the testimony of the opposing expert. 

In connection with excluding the opposing expert, Holder and its subcontractors argued the opposing expert’s testimony was unreliable because he failed to meet the standard required for a causation opinion.  Specifically, he could not testify about the primary cause of the water loss, and he kept saying there were multiple variables to the cause of the loss.  He later offered an affidavit, contradicting his earlier testimony and saying he could opine that the proximate cause of the subject water loss was the mechanical contractor’s actions relating to the maximum air damper on the air handler unit. 

Ultimately, the trial court agreed with the defense and excluded the opposing expert’s testimony. 

After excluding the opposing expert, the trial court also granted summary judgment to Holder and its subcontractor, finding there was no issue of fact on whether Holder and its subcontractor’s actions proximately caused the subject water loss. 

Featured In This Article:

James T. Hankins, III

Partner

Atlanta Office

In Eichenblatt v. Piedmont/Maple, LLC, the Georgia Court of Appeals held the trial court improperly awarded attorney’s fees to a party pursuant to O.C.G.A. 9-11-68, reversing a six figures award ($837,444.95) of attorney’s fees.   In Eichenblatt, David Eichenblatt and Kaufman Development Partners (“KDP”) formed Piedmont/Maple, a real estate investment company that owned and operated a piece of commercial property in Atlanta.  The business marriage of the newly created venture later soured, and litigation followed between the business partners.  In connection with one of the cases,  Piedmont/Maple, LLC, Kaufman Development Partners, and Craig Kaufman filed a declaratory judgment action against Mr. Eichenblatt, and he answered the complaint and also asserted counterclaims against his business partners based on breach of contract (i.e. breaching the operating agreement for the business) and tort (i.e. breach of fiduciary duty).   During the lawsuit, the Plaintiffs served a statutory settlement offer pursuant to O.C.G.A. 9-11-68, seeking to settle Mr. Eichenblatt’s counterclaims.  Although Plaintiffs described the offer as an “offer to settle the counterclaim for breach of fiduciary duty asserted by [Mr. Eichenblatt]”,  the statutory offer required Mr. Eichenblatt to dismiss and release all counterclaims. 

The Georgia Court of Appeals reviewed the statutory offer and held the statutory offer unenforceable.  First, O.C.G.A. 9-11-68 only applies to settlement of tort claims, and because the offer required the release and dismissal of all claims, including the contract claim, the statutory offer could not be enforced by the trial court.  In connection with this part of the opinion, the Court of Appeals did address an exception to the general rule that these types of statutory offers can only be used to settle tort claims.  If the other claims sought in the case are entirely premised on the allegations contained in the tort claims, then a statutory offer may require settlement of these non-tort claims.  Applying this exception to the Eichenblatt case, the Court of Appeals reasoned this exception did not apply because the breach of contract claim was not entirely premised on the breach of fiduciary duty claim. 

The Court of Appeals also reversed the trial court’s grant of attorney’s fees because the statutory offer was ambiguous based on the inconsistent description of the scope of the offer.  Although the introductory paragraph noted the offer was to settle the breach of fiduciary duty claim, other parts of the statutory offer required dismissal and release of all claims.  Accordingly, based on this ambiguous language, the Court of Appeals reversed the trial court’s award of attorney’s fees due to the statutory offer being legally unenforceable. 

Eichenblatt illustrates both the strategic value in sending a statutory offer and how important it is to draft an offer that fully complies with the statutory requirements.  A defendant can send an early statutory offer, which may create leverage in the case and in later settlement discussions.  But if a defendant is going to send a statutory offer, the defendant must make sure the offer terms are clear and the other statutory requirements are satisfied. 

Featured In This Article:

James T. Hankins, III

Partner

Atlanta Office

The recent OSHA guidance has been issued and is intended to inform employers and workers (outside of healthcare workplace settings) to help identify risks of being exposed to and/or contracting COVID-19 at work, as well as identifying the appropriate control measures to implement.

Employers should be aware of this recent OSHA guidance, more information is available on the OSHA website HERE.  

House Bill 112, which extends the COVID liability protections to July 14, 2022 was introduced and is expected to be passed in some version. We will continue to monitor this important legislation and report as updates are available. 

Click HERE to read more.

On January 26, 2021, the U.S. District court for the Northern District of Georgia granted a Motion to Dismiss to The Hartford Financial Services Group, Inc. and Hartford Casualty Company (“Hartford”) in a class action suit filed by a Georgia law firm seeking business income and extra expenses coverage under its “all risk” business owners policy for COVID 19 shutdown losses.

Hartford initially denied the claim as the law firm did not suffer “physical loss” from a “covered cause of loss” as required by the policy.  The law firm argued that the governmental shelter in place order, and the “likely physical presence of COVID-19 on or within the property” were direct physical losses which caused loss of business income.  The Court found that there was not any direct physical loss. The Court stated that a direct physical loss requires an actual change in the insured property causing it to change from a “satisfactory state” to an “unsatisfactory state”. In the case of the law firm at issue, there was not a “physical change” to the property and thus there was not a physical loss. The “likely” presence of COVID 19 was not sufficient in the Court’s eyes because it did not physically alter the insured property.

Further, the Court pointed out that COVID 19 was never actually found on the property and thus even if it could or did cause a physical change in property, it did not do so in this case. Last, the Court pointed out that the law firm’s inability to access the law office was also not a direct physical loss. Thus, no coverage was available for the law firm or the putative class and the matter was dismissed.

You can access the order by clicking HERE.

Featured In This Article:

Stephanie F. Glickauf

Partner

Atlanta Office

Goodman McGuffey partner, Teri Zarrillo, will be speaking on the topic, “Workers’ Comp & Sleepless Nights” at the virtual 2021 Spinal Updates Webinar with Peachtree Orthopedics and Peachtree Occupational Medicine. This webinar will take place next Friday, February 5^th from 11:00 AM – 2:00 P.M., via Zoom. Teri will be joined by speakers Dr. Donald Langenbeck Jr., and Dr. Robert Owen from Peachtree Orthopedics.

Participants will receive 3 GA CEU Credits and will be entered to win gift cards + gift baskets giveaways!

Please RSVP to Kim Ledet at KLedet@pocatlanta.com  to receive your registration link. Feel free to contact our marketing coordinator at BFarlow@GM-LLP.com with any questions.

Teri Zarrillo is a partner in Goodman McGuffey LLP, and primarily represents self-insured and commercially insured employers in workers’ compensation matters. Teri was admitted to the State Bar of Georgia and The Florida Bar in 1993.  She earned both her undergraduate and graduate degrees from Emory University (B.A. in 1990 and J.D. in 1993).  Teri serves on the Board of the Workers’ Compensation Section of the Atlanta Bar Association, and the Board of the Atlanta Claims Association, where she was Education Chairperson from 2012-2015 and currently serves as the Sponsor Liaison Chairperson.  She also is an active member of the Atlanta Lawyers Club, CLM, and RIMS.

For more information about Workers’ Comp or Goodman McGuffey, please contact Teri Zarrillo at tzarrillo@gm-llp.com or 404.926.4109.

Featured In This Article:

Teri Alpert Zarrillo

Managing Partner

Atlanta Office

Florida law requires a first party property lawsuit against an insurer to be filed in two stages.  The first stage is a breach of contract claim with no “bad faith” allegations and very little, if any, discovery from the claims file or company representatives.  After a final determination that the policy was breached and an award of damages (including attorneys’ fees) to the insured, a claim for “bad faith” may be filed.   When the two claims are filed together, the Court abates or dismisses the “bad faith” claims as premature. 

Until recently, there was no case law on when “consequential damages” could or should be considered by the Court.  Last week the Florida Supreme answered the question holding that “consequential damages” could only be part of the “bad faith” claim. Citizens Property Ins. Corp. v. Manor House, LLC __ So. 3d __, (2021 WL 208455). 

In that case, lost rental income was the alleged “consequential damage” because it was not expressly covered by the policy.  The policy did not include business income coverage.  Until the “amount owed pursuant to the express terms and conditions of the policy” is finally determined, no “bad faith” (including no consequential damages) can be pursued.  Citizens is statutorily immune from all “bad faith” claims and so this insured should not recover any consequential damages.

In the breach of contract claim, insureds regularly pursue consequential damages for things like delay damages, increased construction costs due to procrastination (2020’s plywood cost increases), loss of customers, loss of good will, bond costs required by third parties, decreased value of the property, and even occasionally “stigma damages.”  Now those damages, and the discovery related to them, will not be part of the breach of contract claim.  If recoverable at all, they may only be alleged as part of the “bad faith” claim.

Featured In This Article:

Robert M. Darroch

Partner

Orlando Office

Goodman McGuffey Attorney, Teri Zarrillo, is a panelist for the CWCP Certification Course next Tuesday, January 26th from 9:00 AM – 1:00 PM. The CWCP Certification Course is a pre-requisite for a Georgia Workers’ Comp Adjuster’s License and is also a 3-part process consisting of an online Course, a live Webinar, and a Final Exam.  Completion of the online Course is required before attending the live Webinar and there are five live Webinars offered throughout the year.  

The 2021 Webinar Dates are listed below.  Upon successful completion of the CWCP Certification Course, a CWCP Professional Designation Certificate will be awarded to each participant. 

January 26
March 16
May 18
July 20
October 19

If you are interested in registering for any of CWCP webinars or want more information, please visit the CWCP Certification Program page by clicking HERE.

Featured In This Article:

Teri Alpert Zarrillo

Managing Partner

Atlanta Office