<img src="//bat.bing.com/action/0?ti=5189112&amp;Ver=2" height="0" width="0" style="display:none; visibility: hidden;">

    The Lawletter Blog

    Charlene J. Hicks

    Recent Posts

    CIVIL PROCEDURE: What Happens to a Derivative Action When the Company Settles a Parallel Lawsuit?

    Posted by Charlene J. Hicks on Mon, Feb 22, 2021 @ 09:02 AM

    The Lawletter Vol 46 No 2

    Charlene Hicks—Senior Attorney, National Legal Research Group

                Corporate shareholders, individual members of a limited liability company, or residents of a homeowners' association often file derivative complaints on behalf of the entity to assert rights that the entity itself has failed to raise against third parties. Sometimes these derivative actions prompt the entity to file its own lawsuit against the same third parties, resulting in parallel proceedings.

                In Star v. TI Oldfield Development, LLC, 962 F.3d 117, 131 (4th Cir. 2020), the Fourth Circuit considered for the first time the issue of "whether a plaintiff's derivative action on behalf of an entity is rendered moot by the entity's settlement of the same or similar claims in another action." As a matter of first impression, the court held that it may.

                The evidence showed that the Board of Directors of Oldfield, a residential community in South Carolina, filed lawsuits related to Oldfield's development. Rob Star, an Oldfield resident, later filed a derivative action on Oldfield's behalf, alleging similar claims against the same defendants. After the Board settled the lawsuits that it brought, the defendants moved to dismiss Star's derivative action on the ground that the settlements rendered the derivative lawsuit moot, and, therefore, the court lacked jurisdiction. In opposition, Star alleged that the settlement agreement was invalid due to a conflict of interest by certain board members and that the derivative action alleged claims not included in the Board's lawsuits.

    Read More

    Topics: civil procedure, Charlene J. Hicks, derivative action, parallel lawsuit, settlement of similar claim, release provision

    CIVIL PROCEDURE: Maritime Law—Could COVID-19 Cruise Ship Passenger Litigation Sink the Cruise Line Industry?

    Posted by Charlene J. Hicks on Tue, Feb 2, 2021 @ 10:02 AM

    The Lawletter Vol 46 No 1

    Charlene Hicks—Senior Attorney, National Legal Research Group

                The COVID-19 pandemic has proven disastrous for cruise lines and passengers alike, with multiple coronavirus outbreaks and lengthy quarantine periods imposed. The resulting lawsuits have met with mixed results.

                In Weissberger v. Princess Cruise Lines, Ltd., No. 2:20-CV-02328-RGK-SK, 2020 WL 3977938 (C.D. Cal. July 14, 2020), plaintiffs claimed that Princess Cruise Lines was negligent and/or grossly negligent because it had knowledge that a disembarking passenger had symptoms of COVID-19 but it made the conscious decision to continue sailing with 3,000 passengers aboard. The Weissbergers claimed emotional distress damages arising from the ship's quarantine and the associated trauma from fear of developing the virus.

                The court recharacterized the negligence counts as claims for the negligent infliction of emotional distress. Id. at *2. From there, the court invoked the "zone of danger" test applicable to maritime cases, which "limits recovery for emotional injury to two categories of plaintiffs: (1) 'plaintiffs who sustain a physical impact as a result of a defendant's negligent conduct'[;] and (2) plaintiffs 'who are placed in immediate risk of physical harm by that conduct.'" Id. (quoting Consol. Rail Corp. v. Gottshall, 512 U.S. 532, 547-48 (1994)) (Weissberger court's emphasis).

    Read More

    Topics: emotional distress, damages, Charlene J. Hicks, maritime law, COVID-19, liability of cruise line

    CIVIL PROCEDURE: Seeking Appellate Relief Under Mandatory Standard of Review Theory

    Posted by Charlene J. Hicks on Tue, Mar 19, 2019 @ 12:03 PM

    The Lawletter Vol 44 No 3

    Charlene Hicks—Senior Attorney, National Legal Research Group

                One potentially overused legal principle that is often recited in appellate cases is that a party waives any issues or legal theories that he or she fails to assert at the trial court level. In other words, a party generally cannot raise a new issue for the first time on appeal. Any attempt to do so will likely be rejected by the appellate court.

                Even so, an appellate attorney would do well to keep in mind that this oft-repeated principle does not apply to certain situations, including questions pertaining to the standard of review employed by the lower court. The proper standard of review that is applicable to a particular legal issue is a nonwaivable matter. See Winfield v. Dorethy, 871 F.3d 555, 560 (7th Cir. 2017), cert. denied, 138 S. Ct. 2003 (2018); Gardner v. Galetka, 568 F.3d 862, 879 (10th Cir. 2009). Accordingly, an appellant does not forfeit a claim that the lower court failed to employ the proper standard of review “by failing to argue it” to the lower court. Sierra Club v. U.S. Dep't of Interior, 899 F.3d 260, 286 (4th Cir. 2018); see also United States v. Freeman, 640 F.3d 180, 186 (6th Cir. 2011). Similarly, the parties to a case cannot agree on or assign an incorrect legal standard of review to an issue. Sierra Club, 899 F.3d at 286.

    Read More

    Topics: civil procedure, appeal, waiver of issues not asserted, nonwaivable issue, review of lower court's ruling, mandatory standary of review issue

    CREDITOR’S RIGHTS: IRS Form 1099-C—Reporting Requirement or Debt Extinguishment Trap?

    Posted by Charlene J. Hicks on Thu, Nov 29, 2018 @ 09:11 AM

    The Lawletter Vol 43 No 7

    Charlene Hicks—Senior Attorney, National Legal Research Group        

                To date, no consensus has been reached among courts throughout the United States on the question as to whether a creditor’s issuance of an IRS Form1099-C results in the extinguishment of the reported debt in favor of the debtor. Form 1099-C bears the title “Cancellation of Debt,” and, according to the IRS, a creditor should issue this form to the debtor for any year in which a debt is cancelled. Depending on the state in which the debtor resides, a creditor’s issuance of a Form 1099-C may have the effect of barring further collection efforts and of completely discharging the reported debt.

                The two divergent approaches taken by courts on this issue result in opposite outcomes. The majority approach is illustrated by the Fourth Circuit’s opinion in FDIC v. Cashion, 720 F.3d 169 (4th Cir. 2013). 

    Read More

    Topics: Charlene Hicks, creditor's rights, Form 1099-C, debt extinguishment

    CONTRACTS: The Importance of Distinguishing a Contracting Party from a Stranger

    Posted by Charlene J. Hicks on Wed, Jun 13, 2018 @ 09:06 AM

    The Lawletter Vol 43 No 3

    Charlene Hicks—Senior Attorney, National Legal Research Group

         Although the law generally does not allow a contracting party to bring a tort claim against another party to the same contract, this protection does not extend to persons or entities that are classified as "strangers" to the contract. Thus, a contracting party may maintain a viable claim for tortious interference with contractual relations against a stranger to the agreement. In practice, however, the performance of a contract is often contingent on the acts and approval of persons or entities that did not formally enter into the agreement. This makes it difficult to distinguish between a protected contracting "party" and an unprotected "stranger."

         The popular Trader Joe's grocery chain recently found itself pushed into the murky realm of being classified as a "stranger" to a contract between two parties to which Trader Joe's had close business ties.

    Read More

    Topics: contracts, tort claims, tortious interference with contract, Trader Joe's

    CREDITORS RIGHTS/CONTRACTS LAW: Revoking Contractual Consent to Receive Creditor Phone Calls

    Posted by Charlene J. Hicks on Mon, Jan 8, 2018 @ 10:01 AM

    The Lawletter Vol 42 No 10

    Charlene Hicks, Senior Attorney, National Legal Research Group

                In what has been termed a groundbreaking opinion, the Second Circuit recently held that the federal Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227(b), bars a consumer-buyer from revoking his or her contractual consent to receive creditor calls concerning the underlying contract or account.  The case, Reyes v. Lincoln Automotive Financial Services, 861 F.3d 51 (2d Cir. 2017), provides creditors with a strong defense against consumers who issue complaints about the creditors’ debt collection processes.

                In the case, Alberto Reyes Jr. (“Reyes”) leased a new Lincoln MKZ luxury sedan from a Ford dealership. The lease was financed by Lincoln. One provision of the lease stated that Reyes expressly consented to electronic or verbal contact from Ford and Lincoln and their agents, affiliates, and representatives. Id. at 53-54. This contact included manual calling methods, prerecorded voice messages, texts, and emails to any email or telephone number that Reyes provided, “now or in the future, including a number for a cellular phone or wireless device[.]” Id. at 54. In his lease application, Reyes provided Lincoln with his cell phone number.

    Read More

    Topics: contracts, creditor's rights, creditor's phone calls, bar to revocation of contract consent

    CONTRACTS—Arbitration: Nonexistence of Designated Arbitral Institution at Time of Dispute May Void Mandatory Arbitration Requirement

    Posted by Charlene J. Hicks on Fri, Jul 14, 2017 @ 15:07 PM

    The Lawletter Vol 42 No 5

    Charlene Hicks, Senior Attorney, National Legal Research Group

                Despite the federal policy favoring arbitration, prospective plaintiffs continue to push courts to reexamine the enforceability parameters of arbitration agreements. These efforts have met with some success in cases where the arbitration agreement designates a particular arbitral institution to resolve a dispute between the parties, and the designated institution no longer exists at the time an actual dispute arises.

                This factual scenario has unveiled a degree of uncertainty in the meaning of the Federal Arbitration Act ("FAA"). The FAA provides that if "there shall be a lapse in the naming of an arbitrator . . . or in filling a vacancy, then upon the application of either party to the controversy the court shall designate and appoint an arbitrator[.]" 9 U.S.C. § 5. It is unclear from the statute whether the nonexistence of an arbitral institution designated in an arbitration agreement to resolve disputes between the parties constitutes a "lapse in the naming of an arbitrator" such that the court is authorized to appoint a substitute arbitrator. If the designated institution's nonexistence does not fall within the dictates of 9 U.S.C. § 5, then the court does not have the power to appoint a substitute. To do so would violate the long-established contractual principle that a party cannot be compelled to arbitrate a dispute that he or she has not agreed to submit to arbitration.

    Read More

    Topics: contracts, enforceability, arbitration, arbitral institution

    GOVERNMENT CONTRACTS: Supreme Court Decision Aids Veteran-Owned Business

    Posted by Charlene J. Hicks on Tue, Oct 18, 2016 @ 11:10 AM

    The Lawletter Vol 41 No 9

    Charlene Hicks, Senior Attorney, National Legal Research Group

         In Kingdomware Technologies, Inc. v. United States, 136 S. Ct. 1969 (2016), the United States Supreme Court recently declared that the Department of Veterans Affairs (the "VA") is required to give priority to veteran-owned businesses in the bidding process for government contracts as long as two or more veteran-owned small businesses may reasonably be expected to submit fair and reasonable bids. This unanimous decision should provide a boon to veteran-owned businesses and should also give government agencies pause in assessing bids for contract work.

         The Kingdomware dispute originated shortly after the enactment of the Veterans Benefits, Health Care, and Information Technology Act of 2006 (the "VA Act"). The VA Act provides that the VA must restrict bid competitions to veteran-owned companies as long as the "rule of two" is satisfied. Specifically, 38 U.S.C. § 8127(d) states:

    Except as provided in subsections (b) and (c), for purposes of meeting the goals under subsection (a), and in accordance with this section, a contracting officer of the Department shall award contracts on the basis of competition restricted to small business concerns owned and controlled by veterans if the contracting officer has a reasonable expectation that two or more small business concerns owned and controlled by veterans will submit offers and that the award can be made at a fair and reasonable price that offers best value to the United States.

    Read More

    Topics: Charlene J. Hicks, The Lawletter Vol 41 No 9, VA priority, government contracts, veteran-owned business

    WRONGFUL DEATH: Apportioning Wrongful Death Proceeds Between Decedent's Survival Claim and Beneficiaries' Wrongful Death Claim

    Posted by Charlene J. Hicks on Thu, Jan 28, 2016 @ 15:01 PM

    The Lawletter Vol 41 No 1

    Charlene Hicks, Senior Attorney, National Legal Research Group

         When a catastrophic accident causes one or more people to die, multiple legal questions inevitably arise. Among these is the issue as to whether and to what extent the deceased person's medical insurance company is entitled to recoup the costs it paid for the person's medical treatment prior to death from any wrongful death settlement or verdict eventually entered in favor of the decedent's estate and/or beneficiaries.

         Although the answer to this question depends on the law of each particular state, an examination of Administrative Committee of Dillard's, Inc. Group Health, Dental & Vision Plan v. Sarrough, No. 1:14-CV-01165, 2015 WL 3466568 (N.D. Ohio June 1, 2015), appeal dismissed, No. 15-3718 (6th Cir. Aug. 12, 2015), may be illuminating. There, Hanan Saah was injured in a February 2011 car accident in Ohio. Her employer, Dillard's, paid $260,000 of her medical expenses pursuant to a federal Employee Retirement Security Act of 1974 ("ERISA") health plan. Saah subsequently died in July 2011. Her estate was eventually awarded $300,000 in various wrongful death settlements. Dillard's then claimed a right to the settlement proceeds in order to recoup its $260,000 in medical costs.

         The district court determined that, as an initial matter, it was important to distinguish, and to allocate the amount of funds attributable to, the two different components of the settlement: Saah's survival claim versus the wrongful death claim. Dillard's, as the ERISA-approved health benefit plan, had a right to obtain reimbursement of medical expenses paid from net settlement proceeds allocable to the survival portion of the settlement. Under Ohio law, the survival action belongs to the decedent's estate and, therefore, was subject to subrogation.

    Read More

    Topics: wrongful death, Charlene J. Hicks, The Lawletter Vol 41 No 1, subrogation to medical benefit plan, apportionment, survival claim

    CIVIL PROCEDURE: Filing of Postjudgment Motion Tolls Deadline to Move for Attorney's Fees

    Posted by Charlene J. Hicks on Wed, Oct 14, 2015 @ 17:10 PM

    The Lawletter Vol 40 No 9

    Charlene Hicks, Senior Attorney, National Legal Research Group

         For a prevailing party in a civil lawsuit to obtain attorney's fees, he or she must file a motion requesting fees by a statutory deadline. Problematically, however, many state statutes do not specify whether this deadline is tolled by the filing of a postjudgment motion. As a result, counsel may be placed in the awkward position of deciding whether to move for attorney's fees while the losing party's postjudgment motion is pending before the court.

          The effect of a postjudgment motion on the time in which a prevailing party must move for attorney's fees was recently addressed in Barbara Ann Hollier Trust v. Shack, Nos. 63308, 64047, 2015 WL 4656697 (Nev. Aug. 6, 2015). There, the court noted that Rule 54(d) of the Nevada Rules of Civil Procedure requires a prevailing party to move for attorney's fees within 20 days after service of notice of entry of judgment. However, in the case before the court, the losing party filed a motion for judgment notwithstanding the verdict or, alternatively, for a new trial before the prevailing party moved for attorney's fees. The prevailing party did not file any motion for attorney's fees until after the court denied the losing party's postjudgment motions.

    Read More

    Topics: civil procedure, tolling, Charlene J. Hicks, motion for attorney's fees, The Lawletter Vol 40 No 9

    New Call-to-action
    Free Hour of Legal Research  for New Clients
    Seven ways outsourcing your legal research can empower your practice

    Subscribe to The Lawletter

    Latest Posts