Kang Haggerty NewsPA Law Weekly
Kang, Haggerty, Fetbroyt All Named to South Jersey Magazine’s Awesome Attorneys List
Press Release
Kang, Haggerty, Fetbroyt All Named to South Jersey Magazine’s Awesome Attorneys List
Cherry Hill, NJ (December 4, 2015): Kang Haggerty LLC (KH), with offices in Philadelphia, PA and Cherry Hill, NJ is pleased to announce that all three named partners in the firm have been selected in the 2015 Awesome Attorneys listing published annually by South Jersey Magazine.
Pennsylvania Supreme Court Holds That CASPA Does Not Apply Where The Owner Is A Government Entity
In Clipper Pipe & Serv., Inc. v. Ohio Casualty Insurance Co., the Pennsylvania Supreme Court held that the Contractor and Subcontractor Payment Act, 73 P.S. §§ 501-506 (“CASPA”), does not apply to construction projects where the owner is a government entity.
The United States Department of the Navy had entered into an agreement with Contracting Systems, Inc. II (“CSI”) for the construction of an addition to, and renovations of, a training center in Lehigh Valley. CSI, in turn, subcontracted with Clipper Pipe & Service, Inc. (“Clipper”) to perform heating, ventilation, and air conditioning work. When CSI failed to pay Clipper per the terms of their agreement, Clipper filed suit against CSI and its surety, the Ohio Casualty Insurance Company (“OCIC”) in the United States District Court for the Eastern District of Pennsylvania.
OCIC and CSI moved for summary judgment contending that CASPA does not apply to public works projects because a government entity does not qualify as an “owner” under CASPA. CASPA defines an “owner” as “[a] person who has an interest in real property that is improved and who ordered the improvement to be made.” “Person” is defined as “[a] corporation, partnership, business trust, other association, estate, trust foundation or a natural individual.” According to CSI and OCIC, government bodies cannot be “owners” under CASPA because the word “government” does not appear in the definition – i.e., a government body is not an “association” and therefore not a “person” or “owner.” Further, OCIC and CSI argued that the Prompt Payment Act (“PPA”), not CASPA, addresses public works projects. OCIC and CSI argued that given the substantial differences between CASPA and PPA, it would be untenable if both applied simultaneously.
How to Protect the Reputation of Your Small Business
Philadelphia Business Journal
U.S. Supreme Court Clarifies the ‘First-to-File’ Rule Under the False Claims Act
In Kellogg Brown & Root Services, Inc., et al. v. United States ex rel., __, 575 U.S. __ (2015), two questions were presented before the U.S. Supreme Court: first, whether the Wartime Suspension of Limitations Act (WSLA) suspends the already generous statute of limitation under the False Claims Act (FCA); second whether the FCA’s “first-to-file” rule, which states generally that if more than one whistleblowers file the actions on the same fraud, only the first to file survives and others are dismissed, bars later filed whistleblower actions if the first filed action has been dismissed.
Reversing the Fourth Circuit Court’s decision to extend the WSLA to civil offenses, the Supreme Court unanimously held in that the WSLA only applies to criminal offenses, meaning the WSLA does not suspend the statute of limitation for an individual action brought under the FCA. The Supreme Court further held that the False Claim’s Act’s first-to-file bar applies only while related claims are active. Once the first filed case is settled or dismissed, the bar does not apply.
In 2005, the whistleblower, Carter, filed a qui tam complaint alleging that his former employer fraudulently charged the U.S. government for water purification services inadequately or fraudulently performed during the Iraq War. Nearing trial, the complaint (Carter I) was dismissed under the first-to-file rule based on an earlier filing with similar claims in United States ex rel. Thorpe v. Halliburton Co., No. 05-cv-08924 (C.D. Cal., filed Dec. 23, 2005).
Superior Court of Pennsylvania Finds Trial Court Erred in Bad Faith Claim
The Superior Court of Pennsylvania found that the court erred in a bad faith claim in Mohney v. American General (2030 & 2046 WDA 2013). The Court reasoned that the insurer acted in bad faith by having no reasonable basis for terminating the plaintiff’s benefits.
Mohney purchased life insurance from U.S. Life (now succeeded and represented by American General) in October 1991 and September 1992. A year later, the plaintiff suffered an injury as a result of a traffic accident preventing him from returning to work. U.S. Life found Mohney to be totally disabled under the definition of their policy and disbursed insurance benefits on a monthly in basis. In February 1995 U.S. Life suddenly terminated Mohney’s benefits alleging that Mohney no longer met “the covered criteria for total disability as stated in [his] certificates” and was “able to perform regular duties of an occupation for which [he was] qualified”.
The plaintiff immediately initiated civil action against the defendant, and in June 1997 filed a complaint for fraud, breach of contract, violation of the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), and insurance bad faith. During the following four years, U.S. Life’s objections were granted by the court. In 2001, U.S. Life filed a motion for summary judgement which was granted in part with the exception of Mohney’s breach of contract claim. The trial court found Mohney to be “totally disabled under the terms of the insurance contract” and awarded the plaintiff $20,772.58. Upon appeal the Superior Court affirmed the trial court’s breach of contract judgement, but remanded for a trail on the bad faith matter. In October 2013 the trial court ruled in favor of U.S. Life prompting Mohney to appeal the bad faith ruling which is the central consideration of the present memorandum.
Bad-Faith Action Affirmed by PA Superior Court
The Superior Court of Pennsylvania recently affirmed the trial court’s opinion involving a bad faith action in Davis v. Fidelity National Title Insurance Company (674 MDA 2014). In the bad faith action law suit brought against Fidelity in the lower court, the plaintiffs were awarded over $2 million in damages.
The plaintiffs, Richard and Maria Davis, purchased a 15 acre-plot in Lackawanna County, Pennsylvania to develop a residential housing project. Three years later in 2007, a neighboring property owner, Louis Norella claimed that a part of that property, a 1.86 acre-plot, belonged to him. Fidelity, the title insurance company that had insured the Davises’ property, recognized later that year that there was a problem with the title and assured the Davises that the matter would be resolved. It wasn’t until 2012 that Fidelity finally purchased Norella’s property for $50,000. The plaintiffs claimed that this five-year delay on Fidelity’s part prevented the project from coming to fruition at the time, thus causing a lost profit damage.
In affirming the lower court’s opinion, the Superior Court of Pennsylvania stated that the “excessive delay” experienced by the Davises implicated Fidelity in bad faith action. The court also stated this excessive delay caused direct damage to the plaintiffs.
PA Supreme Court Ruling: Attorney Fees are Not an “Ascertainable Loss” Under the PA UTPCPL
The extent of consumer protection of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) was brought to the attention of the Supreme Court in Christina Grimes v. Enterprise Leasing Company of Philadelphia, LLC, 4 MAP 2014. The Court finally decided legal fees alone do not satisfy “any ascertainable loss” as described by the UTPCPL.
Whistleblowers and their Importance to Business Success
1. What is a Whistleblower?
A whistleblower is a person who, on behalf of the federal government, state government or governmental authority, reports illegal, fraudulent or dishonest conduct by a person or an organization.
2. Importance of Internal Whistleblowers:
5 Steps in Evaluating Attorneys
1. Compile a small list of attorneys that you find. It’s okay to start with an entire page of attorneys, but narrow down the list by asking friends, family, and business connections their opinions. Figure out if there are any attorneys you should consider or avoid.
2. Do a background check on the attorneys on your list. Use resources like Martindale-Hubbell, Avvo, Lawyers.com, the American Bar Association, and many other sources on the internet, including news articles. Here are some questions to consider as you do your search:
a. Has the attorney been cited for any ethics violations?