EmployEr AlErt thE EEoC Is tArgEtIng lEAvE polICIEs thAt vIolAtE

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					                                                                                              Vol 21, No. 126, November 2009




EmployEr AlErt: thE EEoC Is tArgEtIng                                                                               oDDs ArE, Its
lEAvE polICIEs thAt vIolAtE thE ADA                                                                                 not “yoUr”
Meredith Riggs Guerrero                                       employers must carefully consider
                                                                                                                    ClosIng AttornEy
404-885-6321                                                  how they address disability dis-                      Gary D. Beelen
                                                              crimination in the workplace. Most
                                                                                                                    404-885-6129
   With the passage of the                                    recently, the Equal Employment
Americans With Disabilities                                   Opportunity Commission
                                                                                                                       1. INTRODUCTION
Amendment Act of 2008                                         (“EEOC”) has targeted their
                                                                                                                       In a standard residential real
(“ADAA”), which expanded                                      efforts against employers whose
                                                                                                                    estate purchase transaction, there
coverage of the Americans With                                medical leave policies impose strict
                                                                                                                    are generally six (6) separate
Disabilities Act (“ADA” or the                                leave periods that do not allow
                                                                                                                    contracts in play: (1) the Purchase
“Act”), the federal government                                employees who are covered by
                                                                                                                    and Sale Agreement; (2) the
has made no secret of the fact that                           the Act to take extended leave as
                                                                                                                    buyer’s contract with the lender;
they are ramping up enforcement                               a reasonable accommodation. The
                                                                                                                    (3) the seller’s contract with listing
of the ADA. Now more than ever,                               EEOC has taken the position that
                                                                                                                    broker; (4) the buyer’s contract
                                                                                                                    with selling broker; (5) the com-
                                                                                  (PLEASE TURN TO PAgE 4)           mission agreement between listing
                                                                                                                    broker and selling broker; and (6)
                                                                                                                    the real estate agents’ independent
                                                                                                                    contractor agreements with their
  InsIDE thIs IssUE                                                                                                 respective brokers. In many cases,
                                                                                                                    the closing has been referred to the
  Employer Alert: The EEOC Is Targeting Leave Policies
                                                                                                                    closing attorney by a real estate
  That Violate the ADA
                                                                                                                    agent, builder/developer, seller,
  by Meredith Riggs Guerrero ..................................................................... 1
                                                                                                                    or relocation company with whom
  Odds Are, Its Not “Your” Closing Attorney                                                                         the attorney has a preexisting
  by Gary D. Beelen ...................................................................................... 1        business relationship. Though
                                                                                                                    one or more of these referring
  Subrogation of UMBI, Personal Injury, and Medical Payments –                                                      sources may “represent” you in the
  When Allowed? A State by State Approach                                                                           transaction, the closing attorney
  by Eric Mull................................................................................................. 2   generally has few, if any, duties
                                                                                                                                 (PLEASE TURN TO PAgE 2)

Drew Eckl & Farnham, LLP November 2009                                                                                                                  1
sUbrogAtIon of UmbI, pErsonAl InjUry, AnD                                       oDDs ArE, Its
mEDICAl pAymEnts – WhEn AlloWED?                                                not “yoUr”
A stAtE by stAtE ApproACh                                                       ClosIng AttornEy
                                                                                (CONTINUED FROM PAgE 1)

Eric Mull                                when a subrogation claim involves
404-885-6164                             amounts paid out by an insurer for     to a buyer/borrower or referral
                                         a personal injury claim, the ability   sources unless formally, separately,
  Subrogation arises in equity to        to pursue such an action can be        and exclusively retained thereby.
ensure the payment of a debt by          treated as either a conventional or    An attorney acts only as the
the one who in justice, equity, and      legal right to subrogate depending     agent for the client or clients who
good conscious should ultimately         on the applicable jurisdiction. This   retained him. Bandele v. Am. Home
pay. There are two general grounds       article will address the approach      Mortg. Servicing, 2009 U.S. Dist.
                                         taken by courts in Alabama,            LEXIS 96744 (N.D. Ga. 2009).
                                         Arkansas, Florida, Georgia, South
 Subrogation arises                      Carolina, and Tennessee.

 in equity to ensure                                                            Though one or more
  the payment of a                       An example of the                        of these referring
   debt by the one                       conventional right                          sources may
   who in justice,                       of subrogation is a                     “represent” you in
  equity, and good                         direct suit by an                    the transaction, the
  conscious should                        insurer to recover                      closing attorney
   ultimately pay.                       for property dam-                       generally has few,
                                         age paid pursuant                       if any, duties to a
affording an insurer the right to            to a policy of                      buyer/borrower or
subrogate a claim. First, there is the
“conventional” right of subroga-           insurance. This                        referral sources...
tion, which arises under contract
between the parties. Second, there
                                            suit is allowed
is the “legal” right of subrogation,       pursuant to the                         2. CASH TRANSACTIONS
which arises by operation of law
without a contract because an             applicable policy                        In a cash transaction, the closing
                                                                                attorney will generally represent
insurer has made a payment.
An example of the conventional
                                             of insurance.                      the party who contacted them to
                                                                                initiate the conveyance process.
right of subrogation is a direct
                                                                                Such a relationship is a matter of
suit by an insurer to recover for        Alabama
                                                                                contract that may be express or
property damage paid pursuant to           Alabama law is straightforward
                                                                                implied from the conduct of the
a policy of insurance. This suit is      on the issue of the right of an
                                                                                parties. Cleveland Campers, Inc. v.
allowed pursuant to the applicable       insured to subrogate UMBI,
                                                                                R. Thad McCormack, P.C., 280 Ga.
policy of insurance. However,            personal injury, and medical
                                                                                App. 900, 903 (2006). Though an

                                                     (PLEASE TURN TO PAgE 3)                 (PLEASE TURN TO PAgE 3)

Drew Eckl & Farnham, LLP November 2009                                                                              2
sUbrogAtIon of UmbI, pErsonAl InjUry, AnD                                     oDDs ArE, Its
mEDICAl pAymEnts – WhEn AlloWED?                                              not “yoUr”
A stAtE by stAtE ApproACh (CONTINUED FROM PAgE 2)                             ClosIng AttornEy
                                                                              (CONTINUED FROM PAgE 2)

payments. Under Alabama law, the       out of any third party recovery.
contractual right of subrogation       Accordingly, for any claim involv-     attorney-client relationship cannot
for medical payments is enforce-       ing subrogation of UMBI, personal      be created unilaterally in the mind
able by the insured. See Wolfe v.      injury, or medical payments in         of a would-be client, an attorney-
Alfa Mut. Ins. Co., 880 So.2d 1163                                            client relationship is sufficiently
(Ala. App. 2003). In other words,                                             established when it is shown that
                          ...for any claim
Alabama courts follow the same                                                the advice or assistance of the
                                                                              attorney is sought and received in
general procedure for property
subrogation - direct suit by an
                               involving
                           subrogation of
insurer to recover for damage paid
                                                           ...an attorney-client
pursuant to a policy of insurance
                         UMBI, personal
is allowed if the applicable policy
                                                               relationship is
                       injury, or medical
gives the insurer the right
of subrogation.                                                   sufficiently
                             payments in                   established when it
  Under Arkansas            Arkansas, the                    is shown that the
law, an insurer only   insured must first                           advice or
has a lien and right initiate suit against                    assistance of the
 of reimbursement          the third party                  attorney is sought
 from its insured if           tortfeasor.                     and received in
the insured pursues Arkansas, the insured must first         matters pertinent
    a third party    initiate suit against the third party
                                                             to his profession.
                     tortfeasor. In practice, the insurer
     tortfeasor.     must place its insured on notice of   matters pertinent to his profession.
                                       the insured’s interest and actively    Id. However, the mere initiation of
Arkansas                               monitor whether the insured has        contact alone is not conclusive of
   Under Arkansas law, an insurer      filed suit. Failure of an insurer to   the establishment of an attorney-
only has a lien and right of           properly and timely assert its lien    client relationship, nor is the mere
reimbursement from its insured if      may prevent recovery by                payment of the attorney’s fees. Id.
the insured pursues a third party      the insurer.                           at 277. Additional considerations
tortfeasor. Daves v. Hartford Acc.                                            to justify a reasonable belief that
& Indem. Co., 788 S.W. 2d 73 (Ark.     Florida                                an attorney-client relationship has
1990). In the event the insured pur-      Between 1971 and 1976, 16           been established are the extent of
sues such a claim, the insurer has     states enacted no-fault automobile     contact during the process, as well
a lien or a right of reimbursement     insurance laws featuring two           as any prior relationship between
                                                                              the attorney and the would-be
                                                    (PLEASE TURN TO PAgE 8)                (PLEASE TURN TO PAgE 4

Drew Eckl & Farnham, LLP November 2009                                                                           3
EmployEr AlErt: thE EEoC Is tArgEtIng                                        oDDs ArE, Its
lEAvE polICIEs thAt vIolAtE thE ADA                                          not “yoUr”
CONTINUED FROM PAgE 1)
                                                                             ClosIng AttornEy
                                                                             (CONTINUED FROM PAgE 3)

inflexible leave policies that allow   settlement is the largest obtained    client. Since it is not uncommon
for termination immediately when       by the EEOC for a single lawsuit,     for a seller to initiate communica-
leave is exhausted may violate the     and also requires Sears to amend      tions with the closing attorney
ADA by failing to contemplate          its workers’ compensation leave       in cash transactions, even where
accommodation of employees             policy and train its employees in     the buyer is to pay the attorney’s
covered by the Act, as evidenced       ADA compliance.                       fee, it is imperative to clearly
by two lawsuits recently filed by
the EEOC.
                                          The EEOC has                             Additional
                                        taken the position                    considerations to
  With the passage                     that inflexible leave                        justify a
  of the Americans                         policies that                       reasonable belief
 With Disabilities                           allow for                        that an attorney-
 Amendment Act of                          termination                        client relationship
 2008 ... the federal                   immediately when                            has been
  government has                        leave is exhausted                   established are the
 made no secret of                        may violate the                      extent of contact
 the fact that they                      ADA by failing to                   during the process,
   are ramping up                          contemplate                       as well as any prior
     enforcement                        accommodation of                          relationship
     of the ADA.                        employees covered                         between the
                                           by the Act...                       attorney and the
Recent Cases
   On September 29, 2009, Sears                                                would-be client.
Roebuck & Co. (“Sears”) agreed to         The action was filed in federal
pay $6.2 million to settle a lawsuit   court in November of 2004             and unequivocally establish with
filed against it by the EEOC, in       on behalf of a class of Sears         the attorney from the outset the
which the EEOC claimed that            employees. The case arose from        scope and extent of representation
Sears’ workers’ compensation           a charge of discrimination filed      desired.
leave policy violated the ADA          with the EEOC by John Bava, a            In certain cash transactions,
because it was inflexible and did      former Sears service technician.      the attorney may elect to act in
not allow disabled employees           According to the EEOC, Bava was       a purely ministerial capacity
to take additional leave as a          injured on the job, took workers’     pursuant to O.C.G.A. §15-19-50.
reasonable accommodation. This         compensation leave, and, although
                                                   (PLEASE TURN TO PAgE 5)                (PLEASE TURN TO PAgE 5)

Drew Eckl & Farnham, LLP November 2009                                                                             4
EmployEr AlErt: thE EEoC Is tArgEtIng                                       oDDs ArE, Its
lEAvE polICIEs thAt vIolAtE thE ADA                                         not “yoUr”
(CONTINUED FROM PAgE 4)
                                                                            ClosIng AttornEy
                                                                            (CONTINUED FROM PAgE 4)
still disabled by his injuries,       that UPS violated the ADA by
repeatedly attempted to return        implementing an inflexible leave
to work. The EEOC alleged that        policy that fails to accommodate      In such case, the attorney must be
Sears never provided Bava with        employees covered by the Act.         diligent in clearly and unequivo-
a reasonable accommodation that       The lawsuit alleges that an admin-    cally adhering to the ministerial
would have allowed him to return      istrative assistant at UPS took a     functions of conveyance, and
work. Instead, Sears fired him        12-month leave of absence from
                                      work when she began experienc-
                                                                               Since it is not
  According to the                    ing symptoms of what was later
                                      diagnosed as multiple sclerosis.        uncommon for a
EEOC, discovery in
                                                                              seller to initiate
    the lawsuit                         ...the EEOC filed
                                                                              communications
   revealed that                      suit against United
                                                                              with the closing
 hundreds of other                      Parcel Service ...
                                                                              attorney in cash
  employees who                        alleging that UPS
                                                                            transactions, ... it is
had taken workers’                     violated the ADA
                                                                                imperative to
compensation leave                      by implementing
                                                                                 clearly and
      were also                        an inflexible leave
                                                                               unequivocally
 terminated when                      policy that fails to
                                                                             establish with the
their leave expired...                    accommodate
                                                                             attorney from the
                                      employees covered
                                                                              outset the scope
when his leave expired. According
                                            by the Act.
to the EEOC, discovery in the                                                   and extent of
lawsuit revealed that hundreds of
other employees who had taken         She allegedly returned to work           representation
workers’ compensation leave were      for a few weeks following her                desired.
also terminated when their leave      leave, but soon thereafter needed
expired and that Sears never seri-    additional time off for complica-
ously considered whether a brief      tions arising from treatment she      refrain from offering legal advice
extension of their leave could be a   received for her medical condition.   to either party, especially as to
reasonable accommodation.             The employee alleges that that she    matters of title, lest an attorney-
   On August 27, 2009, the EEOC       could have returned to work after     client relationship unwittingly be
filed suit against United Parcel      an additional two-week leave of       established.
Service (“UPS”) in U.S. District      absence, but was terminated by
Court in Chicago, alleging            UPS for exceeding its 12-month

                                                  (PLEASE TURN TO PAgE 7)                (PLEASE TURN TO PAgE 7)
Drew Eckl & Farnham, LLP November 2009                                                                            5
           AT L A N TA                                                                                                  BRUNSWICK
     880 West Peachtree Street                                                                                        777 Gloucester Street
      (street zip code: 30309)                                                                                              Suite 400
           P.O. Box 7600                                                                                              Brunswick, GA 31520
    Atlanta, Georgia 30357-0600                                                                                         Tel (912) 280-9662
         Tel (404) 885-1400                                                                                             Fax (912) 267-0654
         Fax (404) 876-0992                                      www.deflaw.com
                                                       DIRECT DIAL NUMBERS
John Adkisson                               885-6325   Dan Kniffen                            885-6411   FAX                              (404) 876-0992
	                           jadkisson@deflaw.com                                 dkniffen@deflaw.com
Abdi Ammari                                 885-6408   Barbara Marschalk                      885-6322   Switchboard                      (404) 885-1400
                             aammari@deflaw.com                              bmarschalk@deflaw.com
Jim Anderson                                885-6169   Hall McKinley                          885-6320
                           janderson@deflaw.com                               hmckinley@deflaw.com       LEGAL NURSE CONSULTANTS
Mike Bagley                                 885-6415   Michael Melonakos                      885-6309
                             mbagley@deflaw.com                             mmelonakos@deflaw.com        Marty Morris                        885-6357
Gary Beelen                                 885-6129   Michael Miller                         885-6421                              mmorris@deflaw.com
                                gbeelen@deflaw.com                               mmiller@deflaw.com      Cindy White                         885-6374
Chris Bennett                               885-6256   Steve Miller                           885-6316                               cwhite@deflaw.com
                             cbennett@deflaw.com                                   smiller@deflaw.com    PARALEGALS
John Bennett                            404-885-6144   Andrea Mitchell                        885-6224   Gladys Avelar                            885-6330
                              jbennett@deflaw.com                               amitchell@deflaw.com                                   gavelar@deflaw.com
John Blackmon                               885-6414   Randy Moody                            885-6223   Cheryl Bravo                             885-6478
                          jblackmon@deflaw.com                                    rmoody@deflaw.com                                     cbravo@deflaw.com
Tekesha Brown                               885-6373   Brian Moore                            885-6108   Richard Breland                          885-6425
                                tbrown@deflaw.com		                                bmoore@deflaw.com                                 rbreland@deflaw.com
John Bruffey                                885-6426   Eric Mull                              885-6164   Lisa Cunningham                          885-6457
                               jbruffey@deflaw.com                                   emull@deflaw.com                          lcunningham@deflaw.com
Paul Burke                                  885-6310   Matt Nanninga                          885-6221   Julie Cureton                            885-6263
                                pburke@deflaw.com                            mnanninga@deflaw.com                                    curetonj@deflaw.com
Douglas Burrell                             885-6163   Andrew Nelson                          885-6139   Deborah Davis                            885-6137
                              dburrell@deflaw.com                                 anelson@deflaw.com                                    davisd@deflaw.com
Christina Campbell                          885-6209   Burke Noble                            885-6226   Wendy Dumond                             885-6453
                           ccampbell@deflaw.com                                     bnoble@deflaw.com                             dumondw@deflaw.com
Joe Chancey                                 885-6222   Megan Noble                            885-6142   Jennifer Edwards                         885-6244
                             jchancey@deflaw.com                                  mnoble@deflaw.com                                 jedwards@deflaw.com
Sunil Cherian                               885-6148   Ingrid Nuss                            885-6410   Cynthia Gray                             885-6254
                             scherian@deflaw.com                                     irojas@deflaw.com                                    cgray@deflaw.com
Sandra Cho                                  885-6413   Anne Marie Du Toit                 404-885-6229   William Harrison                         885-6542
                                    scho@deflaw.com    	                       apritchett@deflaw.com                              harrisonw@deflaw.com
Judy Croy                                   885-6338   Jack Reale                             885-6404   Emily Haupt                              885-6247
                                   jcroy@deflaw.com                                  jreale@deflaw.com                                  ehaupt@deflaw.com	
Patricia Cunningham                         885-6135   Brandon Rhodes                         885-6127   Linda Hewlett                            885-6352
                      tcunningham@deflaw.com                                      brhodes@deflaw.com                                  hewlettl@deflaw.com
Dean Dellinger                              885-6439   Lisa Richardson                        885-6220   Lisa Hughes                              885-6475
                          ddellinger@deflaw.com        	                     lrichardson@deflaw.com	                                  lhughes@deflaw.com
Kathy Dixon                                 885-6412   Terry Rock                             885-6419   Lois Johnson                             885-6228
                                 kdixon@deflaw.com                                    trock@deflaw.com                               ljohnson@deflaw.com
Charlie Drew                                885-1400   J.C. Roper                             885-6417   Cheryl Jones                             885-6114
Michael Eshman                              885-6427                                jroper@deflaw.com                                    cjones@deflaw.com	
                           meshman@deflaw.com          Nick Salter                            885-6219   Sarah Kazin                              885-6263
Wray Eckl                                   885-6327                               nsalter@deflaw.com                                    skazin@deflaw.com
                                  weckl@deflaw.com     David Schulte                          885-6347   Beth Koplan                              885-6463
Clayton Farnham                             885-6304   	                         dschulte@deflaw.com	                                 bkoplan@deflaw.com
                            cfarnham@deflaw.com        David Smith                            885-6249   Joshua Landers                           885-6269
John Ferguson                               885-6422                               dsmith@deflaw.com                                  landersj@deflaw.com
                            jferguson@deflaw.com       Doug Smith                             885-6147   Jane Luckett                             885-6477
Robert Goldsmith                            885-6462                             dgsmith@deflaw.com                                    jluckett@deflaw.com
                         rgoldsmith@deflaw.com         Nick Smith                             885-6344   Vickie McClure                           885-6207
Stephen Graham                              885-6132                               nsmith@deflaw.com                               vmcclure@deflaw.com
                             sgraham@deflaw.com        Taylor Stevens                         885-6161   Susan Millican                           885-6442
Meredith Guerrero                       404-885-6321                             tstevens@deflaw.com                               smillican@deflaw.com
                         mguerrero@deflaw.com          Aarati Subramaniam                     885-6205   Amanda Mueller                           885-6128
Andrew Haeberle                             885-6218                      asubramaniam@deflaw.com                                   amueller@deflaw.com
                            ahaeberle@deflaw.com       Bruce Taylor                           885-6230   Tracey Peters                            885-6233
Sarah-Elizabeth Herrup                      885-6126                               btaylor@deflaw.com                                   tpeters@deflaw.com
                               sherrup@deflaw.com      David Thomas                           885-6111   Terri Pike                               885-6446
Andrew Horowitz                             885-6145                             dthomas@deflaw.com                                        piket@deflaw.com
                          ahorowitz@deflaw.com         David Thompson                         885-6206   Lisa Rose                                885-6158
Kelleen Hubbs                               885-6140                         dthompson@deflaw.com	                                         lrose@deflaw.com
                                khubbs@deflaw.com      Bonnie Timms                           885-6143   Lauren Russell                           885-6210
Gary Hurst                                  885-6423                              bmorris@deflaw.com	                                  lrussell@deflaw.com
                                 ghurst@deflaw.com     Chad Torri                             885-6199   Lori Stom                                885-6440
Mark Irby                                   885-6315                                 ctorri@deflaw.com                                    stoml@deflaw.com
                                  mirby@deflaw.com     Andy Treese                            885-6191   Asheia Thomas                            885-6311
Chad Jacobs                                 885-6369                               atreese@deflaw.com                                athomas@deflaw.com
                                cjacobs@deflaw.com     Matt Walker                            885-6308   Holliday Trice                           885-6342
James Janarious                             885-6305                             mwalker@deflaw.com                                       triceh@deflaw.com
                          jjanarious@deflaw.com        Benson Ward                            885-6141   Beth Wade                                885-6212
Julie John                                  885-6227                                bward@deflaw.com                                     bwade@deflaw.com
                                   jjohn@deflaw.com    Rob Welch                              885-6405   Moshica Wallace                          885-6110
Brian Johnson                               885-6208                               rwelch@deflaw.com                               wallacem@deflaw.com
                            bjohnson@deflaw.com        Kathryn Westberry                      885-6319   Ladita Walton                            885-6266
Karen Karabinos                             885-6313                          westberryk@deflaw.com                                    waltonl@deflaw.com
                         kkarabinos@deflaw.com         Kate Whitlock                          885-6225   Michelle Williams                        885-6318
B. Kaye Katz-Flexer                     912-280-9662   	                       kwhitlock@deflaw.com	                              williamsm@deflaw.com
                                 bflexer@deflaw.com    Cassandra Williams                     885-6112   Kimberly Williams                        885-6367
Ryan Klee                                   885-6152                           cwilliams@deflaw.com                                kwilliams@deflaw.com
                                    rklee@deflaw.com   Nathan Woody                           885-6406   Kelly Wood                               885-6337
                                                                                 woodyn@deflaw.com                                       kwood@deflaw.com
                                                                                                         Queia Young                              885-6258
                                                                                                                                       qyoung@deflaw.com
oDDs ArE, Its not “yoUr” ClosIng AttornEy                                      EmployEr AlErt: thE
(CONTINUED FROM PAgE 5)                                                        EEoC Is tArgEtIng
   3. LOAN TRANSACTIONS                 252 Ga. App. 47, 52 (2001), a          lEAvE polICIEs thAt
   In a loan transaction, the closing   mortgage broker submitted the          vIolAtE thE ADA
attorney generally represents the       title order to the closing attorney,   (CONTINUED FROM PAgE 5)
“lender.” Where the originating         but the closing documents
and funding entity are one and          indicated that the loan was to be
the same, this is not a difficult       assigned to Fleet Finance. The         leave policy. According to the
determination. Where a mortgage         Court’s decision in this matter        EEOC, UPS’s leave policy violates
                                        required a preliminary determina-      the ADA because it fails to take
                                        tion of who retained the closing       into account potential reasonable
      In a loan                         attorney, i.e. whether the closing     accommodations such as extended
                                                                               leave and sidesteps the interactive
  transaction, the                                                             process required under the ADA.
  closing attorney                           The Court’s                          In a press release issued August
                                                                               28, 2009 by the EEOC, acting
      generally                            decision in this                    chairman Stuart J. Ishimaru stated
    represents the                        matter required a                    that the lawsuit against UPS
                                                                               “should send a wake up call to
“lender.”... Where a                         preliminary                       Corporate America that violating

mortgage broker is                        determination of                     the Americans With Disabilities
                                                                               Act will result in vigorous enforce-
      involved,                           who retained the                     ment by the EEOC. The ADA has

 however, the issue                     closing attorney, i.e.                 been the law of the land for nearly
                                                                               two decades now, and employers
  is not so clear, ...                  whether the closing
                                              attorney                                     (PLEASE TURN TO PAgE 8)


broker is involved, however, the           represented the
issue is not so clear, especially
where the funding lender, or            broker or the lender.
the entity to whom the loan is                                                        noW onlInE
being simultaneously assigned, is       attorney represented the broker
disclosed in the closing package or     or the lender. Though Garrett
                                                                                    All editions of
instructions, or where the closing      submitted an expert opinion from               JOURNAL
attorney is directed to ensure          a non-attorney asserting that the
                                                                                    are available at
that the mortgagee clause on the        assignee of a mortgage was the
hazard insurance is an entity other     true lender, the Court rejected the       www.deflaw.com
than the one who submitted the          opinion of the non-lawyer regard-        and the articles may
title order, or where the closing       ing the existence, nonexistence,
instructions are generated by an        or conflict of interest of agency          be searched for
entity other than the entity who        arising from the attorney client         by title, author, topic
submitted the title order.              relationship. After conducting
   In garrett v. Fleet Finance, Inc.,   an examination of the Truth in
                                                                                      and edition.

                                                    (PLEASE TURN TO PAgE 10)

Drew Eckl & Farnham, LLP November 2009                                                                            7
sUbrogAtIon of UmbI, pErsonAl InjUry, AnD                                      EmployEr AlErt: thE
mEDICAl pAymEnts – WhEn AlloWED?                                               EEoC Is tArgEtIng
A stAtE by stAtE ApproACh (CONTINUED FROM PAgE 3)                              lEAvE polICIEs thAt
                                                                               vIolAtE thE ADA
components: (1) the mandatory          Med pay will pay the insured no         (CONTINUED FROM PAgE 7)
purchase of first party no-fault       matter who caused the accident.
coverage for medical benefits          Similarly, PIP coverage pays
                                                                               simply have no excuse for failing
(usually referred to personal injury   benefits for medical expenses and
                                                                               to abide by its provisions.”
                                       lost wages incurred by the insured
                                                                                  EEOC Chicago Regional
                                       as a result of an accident, including
     ..under this                      funeral expenses. While both types
                                                                               Attorney John Hendrickson
                                                                               stated that “policies . . . which set
 statutory scheme,                     of coverage generally afford the
                                       same level of coverage, subroga-
                                                                               arbitrary deadlines for returning
                                                                               to work after medical treatment
the insurer provides                   tion of PIP payments is strictly
                                                                               unfairly keep disabled employees
    coverage for                                                               from working. Sometimes a simple
                                         A close review of
   medical and/or                                                                     ...acting
                                          the applicable
wage benefits with-                                                              EEOC chairman
                                            policy and a
  out regard to the                                                              Ishimaru stated
                                         determination of
fault of the insured.                                                                 that the
                                       the type of coverage
protection (“PIP”); and (2) limited         under which                           lawsuit against
third party liability for negligent
                                          payments were                         UPS “should send
drivers. Florida is one such state.
                                                                                 a wake up call to
Under this statutory scheme, the         made is essential
insurer provides coverage for                                                   Corporate America
medical and/or wage benefits               before filing a
without regard to the fault of the                                              that violating the
                                        subrogation action
insured. However, the insured
                                                                                 Americans With
gives up some degree of freedom              in Florida.
to sue the tortfeasor for pain and                                                Disabilities Act
suffering, while the insured may
be prevented from subrogating          prohibited by F.S.A. § 627.736(3),
                                                                                    will result in
any amounts paid pursuant to the       unless the insured’s vehicle is a              vigorous
applicable policy. Under Florida’s     “commercial motor vehicle” or the
no-fault system, there are two         insured was a pedestrian struck by          enforcement...”
types of personal injury coverage:     a “commercial motor vehicle.” In
medical payments coverage (“med        contrast, subrogation of med pay is     conversation with the employee
pay”) and PIP coverage.                permitted under Florida law.            about what might be needed to
   Med pay coverage generally             As an initial matter, PIP cover-     return to work is all that is neces-
pays for medical expenses of an        age is the most common type of          sary to keep valued employees in
insured relating to an accident.       coverage in Florida because all         their jobs.”
                                                    (PLEASE TURN TO PAgE 9)                 (PLEASE TURN TO PAgE 9)

Drew Eckl & Farnham, LLP November 2009                                                                                8
EmployEr AlErt: thE EEoC Is tArgEtIng                                       sUbrogAtIon of
lEAvE polICIEs thAt vIolAtE thE ADA                                         UmbI, pErsonAl
(CONTINUED FROM PAgE 8)
                                                                            InjUry, AnD mEDICAl
Interplay With the FMLA               year, for at least 1,250 hours over   pAymEnts – WhEn
   As most employers are already      the previous 12 months. However,
aware, the Family Medical Leave       an employee covered by the ADA        AlloWED? A stAtE by
Act (“FMLA”) provides that            may be entitled to leave beyond       stAtE ApproACh
covered employers (i.e., employers    that required by FMLA if the leave    (CONTINUED FROM PAgE 8)
who employ 50 or more employees       can be considered a reasonable
for 20 or more weeks in the current   accommodation that would allow        drivers are statutorily required to
or preceding calendar year) must      the employee to perform his or        carry such coverage. In contrast,
                                      her job.                              med pay coverage is an additional
                                                                            coverage most Florida drivers
     ...the Family                                                          elect to purchase. The practical
                                          An employee is                    effect is that the majority of UMBI,
Medical Leave Act
                                        eligible for FMLA
    provides that
                                         leave if he or she                    A close review ...
covered employers
                                        has worked for a                      is essential before
  ... must provide
                                        covered employer                    filing a subrogation
eligible employees
                                          for at least one                  action in Florida to
 up to 12 weeks of
                                         year, for at least                 recover any damage
     unpaid, job-
                                         1,250 hours over                    related to personal
protected leave for
                                          the previous 12                           injury.
   serious health
                                              months.
conditions hich the                                                         personal injury, and/or medical

employee is unable                       Under the ADA, a “qualified        payments made under a Florida
                                                                            car insurance policy cannot be
                                      individual with a disability” is
 to perform his or                    identified as “an individual with a   properly subrogated. A close
                                                                            review of the applicable policy
         her job.                     disability who satisfies the requi-
                                      site skill, experience, education     and a determination of the type of
                                      and other job-related requirements    coverage under which payments
provide eligible employees up to      of the employment position such       were made is essential before filing
12 weeks of unpaid, job-protected     individual holds or desires, and      a subrogation action in Florida
leave for serious health conditions   who, with or without reasonable       to recover any damage related to
during which the employee is          accommodation, can perform the        personal injury.
unable to perform his or her job.     essential functions of such posi-
An employee is eligible for FMLA      tion.” 29 C.F.R. § 1630.2(m)(2006).   Georgia
leave if he or she has worked for a   When an individual is unable to         Georgia law is similar to Florida
covered employer for at least one     perform the essential functions of    law in that it also differentiates


                                                 (PLEASE TURN TO PAgE 11)               (PLEASE TURN TO PAgE 11)

Drew Eckl & Farnham, LLP November 2009                                                                         9
oDDs ArE, Its not “yoUr” ClosIng AttornEy (CONTINUED FROM PAgE 7)
Lending Act, the Court determined                                disclosure statement, conveys title
that that Act did not treat a broker       ...that Act did not   only by limited warranty deed,
and an assignee as one and the
same, and that the closing attorney
                                         treat a broker and an   and/or deletes survival clauses
                                                                 and provisions dealing with
represented the broker because the        assignee as one and    obligations for the adjustment of
broker submitted the title order                                 prorations subsequent to closing.
and all disclosures mandated by              the same, ... the   Moreover, the closing attorney
the Act were made in the name of
                                            closing attorney     will often be provided power of
the broker.                                                      attorney to sign for the relocation
                                              represented the    company, who was provided
   4. REO & RELOCATIONS                                          power of attorney by the seller.
   Where a closing is referred to an       broker because the    Such circumstances are fraught
attorney by a financial institution      broker submitted the    with malpractice liability, let
or relocation company, where the                                 alone issues of conflict of inter-
financial institution or relocation        title order and all   est. Because such circumstances
company is acting as or on behalf                                put the buyer/borrower at a
of the seller, substantial conflict of
                                                disclosures      significant legal disadvantage, it
interest issues can arise. In such       mandated by the Act     is highly advisable to avoid such
transactions, the closing attorney                               circumstances, even if a conflict
often represents the seller and the         were made in the     letter is obtained from the seller
lender. In many such cases, the
seller does not provide a seller’s
                                          name of the broker.    and lender.

                                                                            (PLEASE TURN TO PAgE 13)




Drew Eckl & Farnham, LLP November 2009                                                             10
EmployEr AlErt: thE EEoC Is tArgEtIng                                         sUbrogAtIon of
lEAvE polICIEs thAt vIolAtE thE ADA                                           UmbI, pErsonAl
(CONTINUED FROM PAgE 9)
                                                                              InjUry, AnD mEDICAl
a job without an accommodation,          The federal regulations
                                                                              pAymEnts – WhEn
“the burden of identifying an         provides that an accommodation          AlloWED? A stAtE by
accommodation that would allow
a qualified individual to perform
                                      request is “reasonable” only if the
                                      accommodation actually assists
                                                                              stAtE ApproACh
                                                                              (CONTINUED FROM PAgE 9)
the job rests with that individual,   the employee in performing the
                                      essential functions of his job and
                                                                              between the different types of
                                      is not an “undue hardship” on
     The federal                                                              coverage available to a driver.
                                                                              While Georgia repealed its no-
regulations provides                      ...a request for                    fault scheme in 1991, Georgia law
                                                                              still distinguishes between med
       that an                         indefinite leave of
  accommodation                        absence generally                         Georgia law...
      request is                         should not be c                          differentiates
“reasonable” only if                        onsidered a                            between the
         the                                 reasonable                         different types of
  accommodation                       accommodation, as
 actually assists the                                                          coverage available
                                         this would not
    employee in                                                                    to a driver.
                                      assist the individual
   performing the                         in performing                       pay and PIP coverage. In sum,
 essential functions                      his or her job.                     med pay coverage is an optional

of his job and is not                                                         coverage that cannot be subrogated
                                                                              pursuant to O.C.G.A. § 33-24-56.1,
     an “undue                        the employer. 29 C.F.R. § 1630.2(o)
                                      (2006). While a leave of absence
                                                                              while subrogation of PIP benefits
                                                                              is allowed if one of the vehicles
  hardship” on the                    might be considered a reasonable        involved weighs more than 6,500
     employer.                        accommodation under the ADA,
                                      federal courts have consistently
                                                                              pounds. See O.C.G.A. § 33-34-3.
                                                                              However, Georgia case law adds
                                      held that a request for indefinite      an additional layer of complexity,
as does the ultimate burden of        leave of absence generally should       providing that an action to recover
demonstrating that such an            not be considered a reasonable          amounts paid out on a personal
accommodation is reasonable.”         accommodation, as this would not        injury claim must be brought in
Stewart	v.	Happy	Herman’s	Cheshire	   assist the individual in performing     the name of the insured, who is the
Bridge, Inc., 117 F.3d 1278, 1286     his or her job. In Wood v. green, 323   real party in interest. See O.C.G.A. §
(11th Cir. 1997).                     F.3d 1309 (11th Cir. 2003), the U.S.    44-12-24; State Farm Mut. Auto. Ins.
                                                                              Co. v. Cox, 515 S.E.2d 832 (Ga. 1999).

                                                  (PLEASE TURN TO PAgE 12)                (PLEASE TURN TO PAgE 13)

Drew Eckl & Farnham, LLP November 2009                                                                            11
                                    EmployEr AlErt: thE EEoC Is tArgEtIng
  EDItorIAl polICy                  lEAvE polICIEs thAt vIolAtE thE ADA
                                    (CONTINUED FROM PAgE 11)

  The JOURNAL is a
  publication for the clients of    Court of Appeals for the Eleventh    their leave policies and ensure
  Drew Eckl & Farnham, LLP,         Circuit explained that a             that the policy does not apply an
  Attorneys at Law, 880 West        “reasonable accommodation is by      arbitrary leave requirement that
                                    its terms most logically construed   fails to allow for the possibility of
  Peachtree Street, P.O. Box
                                    as that which, presently, or in
  7600, Atlanta, GA 30357.
                                    the immediate future, enables the
  It is written in a general                                             ... employers should
  format and is not intended
  to be legal advice applicable       ...a “reasonable                   immediately review
  to any specific circumstance.     accommodation is                      their leave policies
  Legal opinions may vary
                                     by its terms most                    and ensure that the
  when based upon subtle
  factual differences.              logically construed                      policy does not
                                       as that which,                     apply an arbitrary
  All rights are reserved.
                                    presently, or in the                   leave requirement
                                     immediate future,                    that fails to allow
  Editorial Board:
  H. Michael Bagley                      enables the                               for the
  (Editor-in-chief)
                                         employee to                          possibility of
  Subscriptions                          perform the                           flexibility for
  To receive your subscription      essential functions                          employees
  of the JOURNAL, provide
                                         of the job in                        covered by the
  your name, business
  affiliation and address to:             question.”                       ADA, as amended
                                                                              by the ADAA.
   Elaine McIntosh                  employee to perform the essential
   Drew Eckl & Farnham, LLP         functions of the job in question.”   flexibility for employees covered
   880 West Peachtree Street        Id. at 1313 (emphasis added).        by the ADA, as amended by the
   P.O. Box 7600                                                         ADAA. Employers should also
                                    Recommendations                      carefully consider any request for
   Atlanta, Georgia 30357
                                       In light of the EEOC’s recent     leave beyond that provided by
                                    crack-down on leave policies that    the company’s leave policy by an
  or phone (404) 885-6289           allow for termination immediately    employee who may be covered
                                    when leave is exhausted, employ-     by the Act, keeping in mind that
                                    ers should immediately review        the ADAA has redefined the term


                                                                                     (PLEASE TURN TO PAgE 15)


Drew Eckl & Farnham, LLP November 2009                                                                       12
sUbrogAtIon of                          oDDs ArE, Its not “yoUr” ClosIng AttornEy
UmbI, pErsonAl                          (CONTINUED FROM PAgE 10)


InjUry, AnD mEDICAl                        5. DUTY OF CARE                     Conduct, Rule 1.2 Comment 8
                                           A closing attorney has a fidu-      (2009). In general, Georgia’s courts
pAymEnts – WhEn                         ciary relationship with his client,    look to the quantity of direct
AlloWED? A stAtE by                     whomever it may be, and therefore      communication with the attorney,
stAtE ApproACh                          owes the client a duty of “utmost      the reasonableness, and foresee-
(CONTINUED FROM PAgE 11)                good faith.” garrett, supra, at 51;    ability of reliance of the third party,
                                        O.C.G.A. §23-2-58. Even if a           who paid the attorney’s fees, who
   The “Georgia approach” stems         buyer/borrower is not the closing      initiated contact with the attorney,
from the concept that a personal        attorney’s client, and not owed        and the existence of disclaimers
injury cannot be assigned.              a duty of “utmost good faith,”         and disclosures to determine if a
Accordingly, in order to properly       however, the buyer/borrower’s          duty exists, and if so, the degree of
                                        interests cannot be completely         duty owed.
                                        disregarded.
    ...in order to
                                                                                    The trend in
properly subrogate                       A closing attorney                      Georgia has been
 any claim arising                         has a fiduciary                      to relax the rule of
 out of a personal                       relationship with                      strict contractual
injury in Georgia,                            his client,                       privity in matters
  the action must                        whomever it may                              of legal
 name the insured                         be, and therefore                       malpractice...
      as a party                         owes the client a
     to the suit.                         duty of “utmost                         In a real estate closing, a

subrogate any claim arising out
                                            good faith.”                       borrower may be justified as a
                                                                               foreseeable third party beneficiary
of a personal injury in Georgia,                                               in reasonably relying upon the
the action must name the insured           The trend in Georgia has been to    competency of a closing attorney.
as a party to the suit. In applica-     relax the rule of strict contractual   Williams v. Fortson, Bentley &
tion, this requires the insurer to      privity in matters of legal malprac-   Griffin, 212 Ga. App. 222, 224
contact its insured and have them       tice, recognizing that under certain   (1994). Therefore, even though
agree to be named as a party to a       circumstances, professionals owe       a lender is not deemed to have
subrogation action. While most          a duty of reasonable care to parties   a fiduciary relationship with a
policies require the insured to fully   who are not their “client.” Driebe     borrower, and the borrower is
cooperate with the insurer in such      v. Cox, 203 Ga. App 8, 9 (1992). For   not technically the client of the
instances, contacting and persuad-      example, a lawyer may be charged       closing attorney, the third party
ing the insured to be named as a        with special obligations in deal-      beneficiary is owed a duty of rea-
party not only adds an additional       ings with a beneficiary of a client.   sonable care where it is clear that
level of hurdle, it also raises the     Georgia Rules of Professional          a client has engaged an attorney

            (PLEASE TURN TO PAgE 14)                                                       (PLEASE TURN TO PAgE 14)

Drew Eckl & Farnham, LLP November 2009                                                                             13
oDDs ArE, Its                            sUbrogAtIon of                        fIrm notEs
not “yoUr”                               UmbI, pErsonAl                        The Fulton County Daily
                                                                               Reporter in conjunction with
ClosIng AttornEy                         InjUry, AnD mEDICAl                   ALM Media has invited J.C.
                                                                               Roper to speak to over 70
(CONTINUED FROM PAgE 13)
                                         pAymEnts – WhEn                       corporate in-house counsel
for another’s benefit, to inspire        AlloWED? A stAtE by                   attorneys of Georgia’s largest
                                                                               employers on Corporate Risk
confidence in and invoke reliance
upon the client. Burch v. Chase
                                         stAtE ApproACh                        Management and Reduction of
                                         (CONTINUED FROM PAgE 13)              Workers’	Compensation	Costs/
Manhattan Mortg. Corp., 2008 U.S.                                              Claims in Lean Economic
Dist. LEXIS 76595 (N.D. ga. 2008),                                             Times at the 103 West Club in
                                         risk that the insured cannot be       Buckhead (Atlanta). Mr. Roper’s
citing to Pardue v. Bankers First Fed.
                                         located or will not cooperate. In     presentation offers practical
                                         those instances, the insurer must     solutions to corporate insurance
                                                                               risk professionals and in-house
     ...the Court                        determine the level of importance
                                         subrogating the personal injury
                                                                               counsel to minimize costly
                                                                               mistakes made in the initial stages
determined that an                                                             of workers’ compensation claims.
                                                                               The presentation also features
    attorney who                         ...this requires the                  practical solutions for corporate
                                                                               in-house counsel and risk
 undertakes to do,                       insurer to contact                    managers to identify and reduce

    even without
                                                                               specific types of claims that spike
                                            its insured and                    significantly during recessions

      reward, is                         have them agree to
                                                                               or “lean economic times” which
                                                                               directly impact corporate net

   responsible for                           be named as a                     profits.


misfeasance, though                            party to a                      Mr. Roper’s presentation has been
                                                                               approved for CLE and is available
 they would not be                            subrogation                      on demand via online video
                                                                               or CD at no cost to you upon
       liable for                                action.                       request to insurance company
                                                                               claim managers, in-house counsel
 non-feasance had                                                              and corporate executives. The
                                                                               presentation also includes a
                                         claim is to them, and whether they
 the task for which                      are willing to invest additional
                                                                               question and answer session.
                                                                               Mr. Roper is a partner in the
  the attorney had                       time and money into
                                         enforcing their insured’s
                                                                               workers’ compensation practice
                                                                               group primarily dedicating his
no duty to perform                       contractual obligations.              practice to defending Fortune 500
                                                                               and Fortune 1000 corporations in
      never been                         South Carolina
                                                                               workers’ compensation claims.
                                                                               You may reach Mr. Roper at (404)
     undertaken.                            Under South Carolina law, the      885-6417 or via email jroper@
                                         right to subrogate personal injury    deflaw.com to submit your
                                         and medical payments is relatively    request for the online video
Savings &c. Assn., 175 Ga. App. 814                                            version or CD.
                                         straightforward, as PIP and med
(1985); Legacy Homes, Inc. v. Cole,      pay cannot be subrogated. See S.C.    Save the date! The Firm’s
205 Ga. App. 34, 36 (1992).              Code § 37-77-144.                     seminar at the Atlanta Aquarium
   Further, a closing attorney may                                             will be March 11, 2010. More
also assume liability through                                                  details to follow.

            (PLEASE TURN TO PAgE 15)                (PLEASE TURN TO PAgE 15)

Drew Eckl & Farnham, LLP November 2009                                                                               14
sUbrogAtIon of                          oDDs ArE, Its                           EmployEr AlErt: thE
UmbI, pErsonAl                          not “yoUr”                              EEoC Is tArgEtIng
InjUry, AnD mEDICAl                     ClosIng AttornEy                        lEAvE polICIEs thAt
pAymEnts – WhEn                         (CONTINUED FROM PAgE 14)
                                                                                vIolAtE thE ADA
                                                                                (CONTINUED FROM PAgE 12)
AlloWED? A stAtE by                     “gratuitous representation”.
stAtE ApproACh                          In Simmerson v. Blanks, 149 Ga.         “disability,” making it easier for
(CONTINUED FROM PAgE 14)                App. 478, 481 (1978), the Court         an individual seeking protec-
                                        determined that an attorney who         tion under the Act to qualify as
Tennessee                               undertakes to do, even without
  Tennessee law gives an insurer        reward, is responsible for misfea-
the right to subrogate medical pay-     sance, though they would not be          Employers should
ments if the applicable policy of       liable for non-feasance had the
                                        task for which the attorney had
                                                                                    also carefully
insurance provides for a complete
                                        no duty to perform never been               consider any
                                        undertaken. In such circumstances,
    Tennessee law                       a gratuitous agent would owe              request for leave
   gives an insurer                     the duty of “slight diligence” to a          beyond that
                                        party justified in relying upon the
     the right to                       representations or conduct of an           provided by the
      subrogate
                                        attorney to the degree such reli-
                                        ance encompasses the knowledge
                                                                                  company’s leave
       medical                          which the attorney professes to              policy by an
     payments...
                                        possess. Driebe at 9.
                                                                                   employee who
                                           6. CONCLUSION                         may be covered by
                                           Due to the number of contracts
assignment of the insured’s claim
against the third party tortfeasor.     involved in a standard residential        the Act, keeping
See	Wilson	v	Tenn.	Farmers’	Mut.	       real estate transaction, the buyer/       in mind that the
                                        borrower is more often than not
Ins. Co., 411 S.W.2d 69 (Tenn. 1966).
In order to stream line the sub-
                                        unrepresented by legal counsel.               ADAA has
rogation of medical payments in
                                        Therefore, a buyer/borrower
                                        should, as an initial matter,
                                                                                 redefined the term
Tennessee, it is essential for insur-
ers writing policies in Tennessee
                                        communicate with the closing                “disability”...
                                        attorney at the earliest possible
to ensure that the policy provides      time to determine who in fact           disabled within the meaning of
for a complete assignment of the        is represented by the closing           the Act. If you need assistance
insured’s claim against a third         attorney, evaluate whether their        updating your policy, please
party tortfeasor. n                     legal interests are sufficiently        contact Joe Chancey at (404)
                                        represented in the transaction, and     885-6222 or JChancey@deflaw.com,
                                        whether a conflict of interest exist.   Megan Noble at (404) 885-6142 or
                                        The only way to ensure adequate         MNoble@deflaw.com, or Meredith
                                        representation, however, is to
                                                                                Guerrero at (404) 885-6321 or
                                        retain independent counsel. n
                                                                                MGuerrero@deflaw.com. n


Drew Eckl & Farnham, LLP November 2009                                                                               15
DREW ECKL & FARNHAM, LLP
880 West Peachtree Street                      PRSRT STD
P.O. Box 7600                                  U.S. Postage
Atlanta, Georgia 30357                            PAID
                                               Atlanta, GA
                                              Permit No. 869
ADDRESS SERVICE REQUESTED




     All of us here at Drew Eckl & Farnham, LLP
      thank each and every one of our clients for
       your friendship and business during 2009.
           We sincerely wish you and yours
    the healthiest and happiest of holiday seasons.



Drew Eckl & Farnham, LLP November 2009                     16

				
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