Dealing with insurance companies
The California Insurance Code identifies sixteen claims settlement practices which, when either knowingly committed on a single occasion or performed with such frequency as to indicate a general business practice, are considered to be unfair claims settlement practices and are therefore prohibited by Title 10, Chapter 5 Subchapter 7.5 of the California Insurance Code. These are known as the unfair claims settlement practices regulations. It is important that the attorney you retain is familiar with these sections so as to provide the best available representation when dealing with insurance carriers.
Emotional Distress as Element of Injury
The general inclination is to perceive chronic pain, without identifiable diagnostic explanatory pathology, as potential malingering. However, injuries with lasting pain create emotional distress characterized primarily in the form of depression. Depression is indicative of the fact that the Plaintiff is not voluntarily consciously malingering, but in fact is experiencing real pain which is having a major impact on the individuals life. The Plaintiff begins to feel hopeless and helpless when they learn that they have no control over their symptoms, and that the potential of a poor prognosis in terms of available medical treatment for the pain exists.
It is very common for an individual suffering from chronic pain syndrome to experience marital and family difficulties. Family members will experience emotional upset over the original injury. Thereafter, as the symptoms continue, financial difficulties may arise which creates discord in the family unity and harmony. This can continue to be disruptive to the family unit and create agitation. As the chronic pain continues, family activities are abandoned due to the pain.
For these reasons, it is important to obtain an attorney who is familiar with the medical field and has knowledge of the impact of soft tissue injuries and the subsequent affect of chronic pain syndrome. The successful treatment of chronic pain requires team work among the patient, doctor, family members, and attorney. Through cooperation of all parties, the Plaintiff can begin to establish an attitude of trust and understanding that will assist in the recuperation process, which is the most important aspect of any claim.
We have working relationships with medical professionals in all fields and can provide referrals on lien basis to make certain that you obtain the best care available at no up front cost. Physicians fees may be paid upon settlement out of the proceeds of your claim so that you can obtain the care you need without the worry of medical expense.
New Usury Laws in California
California previously had enacted laws to prevent the charging of excessive interest on personal loans. Licensed Lenders and Mortgage Brokers have always been exempt from the usury regulations. Trust deeds for purchase mortgage of a residence is also exempt from the usury regulations, whether the loan is through a broker, lender, or seller taking back paper. Prior to 2007, the maximum interest rate allowed by law was ten percent (10%) per annum. In 2007, the maximum interest rate increased to twelve percent (12%) per annum.
Prior to 2007, the remedy for an individual who had been damaged through a usurious loan was the application of all interest against the principal. The affect was that any interest paid against the loan, not just the amount over ten percent, would be credited against the principal, and the lender would still be entitled to return of at least the principal loaned. This remedy has now changed to provide the victim of a usurious loan additional damages in the way of a penalty. California Civil Code Section 1916-3 provides that a person who is damaged as a result of usury may recover from the party who has committed usury, treble the amount of the monies paid in violation of the usury laws for a period of one year. Therefore instead of the interest paid in excess of the usury laws going as a credit against principal, the injured party can receive three times the amount paid from the lender who committed usury. Further, California Civil Code Section 1916-3(b) makes the act of usury a crime punishable by up to five years in the State prison.
An Update on the Insurance Requirements for LLP Status
The professional business status of Limited Liability Partnership has existed in California since 1996 with the adoption of the Uniform Partnership Act. Lawyers, Accountants and Architects can take advantage of this hybrid business form, gaining the benefits of running an informal practice between partners without concern of personal liability for the negligence or wrongful acts of the other partners. Of course, there is a price to pay for this “corporate veil” status. Worse, the “corporate veil” status may end up of no protection at all! The intent of this article is to address the recent revisions that all LLP’s must meet and to point out an ambiguity in the applicable code section. That being said, “LLP status” may still be an excellent entity choice.
The idea of not being responsible for the errors of one’s partners is extremely important. LLP’s have flourished over the past twelve years; there are now over 1900 LLP’s made up of lawyers in our state. In fact, many LLP’s have been formed strictly as a cost sharing means towards decreasing expenses. Some attorneys barely know their fellow partners and they are not concerned about that partner’s ability to practice law due to their perceived isolation from liability for their partner’s incompetence.
Senate Bill 414, an act to amend Section 16956 of the Corporations Code, relating to partnerships, effective January 1, 2008, mandated that LLP’s must meet either a financial security threshold or purchase malpractice insurance. The financial securitization can be: “to maintain in trust or bank escrow, cash, bank certificates of deposit, United States Treasury obligations, bank letters of credit, or bonds of insurance or surety companies as security for payment of liabilities imposed by law for damages arising out of all claims; however, the maximum amount of security for partnerships with five or fewer licensed persons shall not be less than one million dollars ($1,000,000), and for partnerships with more than five licensees rendering professional services on behalf of the partnership, an additional one hundred thousand dollars ($100,000) of security shall be obtained for each additional licensee; however, the maximum amount of security is not required to exceed seven million five hundred thousand dollars ($7,500,000).”
The vast majority of LLP’s purchase the insurance. Recently Amended California Corporations Code Section 16956 A reads, “Maintaining a policy or policies of insurance against liability imposed on or against it by law for damages arising out of claims; however, the total aggregate limit of liability under the policy or policies of insurance for partnerships with five or fewer licensed persons shall not be less than one million dollars ($1,000,000), and for partnerships with more than five licensees rendering professional services on behalf of the partnership, an additional one hundred thousand dollars ($100,000) of insurance shall be obtained for each additional licensee; however, the maximum amount of insurance is not required to exceed seven and a half million dollars ($7,500,000) in any one designated period, less amounts paid in defending, settling, or discharging claims as set forth in this subparagraph. The policy or policies may be issued on a claims-made or occurrence basis, and shall cover: (i) in the case of a claims-made policy, claims initially asserted in the designated period, and (ii) in the case of an occurrence policy, occurrences during the designated period.”
Professional Liability policies are typically issued with a per claim limit along with an aggregate limit of liability. This year’s revision only mentions the aggregate limit of exposure and it is clear after conferring with Thomas Clark, the staff counsel for Assembly Judiciary Committee, that the revision was not intended to increase the per claim limit, only the aggregate. “Per claim” limit of liability is the maximum that the insurance company will pay on behalf of an insured for any one claim. “Aggregate” limit of liability is the maximum the carrier will pay on behalf of an insured for an entire policy period, without regard to the number of claims.
The vast majority if not all California Professional liability policies are sold on a claims-made and reported policy form. The responsible insurance carrier is the one insuring the entity when the claim is actually made as opposed to when the reported act occurred. This raises an interesting issue with regards to insurance requirements to maintain this “corporate veil” status for non-negligent partners. What happens when the LLP dissolves?
Clearly, the legislative intent was to continue protecting the general public (clients) through financial securitization or mandated professional liability insurance. The issue of dissolution was addressed in California Corporations Code Section 16956 A as follows, “Upon the dissolution and winding up of the partnership, the partnership shall, with respect to any insurance policy or policies then maintained pursuant to this subparagraph, maintain or obtain an extended reporting period endorsement or equivalent provision in the maximum total aggregate limit of liability required to comply with this subparagraph for a minimum of three years if reasonably available from the insurer.” This Section raises critical issues!
Absent of such coverage or available security, the LLP becomes a General Partnership exposing all partners to the liability of any one partner.
New Developments In Real Estate Law
A Real Estate Licensee’s Duty to Inspect. Current Civil Code provisions require a real estate licensee to conduct a reasonably competent visual inspection of property which he or she is selling. A new provision makes clear that the inspection does not include an affirmative duty to inspect inaccessible areas, or areas offsite of the property, public records or permit files concerning title to or the use of the property (Civil Code §2079.3).  Further, where the sale is of a condominium unit, the inspection does not require an inspection of any units or property other than the unit for sale
Transfer Disclosure Statement. Changes have been made to the required form of Transfer Disclosure Statement (“TDS”), so be sure you are utilizing a current form. The changes, although relatively minor, have broadened the scope of certain of the representations made by the seller in the TDS. The word “landfill” has been changed to require disclosures concerning any “fill” on the property. The TDS now asks the seller to disclose not only lawsuits affecting the property, but specifically any lawsuits alleging a defect in the property or common area facility such as pools or walkways. Also, in response to a 1993 court case, the legislature has clarified that use of this form may not be waived by the parties (Civil Code §§1102, 1102.6). Further, as identified in the case of Loughrin v. Superior Court (1993) 15 Cal. App. 4th 1188, and subsequently codified within California Civil Code Section 1102.1(a) the Transfer Disclosure Statement is not made waived by an “as is” sale of a residence. However, where the transfer is with regard to a foreclosure, court ordered probate sale or other specific transfer identified under California Civil Code Section 1102.2, the Transfer Disclosure Statement is not required.
