California Court of Appeals Holds that Title Insurance Policy Terminated When Individual Insured Transferred Title to a Wholly-Owned LLC

Posted by on Jan 5, 2021 in Newsflash | 0 comments

A recent unpublished California Court of Appeals decision in Pak v. First American Title Insurance Company, 2020 WL 6886551, involved issues important to the title insurance industry and its insureds. The California Court of Appeals held that coverage under a title insurance policy terminated when the originally-named insureds transferred title to their property to a wholly-owned LLC via a quitclaim deed per the language in the title insurance policy at issue, and further held that the title insurance policy could not be reinstated by rescinding the quitclaim deed. In Pak, the plaintiffs purchased a commercial property in 2003 in their individual capacity and secured a title insurance policy from the defendant. In 2008, plaintiffs transferred their property via a quitclaim deed to an LLC in which the plaintiffs were the sole members. In 2017, a group of third parties purchased a neighboring property and informed plaintiffs that a portion of the plaintiffs’ property was burdened by an easement that granted the neighboring property the right to use a parking lot on the plaintiffs’ property. Plaintiffs notified defendant of the adverse claims against the property and made a claim under the title insurance policy. Defendant denied the plaintiffs’ claim on the grounds that the quitclaim deed to the LLC divested the plaintiffs of any interest in the property (as required by the condition of policy), thus voiding coverage of any such claims. In August 2018, plaintiffs rescinded the quitclaim deed and notified defendant of the recission. Defendant again denied coverage, reasoning that the title insurance policy was voided when title was transferred via the quitclaim deed from plaintiffs to the LLC and that the recission could not revive coverage. Plaintiffs then brought suit against defendant and the trial court dismissed the suit, finding that the title insurance policy terminated when plaintiffs transferred their property to their LLC. The Court of Appeals affirmed the trial court decision and found that “because it is well established that a limited liability company is an independent legal entity and the members of such a company have no interest, much less a fee interest, in the company’s property, the transfer of the property to the LLC triggered Condition 2 and terminated the Policy.” The Court also found that the recission of the quitclaim deed did not revive coverage because the title insurance policy immediately terminated upon the 2008 transfer. The court held that “the subsequent recission of the quitclaim deed did restore the plaintiffs and the LLC to their pre-contracts statuses vis-à-vis each other, but it did not erase the consequences and effects of originally executing the quitclaim deed, including the violation of Condition 2 and termination of coverage.” Generally, obtaining title insurance provides the owner peace of mind that most types of adverse claims against its property rights will be covered by the title company. However, based on the language of your specific title insurance policy, transferring a piece of property into a wholly-owned LLC, via quitclaim deed, may very well void the policy protections a property owner believes are in place.  If you have transferred property into a wholly-owned LLC via quitclaim deed, you should review your title insurance policy to determine whether there is a chance coverage has terminated as a result of the transfer.  If so, and if title insurance may...

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EEOC Provides Guidance for Employers on COVID-19 Vaccinations

Posted by on Jan 5, 2021 in Newsflash | 0 comments

The Equal Employment Opportunity Commission (“EEOC”) issued guidance for employers relating to mandating employee COVID-19 vaccinations as a condition of employment. The EEOC confirmed that employers can legally require their employees to receive a COVID-19 vaccination, subject to several caveats. The primary legal restrictions on employers mandating COVID-19 vaccinations or any other employer-mandated vaccination arise under the Americans with Disabilities Act (“ADA”), which limits an employer’s ability to require employees to undergo medical examinations and make disability-related inquires. The EEOC in its latest guidance confirms that the COVID-19 vaccination is not a “medical examination” and that asking employees whether they have been vaccinated is not a “medical inquiry” within the meaning of the ADA. Employers may also ask employees to show proof of vaccination without running afoul of the ADA, at least according to EEOC’s guidance. However, employers should avoid any follow-up questions and should warn employees not to share any other medical information when providing proof of vaccination because the additional information may elicit disability-related information. Although the COVID-19 vaccination is not a medical exam under the ADA, the EEOC notes that pre-screening vaccination questions may impact the ADA’s provision on disability-related inquiries and thus employers should be mindful of what questions they ask employees about their health and vaccination status. The ADA prohibits employers from making disability-related inquiries that are not “job-related and consistent with business necessity.” However, the EEOC provides that the pre-screening rule will not apply if the employee receives the vaccination from a non-employer related third party such as the employee’s own health care provider or if the employer offered the vaccine on a voluntary basis, because then answering the pre-screening questions would also be voluntary. Therefore, employers should proceed with caution and consult with counsel if the employer contemplates requiring its employees to receive the COVID-19 vaccination. While employers can require employees to take the COVID-19 vaccine, employers must make exemptions for employees that have a sincerely-held religious belief or a disability that would prohibit them from taking the vaccine. The EEOC cautioned that if an employee is unwilling or unable to be vaccinated due to an alleged disability or based on a protected characteristic, then the employer must undertake a two-step analysis. First, the employer must assess whether an unvaccinated employee would constitute a “direct threat” to the workplace by considering: “(1) the duration of the risk; (2) the nature and severity of the potential harm; (3) the likelihood that the potential harm will occur; and (4) the imminence of the potential harm.” To determine that an unvaccinated employee constitutes a “direct threat,” an employer must conclude that “an unvaccinated individual will expose others to the virus at the worksite.” Second, the employer must consider whether any reasonable accommodation (absent undue hardship) would eliminate or reduce the risk. Under the ADA, reasonable accommodation is an individualized, fact-based, and interactive process between the employer and the employee. Employers that adopt mandatory vaccination policies and then receive requests from employees for accommodation or exemption are encouraged to contact NavBat to discuss...

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SEXUAL HARASSMENT PREVENTION TRAINING DEADLINE IS APPROACHING

Posted by on Dec 1, 2020 in Newsflash | 0 comments

All California businesses must be in compliance with California’s Sexual Harassment Prevention Training by January 1, 2021. Employers should review their sexual harassment training obligations to ensure compliance. SB 1343 requires that all employers of 5 or more employees provide 1 hour of sexual harassment and abusive conduct prevention training to non-managerial employees and 2 hours of sexual harassment and abusive conduct prevention training to managerial employees once every two years. Employers with five or more employees must provide sexual harassment prevention training to all employees, even nonsupervisory employees, by January 1, 2021. The California Department of Fair Employment and Housing provides a free online sexual harassment and abusive conduct in the workplace training that satisfies California’s legal training requirement pursuant to Government Code section 12950.1. Click here- https://www.dfeh.ca.gov/shpt/. Employers of 50 or more employees have an existing and ongoing obligation to train new supervisory employees within six months of assuming their supervisory positions. Beginning January 1, 2021, new supervisory employees in workplaces of 5 or more employees must be trained within six months of assuming their supervisory positions, and new nonsupervisory employees must be trained within six months of hire. Employees must be retrained once every two years. It is not required that employers train independent contractors, volunteers, and unpaid interns. However, in determining whether an employer meets the threshold of having 5 employees and being subject to the harassment prevention training requirement, independent contractors, volunteers, and unpaid interns must be counted. For example, if an employer has 2 full time employees and 6 unpaid interns, the employer would meet the training threshold requirement and would need to ensure the two full time employees receive training only. The law requires employers to keep documentation of the training they have provided to their employees for a minimum of two years, including but not limited to the names of the employees trained, the date of training, the sign-in sheet for such training (if any), a copy of all certificates of attendance or completion issued, the type of training, a copy of all written or recorded materials that comprise the training, and the name of the training provider. Examples of tracking individual compliance include a certificate and/or a sign-in sheet that includes a verification that trainees completed the training. Documentation of the training should not be sent to DFEH but should be kept on the employer’s premises. In addition, every employer must post a poster developed by the Department of Fair Employment and Housing regarding Transgender Rights and Sexual Harassment in a prominent and accessible location in the workplace. The required posters can be found here...

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CAL-OSHA’S NEW EMERGENCY COVID-19 PREVENTION PROGRAM

Posted by on Dec 1, 2020 in Newsflash | 0 comments

On November 19, 2020, the California Occupational Safety and Health Standards Board implemented new temporary emergency COVID-19 regulations related to prevention and response to COVID-19 in the workplace. Yesterday, the California Office of Administrative Law (“OAL”) approved the emergency regulations. Now that the OAL has approved the emergency regulation, employers will have to immediately familiarize themselves with the new emergency regulation and implement necessary changes to workplace policies and procedures. One of the main requirements of the new emergency regulation requires employers to “establish, implement, and maintain an effective, written COVID-19 Prevention Program,” similar to California’s Injury and Illness Prevention Program requirements. The COVID-19 Prevention Program may be integrated into the employer’s existing Injury and Illness Prevention Program or be maintained in a separate document. The requirements of the COVID-19 Prevention Program are codified in section 3205 of the Cal-OSHA’s General Industry Safety Orders. Below is a general overview of the key requirements that employers must include in their COVID-19 Prevention Programs: System for Communicating. Employers must ask employees to report COVID-19 symptoms, possible exposures, and possible COVID-19 hazards at the workplace.  Employers must describe procedures or policies for accommodating employees with conditions that put them at increased risk of severe COVID-19 illness.  Employers must also provide information about access to COVID-19 testing, COVID-19 hazards, and the employer’s policies and procedures related to COVID-19. Procedures for Identifying and Evaluating COVID-19 Hazards. Employers are required to establish procedures to regularly identify and evaluate COVID-19 related hazards in the workplace. Employers are required to develop and implement  a system that provides for screening employees for symptoms associated with COVID-19 and employers should let employees participate in the process of identifying and evaluating COVID-19 related hazards. Investigating and Responding to COVID-19 Cases. Employers are required to establish a procedure to investigate COVID-19 cases[1] in the workplace. This includes procedures for verifying COVID-19 case status, receiving information regarding COVID-19 test results, the onset of COVID-19 symptoms, and identifying and recording COVID-19 cases. Employers also must take specific steps in response to a case of COVID-19 in the workplace, including, but not limited to, determining when the COVID-19 case was last present in the workplace, who may have been exposed, and notifying those employees or contractors who may have been exposed within one business day (without revealing any personal identifying information). Additionally, employers must offer free COVID-19 testing during working hours to all employees who were potentially exposed to the COVID-19 case and provide information on COVID-19-related benefits. Employers must also conduct an investigation to determine whether any workplace conditions could have contributed to the risk of COVID-19 exposure and what could be done to reduce exposure to hazards. Procedures for the Correction of COVID-19 Hazards. Employers must correct unsafe or unhealthy conditions, policies, and procedures in a timely manner after either learning of a COVID-19 positive case or concerns raised by employees.  COVID-19 Training. The employer needs to include policies for training employees on topics relating to COVID-19. Employer must train employees on COVID-19 prevention measures such as physical distancing and hand washing. Employer must provide information about the transmission of the virus that causes COVID-19. Employers must also instruct employees on the symptoms of COVID-19, the importance of not coming to work and obtaining a test if the employee has symptoms, COVID-19-related...

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New California Homestead Exemption Amount

Posted by on Nov 3, 2020 in Newsflash | 0 comments

California increased the creditor homestead exemption for personal residences, allowing debtors with residences in California to protect more equity in their homes. AB 1885 increased the California homestead exemption to the greater of $300,000 or the median sales price in the county where the single-family home is located in the prior year, not to exceed $600,000. This new homestead exemption amount will become effective January 1, 2021. The homestead exemption protects a specified portion of a debtor’s home equity in the event of bankruptcy or if a creditor requests that the debtor’s house be sold to pay a judgment. The current homestead exemption is believed by many to be antiquated. The new law is intended to significantly increase the protection of a debtor’s primary residence and bring the law current with California home values.  The new homestead exemption is significantly more protective for debtors than existing law. Under existing law, the homestead exemption provides for just a $75,000 to $175,000 homestead exemption, depending on age, disability and marital status. California will adjust the homestead exemption amounts for annual inflation based on the change in the annual California Consumer Price Index for All Urban Consumers, and thus the exemption amounts will likely increase...

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California Expands Leave Law

Posted by on Nov 3, 2020 in Newsflash | 0 comments

California Governor Gavin Newsom greatly expanded the California Family Rights Act (CFRA) by signing SB 1383 into law.  SB 1383 goes into effect on January 1, 2021. Under this new law, small business employers with as few as 5 employees will be required to provide certain unpaid, job-protected family, medical, and military leave to eligible employees. As the CFRA currently stands, only employers with 50 or more employees within a 75-mile radius (or 20 or more employees within a 75-mile radius for new child leave) are required to provide eligible employees up to 12 workweeks of unpaid protected leave during a 12-month period, if needed due to the employee’s own serious health condition, to care for a family member with a serious health condition, or to bond with a new child. This protected leave is available to employees that worked at least 12 months with the company and worked at least 1,250 hours during the previous 12-month period of employment. SB 1383, codified in Government Code section 12945.2, will now cover a substantially wider range of California employers- employers with 5 or more employees. The new law also eliminates the 75-mile radius requirement. As a result, if an employer has 5 employees that work anywhere in California, the employer is required to provide eligible employees job-protected leave. Governor Newsom stated that this lower threshold will impact “nearly 6 million Californians.” To qualify for CFRA leave, the employee still must have worked at least 12-months with the employer and have worked at least 1,250 hours in the 12-month period before the leave begins. An employee may take CFRA leave for the following reasons: For the birth of a child or placement of a child with the employee in connection with an adoption or foster care; To care for a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner who has a serious health condition; To care for the employee’s own serious health condition; or Because of a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States Currently, under the CFRA, parents who work for the same employer are limited to a collective 12 weeks of leave that may be taken to bond with their child. SB 1383 eliminates this limitation.  Under the new law, new parents working for the same employer are both able to benefit from this leave and each may take up to 12 workweeks of unpaid job-protected leave. Notably, the federal Family and Medical Leave Act (FMLA) does not cover all of the categories established in SB 1383. SB 1383 expands the definition of family member to include grandparents, grandchildren, siblings and children of domestic partners.  Previously, only parents, children, spouses or registered domestic partners were included. The CFRA also eliminates the “key employee” exception. The “key employee” exception allowed employers to refuse reinstatement to the same or comparable position if the employee was in the highest paid 10% of employees. SB 1383 will cause California employers to revisit how they handle requests for leave under the new law. Employers who will be subject to CFRA beginning January 1, 2021 should familiarize themselves with the law’s requirement. Employers should consider whether any updates are appropriate...

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SB1159 – COVID-19 Workers’ Compensation Presumption and Employer Reporting Obligations

Posted by on Oct 1, 2020 in Newsflash | 0 comments

On September 17, 2020, California enacted SB 1159, which imposes certain reporting requirements on California employers. SB 1159 also creates a “disputable presumption” that employees who contract COVID-19 did so in the course of employment for the purpose of obtaining workers’ compensation benefits, under certain conditions. This legislation follows the Governor’s Executive Order N-62-20 signed on May 6, 2020, which created a disputable presumption that employees contracted COVID-19 at work and would be eligible for workers’ compensation benefits under specific circumstances.  The Executive Order expired on July 5, 2020.  The new law incorporates the Executive Order into the statute for the period between March 19, 2020 through July 5, 2020, and adds additional framework for COVID-19-related illnesses that occur between July 6, 2020 and January 1, 2023, at which point the presumption will no longer apply. The law went into effect immediately as emergency legislation. (See Labor Code section 3212.86.) Requirements for Coverage The disputable presumption applies to all employees who test positive during an “outbreak” at the employee’s “specific place of employment,” as long as the employer has 5 or more employees and the following circumstances apply (See Labor Code section 3212.88(a).): The employee tests positive for COVID-19 within 14 days after the employee performed labor or services at the employee’s place of employment at the employer’s direction. The day on which the employee performed labor or services at the employee’s place of employment was on or after July 6, 2020. The date of injury is the last date the employee performed labor or services at the employee’s place of employment at the employer’s direction prior to the positive test. The employee’s positive test occurred during a period of an outbreak at the employee’s specific place of employment. “Specific Place of Employment” The law defines a “specific place of employment” as a building, store, facility, or agricultural field where an employee performs work at the employer’s direction. This does not include the employee’s home or residence, unless the employee is providing home health care services to someone else in the employee’s home. (See Labor Code section 3212.88(m)(3).) For an employee who performs work at the employer’s direction in multiple places of employment within 14 days of the employee’s positive test, the employee’s test shall be counted for the purpose of determining the existence of an outbreak at each of those places of employment.  If an outbreak exists at any one of those places of employment, that shall be the employee’s “specific place of employment.” (See Labor Code section 3212.88(m)(3)(B).) “Outbreak” An “outbreak” exists if within 14 calendar days one of the following occurs at a specific place of employment (See Labor Code section 3212.88(m)(4)): For employers with 100 employees or fewer, 4 employees test positive for COVID-19. For employers with 100 employees or more, 4 percent of the number of employees who reported to the specific place of employment test positive for COVID-19. A specific place of employment is ordered closed by a local/state public health department, CAL-OSHA, or a school superintendent. There must be an “outbreak” during which an employee tests positive for the presumption to apply.  If there is no “outbreak”, then the presumption does not apply. Employer’s Duty to Report COVID-19 Claims From September 17, 2020 forward, when an employer knows or has reason to...

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California Governor Approved Modifications to Independent Contractor Law

Posted by on Oct 1, 2020 in Newsflash | 0 comments

California Governor approved modifications to Assembly Bill 5 (“AB 5”), California’s worker misclassification law, to allow more individuals to be classified as independent contractors. This distinction is important because employees are provided wage and hour, workplace safety, and other workplace protections that independent contractors generally are not. The new legislation, Assembly Bill 2257 (“AB 2257”), creates a carveout for certain professionals, making it easier for them to be classified as independent contractors rather than employees. However, most industries will still be subject to the requirements of AB 5. California’s worker classification law, AB 5, took effect on January 1, 2020. AB 5 codified the ABC Test adopted by the California Supreme Court in its 2018 decision in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903, and expanded it to cover more industries. Under the ABC Test, a worker is presumed to be an employee and not an independent contractor, unless the hiring entity satisfies all three of the following conditions: The worker is free from the control and direction of the hiring entity in connection with the performance of the work. The worker performs work that is outside the usual course of the hiring entity’s business. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed. AB 5 expanded the reach of Dynamex by making the ABC Test the default test for all Labor Code, Unemployment Insurance Code, and Wage Order claims. When the ABC Test does not apply, the Legislature left in place the California Supreme Court’s test announced in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, under which it is generally an easier task to establish that a particular individual is correctly classified as an independent contractor. Thus, virtually all independent contractor relationships under state employment law are evaluated either under the old “Borello” test, or the “ABC Test”. Under AB 5 (and now its replacement, AB 2257), the default is the ABC Test, which is very hard to satisfy. The ABC Test is rigorous to meet in part because unless each element (A, B, and C) is proven by the employer, the worker will be deemed to be an employee and not an independent contractor. Under Borello, on the other hand, the decision is made based on the “totality of the circumstances” and takes into account a multi-factor analysis- no single factor controls the determination but rather requires consideration of all potentially relevant factors. The scope of AB 2257 remains the same as it did in AB 5. That is, the ABC Test and definitions formerly contained in Labor Code 2750.3(a) are now going to be contained in Labor Code section 2775. AB 2257 contains new exceptions and modifies some of the old ones.  Here is a summary of the main changes. Business-To-Business Under AB 5, the “business to business” contract was analyzed under the ABC Test if the vendor’s employees were directly working with customers of the other company. Under AB 2257, this is modified to say: The business service provider is providing services directly to the contracting business rather than to customers of the contracting business. This subparagraph does not apply if the business service provider’s employees are solely...

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Navigato & Battin, LLP Opens Carlsbad Office

Posted by on Sep 1, 2020 in Newsflash | 0 comments

Even a pandemic cannot constrain Navigato & Battin’s expansion!  Well, it was not exactly planned that way, but nonetheless, N&B recently opened its second location in Carlsbad.  The new address is 5927 Balfour Court, Suite 110, Carlsbad, CA 92008.  “Over the last several years, our North County San Diego client base has grown substantially,” observes partner Mike Battin.  “It just made sense to have a physical presence in Carlsbad because our North County clientele continues to grow and both Travis [Bray] and I live here.” A satellite office, the Carlsbad location is more intimate, with 3 interior offices, reception, an open area for support staff and office equipment, a kitchen, and conference room.  N&B will maintain its flagship downtown San Diego location but its new Carlsbad office will allow greater reach throughout the County. And, quips Mr. Battin, “my commute went from 35 minutes to 5!” An office-warming party will be planned when things calm down and it is safe.  Until then, if any client would like to tour the new office or just say hi, come on by! If you need assistance from N&B (at either location), please give us a call at...

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Employer Reminder- Employees with Children Whose “Place of Care” Remains Closed Due to COVID-19 May be Entitled to Leave

Posted by on Sep 1, 2020 in Newsflash | 0 comments

Since schools are starting up in San Diego but most children are currently starting the year in various forms of online learning, employers must remember their obligations with respect to employees who request leave to care for their child whose “place of care” is closed for COVID-19-related reasons. The Families First Coronavirus Response Act (FFCRA) requires covered employers to provide eligible employees with up to two weeks of paid sick leave and up to twelve weeks of expanded family and medical leave, of which up to 10 weeks may be paid. FFCRA leave may be taken if the employee is unable to work or telework due to the need to care for his or her child whose “place of care” is closed as a result of COVID-19. The leave must be offered to employees who are able to work (including telework, if offered), but who cannot work because they must care for children whose schools or places of care are currently closed.  If telework is offered, the employee should explain why he or she is unable to telework. Of note, the IRS in its guidance indicates that if the child is over 14, the employee should also explain that special circumstances exist requiring the employee to provide care. “Place of care” means the physical location where care is provided while the employee is normally working. Examples of such places of care are: day care facilities, preschools, before-school and after-school programs, schools, summer camps, summer enrichment programs, and respite care programs. (Note, the Department of Labor has stated that a school that is offering virtual learning is still closed for purposes of the FFCRA). There is a limited exemption for private employers with fewer than 50 employees from having to provide emergency family and medical leave expansion act (EFMLEA) or the emergency paid sick leave act (EPSLA) leave for school or childcare closures when the imposition of such leave requirements would jeopardize the ongoing viability of the business. The FFCRA allows for this exemption if an authorized officer of the business has determined that: Providing the leave “would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;” “The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or” “There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.” This is a rather burdensome showing on the part of the employer to invoke the exception. Essentially the employer must show that granting leave to this particular employee would jeopardize the viability of its business. This is a case-by-case analysis that must be documented, and the determination must be made by an officer of the company. The employer is not required to send such documentation to the DOL, but should retain...

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