The Letter of the Law: June 2012

IN THIS ISSUE:

EMPLOYMENT: Brinker Ruling: Coup for Employers

FAMILY LAW: Evidence in a Divorce and/or Custody Hearing

INSURANCE: Allowable Offsets in UIM/UM Claims

Brinker Ruling: Coup for Employers
By: Allyson K. Thompson

The California Supreme Court ruled today that employers are under no obligation to police that workers take their legally mandated lunch and rest breaks. This is a major victory for all California employers.

The ruling comes after employees argued that meal and rest break abuses are routine and widespread when companies are not required to issue direct orders to take breaks. Some of the major issues argued included: 1) does an employer need to regulate that employees are taking a 30-minute duty free meal period; and 2) the timing of when a meal break must be taken. Is early lunching, i.e., taking a lunch break at the very beginning of shift longer than five hours permissible?

The Supreme Court sided with employers when it ruled that requiring companies to specially schedule and order breaks is unmanageable and that those decisions should be left to the employees. Specifically, the court ruled that employers merely have an obligation to provide the opportunity to take a meal period to its employees. "The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so.

The court went on to hold that employers "are not required to police meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies the employer's obligations, and work by a relieved employee during a meal break does not thereby place the employer in violation of its obligations and create liability for premium pay under Wage Orders and Labor Code section 226.7. Next, the court addressed the timing of meal breaks. Their ruling upholds current California law, which states that absent a waiver, Labor Code section 512 requires a first meal period no later than the end of an employee's 5th hour of work, and a second meal period no later than the end of the employee's 10th hour of work. This means that an employer can provide a meal break at any point in scheduled shifts that exceed five hours.

The entire case can be accessed here. Please do not hesitate to contact us if you have any questions.

Evidence in a Divorce and/or Custody Hearing
By:

Many hearings in the family court involve supplying the court with evidence as to your claims. Only relevant and competent evidence can be received and considered by the court. Not every scrap of paper accumulated is going to be considered "relevant" to the court. And often, due to the time constraints of the court, it is especially necessary to select only the most relevant evidence for the court to consider.

Witnesses can be useful to tell the court facts they know, things they see, or things they hear one of the parties say. The more objective a witness appears, the better. A party to a dissolution proceeding will not need a witness for every fact or allegation. A party can testify or "tell their story" about most of the facts, but a witness that has observed violence or other bad behavior can be helpful to the court in verifying and validating what a party is alleging.

If a party to a dissolution proceeding wants a witness to testify at a hearing or the trial, they will need to prepare and file a witness list. This legal document tells the court and other party who the witness is, how they can be contacted, and generally what that witness can testify to.

There is other evidence beside witness testimony that may be helpful to a party's case. Very often, physical evidence is used. Common types of physical evidence used in a dissolution or custody case consists of photographs, videotapes, voice records, and such other things as torn clothing, broken property, and documents.

To properly get a photograph or videotape into evidence, a party or witness must testify that the photograph or videotape accurately represents what is being shown at the time taken, and that the photograph or videotape has not been altered.

Voice recordings are a bit more tricky. In California, you cannot record another person without their consent. However, if someone leaves a voicemail message, that person understands by the nature of leaving a voicemail message that they are being recorded. A party or person will want to testify as to the voice being heard, how they know that to be the voice of that person, and general foundational information as to how the voicemail recording came to take place.

It is wise to collect and preserve potential evidence as early as possible. These are just some examples of common types of evidence, but realistically, almost any object can be an item of evidence, depending upon what the item would prove.

Allowable Offsets in UM/UIM Claims
By: Merielle Enriquez

NRS §690B.020 requires with certain exceptions that automobile liability policies provide protection to insureds who are legally entitled to recover damages from uninsured drivers. When defending against UM/UIM (uninsured motorist/underinsured motororist) claims, Nevada law allows for certain offsets, which may work to reduce the overall total exposure in UM/UIM claims for the insurer.

An Offset is Allowed for the Full Amount of the Underlying Insurance Policy, Even if the Policy Limits were not Paid.

In the case of Mann v. Farmers Insurance, 108 Nev. 648 (1992 (overruled on other grounds), the Court held that the UIM carrier was only obligated to pay UIM benefits for the damages that exceed the underinsured driver's liability limits. Therefore, even if a UM/UIM insured settled with the underinsured driver for less than the driver's liability limits, the insured's UIM coverage applies only to damages that surpass those liability limes. In other words, there is no UM/UIM coverage for the gap between the settlement amount and the adverse driver's liability policy limits.

To put this case law in perspective, in the Mann case, the UIM insured settled with the underinsured driver for $35,000.00 when the underinsured driver had policy limits $50,000.00. Since UIM coverage applies only to damages that surpass liability limits, the UIM insurer was allowed an offset of $15,000.00, the difference between the settlement amount and the underinsured driver's policy limits.

Offset Clauses are Allowed and Enforceable in UM/UIM Settlements for Medical Payments When the Contract Language is Clear and Understandable, and to the Extent that the Damages Do No Exceed the Coverage Limits.

In the case of Ellison v. California State Auto. Ass'n, 106 Nev. 601 (1990), the Nevada Supreme Court upheld the medical payments setoff provision in the auto insurance policy as enforceable. In Ellison, the insured driver, Karen Ellison, was injured in an accident with an uninsured motorist. Her auto insurance carrier paid medical expenses under the medical payments portion of her policy. Ellison's UM claim went to arbitration and the arbitrator awarded Ellison $7,000 for pain and suffering and $3,617.96 for medical expenses. Ellison's auto insurance carrier paid the pain and suffering award, but did not pay the medical expenses award, citing the medical payment setoff provision in the policy. The Court held that "because Ellison's medical expenses did not exceed the medical payment limits of the policy and there was full payment of such expenses, there can be no further recovery, especially in the face of the offset provision prohibiting duplicate payments." Id. at 604.

Offset Provisions are Enforceable Against Personal UM/UIM Coverage Where an Employer Provides the UM/UIM Coverage. However, No Offset is Allowed where the Insured Person Bought their Own Disability Insurance and Where the Contract Provisions Did Not Expressly Allow for this Offset

In the case of Phelps v. State Farm, 112 Nev. 675 (1996), Plaintiff Royal Phelps was injured while driving his employer's rented vehicle during the course and scope of his employment. The car that collided with Phelps was uninsured. Phelps made claims against his employer's UM/UIM insurance, worker's compensations, and against his own private disability coverage. Phelps recovered the policy limits of $100,000.00 from his employer's UM insurance, a total of $98,022.40 from worker's compensation ($16,542.40 for medical bills, $36,480.00 for past disability and $45,000.00 for future disability), and received $13,770.00 from his privately purchased disability insurance. The total amount received from these sources was $211,792.40.

Phelps alleged that the amount recovered from these three sources was insufficient to cover his total damages, and made a claim against his own UM/UIM insurance against State Farm. State Farm only paid Phelps the difference between his total damages and what he had received from other sources. Phelps alleges that State Farm was required to pay him for his total damages and was not permitted to offset what he received from other sources against his UM benefits. The Court ultimately held that the offsets for the employer's UM policy and worker's compensation were valid and that State Farm's Provisions regarding these offsets were valid. However, the Court held that the offset from the private disability insurance was improper because such an offset was not expressly permitted by Phelp's UM policy.

In UM/UIM actions, it is therefore important to fully analyze what offsets are allowed under the policy. Offset policy language that is clear and understandable will generally be enforced by the Court so as to prevent any potential double recovery. However, offset provisions that are ambiguous will be subject to further scrutiny and it will be up to the Court's discretion whether to allow the potential offset.

Kring & Chung Hosts "Suits for a Cause" Clothing Drive

Kring & Chung is participating in a law firm clothing drive called "Suits for a Cause" to benefit WHW (Women Helping Women/Men2Work), an Orange County non-profit organization that helps low-income women and men get jobs by providing them with resume assistance, job placement workshops, computer training, and a professional wardrobe. Visit the Women Helping Women/Men2Work website for more information.

Starting on Friday, June 1st and ending on Friday, June 29th, we will be collecting used men's and women's clothing, including professional/business attire, non-professional attire (all regular clothing), and accessories (shoes, purses, jewelry, ties, etc.) This year, WHW is especially looking for women's non-professional attire to sell in their resale boutique, Deja New, which supports many of their job assistance programs.

If you would like to make a donation, please contact Courtney Kring at (949) 261-7700 or ckring@kringandchung.com. We will have donation receipts available. Feel free to contact us for more information. Thank you for your support!

Partner Laura C. Hess Selected for OC METRO's "40 Under 40"

Congratulations to Partner Laura C. Hess who was named as one of OC Metro Magazine's "40 under 40" honorees.

The list consists of 40 Orange County entrepreneurs, leaders and opinion makers under the age of 40 who are making their mark. The list will appear in OC Metro Magazine's "40 Under 40" May 2012 issue.

Lance A. Adair Joins Kring & Chung's Irvine, CA Office

Kring & Chung is proud to announce the addition of Lance A. Adair to our Irvine, CA office. Mr. Adair is Of Counsel to the firm and handles all types of real estate, construction and land use disputes and litigation for clients ranging from individuals to Fortune 500 companies. He is experienced in handling all aspects of complex case management and litigation, including mediation, arbitration, trial and appeal. Mr. Adair is rated "AV-Preeminent" TM by Martindale-Hubbell, the highest rating awarded.

Registration Opens for Kring & Chung Newport Beach Triathlon

Registration is now open for the Kring & Chung Newport Beach Triathlon, which is scheduled to take place on October 21, 2012 in Back Bay in Newport Beach, California. The course includes a 1/2 mile swim, 15 mile cycle, and a three mile run.

This year marks the 35th year of the event. Visit www.newportbeachtriathlon.com for more information and to register.

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