Statutes of Limitation for Breach of Contracts

Many companies are having trouble collecting on invoices after having rendered the services or delivered goods. But with this economy, what options do you have?

A client’s failure to pay for services rendered or goods delivered pursuant to contract constitutes a “breach of contract.” If you can’t otherwise get your client to pay, then you may sue for the payment in state court in a breach of contract action.

When the amount due is relatively small, it may be easiest and best to file suit in “small claims” or “magistrate” court. Some courts have minimum amounts to sue starting at $1,000 and all have maximums ranging up to about $15,000. In Georgia, the court is called “Magistrate court” and handles money claims of less than $15,000. Even if you’re owed more than the maximum, you can forego the excess and seek the maximum allowed by the small claims court. The filing fee varies by county and can range from approximately $45 to $55, which includes the charge to serve one defendant. An extra charge for service for any additional defendants usually ranges from $25 to $35 per defendant.

Some states will not allow attorneys to represent the parties in small claims courts. But in Georgia, you may choose to have an attorney assist you in Magistrate Court. An attorney is advisable if the opposing party has counsel.

Since the economy has slowed, some clients don’t have money now. So you may want to wait a bit to sue, hoping that the client gets money later (balancing the risk that the client will go out of business). But the time that you have to make your claim is limited. This is based on a legal principle called “the statute of limitations.” Statutes of limitation, in general, are laws that prescribe the time limits during which you can file lawsuits. The deadlines vary with the type of claim and depend on the state where the claim is made. The purpose of them is to reduce the unfairness of defending actions after a substantial period of time has elapsed. They allow people to go on with their lives, regardless of guilt, after a certain amount of time has passed.

In the United States, the statute of limitations to sue for breach of a written contract ranges from 3-15 years. In Georgia, the statute of limitations for a written contract is six years. So whether you file suit now or later, be sure to take steps to protect your business!

For more information, please contact Tim Buckley at (404) 633-9230.

Statute of Limitations for Catastrophic Workers Compensation Claims

The issue of whether, and what, statute of limitations applies to claims for catastrophic designation has previously remained unanswered in Georgia.  A trio of cases – two already decided by the Georgia Court of Appeals and one fully briefed and under consideration – will provide answers to these questions and will establish in what, if any, circumstances the statute of limitations regarding a catastrophic claim can be tolled.

 As a brief background, under Georgia workers’ compensation law, an injured employee’s entitlement to income benefits is capped at 400 weeks.  However, if an injury is deemed to be catastrophic, the injured worker is entitled to lifetime income benefits.  A catastrophic injury must fit in one of five categories: “(1) spinal cord injury involving severe paralysis of an arm, a leg, or the trunk; (2) amputation of an arm, a hand, a foot, or a leg involving the effective loss of that appendage; (3) severe brain or closed head injury…; (4) second or third degree burns…; (5) total industrial blindness; or (6) any other injury of a nature and severity that prevents the employee from being able to perform his or her prior work or any work available in substantial numbers within the national economy for which such employee is otherwise qualified.”  O.C.G.A. § 34-9-200.1(g).  Most claims which fit into the first five (5) categories are relatively easy to discern, but the “catch-all” sixth category has generated substantial litigation. 

 The first of three recent cases that will finally solidify the law as to what statute of limitations applies to requests for catastrophic designation and when, and if, the statute is tolled is Williams v. Conagra Poultry of Athens, Inc., 295 Ga. App. 744, 673 S.E.2d 105 (2009).  In Williams, the employee injured her neck and shoulders in November 1992.  She received income benefits for the full 400 weeks, ending in April 2001.  In March 2002, she requested that the State Board of Workers’ Compensation deem her injury catastrophic.  Her request was denied in August 2002.  She filed a second request in April 2003, which was denied as well.  With this denial, the State Board stated that the employee could submit another request if she included the proper documentation.  Ms. Williams did not appeal either decision, but submitted another request in September 2003, which was granted.  The employer appealed.  The Court of Appeals held that requests for catastrophic designation, at their essence, are requests for change of condition in status.  O.C.G.A. § 34-9-104(b) sets the statute of limitations for requests for change of condition claims and requires that any request be made within two (2) years after the last payment of income benefits.  Therefore, to be deemed timely, a request for catastrophic designation must be filed within two (2) years after the last payment of income benefits.  The Court held that the September 2003 request at issue was not timely and, as such, barred by the statute of limitations.

The second case that addresses the statute of limitations issue is Tara Foods v. Johnson, ___ S.E.2d ____, 2009 WL 783011 (Ga. App. 2009).  In Johnson, the employee injured her neck in November 1992 and she received income benefits until August 2001.  In November 2002, Ms. Johnson filed a WC-14, marking only “notice of claim,” indicating that she was not seeking a hearing but only income benefits from August 28, 2001, and continuing for catastrophic designation.  No action was taken.  In August 2005, Ms. Johnson filed another WC-14, requesting payments of medical expenses.  This dispute was resolved and the Consent Agreement indicated that there were no additional issues to be heard.  In September 2006, Ms. Johnson filed another WC-14, this time indicating that she was requesting a hearing.  She also checked the box for catastrophic designation.  The State Board determined that her request for catastrophic designation was untimely.  On appeal to the Court of Appeals, the Court reiterated its holding in Williams that claims for catastrophic designation are subject to the two (2) year statute of limitations of O.C.G.A. § 34-9-104(b).  Additionally, the Court held that Ms. Johnson’s 2002 WC-14 only gave notice of her claim and failed to meet the requirements of O.C.G.A. § 34-9-104(b) and, therefore, it was not proper application.  As such, and consistent with its opinion in Williams, the Court of Appeals held that Ms. Johnson’s first proper request for catastrophic designation was not made until September 2006 and was barred by the applicable statute of limitations.

The final case that addresses the statute of limitations for catastrophic designations is the case of Kroger Co. v. Wilson, Appeal No. A09A1226, currently pending before the Court of Appeals.  In this matter, Mr. Wilson injured his back in June 1994.  He returned to work, was injured in 1998, and returned to work for a different employer until 2004.  Mr. Wilson received his statutory maximum weeks of income benefits and last received income benefits in September 2001.  In August 2003, Mr. Wilson, while gainfully employed, filed a WC-14 seeking income benefits from September 2001 and continuing.  He made no mention of catastrophic designation.  In October 2003, Mr. Wilson dismissed the hearing request, “not to be re-set.”  In April 2006, Mr. Wilson filed a WC-R1CATEE seeking catastrophic designation.  The State Board ruled that Mr. Wilson’s April 2006 request was barred by the statute of limitations and his August 2003 request did not provide the employer with notice he was seeking benefits for catastrophic designation.  This decision was reversed by the Appellate Division, which held that Mr. Wilson was entitled to catastrophic designation.  The Superior Court upheld the Appellate Division’s opinion and the case is currently pending before the Court of Appeals.

In light of the recent related cases of Williams and Johnson, it appears likely that the Court of Appeals will determine that Mr. Wilson’s request for catastrophic designation was not timely filed and was barred by the statute of limitations.  Should the Court of Appeals provide full analysis, as it did in Williams and Johnson, the issue of the application and potential tolling of the statute of limitations with regard to catastrophic claims should be clearly established.  However, both Williams and Johnson have been appealed to the Georgia Supreme Court and, regardless of the decision, Wilson is likely to be appealed as well.  The final result, regardless of the outcome, will give both employees and employers direction as to the time frame in which a claim for catastrophic designation must be filed.

For more information, please contact Tim Buckley at (404) 633-9230.

County Immunity Not Waived by Community Service Act

The sovereign immunity doctrine provides that a sovereign or state cannot commit a legal wrong and thus is immune from civil suit or criminal prosecution. For some situations, however, governments have waived its immunity to allow for suits. Recently, the Supreme Court of Georgia clarified that O.C.G.A. § 42-8-71, also known as the “Community Service Act,” does not waive a county’s sovereign immunity. Currid v. Dekalb State Court Probation Department, — S.E.2d —-, 2009 WL 735641 (Ga. 2009).

 In Currid, Vincent Currid was ordered to perform community service based on a DUI plea deal. While performing this community service, Currid fell off a DeKalb County sanitation truck and eventually died from the resulting injuries. DeKalb County relied on the Community Service Act to claim that it was immune from liability. The Community Service Act specifically provides that:

“No agency or community service officer shall be liable at law as a result of any of his acts performed while participating in a community service program. This limitation of liability does not apply to actions on the part of any agency or community service officer which constitute gross negligence, recklessness, or willful misconduct.”

O.C.G.A. § 42-8-71(d).

The Trial Court agreed with Dekalb County because there was no showing of gross negligence concerning Currid’s assignment. The Court of Appeals reversed, holding that whether Currid’s assignment to a sanitation truck was gross negligence was a jury question. Currid v. Dekalb State Court Probation Department, 274 Ga.App. 704, 618 S.E. 2d 90 (2005). Upon remand, the trial court denied DeKalb County’s motion to limit damages based on sovereign immunity and OCGA § 33-24-51. On appeal, the Court of Appeals reversed and held that the language of the Community Service Act barred the claims against DeKalb County.

The Supreme Court of Georgia affirmed. In doing so, it explained that implied waivers of sovereign immunity are not favored. For a waiver of sovereign immunity to be shown, the statutory language must state: (1) a waiver of sovereign immunity; and (2) the extent to which the immunity is waived. The Court held that the Community Service Act did neither of these things. Instead, the statute limits the liability of those partaking in community service programs that typically would not be immune from legal action. It does not state that those who are immune from lawsuit have waived that immunity by participating in a community service program. Therefore, DeKalb County’s sovereign immunity was not waived by the Community Service Act.

 For more information, please contact Tim Buckley at (404) 633-9230.

Are Interns Eligible for Workers Compensation?

Workers compensation is a form of insurance that provides medical care for employees who are injured in the course of employment, in exchange for the mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence.  But it sometimes is difficult to determine who qualifies as an employee.  Does a person have to be paid to receive workers’ comp benefits?

O.C.G.A. § 34-9-1 (2), provides, in pertinent part, that an employee is “every person in the service of another under any contract of hire or apprenticeship, written or implied.”  So does this definition include unpaid interns who work for a company to gain experience?

The courts in Georgia look at several factors to determine whether an uncompensated person qualifies as an employee and thus is eligible for workers compensation.  Specifically, in North v. Floyd County Bd. of Educ., 442 S.E.2d 809 (Ga.App. 1994), the court found that a workers’ compensation claimant who had only begun her training period as a substitute bus driver for the defendant was not an “employee” at time of injury.  The court considered the facts that Ms. North was did not appear to be under the Board’s control, she was not paid during training period, she was not assured that she would be hired after successfully completing training, and the County Board did not receive any significant benefit from her services.  Accordingly, the court held Ms. North was not entitled to workers comp benefits.

The Georgia courts have not specifically addressed the question of whether unpaid interns are “employees” eligible for workers comp benefits.  The North decision is instructive on this issue, however, since interns are not compensated and the benefits derived by the employer for interns may not be significant enough to render the relationship an employment.

Thus, any companies who use unpaid interns should consider carefully the potential ramifications of such relationships and should plan for their workers’ compensation insurance needs appropriately.

For more information, please contact Barbara Mulholland at (404) 633-9230.

Do Photographs of Property Require the Owner’s Permission?

Plantation Road; Copyright Benjamin Ham

The College of Charleston Foundation (”Foundation”) sued Benjamin Ham for trespass, invasion of privacy, and conversion for his taking and selling a photograph of the Foundation’s property, known as the “Dixie Plantation.” The photo at issue is called “Plantation Road” and is shown here (with permission).

Background

The Foundation alleged that Ham passed through locked gates and ignored the “no trespassing signs” to enter its property, the Dixie Plantation, without permission to take photographs. Dixie Plantation was left to the Foundation pursuant to a gift from a will that included certain restrictions on the property’s use for commercial purposes. The Foundation believed that Ham’s selling of his copies of the “Plantation Road” photograph violated that restriction and thus sued Ham after he refused to stop selling his photograph.

The Court’s Order
The case now has settled out-of-court at a mediation, but not before the judge issued some important rulings. The Order may be viewed here.

The Foundation’s Motion to Remand
First, the Foundation asked the judge to remand the case back to state court from federal court. Only federal courts have “jurisdiction” (authority) to hear cases related to copyright. The issue is much more complex than is addressed here, but some of the court’s analysis is instructive. Specifically, the Foundation’s claims of conversion, trespass, and violation of the right of privacy (all state court claims) don’t appear on their face to be related to copyright. Generally, the Foundation would be allowed to keep the case in a state court to hear its state court claims. But Ham argued that the state law claims were “subsumed” by federal copyright law.

As part of the court’s analysis, it looked closely at the Foundation’s claim of conversion. The court defined conversion as “the unauthorized assumption and exercise of the right of ownership over goods or personal chattels belonging to another, to the alteration of the condition or the exclusion of the owner’s rights. Conversion may arise by some illegal use or misuse, or by illegal detention of another’s personal property.” After reviewing the case law on the subject, the court stated:

Federal courts, then, have generally found that when a conversion claim encroaches upon the subject matter covered under federal copyright law, the claim is preempted and should be brought as a copyright claim. A conversion cause of action only passes the extra element test where there was actually physical property converted, or some other circumstance . . . which makes the conversion cause of action fundamentally distinct from the kind of claim that could be brought under the Copyright Act. . . .

[T]he court simply cannot see how the gravamen of the conversion claim is not simply this: that Defendant unlawfully photographed an image belonging to Plaintiff and is now commercially distributing it. Plaintiff has not asserted that Defendant took any tangible object, so the only possible property of Plaintiff’s that Defendant is alleged to have converted is the image of “Plantation Road.”Disputes over ownership, use, or distribution of photographs and images are properly the realm of federal copyright law.

Accordingly, the court held that plaintiff’s state claims are preempted by copyright law so that the parties’ dispute was properly before the federal court. Thus, this court and other courts have found that taking a photograph of real property does not comprise the legal action of “conversion.”

Ham’s Motion to Dismiss
The Foundation’s Conversion Claim
The court then turned to Ham’s motion to dismiss. Because of the above finding, the court dismissed the Foundation’s claim of conversion because it is preempted by federal copyright law.

The Foundation’s Right of Privacy Claim
Ham also argued that the Foundation’s claim of invasion of privacy should be dismissed.  A defendant commits the tort of invasion of privacy by (1) publicizing, (2) absent any waiver or privilege, (3) private matters in which the public has no legitimate concern, (4) so as to bring shame or humiliation to a person of ordinary sensibilities. The court found, however, that most other courts that have considered this issue have held that corporations may not bring suit for invasion of privacy.  When the plaintiff is a corporation, as opposed to a living individual/human, it has no action for invasion of privacy.

Regardless, the court did not need to rule on the issue of whether South Carolina law allows a corporate plaintiff to recover in tort for invasion of privacy because the Foundation failed to allege the 4th element necessary for invasion of privacy. 

The court can see no way in which the publication of a photo capturing a beautiful image like “Plantation Road” in any way “bring[s] shame or humiliation to a person of ordinary sensibilities.” This is especially true in light of the fact that Defendant does not even identify Dixie Plantation as the setting of “Plantation Road.”

 

Accordingly, the court dismissed the Foundation’s claim for invasion of privacy.

The Foundation’s Trespass Claim
Because Ham physically invaded Dixie Plantation without permission to take photographs, the court did not dismiss the trespass claim against Ham. Significantly, the court noted that if Ham had somehow taken the “Plantation Road” photograph from off the property with some sort of high-magnification equipment, the Foundation would have no cause of action for trespass.

The court closely compared this matter to the Fourth Circuit’s decision in Food Lion, Inc. v. Capital Cities/ABC, Inc. , 194 F.3d 505 (4th Cir. 1999). The Food Lion case involved news reporters from the ABC program PrimeTime Live who obtained jobs at the grocery store chain at stores in North Carolina and South Carolina under fraudulent pretenses, and then proceeded to surreptitiously film Food Lion’s unsavory food handling practices. When the program aired, Food Lion sued the program and its producers, and at trial, obtained a verdict against the defendants on a charge of trespass, among other charges. Food Lion alleged no physical damages, but sought compensation for “loss of good will, lost sales and profits, and diminished stock value.”

Before the damages phase of the trial went before the jury, the trial court instructed the jury that the plaintiff could not recover damages related to intangible losses on the trespass claim. The court, however, allowed the claim of trespass to go forward and the jury awarded Food Lion nominal damages of $1.00.

The Fourth Circuit upheld the ruling of the trial court and the jury’s verdict with regard to the trespass claim. The inquiry mainly centered on the issue of whether Food Lion somehow consented to have the “employees” videotape the store’s food handling practices by hiring them and allowing them into the store. The court was untroubled by, and indeed never even raised, the issue of whether Food Lion should be barred from its trespass action because the trespass caused no physical harm.

In a separate fraud claim, the Food Lion jury was limited to awarding Food Lion damages based on actual tangible damages, and awarded the plaintiff a mere $1,400. However, the jury then went on to award the plaintiff over $5.5 million in punitive damages on the same claim.

Based on the Food Lion case , the Ham court found that if it is a trespass for a photographer to take photographs without the owner of private property’s consent when the owner has at least consented to have the photographer on the property, the court simply cannot see how it would not also be trespass in a similar situation where the difference is that the owner has not even consented to allow the photographer on the property. Furthermore, the issue of physical versus intangible harm does not represent a per se requirement of a holding of trespass, but rather goes to the issue of harm. While the Foundation had not alleged any physical or tangible harm from Ham’s actions, the Foundation may have been awarded punitive damages by a jury. Thus, the court would have allowed the Foundation’s claim of trespass to go to the jury if the case had not settled.

The Settlement
After the ruling by the court discussed above, trespass was the only surviving claim of the Foundation. The parties then mediated the dispute. As with the vast majority of lawsuits, the parties reached a compromise at mediation.

Importantly, the photo, “Plantation Road,” is still for sale on the Martin Gallery’s website. But, as is usual, the terms of the settlement agreement are confidential.

Of significance, it is reported that despite the Foundation’s position that the property could not be used for “commercial purposes,” parts of the movie, “The Patriot” were filmed there and other photographs have been taken of the property. Unfortunately, many of the photographers identified during discovery as having taken photos while on the Foundation’s property removed their photos after receiving “letters of intent” from the Foundation. But Ham was willing to fight for photographer’s rights (at great expense).

Conclusion
Ham says of his experience, “I am glad the process is over and we were able to reach an agreement that I think was beneficial to both parties. The legal costs were significant and I will have to bear the costs since I had no insurance for such legal issues. I have no regrets in having done so and I hope it will clarify some of these issues.”

Medicare Set-Asides in Liability Settlements

As we previously reported on February 19, 2008, the new Medicare, Medicaid, and SCHIP Extension Act of 2007 requires liability insurers, including self-insurers, no-fault insurers and workers’ compensation insurers, to:
• Determine Medicare/Medicaid status for all claimants; and
• Report to the Centers for Medicare and Medicaid Services (“CMS”), the federal administrative agency responsible for administering Medicare and Medicaid, when those claims are resolved.

The Act now has additional requirements regarding how these insurers must handle the funds for the liability settlements.

With the enactment of the Medicare/Medicaid SCHIP Extension Act of 2007 (MMSEA), which went into effect July 15, 2008, a set-aside must be made concerning Medicare in liability settlements. The Act requires the withholding of Medicare payments when a payment has been or reasonably can be expected to be made by a primary plan, including a liability insurance plan. The Act also requires that, where a primary plan exists, any Medicare payment is conditioned on reimbursement by the entity that received the primary plan payment. Non-group health plans, including liability insurance, no-fault insurance, and workers’ compensation, must begin reporting the information required by the Act July 1, 2009. Failure to report as required by the Act may result in a civil penalty of $1000 per day per claimant.

For more information, please contact Tim Buckley at (404) 633-9230.

Will Limiting Physician Contact Drive Up Costs of Medical Malpractice Defense?

A recent decision by the Supreme Court of Georgia will likely increase the already high costs of medical malpractice litigation, as the Court unanimously held that defense attorneys are no longer allowed to informally communicate with a patient’s prior treating physicians regarding that patient’s health information.  In Moreland v. Austin, __ S.E.2d __, Case No. S08G0498, 2008 WL 4762052 (Ga. Nov. 3, 2008), Plaintiff objected to defense counsel’s informal “ex parte” communications with a deceased patient’s doctors during which defendant’s counsel asked the doctors to assess the Plaintiff’s cardiovascular status and prognosis.  The Court found this communication to be improper.

At the heart of the matter was a patient’s ability to control his/her own medical records when it comes to informal contacts between his/her doctors and an outside party, in this case a lawyer.  Georgia law provides more relaxed controls for patients, as they are deemed to waive their right of privacy regarding relevant medical information when they put that medical condition at issue in a case.  O.C.G.A § 24-9-40(a).  Under HIPAA, however, a medical provider may not disseminate a patient’s medical information without first obtaining a court order or the patient’s specific consent. 

Because the regulation of this information distribution is more narrow at the federal level than at the state level, the Court held that HIPAA preempts Georgia law.  Moreland at *3.  The Court specifically noted that this preemption is focused on the methods used to discover evidence rather than the discoverability of the evidence in general.  Id.

What this means for medical malpractice litigation is that defense attorneys will no longer be able to speak to a plaintiff’s prior treating physicians without complying with HIPAA regulations.  If such ex parte oral communications are to be allowed, the patient must have specifically consented to them prior to the communication.  Attorneys will be limited in their discovery tools for gaining information as well, as the Court explains that even “service of a request for production of documents is insufficient because, although it gave plaintiff notice and an opportunity to object to the production of written documents, it did not give the plaintiff an opportunity to object to the ex parte oral contact and the discovery of physician’s recollections and mental impressions.”  Id.  As critics of the decision have noted, this limitation of efficient discovery opportunities will likely raise the costs of defending medical malpractice suits.

The Court noted that this decision does not limit all ex parte communications between an attorney and the physicians, only those that deal with a patient’s health information.  Conversations regarding benign topics such as the best method for serving a subpoena or the most convenient dates for trial testimony are still allowed.

Georgia law had facilitated and streamlined the litigation process.  However, with this decision, the Supreme Court of Georgia swings the balance towards an emphasis on the protection of a patient’s private health information. 

As the losing defendant’s lawyer in Moreland may file a motion for reconsideration in the Supreme Court, and is not ruling out a petition to the United States Supreme Court on the issue, we will continue to follow this case and provide updates on any new developments concerning this issue.

For more information, please contact T.K. Haff at (404) 633-9230.

More than a Green Light: The Heightened Protection of Individually Identifiable Health Information

Take note, the health and medical data you may receive from your clients, employees, and/or customers is subject to a special level of protection from your use if it in any way identifies the person.  Besides the obvious categories of information such as names or contact information, protected information includes birthdays, medical record numbers, or any full face photographs or comparable images where a person’s identity could be established (a list of 18 individual identifiers according to HIPAA 1996 follows the end of this entry). 

 

So what if you have some great pictures you would like to use in a presentation or study?  The Department of Health and Human Services established guidelines that must be followed to get the person’s valid and legal authorization.

Simply having the person sign a generic authorization form or “release” (often called a “model release” for photos) will not do.  Because medical information is seen as highly private, the Federal Regulations demand that you take specific steps in order to provide the person with the highest level of understanding of what exactly you are asking for.  A valid authorization under the Code of Federal Regulations, section 164.508, has core elements which are required for all authorizations regarding the use of health care information.  These core elements, without any of which an authorization is invalid, are:

1.                   A description of the information to be used or disclosed that identifies the information in a specific and meaningful fashion.

2.                   The name or other specific identification of the person(s), or class of persons, authorized to make the requested use or disclosure.

3.                   The name or other specific identification of the person(s), or class of persons, to whom the covered entity may make the requested use or disclosure.

4.                   A description of each purpose of the requested use or disclosure.

5.                   An expiration date or an expiration event that relates to the individual or the purpose of the use or disclosure.

6.                   Signature of the individual and date.

7.                   A statement of the individual’s right to revoke the authorization in writing, and the exceptions to the right to revoke and a description of how the individual may revoke the authorization.

8.                   A statement of the ability or inability to condition treatment, payment, enrollment or eligibility for benefits on the authorization. 

45 C.F.R. § 164.508(c)(1-2).  In addition, the contract must be written in plain language, and a copy of the authorization must be given to the individual.  45 C.F.R. § 164.508(c)(3-4).

These requirements are not to be taken lightly, as they provide protection to the individual by providing notice of what they are allowing you to do with their personal information.  For example, for the description of the purpose of the requested use, the comments to the Rule provide that no mere generalization will suffice; instead, you must detail specifically what you want and what you plan to do with it:

[a]uthorizations requested by covered entities for their own uses and disclosures of protected health information must also identify each purpose for which the information is to be used or disclosed. The required statement of purpose(s) must provide individuals with the facts they need to make an informed decision whether to allow release of the information. We prohibit the use of broad or blanket authorizations requesting the use or disclosure of protected health information for a wide range of unspecified purposes.  Both the information that is to be used or disclosed and the specific purpose(s) for such uses or disclosures must be stated in the authorization.

 

65 Fed. Reg. 82,518 (December 28, 2000).  It is only when armed with this specific information that the individual will be able to make a true decision on whether to allow you greater rights in that information.  This personal interest is at the foundation of the HHS Privacy Rule, and cannot be tossed aside lightly.

 

So be wary when writing an authorization form in order to gain the rights to use person information.  Even if you personally gathered all of the data, you must be able and willing to follow each of the steps listed above.  If you don’t, you are inviting liability in the form of an invasion of privacy claim.

 

 

 

List of 18 Individual Identifiers according to HIPAA 1996:

1.       Names;

2.       All geographical subdivisions smaller than a State, including street address, city, county, precinct, zip code, and their equivalent geocodes, except for the initial three digits of a zip code, if according to the current publicly available data from the Bureau of the Census: (1) The geographic unit formed by combining all zip codes with the same three initial digits contains more than 20,000 people; and (2) The initial three digits of a zip code for all such geographic units containing 20,000 or fewer people is changed to 000.

3.       dates (except year) for dates directly related to an individual, including birth date, admission date, discharge date, date of death; and all ages over 89 and all elements of dates (including year) indicative of such age, except that such ages and elements may be aggregated into a single category of age 90 or older;

4.       Phone numbers;

5.       Fax numbers;

6.       Electronic mail addresses;

7.       Social Security numbers;

8.       Medical record numbers;

9.       Health plan beneficiary numbers;

10.   Account numbers;

11.   Certificate/license numbers;

12.   Vehicle identifiers and serial numbers, including license plate numbers;

13.   Device identifiers and serial numbers;

14.   Web Universal Resource Locators (URLs);

15.   Internet Protocol (IP) address numbers;

16.   Biometric identifiers, including finger and voice prints;

17.   Full face photographic images and any comparable images; and

18.   Any other unique identifying number, characteristic, or code (note this does not mean the unique code assigned by the investigator to code the data)

For more information, please contact Tim Buckley at (404) 633-9230.

Insurance Company Avoids Bad Faith by Offering Its Policy Limits

Insurers in Georgia can be subject to “bad faith” claims depending on how they respond to a settlement demand sent to multiple insurers.  When multiple insurers are involved, an insurer likely will avoid a subsequent claim for bad faith if it unequivocally meets the portion of the demand over which it has control and then lets the claimant negotiate with the remaining insurers.  

This issue arose in the recent case of Fortner v. Grange Mutual Casualty Co., __ Ga.App. __, Case No. A08A0983, 2008 WL 4334613 (Sept. 24, 2008).  There, Fortner was injured in an automobile accident due to the negligence of Arnsdorff.  Arnsdorff was insured by Grange Mutual under a policy with a bodily injury liability limit of $50,000, and his plumbing business was insured by Auto Owners under a policy with $1.0 million in liability limits.  Fortner’s attorney offered to settle all claims against Arnsdorff for Grange’s policy limits of $50,000 and a contribution by Auto Owners in the amount of $750,000, so long as the offer was accepted in writing within 15 days.  Auto Owners did not respond in time, but Grange agreed to pay the $50,000 if Fortner signed a full release, including indemnification language, and dismissed his claim against Arnsdorff with prejudice.  Fortner deemed this response by Grange as a rejection, and he proceeded to trial where he won a $7.0 million verdict against Arnsdorff.  Arnsdorff then assigned his claim for bad faith against Grange to Fortner.  The bad faith claim eventually went to trial where the jury returned a verdict in favor of Grange. 

On appeal, Fortner objected to the following charge which was given to the jury:

In responding to a settlement demand, which demand is conditional upon the response of another insurance company, an insurance company can offer its policy limits in response to the demand and then let the plaintiff negotiate with the remaining insurers. In that situation, the insurance company would have given equal consideration to its insured’s financial interest and fulfilled its duty to him. And you would return your verdict in favor of the defendant.

The Georgia Court of Appeals held that this charge was a correct statement of the law and affirmed the verdict in favor of Grange.

Although the holding in Fortner reaffirms the principle of Georgia law that an insurer typically avoids liability for bad faith by meeting the portion of a demand over which it has control, the case also demonstrates the risk associated with adding contingencies to the acceptance of an offer to settle within the policy limits when there is a risk of an excess verdict that could lead to a bad faith claim.  In such a situation, the claimant closely scrutinizes the language of any attempted acceptance for new conditions that would allow him or her to consider the insurer’s response to be a counter-offer and thus a rejection of the offer to settle within the policy limits.  Therefore, when an insurer is responding to a settlement offer, it should analyze whether it is accepting the offer on the same terms communicated by the claimant or if it is adding any new terms to its attempted acceptance.

For more information, please contact Denny Brown at (404) 633-9230.

“I Plead The 5th!” When Civil Defendants Face Related Criminal Charges

Defendants in civil cases often also face related criminal charges. It thus is critical to balance the interplay of the civil and criminal matters. The plaintiff likely will propound discovery asking for admissions or information that may be incriminating in the criminal matter. Such risks also will be present during depositions. Therefore, care must be taken to protect the defendant’s rights at all phases of litigation.

A defendant has a right to avoid giving testimony to incriminate him. Ga. Const. 1983, Art. I, § I, ¶; XVI. The privilege against self-incrimination extends not only to those answers that would in themselves support a conviction, but also to answers that may establish a link in the chain of evidence needed to prosecute the criminal matter. Chumley v. Georgia, 282 Ga. App. 117, 637 S.E.2d 828 (2006).

However, when a person invokes his privilege against self-incrimination, an inference may be drawn by the fact finder that the witness’ testimony would be unfavorable to him. Simpson v. Simpson, 233 Ga. 17, 209 S.E.2d 611 (Ga. 1974). This can be devastating to the defense in the civil matter. One way to make the best of this difficult situation is to seek a stay in the civil matter pending the outcome of the criminal matter.

OCGA § 9-11-26(c) authorizes the trial court to issue a protective order where justice so requires: “Upon motion by a party or by the person from whom discovery is sought and for good cause shown, the court in which the action is pending . . . may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including . . . [t]hat the discovery not be had [or] . . .[t]hat certain matters not be inquired into or that the scope of the discovery be limited to certain matters.” The grant or denial of a motion for protective order generally lies within the sound discretion of the trial court. Bridges v. 20th Century Travel, 149 Ga.App. 837, 839, 256 S.E.2d 102 (1979).

The law generally disfavors complete stays in these situations. See Christopher v. State of Ga., 185 Ga.App. 532, 364 S.E.2d 905 (1988), (”a merely conclusory allegation that any and all discovery would prejudice the criminal investigation, without more, would frustrate legitimate discovery, as would either an unreasonable or indefinite stay”); and Bridges, 149 Ga.App. at 839, 256 S.E.2d at 102 (holding that the trial court will not be able to effectively decide whether the privilege is validly raised unless there is a record of the questions propounded, including those to which the privilege has been asserted and the court considers the implications of each question to which the privilege is raised and the setting in which it is asked and whether the party raising the privilege should provide sufficient information on which the court may find that a real danger of incrimination exists.)

Nevertheless, a complete stay is not improper under the law and lies within the sound discretion of the trial judge. OCGA § 9-11-26(c). In the alternative, the defendant can ask the court for protection from responding to certain discovery.

When presented with the possibility of facing both civil and criminal actions, defendants must be careful to not impair one defense while protecting another. Understanding and balancing these issues is vital to the best defense in both matters.

For more information, please contact Barbara Mulholland at (404) 633-9230.