Earlier this month, employers across this state were able to breathe a sigh of relief due to a long anticipated California Supreme Court ruling. On July 6, 2023, the Court held that employers do not owe a duty of care to prevent the spread of COVID-19 to employees’ household members.
In Kuciemba v. Victory Woodwork, Inc., Robert Kuciemba was a worker who claimed he had contracted COVID-19 while at the workplace. As a result of the alleged exposure, Mr. Kuciemba alleged he subsequently transmitted COVID-19 to his wife, who was later hospitalized and placed on a ventilator. As a result, in late 2020, Mr. and Mrs. Kuciemba filed a lawsuit in state court against the employer. Mr. Kuciemba’s wife asserted claims for negligence, negligence, per se, premises liability, and public nuisance. Mr. Kuciemba asserted a claim for loss of consortium. The case was removed to federal district court where it was dismissed in May of 2021. The 9th U.S. Circuit Court of Appeals took the case on appeal before posing its questions to the California Supreme Court.
After nearly three years since the initial filing of the case, the Court determined that Mr. Kuciemba’s wife could not proceed with her claims. The Court reasoned, “although it is foreseeable that an employer’s negligence in permitting workplace spread of COVID-19 will cause members of employee’s household to contract the disease, recognizing a duty of care to nonemployees in this context would impose an intolerable burden on employers and society in contravention of public policy.” The Court focused its ruling on the potentially negative consequence of imposing such a duty on employers. The Court ultimately reasoned that the negative consequences would outweigh the benefits by creating an enormous burden, on not only employers, but the court system and the community.
Although the COVID-19 state of emergency in California has ended, the Court was also concerned with what its decision could mean in the future stating, “… if a precedent for duty is set in regard to COVID-19, the anticipated costs of prevention, and liability, might cause some essential service providers to shut down if a new pandemic hits.” That is, if employers who provide essential services knew they could be liable for employees’ household COVID-19 claims, they could be reluctant to provide those services in the future.
Employers should be relieved that this long awaited liability question has been put to rest for now. Employers should still adhere to and maintain all safety protocols mandated by state and local law.
The fourth appellate district published an opinion earlier this year in Smalley v. Subaru of America, Inc. (2022) 87 Cal.App.5th 450 that serves as an excellent refresher on requirements of the “998 Offer,” or a statutory offer to compromise pursuant to Code of Civil Procedure (“CCP”) §998.
In Smalley, set in the context of a Lemon Law action, Defendant Subaru made a 998 Offer for $35,001.00, together with attorneys’ fees and costs totaling either $10,000.00 or costs and reasonably incurred attorneys’ fees, in an amount to be determined by the Court. (Smalley, supra, 87 Cal.App.5th at 454.) Plaintiff objected that the offer was not reasonable and the case proceeded to trial. At trial, a jury found in favor of Plaintiff and awarded him a total judgment award of $27,555.74 – far short of the $35,001.00 offer. The trial court found Plaintiff had failed to beat the 998 at trial and that Subaru’s earlier 998 offer was reasonable. Plaintiff appealed the post-judgment order awarding Plaintiff pre-offer costs and Defendant post-offer costs on the grounds that the 998 was not reasonable in that it did not specify whether Plaintiff would be deemed the prevailing party for purposes of a motion for attorneys’ fees. The fourth district affirmed the trial court’s order and engaged in a helpful review of 998 requirements.
A statutory offer to compromise has three basic requirements:
(i) must be in writing
(ii) must contain the terms and conditions of the settlement
(iii) must include a provision allowing a plaintiff to indicate his or her acceptance. (Smalley, supra, 87Cal.App.5th at 455, citing Code of Civ. Proc., §998(b).)
The 998 offer must be unconditional, but may include non-monetary terms as well. (Smalley, supra, 87Cal.App.5th at 456.) The terms of the settlement must be sufficiently specific to allow the recipient to evaluate it and make a reasoned decision as to whether to accept the offer or the risk of not accepting. (Ibid.) In addition, the 998 offer must be sufficiently clear that the recipient of the offer can “clearly evaluate the worth of the extended offer.” (Id. citing McQuiddy v. Mercedes-Benz USA, LLC (2015) 233 Cal.App.4th 1036, 1050.) The Smalley court observed there is no rule that a 998 offer identify who is to be the prevailing party; further, a court may not impose additional requirements or limitations that do not appear on the face of the statute. (Id. citing Rowland v. Pacific Specialty Insurance Company (2013) 220 Cal.App.4th 280, 288.) For this reason, the failure to include costs and expenses in a 998 offer does not necessarily invalidate it. Nor does the law require a response by an offering party when the offeree raises objections about the offer.
Once it is determined the 998 offer was valid, the burden shifts to the offeree to demonstrate the offer to compromise is nonetheless unreasonable or was not made in good faith. In a situation where the actual judgment is more favorable to the offeror than the offer to compromise, it is prima facie evidence of the reasonableness of the offer. In considering reasonableness, the Smalley court looked at two questions:
1. Was it in the realm of reasonably possible results at trial?
2. Did the offeror know the offeree had sufficient information to assess the reasonableness of the offer?
In assessing these two questions, the Smalley court noted later discovery of facts known to the offeror at the time of the offer which shed additional light on the value of the case could potentially affect a court’s evaluation of the reasonableness of the offer. As no such facts were discovered in the case before the court, it was comfortable affirming the order.
The Smalley case is an excellent refresher on the use of these statutory offers and stands to reinforce the underlying takeaways surrounding how to make effective use of this powerful litigation tool. Always make offers to compromise clear and sufficiently detailed such that the offeree can make an adequate assessment of the value of the offer and the risk involved in not accepting it.
Wilke Fleury is extremely proud that 18 of its incredible attorneys have been selected as 2023 Northern California Super Lawyers or Rising Stars! Super Lawyers rates attorneys in each state using a patented selection process and publishes a yearly magazine issue that produces award-winning features on selected attorneys. Congratulations to this talented group:
The California Board of Pharmacy (the “Board”) is a member of the National Association of Boards of Pharmacy (the “NABP”), and as a member of the NABP the Board has certain reporting requirements to the NABP. This article sheds light on why you should care about the Board reporting to the NABP.
● What is the NABP Clearinghouse?
The NABP Clearinghouse “is a national database of disciplinary and administrative information from NABP’s member states and jurisdictions. It houses information reported by the member boards of pharmacy on actions taken against wholesale distributors, pharmacies, pharmacy owners, pharmacists, pharmacy technicians, and interns. That information is used to:
[1] Determine the acceptability and qualifications of pharmacists who request the transfer of examination scores and licenses into other states or jurisdictions; and
[2] Screen applicants for [NABP’s] Drug Distributor, Digital Pharmacy, and DMEPOS Pharmacy Accreditation programs.”
● When is the Board required to report a licensee to the NABP?
Therefore, if you are currently licensed in multiple states or may want to become licensed in multiple states in the future, the NABP reports are vital to the licensure process as reports may affect your license eligibility in other jurisdictions. Furthermore, understanding the Board’s reporting requirements and the impact of that reporting to other boards of pharmacy is critical in determining whether to pursue an appeal.
If you find yourself needing help, you may wish to contact an experienced healthcare attorney to help navigate this difficult terrain.
Complex laws and regulations provide employees with certain rights and options during medical leave. It is the employer’s responsibility to ensure they understand the nuances of medical leave law to ensure not only compliance, but an easy transition for a medical concern the employee may face in their life. The laws related to medical leave have developed over time and cannot be found in a single statute. Instead, there are numerous applicable and overlapping statutes at both the state and federal level.
The Family Medical Leave Act (“FMLA”) is administered by the U.S. Department of Labor and provides job protected leave to an employee who is absent from work because of the employee’s own serious health condition or to care for specified family members with serious health conditions, as well as for the birth of a child and to care and bond for a new child. In order to be eligible for FMLA leave, an employee must: (1) work 1,250 hours during the 12 months prior to the start of leave; (2) work at a location where 50 or more employees work at that location or within 75 miles of it; and (3) have worked for the employer for 12 months.
The California Family Rights Act (“CFRA”) is administered by the California Civil Rights Department. The CFRA provides up to 12 weeks of unpaid leave in a 12 month period. The CFRA allows eligible employees to bond with a new child, or to care for themselves, a family member, or a designated person with a serious health condition. In order to be eligible for CFRA leave, an employee must: (1) work 1,250 hours during the 12 months prior to the start of leave; (2) work at a location where 5 or more employees work; and (3) have worked for the employer for 12 months.
Many employees and employers assume that because the basic principles of FMLA and CFRA are alike, they should be administered the same. However, this is a common misconception. While both FMLA and CFRA provide up to 12-weeks of job-protected leave and have nearly identical eligibility requirements, there are significant differences that employers and employees should be aware of.
The CFRA provides protections to a larger portion of the workforce and leave will be granted for more familial relationships, including to care for a domestic partner, a grandparent, a grandchild, sibling, or designated person with a serious health condition. Under the FMLA, a covered family member is limited to a spouse, child, or parent.
The CFRA has strict limitations regarding employer requests to medical providers. Under the CFRA, medical certification forms cannot seek the identification of symptoms or diagnosis of an employee’s serious health condition from the healthcare provider. Whereas under the FMLA, employers may request a diagnosis of an employee’s serious health condition when necessary.
Under both the CFRA and FMLA, certifications from a medical provider may be requested considering the above caveats. Under the FMLA, employers may require second and third medical certifications for employees or family members if the employer has a “reason to doubt” the validity of a certification. FMLA recertification may also be required every six months, even if the original certification has not expired. Whereas under the CFRA, employers may require certification for a employee’s medical condition only and may only require recertifications when the original certification expires.
The nuances associated with CFRA and the FMLA are vital for both employers and employees to understand and, as such, should consult with an experienced employment attorney to navigate the complex laws associated with medical leaves.
Selling a California pharmacy is significantly more complicated than the sale of other businesses. In addition to all of the typical business sale considerations, pharmacy sales require approval from the California Board of Pharmacy (the “Board”) of any transfer of 50% or more of the beneficial interest in that license prior to the closing. Additionally, due to the highly regulated nature of pharmacies, both on a state and federal basis, the pool of prospective buyers is dramatically smaller than with other businesses. Below are a few of the most important areas to be considered by pharmacy owners before moving forward with selling their business:
● Timing
It is critical for sellers to leave themselves a long runway to complete their transaction. Licenses are not transferable to new owners. Therefore, buyers must seek a new license before the close of a transaction. The Board requires approval of changes in ownership before the change occurs. Additionally, change of ownership applications must be filed with the Board at least 30 days prior to closing. If a change of ownership application is not approved by the Board pre-closing, the Board may impose fines and issue citations to the parties. A temporary license should be considered where closing timelines are compressed and may be issued at the discretion of the Board based on the specific facts of the transaction.
● Structure
The sale of a pharmacy corporation can be structured as either an asset sale or a stock sale. An asset sale is where certain business assets are acquired by the buyer and the seller maintains ownership over the corporation and the remaining assets. In a stock sale the buyer acquires all of the shares of the corporation and takes over complete ownership of the business. In general, a stock sale is preferrable to a seller because the buyer takes over responsibility for the entire business. Conversely, buyers generally favor asset sales because they can pick and choose the assets they want and the seller remains responsible for any skeletons in the closet. In either a stock or an asset sale, the parties will need to work together to clarify who is responsible for what after the sale.
● Liability
It is important for sellers to understand that they remain on the hook for any pre-closing licensing issues with the Board. For example, if a seller had failed to satisfy a required notification requirement to the Board and this failure comes to light post-closing, the Board may impose a fine on the seller. Therefore, a careful review of any potential license issues is critical prior to any sale.
● Tax and Legal Advisors
Sellers can find themselves with a surprise tax bill where taxes are not a primary focus of the transaction. Experienced tax advisors can be invaluable when sellers evaluate potential deal structures. Tax advisors should be brought into the mix early so that sellers can make fully informed decisions relative to the tax impact of the sale of their business. Additionally, sellers should retain their own, independent legal advisors to guide them through the complex selling process. Too often sellers rely solely upon the buyer’s advisors for crucial legal advice. It is a mistake to assume that buyer-paid attorneys, no matter how well-meaning, can fairly, and aggressively, represent sellers’ interests as well.
● Transition
Like many businesses, a successful pharmacy is the result of years of work and relationships that the business owners and their teams have cultivated over time. Because of this, the hand-off period can be critical to the ongoing success of the business. The parties should work closely to clearly determine the post-closing role, if any, of the seller. Moreover, considerations should be made on whether there will be a change to the Pharmacist-in-Charge (“PIC”) position post-closing. California law requires that the Board be notified within 30 days of when a PIC ceases to act as the pharmacist-in-charge, and a replacement PIC must be approved by the Board. Additionally, consideration should be made as to whether the buyer will continue operating at the same location, or if a change of location will occur. Under California law, a change of location must also be approved by the Board prior to any change. Therefore, it is important to have these discussions early as the ultimate decision may be based on a third-party landlord.
● Marketing
Who will buy your pharmacy? Current employees and business partners can make attractive prospective buyers as they already are up to speed on running the business. Marketing to employees and partners is generally permissible. Alternatively, you may consider selling to a large pharmacy chain. Business brokers can be helpful in identifying additional buyers outside of a seller’s network.
If you are considering selling your pharmacy, you are not alone. Contact an experienced healthcare attorney to help navigate you through the sale of your business.
Wilke Fleury LLP is excited to announce the addition of two new partners – Kathryne E. Baldwin and Aaron R. Claxton! Ms. Baldwin and Mr. Claxton are talented additions to the firm’s leadership. Each of them brings unique capabilities to Wilke Fleury’s partnership.
Kathryne E. Baldwin’s practice focuses on corporate and business law with a specific focus on litigation and insurance coverage matters. She obtained her undergraduate degree in Philosophy of Science & Logic at California State University, Sacramento. While in college, Kathryne worked for her family’s Sacramento-based business, developing strong ties in the community and gaining a first-hand understanding of the operational issues facing corporations and businesses. Kathryne is a graduate of the University of Pacific, McGeorge School of Law. During law school, Kathryne was a member of the nationally ranked McGeorge Mock Trial Competition Team and a semi-finalist finisher in the regional competition as a second year in 2015 and a finalist as a third year in 2016. Kathryne also served as a board member to the McGeorge Women’s Caucus organization during all three years of law school, her final year as President. Additionally, Kathryne was a member of the Federal Defender Clinic representing indigent clients charged with misdemeanors in federal court.
Aaron R. Claxton provides creative solutions to complex problems in healthcare and corporate law. Aaron’s practice focuses on Knox-Keene Act licensed health care service plans, insurance regulatory matters and healthcare transactions. Additionally, he represents health care providers, including physicians, dentists, veterinarians, optometrists, pharmacists, DMEs, FQHCs, MSOs, IPAs and Employee Assistance Programs. He assists health care organizations with regulatory and compliance matters including licensing, contracting, policies, acquisitions and litigation. Aaron also counsels clients on issues pertaining to Medicaid, Medicare, HIPAA and antitrust laws in health care.
“We are really excited to welcome Kathryne and Aaron into the partnership. They are talented and thoughtful, and bring a wonderful energy and perspective to the table,” said Steve Williamson, Managing Partner. “They are excellent lawyers and great people. We are proud to have them onboard, and confident they will help the firm thrive as we begin our second century.”
Wilke Fleury LLP is a thriving mid‐sized general practice law firm located in California’s capitol. Our attorneys offer broad expertise, creativity, and strong ties to local businesses, families, and individuals, making Wilke Fleury LLP one of the region’s most respected and long‐standing law firms. Our support of local charitable organizations, universities, law schools, political interests and the community reveals the character of the firm and our sincere commitment to the Sacramento region.
Wilke Fleury is extremely proud of its incredibly talented attorneys! Congratulations to Steve Williamson, Dan Egan, Neal Lutterman, Danny Foster, George Guthrie, Mike Polis, Ron Lamb, and David Frenznick, who are all featured in this year’s Sacramento Magazine’s List of Top Lawyers 2022!
Wilke Fleury is extremely proud that 14 of its incredibly talented attorneys are featured in the Annual List of Top Attorneys in the 2022 Northern California Super Lawyers magazine! Super Lawyers rates attorneys in each state using a patented selection process and publishes a yearly magazine issue that produces award-winning features on selected attorneys. Congratulations to this talented group:
After 30 years at its prior office location, Wilke Fleury has moved!! Our beautiful new offices are located at 621 Capitol Mall, Suite 900 in Sacramento, California. We look forward to providing legal services to Sacramento and the nation from our incredible new offices located in the US Bank Building, downtown.
Steve Williamson, Neal Lutterman, Annie Lee, and Elissa Niccum recently attended the Primerus Western Regional Conference in Los Angeles. They were joined by members of other Primerus firms from around California, as well as Washington, Colorado, and Arizona. Among other things, they participated in round table discussions regarding current issues of interest such as recruiting, retention, and succession planning. Annie and Elissa were designated by their respective breakout groups to report back to the group at large about their discussions. Following the meeting, partners from other firms praised Annie and Elissa’s active involvement at the conference and congratulated Wilke Fleury on the quality of its associates. Everyone had a great time connecting with other talented lawyers at the conference.
Wilke Fleury is excited to announce that it has promoted two associates to the position of Senior Counsel – Kathryne Baldwin and Aaron Claxton. Kathryne and Aaron have demonstrated professional excellence and contribute greatly to the firm’s multi-generational leadership.
“Elevating Kathryne and Aaron to Senior Counsel is not just a reflection of the talent and skill they contribute, but is also an acknowledgment of their value to the firm as lawyers and human beings. They are collaborative, generous and kind. They are also incredibly hard-working and, perhaps more importantly, have excellent judgment.” said Steve Williamson, Managing Partner. “They understand clients’ goals and are adept at developing strategies to achieve those goals. I congratulate them both, this is well deserved.”
Senior Counsel at Wilke Fleury have at least six years of experience delivering high-quality legal services, collaborate with partners on the development and management of key practice areas, and actively mentor junior lawyers.
Kathryne Baldwin’s practice focuses on business, insurance, landlord-tenant, and real estate litigation. She obtained her undergraduate degree in Philosophy of Science & Logic at California State University, Sacramento. While in college, Kathryne worked for her family’s Sacramento-based business, developing strong ties in the community and gaining a first-hand understanding of the operational issues facing corporations and businesses.
Kathryne has enjoyed horseback riding since she was nine years old and competes regularly in a variety of equestrian sports. Through hard work and dedication, Kathryne has received several National and Regional awards in both the United States and Canada as both a junior rider and as an adult competitor.
Aaron Claxton provides creative solutions to complex problems in healthcare and corporate law. Aaron’s practice focuses on Knox-Keene Act licensed health care service plans, insurance regulatory matters and healthcare litigation. Additionally, he represents health care providers, including physicians, dentists, veterinarians, optometrists, pharmacists, FQHCs, MSOs, IPAs and Employee Assistance Programs. Aaron assists health care organizations with regulatory and compliance matters including licensing, contracting, policies, acquisitions and litigation. Aaron also counsels clients on issues pertaining to Medicaid, Medicare, HIPAA and antitrust laws in health care. He has litigated coverage disputes and breach of contract cases in state court, administrative hearings and arbitration.
Aaron lives in Natomas with his wife and two sons. Outside of the office, Aaron enjoys traveling and spending time with family and friends.
Wilke Fleury is a thriving mid‐sized general practice law firm located in California’s capital. Our attorneys offer broad expertise, creativity, and strong ties to local businesses, families, and individuals, making Wilke Fleury one of the region’s most respected and long‐standing law firms. Our support of local charitable organizations, universities, law schools, political interests and the community reveals the character of the firm and our sincere commitment to the Sacramento region
The voting for Professional Research Services’ survey to determine the top attorneys in 2021 for Sacramento Magazine was open to all licensed attorneys in Sacramento, Calif. Attorneys were asked whom they would recommend among 56 legal specialties, other than themselves, in the Sacramento area. Each attorney was allowed to recommend up to three colleagues in each given legal specialty. Once the online nominations were complete, each nominee was carefully evaluated on the basis of the survey results, the legitimacy of their license, and their current standing with the State Bar of California. Attorneys who received the highest number of votes in each specialty are reflected in the following list. – Sacramento Magazine
Wilke Fleury congratulates attorneys David Frenznick, Adriana Cervantes, Matthew Powell and Dan Egan on their inclusion in the 2022 Edition of Best Lawyers in America!
First year recognized in Medical Malpractice Law – Defendants: 2021
These awards are recognitions given to attorneys who are earlier in their careers for outstanding professional excellence in private practice in the United States. The “Ones to Watch” recipients typically have been in practice for 5-9 years.
Despite the easing of COVID-19 restrictions in California, many of the changes imposed on the legal industry by the pandemic will likely remain in effect for the foreseeable future. One major change for litigators has been conducting depositions remotely. This change takes an already intricate task and makes it further complex by adding a new dimension of factors to consider. It is imperative that litigators understand these factors to avoid giving their opposition an undue advantage and to maximize the utility of depositions. While we may disagree as to whether remote depositions are a welcome change, the fact of the matter is that lawyers must adapt to them and provide adequate legal representation. This article explores some of the challenges and opportunities presented by remote depositions.
The Deponent
The deponent is the single most important element of any deposition and handing it properly becomes even more delicate in remote settings. I recently took a deposition where the plaintiff met their attorney for the first time at their deposition. The result was not spectacular. The plaintiff was ill-prepared, and the case eventually settled for far less than what it might have if it had been better prepared.
In some cases, deponents testify remotely without their attorneys’ physical presence. This may make them feel less protected and more vulnerable. To manage this risk, additional preparation is necessary. On the other hand, for attorneys taking depositions, this presents an opportunity to elicit testimony otherwise not possible, especially if a defending attorney is distracted in their home or office during long depositions.
Remote depositions require attorneys to be especially vigilant to safeguard against improper influence. The risk of information being conveyed to the deponent by their attorney or others is increased when the deponent is miles away from the attorneys with unlimited access to technology. Attorneys must be innovative and attentive to manage this risk. Steps that can be taken include having the deponent sit alone in a closed room, viewing a 360-degree angle of the deponent’s room before the deposition, and requesting that the deponent’s hands be in clear view of the camera during the deposition.
Preparation
The margin for error is even smaller when preparing for remote depositions. Exhibits must be well-prepared, pre-marked, and, in some instances, sent to the other parties in advance. As such, early preparation is not an option. Attorneys must be strategic in determining how and when they share the exhibits with the other parties. During the deposition, attorneys must be able to seamlessly electronically shuffle between exhibits and share them instantly without creating gaps in the record or interrupting the flow of questioning. For that reason, attorneys must be organized, and their questions must be presented with aforethought.
Further, adequate preparation is required to arrange the technological logistics of remote depositions. This includes securing a strong stable internet connection, operational microphones and speakers, and a quiet room with adequate acoustics. Finally, attorneys must be comfortable with using videoconference software, including filters, screen share, and mute functions to avoid unpleasant situations.
The “Set-Up”
For the attorney taking a remote deposition, it is crucial to arrange it in a manner that ensures command over the proceeding. It is wise to select a court reporter with whom they are comfortable and with whom they have worked in the past. Additionally, it is essential that the court reporter be comfortable working remotely, is familiar with the remote swearing-in process, and is capable of handling electronic documents. Even if all the other parties attend remotely, it is a good idea for the attorney taking the deposition to arrange for the court reporter to be physically present in the same room. This will allow the court reporter to focus on their job and the attorney to maintain command.
In cases where an interpreter is required, an additional layer of complexity is added. It is generally insufficient to have just one connection established with the deponent when an interpreter is utilized. This is because having only one connection means that the interpreter must first listen to the question or answer, write it down, and – only after the person finishes talking – will they be able to interpret. This is a slow, inefficient process. On the other hand, when a second, separate connection is established between the deponent and interpreter, the interpreter will be able to simultaneously translate and relay questions and answers as the parties speak.
There is little doubt that remote depositions are more time-efficient and convenient than in-person depositions. This, combined with the ongoing risk presented by new variants of COVID-19 suggests that remote depositions are likely to remain a key part of litigation practice well into the future. Rather than resist change, attorneys must adapt to this new world and focus on how they can use new technologies for the benefit of their clients, which is the ultimate goal.
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