Indiana case law on constructive fraud is, quite frankly, a mess. There are at least two types of constructive fraud. One form of constructive fraud requires five elements. The five elements include:

(i) a duty owing by the party to be charged to the complaining party due to their relationship; (ii) violation of that duty by the making of deceptive material misrepresentations of past or existing facts or remaining silent when a duty to speak exists; (iii) reliance thereon by the complaining party; (iv) injury to the complaining party as a proximate result thereof; and (v) the gaining of an advantage by the party to be charged at the expense of the complaining party.

The second form of constructive fraud relies on a confidential or fiduciary relationship. These cases do not necessarily list the five elements and do not explicitly require reliance. These cases require only a misrepresentation and not intent to defraud—“conduct which if sanctioned by the law, would secure an unconscionable advantage.” Lawshe v. Glen Park Lumber Co., 375 N.E.2d 275, 278 (Ind. Ct. App. 1978). See also Grubb v. Estate of Wade, 768 N.E.2d 957 (Ind. Ct. App. 2002); Lucas v. Frazee, 471 N.E.2d 1163 (Ind. Ct. App. 1984).

These two lines of cases and much dicta in Indiana case law imply that a plaintiff need not prove the five elements where there is a confidential or fiduciary relationship. As a result, constructive fraud has been used as a “catch-all” cause of action when a party cannot prove actual fraud, promissory estoppel, or breach of contract. Plaintiffs that cannot prove the five elements often argue that their relationship with the defendant constituted a “confidential or fiduciary” relationship such that the five elements are not needed. See Scott v. Boder, Inc., 571 N.E.2d 313 (Ind. Ct. App. 1991); Mullen v. Cogdell, 643 N.E.2d 390 (Ind. Ct. App. 1994)

In Cranston, the Court of Appeals limited the scope of the second form of constructive fraud by more narrowly defining what constitutes a “confidential or fiduciary relationship”. The court held the plaintiff and defendant did not have a “special relationship” that could support a claim of constructive fraud because the only evidence of any relationship between the parties was a prior transaction between the parties involving the sale, lease and re-purchase of office equipment, the sale or lease of a building owned by one party, and the prior transactions were mutually beneficial. Id. at 247. The Court noted that there was no evidence to support any finding of a special or fiduciary relationship between the parties “that would remove their dealings from an ordinary arms length business transaction”. Id. Moreover, the Court held that “a positive business experience, without more” does not necessarily “give rise to fiduciary obligations in future transactions between the same parties.” Id. citing Epperly v. Johnson, 734 N.E.2d 1066 (Ind. Ct. App. 2000). The Cranston court confirmed that when a plaintiff bases its constructive fraud claim on a buyer/seller relationship (and not a fiduciary relationship) the plaintiff must prove all five elements of constructive fraud. Id. at 247. Importantly, the court stated that no presumption of constructive fraud arises from a buyer/seller relationship. Id.

This article was written by Erin Casper Borissov, an associate in the law firm of Parr Richey Obremskey Frandsen & Patterson. The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.

Those injured may look to the utility for potential recovery. Electric cooperatives must be prepared to investigate and defend claims that may be brought even up to two years after the accident.

Electric cooperatives, like other utilities, typically have the authority to locate poles and structures in the road right-of-way. Often the available right-of-way is limited, resulting in the pole being close to the road’s edge. Some traffic safety engineers contend that utility poles (as well as mailboxes, bridge culverts, fences, trees, etc.) should be further from the roadway. A few of those safety engineers will testify against utilities in litigation..

When its pole is struck by a motor vehicle and injury results, an electric cooperatives must anticipate the possibility of a liability claim, even if there is no initial suggestion of blame on the utility’s part.

In these situations coop personnel should take digital photos of the pole, the vehicle(s) involved, and all adjacent areas. They also should prepare a good drawing with accurate measurements of the scene. (Oftentimes the utility line or road layout will be changed before litigation arises.) Record what action was taken to repair the pole. If the pole had to be replaced, take care to preserve its remnants in a dry, interior storage location so it won’t deteriorate over time. Implement a reasonable pole and line inspection policy and preserve the records of those inspections. Treat and report the incident as any other potential claim.

Proper recording of the facts and preservation of relevant evidence will allow for a more thorough and reliable investigation of these pole contacts. It will also improve the coop’s chances of avoiding suit or prevailing in court should suit be filed.

This article was written by Kent Frandsen, a partner in the law firm of Parr Richey Obremskey Frandsen & Patterson, who routinely represents Indiana electric cooperatives in civil litigation. The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney. August 2010

In a recent Indiana Municipal law case, the presence of a police officer during the service of a wrongful eviction notice did not affect the police officer’s governmental employee immunity because the officer was present for the purpose of preventing a possible breach of the peace.

Mark Harness Jr. appealed from a grant of summary judgment in favor of the Town of Winona Lake and one of its police officers, Paul Schmitt. On January 12, 2007, Hunter Carlile went to the police station to enlist the help of Paul Schmitt to serve an eviction notice on Harness as well as to change the locks on Harness’s home. At the time, Harness was purchasing the house on contract from Carlile and had possession of the home. When Carlile and Schmitt arrived at the property, Harness was not present; however, Daniel Linton was. When Linton questioned the eviction, he noticed that Schmitt placed his hand on his gun. Linton decided not to resist or challenge the eviction because he felt threatened by Schmitt. So, Linton helped Carlile remove property from the house. Carlile also changed the locks.

This court held that Schmitt was acting within the scope of his employment and was engaged in law enforcement when he accompanied Carlile to Harness’s home. The court assumed that there was a wrongful eviction in this case for the purposes of argument, although there was a dispute as to whether the eviction notice was valid. Even if Schmitt’s involvement in the eviction was negligent, he still could be immune from liability. A police officer’s performance of his duties in an otherwise illegal manner does not necessarily take those activities outside the scope of his employment or beyond the realm of law enforcement. The court declined to hold that Schmitt agreeing to accompany Carlile to Harness’s house in order to suppress a possible breach of the peace was outside of the scope of his employment because police officers are required to preserve the peace, to prevent offenses, to guard the public health, and to enforce laws. The court also declined to hold that an officer’s presence at a place where a breach of the peace might be anticipated is, as a matter of law, outside the definition of “law enforcement.” The court reasoned that because accompanying private individuals in situations where there is a concern that a breach of the peace may occur is a “routine part” of a police officer’s job, it does not want to discourage police officer’s from their routine police duties by denying immunity under the tort claims act.

Jeremy L. Fetty is an associate at Parr Richey whose practice focuses on corporate law, utility law, municipal law, and labor and employment law. The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.

Once the entire package has become law, the above discussed effects on employers will go into effect and many significant changes will be required in the near future.

Jeremy L. Fetty is an associate at Parr Richey whose practice focuses on corporate law, utility law, municipal law, and labor and employment law. The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.

The next question is what can employers do to protect their employees or to avoid being in the headlines for the CBS Evening News? Employees should have zero tolerance policy towards workplace violence against or by employees, whether the violence originates inside or outside the workplace. Employers should establish a workplace violence prevention program and incorporate that into an accident prevention program, employee handbook, and/or standard operating procedures.

An employer should consider establishing and implementing a written workplace violence prevention program that includes and/or provides for the following:

§ Workplace Violence Policy Statement (statement should include that there is zero tolerance for work place violence and encourage reporting without retaliation)
§ Management commitment and employee involvement (involvement by all and system of accountability)¹
§ Worksite analysis (identify existing hazards)
§ Hazard prevention and control (practice controls and procedures in the event of a violent incident)
§ Training and education for supervisors and employers
§ Incident reporting, investigation, follow up
§ Recordkeeping evaluation program (OSHA 300 log and analyze impact)

§ Safety education for employees so they will know what conduct is not acceptable.
§ Appropriately secure the workplace – surveillance, alarm systems, ID badges, entry locks/guards, etc. (depending on the circumstances).
§ Provide drop safes to limit the amount of cash on hand (keep minimal cash available).
§ Equip field staff with cellular phones, alarms or noise devices and require them to keep contact with people at another location throughout the day.
§ Make sure employees are instructed not to go to a location where they feel unsafe and/or have another person with them or police assistance in potentially dangerous situations.
§ Develop policies and procedures to cover property visits.

(OSHA Fact Sheet.)

What can you advise your clients to do in order to prevent workplace violence beyond a program? The following are some suggestions:

§ Recommend they use effective personnel procedures (background checks, prior employer checks, reference checks, pre-employment interview and follow up).
§ Recommend they incorporate workplace conduct policies into employee orientation.
§ Recommend the use of effective supervisory training (pay attention to early warning signs of stress, education on stress management, effective communication, conflict resolution, team building, dealing with difficult people as lack of training in recognizing such behavior is a high risk factor).
§ Provide support services (help your clients draft policies and train management and employees).
§ Provide safety education from a legal perspective.
§ Review company policies and procedures annually that relate to employee safety and workplace violence.

Interesting Developments

A significant risk factor for workplace violence is the prevalence of handguns and other weapons. Certain states have recently enacted legislation prohibiting employers from having policies that restrict employees from having weapons and ammunition concealed in a vehicle or the workplace premises.

¹Make sure consistent with National Labor Relations Act, 129 U.S.C. 158 (a)(2).

Jeremy L. Fetty is an associate at Parr Richey whose practice focuses on corporate law, utility law, municipal law, and labor and employment law. The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.

According to the Occupational Safety and Health Administration (“OSHA”), approximately 2 million American workers are victims of workplace violence each year. See www.osha.gov. In 2008, homicide was the third leading cause of fatal occupational injury in the U.S. and the second leading cause of death for females in the workplace. See Bureau of Labor Statistics, Census of Fatal Occupational Injuries Summary 2008, available at http://www.bls.gov/news.release/cfoi.nr0.htm.

The National Institute for Occupational Safety and Health (“NIOSH”) defines workplace violence as follows: “violence acts, including physical assaults and threats of assaults, directed towards a person at work or on duty.” See NIOSH, http://www.cdc.gov/niosh/about.html. OSHA expands the definition as follows: “Workplace violence is a physical assault, threatening behavior or verbal abuse occurring in the work setting. It includes, but is not limited to, beatings, stabbings, suicides, shootings, rapes, near suicides, psychological trauma, such as threats, obscene phone calls, and intimidating presence, harassment of any nature, such as being followed, sworn at or shouted at.” See OSHA, www.osha.gov.

Type 1 - Criminal intent or stranger: Perpetrator has no legitimate business relationship to the workplace or its employees and is typically committing a crime in conjunction with violence. Examples include robbery, shoplifting, trespassing and terrorism.

Type 2 – Customer/Clients: Perpetrator has a legitimate business relationship with the business or its employees and becomes violent while being served by the business or its employees. This includes violence by customers, clients, patients, students, inmates, etc.

Type 3 – Worker on Worker or Violence by Co-Workers: Perpetrator is an employee or past employee of the business who attacks or threatens employees or past employees.

Type 4 – Personal Relationships: Perpetrator usually does not have a relationship with the business but has a personal relationship with the intended victim outside of work. Often these include current or former spouses, lovers, relatives, friends or acquaintances.

Certain workers are at an increased risk for workplace violation, and among them are workers who:

§ Exchange money with the public
§ Deliver passenger goods or services
§ Work alone or in small groups during late night or early morning hours in high crime areas or in community settings in homes where they have extensive contact with the public.

This group includes the following professions:

§ health care and social workers, such as visiting nurses, psychiatric evaluators and probation officers;
§ community workers, such as utility employees, phone and cable TV installers and letter carriers;
§ retail workers; and
§ taxi drivers.

(OSHA, Fact Sheet for Workplace Violence, www.osha.gov (“OSHA Fact Sheet”).)

Federal Laws and Regulations

Currently, there are no federal laws or regulations that specifically address workplace violence although the OSHA Act Section 5(a)(1) (the “General Duty Clause”), provides that “[e]ach employer shall furnish to each of his employees employment in a place of employment which are free from recognized hazards that are causing or likely to cause death or serious physical harm to his employees.” As such, any workplace where a risk of violence or serious personal injury are significant enough to be “recognized hazards,” the General Duty Clause would require an employer to take steps to minimize the risk and failure to implement steps to minimize these risks could result in a violation of the OHSA Act under the General Duty Clause. Whether an employer could be cited under the General Duty Clause is dependent upon the specific facts of a unique situation. In order to prove a violation of the General Duty Clause, OSHA must establish:

§ employer failed to furnish a workplace free of hazards to employees;
§ the employer or the employer’s industry recognized the hazard;
§ the hazard caused or was likely to cause death or serious physical harm;
§ feasible means existed to eliminate or materially reduce the hazard; and
§ the employer knew, or with reasonable diligence could have known, of the recognized hazard.

These are difficult claims to prove, but still a possibility and employers should take the risk seriously and stay current with the industry standards.

OSHA has developed guidelines on workplace violence for certain industries that are at high risk for workplace violence. See Guidelines for Preventing Workplace Violence for Health Care & Social Service Workers, OSHA Publication 3148 (2004) and Recommendations for Workplace Violence Prevention Programs in Late-Night Retail Establishments, OSHA Publication 3159 (2009), both available at www.osha.gov/sltc/workplaceviolence. These guidelines are merely best practices guides and do not create duties under the OSHA Act.

There are also several state statutes that are aimed to reduce workplace violence in specific industries.

Part 1 of 2 (Part 2 will be published on 6/28/10)

Jeremy L. Fetty is an associate at Parr Richey whose practice focuses on corporate law, utility law, municipal law, and labor and employment law. The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.

The sad part about a catastrophe such as a fire is that it leaves the insured always in a worse position than they were before the fire. In addition to the obvious emotional toll, the time needed to devote to the developing of a claim is substantial and impossible to replace. Additional living expense, usually a maximum of $5,000.00, would provide some immediate cash to replace clothing and living essentials necessary within a few days of the fire. Then comes the issue of where does the insured live? Initially there would be accommodations provided by the insurance company in a hotel that may or may not be adequate for the insured’s needs. Longer term requirements include the renting of a house or other facilities, as well as furniture and household goods necessary to maintain a living during the pendency of the claim. Depending upon the policy, additional living expenses can be for a “reasonable period of time” or a specific limitation of one year or more depending upon the terms of the contract.

It takes a strong family to deal with the tragedy of a fire and, unfortunately, many families do not survive it.

The statements contained herein are for informational purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.

Insurance provided by any fire insurance policy is either an indemnification policy that indemnifies the insured for the loss, or a replacement policy. Depending on coverage, the loss can be based on the actual cash value of the property loss or on the replacement cost of rebuilding and replacing the lost buildings and property.

The actual cash value of property typically is not defined in the policy. Indiana courts employ the “Broad Evidence Rule” to determine the actual cash value of property subject to a loss. See, Travelers Insurance Co. v. Armstrong, 442 N.E.2d 352 (1982). In simplest terms, this means that any information that is available to the insured can be included in a determination of what constitutes actual cash value. The insurance company will attempt to limit the actual cash value to the cost of the item less depreciation. It is a mistake to let them determine the actual cash value on that basis. For example, a couch lost in a fire in a home with four active children has had a lot more wear and tear and the actual cash value is significantly reduced when compared to the same couch purchased at the same time by an elderly, retired couple. Actual cash value should be determined on a case-by-case, item-by-item basis and not by broad determinations of depreciation as determined by the insurance company’s adjuster for each item in the loss.

As it relates to replacement costs of buildings, the policy may call for replacement cost to be for the same or similar buildings. Some insurance companies will try to argue that they must be built on the same footprint as the destroyed buildings. It makes little difference to the insurance company; they will pay the same amount for the replacement of the building whether it is at the same location or somewhere else, so do not let this inhibit the insured from finding another location for his new building.

That is not to say that replacement cost coverage is unlimited. The contract provisions vary with regard to the amount of money that will be paid for replacement cost coverages. They generally take three different approaches:

(1) The limits of the replacement cost will be the face amount of the policy. Thus, a $100,000 policy limits replacement cost limits replacement to $100,000.

(2) Additional limits that are common are 125% of the face of the policy. Hence, with $100,000 coverage, then $125,000 coverage of replacement cost is provided.

(3) Finally, a guaranteed replacement cost is hard to find and is the best coverage available. It simply states that irrespective of what the cost is to replace, the replacement cost coverage will pick it up. Hence, with $100,000 face amount of coverage and it will cost $500,000 or more to replace the building, then coverage would be the $500,000. This, of course, is subject to the 80% co-insurance provision of the policy itself that need not be gotten into at this juncture.

Insurance calculations of actual cash value and replacement cost can be complicated. The expertise of an experienced adjustor is recommended. Do not take the insurance company’s word for either.

X. Time Limitations.

Insurance policies contain specific time limitations of which the insured must be aware. The most important one is, until recently, the time to file a claim against the company. Most contracts limited the time to bring suit to one year from the date of the loss. However, the one-year limitation has been changed by statute, and now extends the time to two years from the date of the occurrence. There are additional time limitations to present the Proof of Loss as well as to complete the replacement of the buildings or personal property.

These other time limitations are subject to extension by the insurance company if they are willing to do so. Obviously, their failure to extend any of these time limitations leaves the insured no alternative but to file a claim to protect their interests.

(Part 6 of 7. Part 7 will be posted on 6/14/10)

The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.

Within a day or so of the fire, an insurance adjustor will provide to the insured claims forms for what is called the “Proof of Loss.” The Proof of Loss itself is a one page document in which the insured summarizes the amount of the loss and then signs it and swears to it that it is accurate and does not contain any fraud, etc. The insured needs to be careful when sending in the Proof of Loss and must make sure that it is reasonably accurate. This does not mean, however, that the Proof of Loss can’t be amended; it can and should if new evidence indicates that the loss is greater than initially anticipated. Also along with the Proof of Loss will be a great many pages of forms provided by the insurance company in which the insured is obligated to identify the items of personal property that were lost in the course of the fire as well as the extent of the damage to the structure.

With regard to Coverage A, the dwelling loss, unless the insured is an experienced contractor, they will have to obtain the services of a contractor or builder who will give them an estimate of the cost to rebuild the building, whether it be a home or commercial property. With regard to Coverage C, the personal property, the insured can undertake the effort to identify each and every item of personal property lost in the fire, which would include every cup, saucer, plate, piece of silverware, tooth picks and all the related items that are involved in only the kitchen. The remaining rooms likewise will require specific itemization as to not only what was there, but when they were purchased and how much they were purchased for, how many items of pants, shirts, coats, ties, skirts, blouses, sweaters, and an itemization of every piece of clothing that was lost. As is plainly obvious, this is an onerous, difficult, and virtually impossible task to perform. It involves a huge amount of time and effort on the part of the insured to fill out these forms and to obtain the information the insurance company asks for.

It is an ambitious homeowner or commercial establishment that seeks to do this task on its own. Serious consideration should be given to hiring the services of a public adjustor to assist in this effort. A public adjustor should have enough experience in order to not only establish the costs to rebuild the structures, but also to develop the information necessary for the personal property. To assist them in this effort, the public adjustor has developed computer printouts of virtually every item of personal property that is contained in a house which immensely simplifies the efforts of a homeowner to identify each item that they had in their possession. Establishing the cost and when it was purchased may also be virtually impossible. There is nothing wrong with approximating the date of purchase, or indeed saying unknown as to the date of purchase and the initial cost of the item. Personal property adjustors that have experience dealing with that include Fire & Property Adjusters, Inc. in Bloomington; Joe Hoffman, Hoffman Adjustment Co. in Highland, Indiana; and Jay Hatfield, Indiana Public Adjusting in Fort Wayne.

The Proof of Loss form also includes a column for depreciation, used by the insurance company in establishing the actual cash value of the property loss. Replacement cost and actual cash value will be discussed later. The imposition of a depreciation factor greatly affects the ultimate recovery of the insured and again, unless the insured has extensive experience, the assistance of a public adjustor is recommended. The insurance company, as you can imagine, will impose their own depreciation factors, and these are subject of debate. Hence the need for some expert assistance. The fee charged by the public adjustors is normally 10% of the recovery from the insurance company. This, however, can be and should be negotiated, depending on the size of the loss.

One item of caution in dealing with a public adjustor: the public adjustor often will try to require that any check payable by the insurance company to the insured include the name of the public adjustor on the check. The insured should not allow this to occur as the contract is with the insurance company and the insured, not with the public adjustor, and this practice reduces dramatically the leverage the insured may have in dealing with the public adjustor in the event of any disputes between them.

The information on the Proof of Loss will be compared against receipts and other evidences of purchases the insured may have. Unfortunately, in the case of a fire that is a total loss, records of the items of personal property purchased may very well have been destroyed in the fire and cannot be supplied. This should not impair the processing of the claim as best recollection of the purchase date and price will suffice inasmuch the Proof of Loss statement swears to the accuracy of the information in the multiple pages of lost items.

The items of lost property as contained in the Proof of Loss will also be the subject of the examination under oath which the insurance company can insist upon. As with any witness, there is absolutely nothing wrong with statements of “I don’t remember,” “I don’t have the documents,” and the like.

(Part 5 of 7. Part 6 will be posted on 6/10/10)

The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.

If, after taking the statement under oath and conversing with the fire or police authorities, the insurance adjustor calls in the Special Investigations Unit (SIU), look out. It’s time to seriously begin protecting your own interests. The insurance company’s SIU investigator is there for the sole purpose of attempting to find the cause and origin of the fire to be the insured and to deny coverage. That is the sole purpose of his existence. If not before, it is now time for the insured to hire a cause and origin expert of his own to obtain a balanced approach to determining the cause and origin of the fire. In order to do so, it is important that the fire scene remain intact and no efforts be made for cleanup until your investigator has an opportunity to view the fire scene. There are many competent cause and origin investigators available.

The insurance company by this time will have hired an attorney to conduct the examination under oath. They are lengthy, can go on for hours, and are a very detailed inquiry, even to a greater extent than most depositions. In anticipation of an examination under oath, expect a long letter from the insurance company’s attorney outlining what they want you to provide at the time of the examination. This may very well include tax returns, receipts, bank statements, checking accounts, credit card records, telephone records, utility records, to name only a few in this onerous list. You can also expect to receive from the insurance company requests for authorizations to obtain many of these records from their sources. In short, an investigation into a fire is invasive, completely denudes you of any privacy, and makes your financial world very open to the insurance company and the insurance adjustor. And there is little you can do about it as the insurance company has the right to determine what is necessary in its investigation to find out if it indeed has coverage. The examination under oath will be transcribed, submitted to the insured for signature and then sent to the insurance company along with the attorney’s analysis of the claim.

At the conclusion of this process, the insurance company should be in a position to make a determination as to whether or not they are going to afford coverage. They should not be allowed to dilly-dally through this process, as will be explained below.

(Part 4 of 7. Part 5 will be posted on 6/7/10)

The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.

There will be one, and very well may be two insurance adjustors assigned to your claim. One adjustor may specialize in structural damage while a second adjustor may deal with the loss of household goods and personal property.

It is now time for you to be careful. In many instances, indeed most instances, the insurance adjustor may very well show up at the scene with a contractor or a company that specializes in dealing with insured fire claims. The first step will be securing the premises and preserving the remains of the fire for two purposes. First, for making the determination as to the cause and origin of the fire, and secondly, to make an initial determination as to the personal property, furniture, household goods and appliances that the insured owns and may be the subject of future adjustment to the claim.

Thankfully, there is some help even if you unwittingly entered into the contract with the insurance company’s handmaiden. If the contractor has been paid and the work he has left behind is substandard, help arrives in the form of the Home Improvement Contract Act, IC §24-5-11-1, et seq. This Act provides protection to a homeowner from unsavory contractors and sets forth several safeguards for the homeowner. It is virtually certain the contract entered into between the insured and the contractor who appeared on the scene with the insurance company representative does not comply with the terms of the Home Improvement Contract Act. See, e.g., Bunger v. Miller, 855 N.E.2d 716 (2006).

Thus, it may very well be more advantageous to reject the efforts of the insurance adjustor to hire the contractor he brings to the scene and for you to find a contractor in your local community in whom you have confidence and who enjoys a good reputation. It may take a little longer, but in the long run you will be better protected.

VI. The Cause of the Fire.

One of the first things the insurance adjustor will do, if not the first thing, is to attempt to make an initial determination as to the cause and origin of the fire. Accidental and inadvertent fires will be covered. Intentional fires caused by the insured or at the behest of the insured will not be insured. Many times the insurance adjustor attempts to find a cause of the fire under which the insurance company denies coverage. The first step in this process is to take a recorded statement from the insured. The insured is required to cooperate with the insurance company in the investigation of the fire loss and it is incumbent upon the insured to cooperate and provide the insurance company with the recorded statement. Obviously, the insured, not being an expert in cause and origin fires, needs to be careful about any comments, opinions or conclusions he may have as to what caused the fire and, obviously, should not venture any speculation as to what happened. There is a laundry list of things that will be covered in the recorded statement to determine if the insured had any involvement in the cause of the fire. That would include whether or not the family pet was in the house, whether or not items of personal property had been removed from the house prior to the fire, whether or not heirlooms and items, such as wedding dresses, were consumed in the fire, etc.

The adjuster will also pry into the financial condition of the insured, i.e. foreclosure, bankruptcy, debt collection, real estate and tax liabilities, phone records, as well as a history of claims, marital discourse, and many of the other reasons why fires are started for money.

Unfortunately, the insured can expect little help from the law enforcement authorities or the State Fire Marshal’s office, or from investigators from the local fire department. All too often these people are untrained and inexperienced and like nothing better than to find the cause of the fire to be arson. With regard to the State Fire Marshal’s office, through a quirk in the Indiana statutes, the insurance company and the State Fire Marshal’s office may exchange, and indeed have an obligation to share with one another, the results of their investigation of the fire. However, the insured has no right to receive the report of the State Fire Marshal’s office or a report from the insurance company provided to them by the State Fire Marshal’s office unless done so under the subpoena power of the courts. This has become increasingly more difficult given the fact that the State Fire Marshal’s office is now under the Department of Homeland Security and is looking for terrorists under every rock.

The cause and origin of a fire is a highly sophisticated, specialized science that requires persons skilled through education, training and experience to conduct an adequate cause and origin investigation. Unfortunately, local fire departments in many cases do not have this expertise, nor does the State Fire Marshal’s office, whose investigators in most instances are made up of firemen who may have practical experience but little or no scientific background to support their opinions and conclusions. The Bible for the investigation of fires is contained in NFPA 921, and a copy of which is mandatory if a contested issue as to the cause and origin of a fire exists.

(Part 3 of 7. Part 4 will be posted on 6/3/10.)

The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.

The insurance agent has dictated the information contained in the application, photographs submitted to the company, and the desires of the insured to obtain maximum coverage. It is important, on the other hand, that the coverage provided has a relationship with the fair market value or actual cash value of the building being insured. That is to say, if the building is over-insured for its value, the insured may bear some of the risk of the loss, or have coverage denied. The same is true if the building is insured for less than its actual cash value as then the 80/20 provision applies which dictates that the insurance coverage must be at least 80% of the actual cash value of the property.

Debris removal and other related coverages are also tied to the building coverage. Thus, a building that is insured for $100,000 would usually have $10,000 coverage on other buildings, $75,000 coverage on personal property, and the debris coverage would be $5,000, generally 5% of the face of the policy.

IV. Your Insurance Agent.

The first call after a fire will be to your insurance agent, in many cases a friend, a neighbor, and a respected member of the community. You have placed your trust and confidence in him in providing you with the maximum protection for your business and homeowners insurance coverage. Hopefully, the insurance agent has placed your coverage with a reputable company whom he believes will provide you with coverage for all catastrophic events if it becomes necessary to call upon them for your protection. A reputable insurance agent should come to your aid and in some cases, depending on how close your relationship, may very well come to the scene of the loss in an effort to console you and provide you with immediate assistance on how to begin the process of adjusting your loss. The agent will have readily available the phone number and perhaps even the name of the insurance adjustor who will handle the adjustment process. He will immediately notify the company of the loss and within hours, an insurance adjustor will be assigned to your claim and may very well be in contact with you. That will be the end of your insurance agent. He will step out of the picture and get as far away from the adjustment of the claim as possible. All further inquiries to him will be immediately referred to the insurance adjustor, and the agent will provide little or no further assistance in resolving the loss. The insurance agent is well-aware of the fact that in finalizing your claim there may be many disagreements and disputes, and the insurance companies do not want their insurance agent to be involved in dealing with resolving those issues. The insurance agent desires to remain your friend and your neighbor and continues to want to sell you insurance. As a result, he does not want to be a party to any unpleasantness that might arise as a result of the claims process. So long insurance agent.

(Part 2 of 7. Part 3 will be posted on 5/31/10.)

The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.

Short of a death or serious personal injury, the most devastating thing that can befall a family is to have their home or business destroyed by fire. It is hard to imagine the emotional upheaval to stand by and watch the fire department attempt to save your hopes and dreams as they go up in smoke. It is at this juncture you would expect your homeowners or commercial insurance policies to step in and provide the protection for which you have paid insurance premiums for those many years. Unfortunately, there are many pitfalls which you must be aware of if you are going to protect your interests and receive just compensation from the insurance company for the loss that you have suffered. It is important to understand that the damage to your home or business is not only caused by the fire, it is also caused by the smoke, the water and the destruction created by the fire department in an attempt to put out the flames. As the fire department leaves the scene, your thoughts must go from the smoldering ashes to what’s next.

An application for homeowners insurance is an important document. By the time a fire has occurred, the application process has long been resolved and the insurance issued. At the time of the fire, however, the insurance adjustors will review the policy to determine if there were any material misrepresentations made in the application process that would give the company an opportunity to deny coverage. Virtually all applications are now done online with the insurance agent asking the applicant the questions and then filling in the blanks on the computer. Many applications are taken over the phone with the agent making assumptions as to what the answers to the respective questions would be, only to find out later his assumptions are incorrect and are jeopardizing the insured’s policy coverage. The insured must sign the application and swear that the information contained therein is truthful. Hopefully they have carefully read the application to make sure all the answers to the questions are correct.

It is common practice by most insurance companies to require the agents to visit the property, take photographs and attach them either online or with a hard copy of the application so that the underwriters can make a determination as to whether coverage would be afforded. Remember, the agent is on a commission basis and is anxious to sell the insurance. The insurance agent is well-aware of what the underwriting requirements are in order to place coverage. As a result, they participate in the exaggeration and misinformation that the application may contain.

(Part 1 of 7. Part 2 will be posted on 5/27/10.)

The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.

House Enrolled Act 1065 authorizes individuals to bring a civil action against any employer or other person who has violated this statute by attempting to enforce an ordinance, regulation or policy against firearms locked in an employee’s vehicle. A civil action can result in actual damages, costs, attorney fees and an injunction against the employer. The statute, however, specifically prohibits the jurisdiction of the court for an action against an employer who complies with the statute (presumably an action brought by an individual who is harmed by an employee who brings a firearm to work although that section is not clear).

The statements contained herein are for informational purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.

The EEOC guidance states that a waiver in a severance agreement will generally be valid when the employee “knowingly and voluntarily consents to the waiver.” To determine whether the employee actually did know of and voluntarily waived his or her potential discrimination claims, most courts look beyond the language of the contract and consider the totality of the circumstances in order to determine whether the employee knowingly and voluntarily waived his or her right to sue. The following factors have been used by courts to determine the totality of the circumstances: (1) whether it was written in a manner that was clear and specific enough for the employee to understand based on his or her education and business experience; (2) whether it was induced by fraud, duress, undue influence or other improper conduct by the employer; (3) whether the employee had enough time to read and think about the advantages and disadvantages of the agreement before signing it; (4) whether the employee consulted with an attorney or was encouraged or discouraged by the employer from doing so; (5) whether the employee had any input in negotiating the terms of the agreement; and (6) whether the employer offered the employee consideration that exceeded what the employee already was entitled to by law or contract and the employee accepted the offered consideration.

The Older Workers Benefit Protection Act (“OWBPA”) was passed in 1990 as an amendment to the Age Discrimination in Employment Act (“ADEA”), and it establishes specific requirements for a knowing and voluntary release of ADEA claims to guarantee that a severed employee has every opportunity to make an informed choice of whether or not to sign a waiver of age claims. OWBPA lists seven factors that must all be satisfied in order for a waiver of age discrimination claim to be considered knowing and voluntary. At a minimum: (1) a waiver must be written in a manner that can be clearly understood; (2) a waiver must specifically refer to rights or claims arising under the ADEA; (3) a waiver must advise the employee in writing to consider an attorney before accepting the agreement; (4) a waiver must provide the employee with at least 21 days to consider the offer; (5) a waiver must give an employee seven days to revoke his or her signature; (6) a waiver must not include rights and claims that may arise after the date on which the waiver is executed; and (7) a waiver must be supported by consideration in addition to that which the employee already is entitled. Even if a waiver complies with all of the above requirements, a waiver of age claims will be found invalid and unenforceable by a court if the employer used fraud, undue influence or any other type of improper conduct to coerce the employee to sign it, or if the waiver contains a material mistake, omission or a misstatement.

The new EEOC guidance also includes in Appendix A an employee checklist detailing what an employee should do if an employee’s employer offers a severance agreement. The checklist includes tips, such as making sure you understand the agreement, checking for deadlines, acting promptly, having an attorney review the severance agreement, and reviewing the agreement to ensure that it does not ask you to release non-waivable rights.

For additional information, the EEOC guidance also offers in Appendix B a sample waiver which illustrates a way that the required OWBPA information could be presented to employees.

It is recommended that employers review severance agreements with an attorney to make sure the agreements are consistent with the recent EEOC guidance.

For the full text of the EEOC guidance, please visit www.eeoc.gov/policy/docs/qandaseverance-agreements.html.

Jeremy L. Fetty is an associate at Parr Richey whose practice focuses on corporate law, utility law, municipal law, and labor and employment law. The statements contained herein are for information purposes only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have questions regarding this article, please contact an attorney.