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Archive for March, 2010

Butcher v. Beatty, No. 09-1169.

Thelma and John Healy were married in 1979. In 2006, a trial court found that Thelma was incapacitated and appointed Troy Butcher as guardian of Thelma’s person and Butcher and John as co-guardians of her estate. Butcher later filed a motion to sell the couple’s rental property held as tenants by the entirety, and the trial court that the real property be sold and the proceeds divided between Thelma and John. The rental property could not be sold for the appraised value, so the trial court ordered Thelma to pay John $40,000 for sole ownership of the property. A deed to that effect was drafted and signed by Butcher as Thelma’s guardian. Before John could sign the deed, he passed away.

Believing that John’s death vested sole title to the rental property in Thelma, Butcher refused to pay the $40,000 to Diane Beatty, executor of John’s estate. Beatty sued Butcher to compel specific performance of the agreement, and the trial court agreed, ordering Butcher to pay John’s estate $40,000. Butcher appealed to the Arkansas Court of Appeals, who affirmed the trial court’s decision. Butcher then requested review of the decision by the Arkansas Supreme Court, and the court accepted the case for review.

The court noted that, at the time of John’s death, Thelma and John held the rental property as tenants by the entirety. As such neither spouse owned an undivided one-half interest in the property, and both owned the entire estate with the right of survivorship. This right of survivorship to the whole could be dissolved only by (1) a divorce proceeding, (2) death, (3) voluntary action of both parties. Because John had not executed the deed prior to his death, it was not fully executed and delivered; therefore, the rental property was held by Thelma and John as husband and wife, and she became sole owner upon his death.

The court further explained that specific performance is not available if performance is impossible. Upon John’s death, his estate no longer had any interest in the rental property from which to compel Butcher to perform under the previous agreement.

The court then remanded the case for further proceedings.

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In 2006, G.I. Forum and LULAC, two groups representing Mexican-American students, challenged Texas Education Agency’s bilingual program, claiming it violated the Equal Educational Opportunity Act (“EEOA”), which requires a state agency “to take appropriate action to overcome language barriers.” They asserted that Texas denied equal educational opportunities to Mexican-American students. The trial court agreed that too many students with limited English proficiency (“LEP”) were performing poorly, particularly secondary students and ordered the state to “establish a new monitoring system and establish a language program that fulfill the requirements of the EEOA.”

On appeal, the Fifth Circuit Court of Appeals found several flaws with the trial court’s findings, mainly with the evidence it used to conclude that the state was complying with federal law. The court reversed the trial court’s order, noting that the trial court should conduct an “appropriate analysis” of the federal claims in regard to a particular district or districts to determine the cause of LEP student failure. The court then remanded the case for additional proceedings.

For the full story, click here.

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Fireman’s Fund Insurance Company v. Care Management, Inc., No. 09-662.

In June 2006, Care Management, Inc. (“Care Management”), was sued for negligence, medical malpractice, and wrongful death. In September 2008, Care Management’s attorney notified Care Management’s insurers that the case was set for trial on October 7, 2006, provided them with a copy of the complaint, and inquired about coverage. This letter was the insurers’ first notice of the claim.

On October 29, 2008, the insurers filed a declaratory judgment action against Care Management in federal court. The insurers later filed a motion for summary judgment, which prompted the trial court to enter a certification order to the Arkansas Supreme Court because in many cases the Eighth Circuit Court of Appeals has interpreted Arkansas law as not requiring an insurer to show prejudice from the delay in notice. In its most recent opinion, however, the Eighth Circuit noted that state law was unclear.

The Arkansas Supreme Court explained that whether a showing of prejudice is necessary depends on whether the notice requirement is a condition precedent for coverage. If the notice requirement is a condition precedent, then the insured must strictly comply with it or forfeit coverage. The insurance company does not have to show any prejudice from the insured’s failure to provide timely notice. If the notice requirement is not a condition precedent, on the other hand, the insurer must show prejudice from the insured’s failure.

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Carlson v. Kelso Drafting & Design, Inc., No. CA08-1327.

Bill and Jane Carlson hired Kelso Drafting & Design, Inc. (“Kelso”) to design and construct a custom-built home, including a concrete-tile roof. Kelso hired a roofing company to install the roof. Construction was completed in 2002. After the Carlsons moved into the home, they noticed leaking after the first rain. Kelso informed them that the defect could be repaired. From the time of occupancy in 2002 until March 2006, Kelso and the roofing company made repeated attempts to repair the roof. At that time, the Carlsons believed the roof had been repaired, but in November 2006, they discovered additional leakage and demanded the roof be repaired. Kelso notified them in January 2007 that the leaks were caused by product defect instead of faulty design or installation. In August 2007, the Carlsons hired another roofing company to replace the roof. At that time, they learned of various construction and installation defects.

The Carlsons brought suit on February 29, 2008, and Kelso moved to dismiss their complaint based on the statute of limitations contained in Ark. Code Ann. § 16-56-112(a). The trial court agreed and dismissed the lawsuit.

On appeal, the Arkansas Court of Appeals noted that Ark. Code Ann. § 16-56-112 contained one exception to the five-year statute of limitations for construction defects, fraudulent concealment, which requires proof of the following:

some positive act of fraud, something so furtively planned and secretly executed as to keep the plaintiff’s cause of action concealed, or perpetrated in a way that it conceals itself.

The Carlsons alleged that because Kelso maintained that the roof could be repaired—and continued to make repairs—the statute of limitations should be tolled during that time period. Although the repair doctrine is recognized in several other jurisdictions, the court refused to ignore the General Assembly’s intent to provide those in the construction industry with protection from lawsuits based on work performed many years prior to the filing of the complaint.

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In 2003, Disability Advocates, a nonprofit legal group, sued New York Governor David Patterson, the state’s Department of Health and Mental Health, and other defendants “on behalf of individuals with mental illness residing in, or at risk of entry into, ‘impacted adult homes’ in New York City.” The complaint alleged that adult homes are for-profit, large warehouse-like facilities that house hundreds of residents.

After a five-week trial last year, U.S. District Judge Nicholas G. Garaufis found that the state “denied thousands of individuals with mental illness in New York City the opportunity to receive services in the most integrated setting appropriate for their needs,” adding that “these actions constitute discrimination” under the Americans with Disabilities Act and the Rehabilitation Act. The court noted that “virtually all” of the 4,300 mentally ill residents of adult homes were not in the most “integrated settings appropriate to meet their needs.” The judge then ordered the state to place all qualified mentally ill individuals in supported housing, if they choose, within four years.

In his most recent opinion, the judge criticized the state’s remedial proposal, saying it “scarcely begins to address the violations identified by the court.” The state proposed to create 200 supportive housing units per year over the next five years, for a total of only 1,000 new units. The judge wrote as follows:

The court is disappointed and, frankly, incredulous that defendants sincerely believe this proposal would suffice. As if failing to provide a meaningful remedy for current adult home residents were not bad enough, defendants also make absolutely no provision of supported housing for potential future adult home residents, ensuring that the violations found by this court will inevitably recur.

The judge also stated he will appoint a monitor to make sure the state complies with the order. For the full story, click here.

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