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California Appellate Court Affirms Dismissal of Claim Against Title Company and Title Agent, Holds That They Had No Duty to Inform Insured Purchaser of Seller’s Involvement in Other Lawsuits Banner Image

California Appellate Court Affirms Dismissal of Claim Against Title Company and Title Agent, Holds That They Had No Duty to Inform Insured Purchaser of Seller’s Involvement in Other Lawsuits

Month: July 2020

California Appellate Court Affirms Dismissal of Claim Against Title Company and Title Agent, Holds That They Had No Duty to Inform Insured Purchaser of Seller’s Involvement in Other Lawsuits

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The California Court of Appeals recently held that a title insurance company and title agent had no duty to inform their insured purchaser that the individual selling the property, and who was going to act as the insured’s property manager, was involved in multiple other lawsuits.  See Ukoha v. Provident Title Co., 2020 WL 3467817 (Cal. Ct. App. June 25, 2020), reh’g denied (July 15, 2020).  Plaintiff purchased an apartment building from a trust in 2005.  The individual who controlled the seller trust (“Behrend”) obtained title insurance for plaintiff from the defendant title agent and title insurance company.  After purchasing, plaintiff sent payments on her loan to Behrend, who was managing the property for plaintiff, with the understanding that he would forward them to the lender.  Instead, Behrend misappropriated the funds, and the lender took the property via a foreclosure in 2012.  In 2017, plaintiff sued defendants for breach of contract, fraud, and other claims, alleging they had been involved in multiple transactions with Behrend, knew that he was involved in at least eight lawsuits regarding his management of properties, and “were effectively his business partners.”  She further alleged that they “concealed” this information from her and, by not advising her of the risk of investing with Behrend, “falsely represented that she would receive marketable title and promised to pay benefits to her if she did not.”  Defendants moved to dismiss, the trial court granted the motion, and plaintiff appealed.

The Court affirmed the dismissal.  First, it found that there could be no breach of contract against the title agent because there was no contract between plaintiff and the agent.  Second, it found that plaintiff’s claims were not covered under the policy because the policy specifically excludes post-policy events, such as this foreclosure.  The Court also held that the title was not unmarketable:  “a title defect is some circumstance that deprives the seller of complete title to the property being sold. Behrend’s mismanagement of other property effected no such deprivation.”  Third, the Court found that defendants could not be liable for fraud because they had no interactions with plaintiff until after the sale, and they did not owe her any duties.  “A title insurance company owes the insured no duty of disclosure outside the policy.”  Accordingly, the Court found that the dismissal was proper.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

New COVID-19 CDC Guidelines, Provider Relief Fund Reporting Timeline Released, CMS Updates Reimbursement Calculations, D.C. Circuit Rules in Favor of HHS's Site-Neutral Pay Cuts

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, Labinot Alexander Berlajolli, or Daniel J. Parziale.

During the past week or so, federal agencies have released new information and deadlines related to COVID-19. For example, the Department of Health and Human Services (“HHS”) has released a timeline for Provider Relief Fund reporting requirements and extended the deadline for eligible Medicaid and Children’s Health Insurance Program (“CHIP”) providers to apply for funding distribution. Centers for Medicare & Medicaid Services (“CMS”) has updated its reimbursement calculation for Wright Medical’s Augment regenerative solutions, and the Centers for Disease Control and Prevention (“CDC”) announced that patients recovering from COVID-19 no longer need a negative test result to come out of isolation. Lastly, the U.S. Court of Appeals for the District of Columbia recently ruled that HHS has the authority to change its payment formula and make payment cuts to hospitals’ off-site outpatient departments.

HHS Publishes Timeline for Provider Relief Fund Reporting Requirements

HHS released an overview of future reporting requirements for providers that received payments exceeding $10,000 from the Provider Relief Fund. The following timeline is provided:

  • August 17, 2020: Release of detailed instructions
  • October 1, 2020: Reporting system becomes available
  • February 15, 2021: Report due for calendar year 2020 expenditures
  • July 31, 2021: Second report due for those who expended funds in 2021

New CDC Guidelines Say Patients With COVID-19 No Longer Need Tests to Come Out of Isolation

The CDC no longer recommends that patients recovering from COVID‑19 need to test negatively before coming out of isolation. Instead, patients may be deemed to have recovered if, after 10 days since first falling ill, they no longer have symptoms and have not had a fever for 24 hours without taking fever‑reducing medicine.

CMS to Reimburse for Regenerative Orthopedic Product in Ambulatory Surgery Centers

CMS has updated the reimbursement calculation for Wright Medical’s Augment regenerative solutions, allowing Medicare beneficiaries to undergo procedures, such as hindfoot and ankle fusions, with the product in ambulatory surgery centers (“ASCs”) and hospital outpatient departments. The coverage is for the Augment Bone Graft and Augment Injectable. The update was made retroactive to January 1, 2020, and procedures that were billed using code C1734 will be eligible for payments.

Deadline Extended to Apply for Medicaid/CHIP Provider Relief Fund Payment

HHS has announced that eligible Medicaid and CHIP providers will now have until August 3, 2020 to apply for funding distribution from the Provider Relief Fund. For more information regarding the application process, review the fact sheet published by HHS.

D.C. Circuit Rules That HHS’s Site-Neutral Pay Cuts Are Legal

The U.S. Court of Appeals for the District of Columbia (the “D.C. Circuit” or “Court”) reversed a lower court’s decision and ruled that HHS's payment cuts to hospitals' off‑site outpatient departments were legal because the changes were volume-control measures that don't have to be budget-neutral. The goal of the rule is to reduce a disparity in Medicare payments where hospital-affiliated clinics get paid more than physician offices for the same services. Some critics have said the gap has helped fuel a race towards hospital-physician consolidation. The American Hospital Association led a lawsuit against an annual 2019 hospital payments rule, which phased in the cuts over a two-year period. The hospitals argued that HHS’s site‑neutral payment cuts violated the federal statute governing the annual payment rule. The D.C. Circuit found that HHS did have the authority to make payment cuts, because federal law gives HHS the power to control unnecessary increases in the volume of covered outpatient services. The Court also found that HHS’s interpretation of federal law was adequate, as the federal law governing the payment rule allows the agency some latitude on changing its payment formula. The case is American Hospital Association, et al v. Alex M. Azar, DC. Cir July 17, 2020 Case No. 19-5352.

Please visit Riker Danzig’s COVID-19 Resource Center to stay up to date on all related legal issues.

New Mexico Bankruptcy Court Holds Claim Regarding Prior Mortgage Barred by Exclusion 3(a)

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The United States Bankruptcy Court for the District of New Mexico recently found that an insured’s claim regarding a prior mortgage was barred by the title insurance policy’s Exclusion 3(a) and the fact that the insured could not prove any damages.  See In re: Lamey, 2020 WL 4045254 (Bankr. D.N.M. July 17, 2020).  Plaintiff is an LLC and the insured owner of a property, and defendant issued a title insurance policy on the property.  Plaintiff later discovered that a prior mortgage—which had been disclosed in the title commitment but not listed as an exception in the policy—was not discharged.  Plaintiff brought a claim and defendant denied it, stating that plaintiff knew about the prior mortgage and that plaintiff’s agent had agreed to handle to discharge.  Plaintiff then brought this claim alleging a breach of contract, and defendant moved for summary judgment.

The Court granted the summary judgment motion.  First, the Court found that there is no reasonable dispute that the individual tasked with discharging the mortgage was plaintiff’s agent.  Second, it found that the agent had executed the mortgage, and his knowledge was imputed to plaintiff so there could be no question plaintiff was aware of the mortgage.  Third, the Court found that both the agent and plaintiff knew the prior mortgage would not be discharged because they signed a HUD showing no disbursement to the prior lienholder.  Accordingly, the Court found that plaintiff’s claim was barred by Exclusion 3(a) of the policy, which prohibits claims “created, suffered, assumed, or agreed to” by the insured.  Finally, the Court found that plaintiff also did not have a claim because it did not show that it suffered any damages.  Defendant paid off the prior mortgage, and there was no evidence connecting any alleged delay in the discharge with any losses suffered by plaintiff.  “If [plaintiff] wanted to avoid summary judgment on this issue, it was required to provide some evidence that [defendant’s] alleged delay in getting the KZRV Mortgage released proximately caused damages recoverable under the Owner’s Policy.”

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

New York Court Dismisses Claim Against Title Insurance Company for Encroachment

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The New York Supreme Court, Kings County, recently dismissed a complaint against a title insurance company, finding that the encroachments at issue were disclosed in a survey and barred by the policy’s Exclusion 3(a).  See 1267 Rogers Ave., LLC v. First Am. Title Ins. Co., 67 Misc. 3d 1241(A) (N.Y. Sup. Ct. 2020).  In April 2014, the owner of the subject property entered into a lease agreement for a property in Brooklyn.  In September 2014, the owner also obtained a title insurance policy from defendant.  The policy attached a survey that described a number of encroachments.  In 2015, the adjacent property owner brought an action against the insured seeking easements by implication over certain areas of the insured property, as well as an injunction that the insured could not block a door on the boundary between the properties.  The insured sent a claim letter to the title insurance company, who denied the claim.  The insured then brought this action alleging that defendant breached the policy, and seeking contribution for fees the insured paid in the action against the neighbor.  The title insurance company moved to dismiss.

The Court granted the title insurance company’s motion based on the documentary evidence.  The Court found that the insured was not entitled to coverage for three reasons.  First, the policy included an exception for parties in possession, which includes easements implied by law.  Second, the survey attached to the policy specifically excepted certain encroachments, including those at issue in the insured’s litigation against the neighbor.  Third, the Court found that the claims were excluded by Exclusion 3(a) of the policy, which excludes defects “created, assumed or agreed to,” by the insured, and that the insured was aware of the encroachments both because of the survey and through visual inspection of the property.  Finally, the Court also dismissed the contribution claim, finding that the insured’s damages “do not sound in tort” and that the policy states that “any claim of loss or damage that arises out of the status of the [t]itle or by any action asserting such claim shall be restricted to this policy.”

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

New Jersey Opens Up Visitations to Nursing Homes, OIG Alleges Significant Overpayments to Hospitals, and New Federal Rules, Including to HIPAA Part II

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, Labinot Alexander Berlajolli, or Daniel J. Parziale.

New
Jersey Department of Health Allows Visitations to Long-Term Care Facilities

The Department of Health recently
issued an executive directive that
permits parents, a family member, legal guardians and support persons of
pediatric, developmentally disabled and intellectually disabled residents of
long-term care facilities to arrange for by-appointment indoor visits with
their loved ones. Facilities can only allow visits if there have been no
new probable or confirmed coronavirus cases recorded across a 28-day period,
which is two incubation periods for COVID-19. The guidance also provides a
multi-step screening process before visitors can enter the facilities.

OIG Finds
Hospitals Overbilled Medicare By Approximately $1 Billion

The Office of the Inspector
General (“OIG”) recently published a report
finding that during fiscal years 2016 and 2017, hospitals overbilled Medicare
by an estimated $1 billion using statistical sampling. The OIG started
with over 224,175 claims that contained a severe malnutrition diagnosis code
during fiscal year 2016 and 2017, and then narrowed its audit to only 200
claims. Of the 200 claims reviewed by the OIG, hospitals were found to
have correctly used a severe malnutrition diagnosis code on 27 of the claims
and the remaining 173 claims were found to have been incorrect. The OIG found
that the aforementioned 173 incorrectly billed claims resulted in an
overpayment of $914,128. Extrapolating that data to the entire 224,175
claims, the OIG estimated there were over $1 billion in overpayments to
hospitals.  This is particularly troubling considering that Medicare
just announced that it will
resume audits by August 3, 2020.

HHS
Modifies Substance Use Disorder Privacy Regulations

The Department of Health and
Human Services’ Substance Abuse and Mental Health Services Administration
released a final rule, effective
August 14, 2020, modifying privacy provisions related to records for patients
with substance use disorder (“SUD”) under 42 CFR Part 2. Among other
things, SUD patients may now consent to disclosure of their Part 2 treatment
records to a practice without identifying a specific person in the practice,
and non-opioid treatment programs and non-central registry providers are now
eligible to query a central registry to determine whether their patients are
receiving opioid treatment. The changes will allow healthcare providers –
with patient consent – to more easily conduct activities such as quality
improvement, claims management, patient safety, training, and program integrity
efforts. For additional information, review the HHS’ fact sheet regarding the
revised rule.

CMS
Proposed Rule On End-Stage Renal Disease

The Centers for Medicare &
Medicaid Services (CMS) issued a proposed rule to update
payment policies and rates under the End-Stage Renal Disease (ESRD) Prospective
Payment System for renal dialysis services furnished to beneficiaries on or
after January 1, 2021. Specifically, the rule proposes a $16.26 pay
increase that would bring the 2021 end-stage renal disease payment base rate to
$255.59. The rule also proposes updates to the acute kidney injury (AKI)
dialysis payment rate for renal dialysis services furnished by ESRD facilities
to individuals with AKI. Additionally, the rule makes changes to the
eligibility criteria for transitional add-on payment adjustments for new and
innovative equipment and supplies (TPNIES) and expands TPNIES to include new
and innovative capital-related assets that are home dialysis
machines.  Products from two manufacturers that include a dialyzer
and a cartridge for a home dialysis machine are being considered for add-on
payment adjustments in 2021. Finally, the rule proposes a five percent cap on
any year-over-year decrease in a dialysis facility's wage index. The wage index
is applied to the labor-related share of the payment rate to reflect differing
wage levels in areas where dialysis facilities operate. The cap would be phased
in over two years. Comments are due by September 4, 2020.

Please visit Riker Danzig’s COVID-19 Resource Center to stay up to date on all related legal issues.

New Telehealth Quality Measures, CMS Pours More Resources into Nursing Homes, Different Hospital COVID-19 Reporting Requirements, and a Proposed Rule on Grandfathered Health Plans and Coverage

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, Labinot Alexander Berlajolli, or Daniel J. Parziale.

CMS
Directs Additional Resources to Nursing Homes in COVID‑19 Hotspot Areas

The Centers for Medicare &
Medicaid Services (“CMS”) announced it is
providing additional resources to nursing homes in COVID-19 hotspot
areas. CMS plans to deploy Quality Improvement Organizations
(“QIOs”) to provide immediate assistance to nursing homes. QIOs are
contractors who work with healthcare providers to help improve the quality of
healthcare provided to Medicare Beneficiaries. To facilitate these
efforts, the agency is implementing an enhanced survey process to assess the
specific concerns of hotspot areas and leverage all available resources to the
facilities with known infection control issues.

CMS
Issues New Guidance on 39 New Telehealth Eligible Clinical Quality Measures

CMS recently issued new guidance
regarding the allowance of telehealth encounters for the eligible professional/eligible
clinician electronic clinical quality measures (“eCQMs”) used in CMS quality
reporting programs for the 2021 performance period. There are 39
telehealth eligible eCQMs for the 2021 performance period and they can be found
here.

HHS
Alters COVID-19 Reporting Protocol

On July 10, 2020 the United
States Department of Health and Human Services (“HHS”) issued new guidance on COVID-19
reporting protocols for hospitals. On March 29, 2020, Vice President Mike
Pence requested daily reports on testing, capacity, utilization, and patient
flows be sent to the United States Center for Disease Control (“CDC”) on a
daily basis. According to the new guidance, “hospitals may be relieved
from reporting directly to the federal government if they receive a written
release from the state stating that the state will collect the data from the
hospitals and take over federal reporting responsibilities.” Moreover, the
guidance clarifies that prior to a hospital seeking certification from their
state, the state “must first receive written certification from their ASPR
Regional Administrator affirming that the state has an established, functioning
data reporting stream to the federal government that is delivering all of the
information below at the appropriate daily frequency.” Finally, the guidance
still requires that states collecting this data “must provide this data,
regardless of whether they are seeking immediate federal assistance.”

Proposed
Rule on Grandfathered Health Plans and Grandfathered Group Health Insurance
Coverage

85 FR 42782 – Proposed Rule
– The IRS, Department of Labor and HHS released a proposed rule regarding
grandfathered group health plans and grandfathered group health insurance
coverage. The proposed rule would amend the current rules to provide
greater flexibility for certain health plans in existence before the Patient
Protection and Affordable Care Act took effect. The changes would enable
eligible plans to continue offering affordable coverage while enhancing their
ability to respond to rising healthcare costs. Group health plans would be permitted
to increase cost-sharing requirements for enrolled individuals as long as they
do not exceed certain limits. Further, in some situations, the proposed rule
would allow plans to comply with minimum cost-sharing requirements for high
deductible health plans so enrolled individuals are eligible to contribute to
health savings accounts. These proposed regulations would not apply to or
otherwise change the current requirements applicable to grandfathered
individual health insurance coverage. In addition, the proposed rules would not
provide any opportunity for a plan or coverage that has lost its grandfather
status under existing rules to regain that status. Comments must be received by
no later than 5:00 pm on August 14, 2020.

Please visit Riker Danzig’s COVID-19 Resource Center to stay up to date on all related legal issues.

Michigan Appellate Court Holds Title Insurer and Agent Not Liable for Negligent Misrepresentation and Breach of Contract

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The Court of Appeals of Michigan recently affirmed a decision finding that a title insurance company and title agent were not liable to an insured for negligent misrepresentation or breach of contract for an issue with a disputed portion of property that fell outside the policy’s legal description.  See Shower Curtain Sols. Ltd., LLC v. First Am. Title Ins. Co., 2020 WL 3393467 (Mich. Ct. App. June 18, 2020).  After purchasing the property at issue, plaintiff discovered that a neighbor had fenced off a portion of an alley that should have been part of the insured’s property.  Plaintiff brought a quiet title suit against the neighbor, and included claims against the title insurance company and title agent for negligent misrepresentation and breach of contract.  The trial court granted plaintiff summary disposition on the quiet title claim, but dismissed the claims against the title insurance company and the title agent.  The trial court also dismissed the agent’s request for sanctions.

On appeal, the Court affirmed the dismissal of the claims against the two title entities.  First, the Court found that the trial court properly dismissed the negligent misrepresentation claim because, under Michigan law, “an injured party must rely on its title insurance contract to bring suit against its title insurer or the insurer’s agent; there can be no action in tort.”  Second, the Court found that the trial court properly dismissed the breach of contract claims.  With regard to the title agent, the Court found that it was not a party to the policy and therefore could not be liable under it.  “The act of countersigning the policy does not demonstrate an express intent by [the agent] to also be held liable on the contract.”  With regard to the title insurer, the Court found that the legal description of the insured property did not include the alley at issue and that there therefore could not be coverage under the policy for land that was not part of the insured property.  In doing so, the Court rejected plaintiff’s claim that the policy’s reference to the insured property’s street address—which plaintiff argued included the alley—created coverage for the alley, finding instead that the more specific legal description found in Schedule A controlled.  Finally, the Court reversed the trial court’s decision not to award sanctions to the agent, finding that the breach of contract allegation against the agent was “so contrary to . . . precedent without citing any ground to overrule that precedent [that it] was frivolous.”

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

New Jersey Moves Again to Include Environmental Justice in Permitting Process

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Update: Governor Phil Murphy signed this legislation into law on September 18, 2020, and NJDEP began stakeholder meetings to discuss the implementing regulations earlier this fall.  We expect that NJDEP will conduct a robust stakeholder process given the complex issues involved in implanting the legislation.  Riker Danzig attorneys will be tracking this process closely.

New Jersey continues to focus on environmental justice as the Legislature advances proposed legislation that would require the New Jersey Department of Environmental Protection (the “NJDEP”) to consider impact on overburdened communities when reviewing certain permit applications.  In fact, at the end of June the New Jersey Senate passed the proposed legislation, which is referred to as S232 and can be reviewed here.  The proposed legislation now goes to the Assembly for further consideration and voting and, if it passes the Assembly as well, could be signed into law by Governor Phil Murphy later this summer.  Similar legislation has been pending in New Jersey for more than a decade, as we reported last year in our prior blog post titled “Environmental Justice Initiatives Soon May Impact Permitting and Other Regulatory Actions”, but the current legislation seems slated for passage with the support of several legislators and Governor Phil Murphy.

How would the legislation incorporate environmental justice into the permitting process?

The key components of the proposed legislation are as follows.

  • Preparation of an Environmental Justice Impact Statement.  Applicants for certain permits would be required to prepare an “environmental justice impact statement.”  This statement would need to “assess[] the potential environmental and public health stressors associated with the proposed new or expanded facility, . . . including any adverse environmental or public health stressors that cannot be avoided if the permit is granted, and the environmental or public health stressors already borne by the overburdened community as a result of existing conditions located in or affecting the overburdened community.”
  • Public Notice and Hearing.  Applicants would then be required to provide the environmental justice impact statement to the NJDEP and other governmental entities, which in turn would disseminate the statement to the public.  Applicants also would need to organize and hold a public hearing in the overburdened community.  A transcript of the hearing and a record of any comments received from the public would then be provided to the NJDEP.
  • Consideration of Environmental Justice Impacts by NJDEP; Requirement to Deny Permit Based on Environmental Impact.  After reviewing the environmental justice impact statement and the input from the public, the NJDEP would be required to deny a permit, or apply new conditions to the renewal of an existing permit, “upon a finding that approval of the permit . . . would, together with other environmental or public health stressors affecting the overburdened community, cause or contribute to adverse cumulative environmental or public health stressors in the overburdened community that are higher than those borne by other communities within the State, county, or other geographic unit of analysis as determined by the department pursuant to rule, regulation, or guidance.”  The exact meaning and implementation of this requirement is not yet clear, but it seems to place a high bar on the expansion or construction of any facility that would negatively impact the environment in an overburdened community.  It is particularly important to note that the legislation requires the NJDEP to consider the cumulative impact of the facility on the community.  It also remains to be seen whether facilities can offset negative environmental impacts through modifications to the design and operation of subject facilities.

What facilities, permits and communities would be subject to the legislation?

The application of the proposed legislation is governed by the definitions of “facility,” “permit,” and “overburdened community.”

  • Facility.  The legislation defines “facility” as “any:  (1) major source of air pollution; (2) resource recovery facility or incinerator; (3) sludge processing facility, combustor, or incinerator; (4) sewage treatment plant with a capacity of more than 50 million gallons per day; (5) transfer station or other solid waste facility, or recycling facility intending to receive at least 100 tons of recyclable material per day; (6) scrap metal facility; (7) landfill, including, but not limited to, a landfill that accepts ash, construction or demolition debris, or solid waste; or (8) medical waste incinerator.”
  • Permit.  It defines “permit” as “any individual permit, registration, or license” issued under numerous state laws, including  . . . the Solid Waste Management Act, the New Jersey Statewide Mandatory Source Separation and Recycling Act, the Freshwater Wetlands Protection Act, P.L.1987, the Coastal Area Facility Review Act, the Highlands Water Protection and Planning Act, the Air Pollution Control Act, the Water Pollution Control Act, the Flood Hazard Area Control Act, and others.  Notably, the definition includes only individual permits, which as the name suggests contain requirements specifically tailored to the individual facility.  As a result, the definition does not include general permits or other standardized permits, which contain standard requirements and are available to facilities that meet certain pre-determined criteria.  Additionally, the current definition does not reference permits issued under the Industrial Site Recovery Act, the Site Remediation Reform Act, or any other New Jersey statutes directly applicable to site remediation.  This is a change from a prior version of the legislation, which included a specific reference to the Industrial Site Recovery Act, and limits the scope of “permit” significantly in a way that should be welcomed by the regulated community.
  • Overburdened Community.  Lastly, the legislation defines “overburdened community” as “any census block group . . . in which:  (1) at least 35 percent of the households qualify as low-income households; (2) at least 40 percent of the residents identify as minority or as members of a State recognized tribal community; or (3) at least 40 percent of the households have limited English proficiency.”  According to NJ Spotlight, “the bill’s definition of ‘overburdened communities,’ could apply to more than 300 municipalities and over 4 million residents.”

What is the status of the proposed legislation?

As noted above, the New Jersey Senate passed the proposed legislation on June 29, 2020.  The legislation now has been referred to the Assembly, and is scheduled for a hearing on July 20th before the Assembly Environment and Solid Waste Committee.  Interested parties should be able to observe and testify at the hearing through virtual means.  It is possible that the Assembly could pass the proposed legislation later this summer, especially given the high profile support referenced above.

Attorneys at Riker Danzig will be tracking this legislation closely.  If it becomes law, the operative provisions would go into effect after a period of six months.  To put it mildly, it’s passage would be a victory for champions of environmental justice and would have a significant and lasting change on the regulated community and the permitting process in New Jersey.

For more information, please contact any attorney in our Environmental Practice Group.

New Jersey Appellate Division Affirms Vacation of Judgment and Dismissal of Action Eight Years After Final Judgment, Finds Plaintiff Violated FDCPA

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New Jersey’s Appellate Division recently affirmed a trial court decision vacating a final judgment and dismissing a complaint despite the fact that the defendant waited eight years to bring the motion, finding that the plaintiff brought the action outside the limitations period and violated the FDCPA.  See LVNV Funding, LLC v. Deangelo, 2020 WL 3163668 (N.J. Super. Ct. App. Div. June 15, 2020).  In 2009, plaintiff brought an action against defendant to collect on a defaulted debt.  Defendant did not respond, and plaintiff obtained a final judgment in 2010.  Defendant finally brought a motion to vacate the judgment in 2018.  The trial court found that defendant had made his last payment in 2004, which made the 2009 action untimely and a violation of the FDCPA.  The trial court further found that defendant’s eight-year delay in seeking to vacate the final judgment was “inexcusable” and that he had lied about his identity to avoid the judgment.  Nonetheless, in balancing the equities, the trial court found that “plaintiff’s breach of the Fair Debt Collection Practices Act outweighed defendant’s inexcusable neglect,” and it vacated the judgment and dismissed the complaint.

On appeal, the Appellate Division affirmed.  The Court noted that the case presents “some unusual circumstances and conflicting equities” and that it requires the Court to “have to choose the least blameworthy of two competing wrongs.”  After balancing the competing public policies—the FDCPA’s policy of curbing abusive debt collection practices and the State’s policy seeking finality of judgments—the Court found that the trial court did not abuse its discretion in vacating the final judgment.  “The [trial court] judge determined that the interest in curbing abusive collection practices outweighed the interest in the finality of judgments. In the final analysis, we cannot conclude that the choice the judge made constitutes an abuse of the discretion provided by Rule 4:50-1(f).”

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

New Jersey Takes More Actions In Light of COVID-19, the SEHBP Reduces OON Reimbursements, and CMS’ New Health Informatics Office

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, Labinot Alexander Berlajolli, or Daniel J. Parziale.

Recent
Adopted Statutes in New Jersey

With the
approval of S2273,
the School Employees’ Health Benefits Program (“SEHBP”) is required to offer,
starting January 1, 2021, only three plans for medical and prescription
benefits coverage:  (1) New Jersey Educators Health Plan; (2) the SEHBP NJ
Direct 10 plan; and (3) SEHBP NJ Direct 15 plan.  Starting July 1, 2021,
the SEHBP must provide a fourth plan called the Garden State Health Plan, which
shall offer the same level of medical and prescription drug benefits provided
by the New Jersey Educators Health Plan, except that the benefits under the
Garden State Health Plan shall be available only from providers located in the
State of New Jersey.   For the New Jersey Educators Health Plan, the
schedule for out-of-network reimbursement has been reduced to 200% of Medicare,
but the out-of-network reimbursement for the NJ Direct Plans 10 and 15 remains
the same.

With
regard to telemedicine, the New Jersey Legislature approved S2467.
S2467 extends P.L.2020, c.3, which expanded the use of telemedicine and
telehealth services during the COVID-19 public health emergency, and P.L.2020,
c.7, which requires insurers to cover COVID-19 testing and healthcare services
provided using telemedicine and telehealth during the COVID-19 public health
emergency, to continue until 90 days after the end of both the state of
emergency and the public health emergency declared in response to
COVID-19.

Recent
Regulatory State Waivers

Various
agencies have also waived certain regulatory requirements.  For example,
under 52
N.J.R. 1251(a), the Commissioner of Health waived and/or altered certain
regulations N.J.A.C. 8:43G-31.11, which sets forth certain criteria for the
maintenance of respiratory care equipment, which includes ventilators, in
hospitals.  Since hospitals are receiving ventilators that have been in
State storage or from federal stockpiles for several years, often with expired
preventative maintenance tags, hospitals are required under this wavier to
perform a mechanical and electrical function test on a ventilator released from
State storage or from the federal stockpile prior to placing it into service
and using it for the first time.  The waiver continues and explains the
testing and reporting process under the waiver.

The waiver
under 52
N.J.R. 1251(b) addresses individuals enrolled in Opioid Treatment Programs
("OTP"s) who are unable to maintain access to medication necessary
for managing the symptoms of withdrawal. To ensure that patients in OTPs have
access to needed medications, the Department of Health is waiving the
requirements of N.J.A.C. 10:161B-11.10 and permitting facilities to provide
medication to clients at locations other than the location listed on their OTP
facility license, in accordance with the guidance issued by the Drug
Enforcement Agency ("DEA") on April 7, 2020. The intent of the
guidance is to provide OTPs greater flexibility in the delivery of take-home
doses of methadone to their patients.

Under 52
NJR 1253(a), the Department of Health and Human Services waives N.J.A.C.
10:51-1.25(j)(3), which requires that a Medicaid/NJ FamilyCare beneficiary
provide a signature at the time a pharmacy dispenses or delivers a prescription
to the beneficiary; N.J.A.C.10:167A-1.27(j)(4), which requires that a PAAD
beneficiary provide a signature at the time a pharmacy dispenses or delivers a
prescription to the beneficiary; and N.J.A.C.10:167C-1.25(j)(3), which requires
that a Senior Gold beneficiary provide a signature at the time a pharmacy
dispenses or delivers a prescription to the beneficiary.  To avoid
unnecessary contact, beneficiaries of these programs will no longer be required
to provide signatures at the time a prescription is dispensed or delivered.
Instead, the pharmacist must document in the patient's profile the date the
beneficiary received the prescription.

The
Commissioner of the Department of Health recently cancelled
the certificate of need applications for new home health agencies.  In
addition, the Commissioner postponed
the certificate of need call for applications for home healthcare services.

CMS
Unveils Creation of the Office of Burden Reduction and Health Informatics

CMS announced
the creation of the Office of Burden Reduction and Health Informatics.
The new office stems from the CMS Patients over Paperwork (“PoP”) initiative,
which aims to reduce regulatory and administrative burden and allow providers
to focus more time on patient care.  The PoP initiative is expected to
save providers and clinicians $6.6 billion and 42 million unnecessary burden
hours through 2021.  Among other things, the new office will focus on
health informatics, or using and applying health and clinical data to provide
better care for patients, as well as strengthening CMS’ efforts across
Medicare, Medicaid, and the Children’s Health Insurance Program and the Health
Insurance Marketplace to reduce hours and costs that clinicians and providers
generate for CMS-mandated compliance.

Please
visit Riker Danzig’s COVID-19
Resource Center to stay up to date on all related legal issues.

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