As a small business owner, you will develop many strategic partnerships such as those with vendors, clients, consultants and marketers. Not surprisingly, you will cultivate these relationships to build a solid foundational base for your business to not only survive but also thrive. Although each of these partners are important in their own right, only one partnership will meaningfully assist you in all aspects of your business, from beginning to end: your attorney. You might be thinking, clearly this is a self-serving statement considering I’m an attorney and you would be correct. However, do not allow that to cloud your judgment before finishing this article. Most of those reading this either own or operate their own snow and ice management business. At some point since you began in the industry you have likely faced significant legal issues with the business that required the assistance of an attorney to guide you. An attorney’s knowledge and experience cannot be understated as it relates to protecting your interests. Your attorneys can help you navigate complex business transactions and advise you to make informed decisions to protect not only your business but also your personal assets.
I want to provide you a review of one of the most common legal events that you might think about: the lawsuit. As we see in the news each day, in today’s world anyone can sue anyone for just about anything (thank you McDonalds’ for your “hot coffee”). No matter how well you run your business, it is likely your business will be named in a lawsuit at some point. Unfortunately, snow contractors are often viewed as an easy target by plaintiffs and their attorneys, who may see a snow contractor as a quick “payday.” The most common claim involving snow contractors is the “slip-and-fall” claim alleging failure to maintain the property in safe condition. So, what can you do as a responsible, professional snow contractor to protect yourself from these types of lawsuits? The best thing you can do is limit your exposure by acting early and understanding what will be required during litigation.
As we all know a lawsuit is a civil legal action brought by someone (a plaintiff) who claims that another person or company (defendant) did something that caused them to be injured or damaged. For the purposes of providing you with the basic understanding of the process, we will break up the lawsuit into four separate parts; pre-litigation, pleadings, discovery, and settlement/trial.
Without proper attention and preparation, lawsuits can severely damage not only the solvency of your company but also your company’s reputation. In many cases, forming a strategic partnership with an attorney early on can save you precious time and money once the inevitable lawsuit occurs. A company that fails to put proper legal protections in place prior to beginning their work is an easy target. If you want your small business to succeed, you cannot afford to neglect your record-keeping. Documentation will be a key element in protecting yourself in litigation. These documents, as further identified in the ANSI approved snow and ice management standards, should be kept for seven to ten years.
A snow and ice contractor needs to ensure that they have appropriate insurance coverage, including but not limited to commercial general liability, workers’ compensation, and auto coverage. Further, with the assistance of a knowledgeable insurance agent and/or counsel, the contractor should ensure that there are not exclusions that would lead to a potential denial of coverage for the contractor or any property owner/manager they will be naming as an additional insured.
You will want to make sure that amongst your documents are training records for your employees showing the depth of their knowledge on how to observe, diagnose and address the conditions onsite, such as knowing the appropriate amount of material to treat various conditions. You also want to ensure that you keep records on any vehicles or equipment that you use. These records should show that the vehicles and equipment have been recently inspected and are properly calibrated. Finally, the most well-prepared contractors also keep track of every single call that comes into their office. Often, a call log may prove to be the key piece of evidence if it can be shown that the purported injury occurred before you arrived on site or were notified by your customer.
Accurate and detailed records will help you defend your company by showing that you acted appropriately and adequately at the time based upon the conditions onsite. One of the most important things to document in your records is what work is performed by you and your workers. The types of information you should include are arrival at and departure from the site, initial observations of conditions, where and what type of work was performed at the site, equipment, manpower and materials used, and any subsequent checks or de-icing activities performed after the initial service. These details can be key to determining whether your company will be liable for the plaintiff’s injuries.
Initial filing/Notice of Claim
A lawsuit is typically filed in court in the form of a complaint. A complaint is the document written by the plaintiff’s attorney that communicates to the court and the defendant what injury has been allegedly sustained as a result of the defendant’s actions. It lays out the legal basis for recovering and state the relief that the plaintiff is seeking, typically money damages. In response, a defendant may file an answer. The answer contains the defendant’s version of the events leading to the lawsuit, responding to the contents of the complaint and sets forth why the defendant is not liable for plaintiff’s injuries.
Typically, when a slip-and-fall lawsuit is initially filed, you may not get notice of the claim for several months. We normally see the plaintiff’s attorney filing the lawsuit against only the business or location where the injury occurred. It is only after the litigation has entered the discovery phase, that the snow contractor is identified and named as an additional defendant or the business will formally request that the snow contractor defend them in the lawsuit. In most cases, the snow contractor is contractually bound to defend the property manager or owner of the property in these cases.
If you find that you have been named in a lawsuit or have notice of a potential claim at a location you have serviced, the first thing you should do is notify your insurance carrier. These types of claims are why it is necessary for your company to have insurance. Immediately after notifying your carrier you should gather together all of those documents that we discussed above that you have been keeping so meticulously. The documents you should look for include your contract with the site, all letters, phone calls or emails with the property or business manager, all documents regarding the employees and equipment who performed work at the site, and what work was performed. A general rule of thumb that we like to tell our clients is that if you believe that the document could be related, it is likely relevant.
Your carrier will immediately assign a claims adjuster to the claim who will be your main point of contact with the carrier. When you have an opportunity, tell the claims adjuster your side of the story at the outset. You should be open and honest with your claims adjuster; they can be a great advocate for you with the insurance carrier, especially if you have properly documented activities for the time of the incident.
After your initial conversation(s) with your claims adjuster, the carrier will appoint an attorney to represent you and your company. Remember, once your lawyer has been assigned to your case by the insurance carrier, they represent you and will work on your behalf to protect you and your company’s best interest. As such, you need to be forthright and honest with him/her about everything surrounding your business and the incident. If you withhold information or documents, even if you believe they can hurt your position, you are holding your attorney back from being able to appropriately defend you. On the flip-side, if you are honest, you will provide your attorney with all of the information they need to protect you and resolve the matter in your best interest.
After you have filed an answer, the discovery phase begins. As the name suggests, this is an opportunity for each side to “discover” all of the information and documents that relate to the claim and consists of both written and oral discovery. Discovery can last for several months as each party attempts to gain as much knowledge as possible about the incident.
Interrogatories, or written questions, are served by each side seeking responses to a wide range of questions relating to the incident and your business. After interrogatories are exchanged, the parties ask for documents. Often, the discovery will cover the date of the incident and several weeks both before and after. The plaintiff’s legal team will seek to see these records to determine if the work you performed was appropriate and sensible.
Once the written discovery is complete, depositions are taken. Depositions are lawful question and answer sessions where individuals who may have information about the incident are questioned under oath. Those being questioned should only answer each question truthfully and to the best of their knowledge. Never guess and never assume. If you do not know an answer, do not guess, rather simply state “I don’t know.” The worst thing that you can do in a deposition is to not be truthful because everything said in a deposition can be brought before a jury at trial. Often, defendants get into trouble by explaining their answers and saying something that is later used against them.
It is often not solely up to you to determine if your case will go to trial or settle. If you are reported this matter to your insurance carrier, your policy may allow the carrier to have the final decision. If your matter goes to trial, it will likely require the use of various experts, including both medical and industry experts. The industry experts are often asked to evaluate whether the snow contractors acted in an appropriate manner with regard to their work. Attorneys from both sides have an opportunity to retain and present their own expert to evaluate the snow contractor’s work and allow the jury to decide which expert to believe. This is often called the “Battle of the Experts” and can have considerable influence on whether you will successfully defend against plaintiff’s claim.
However, these types of lawsuits rarely go to trial and are settled shortly after discovery is complete. In fact, settlement will likely be discussed between the attorneys almost immediately upon the filing of the lawsuit. Both sides will informally argue their respective positions in an attempt to achieve the best possible settlement for their client. Sometimes, the insurance carrier will pay a “nuisance value” to resolve the matter; in other words, the carrier believes that it will be cheaper to settle the claim than to incur the expense of defense.
Throughout the next several months, we will be discussing some key legal issues that your business might face. These issues include forming your business entity or buying an existing business, leasing commercial space, obtaining (and maintaining) insurance, contract negotiation, employment issues, internal disagreements between business partners, protection of intellectual property, environmental concerns, and closing your business/dissolving a corporation.
Throughout the business process, from bidding to performing to billing, a snow contractor should be asking “have I done enough to protect the company.” Further, once litigation ensues a contractor should remain pro-active with counsel and the carrier. Despite a common theme, a good attorney can be your strongest ally. Having counsel knowledgeable in your industry helps you protect yourself and your business from the myriad of issues.