Commercial Law Reporter
A Publication Devoted to Commercial Law and Intellectual Property Issues
November 2011
Managing Editor: Karen Libertiny Ludden
Co-Editors: Robert D. Goldstein and Mark Shreve

• Steps to take if an employee is charged with a crime
• What you need to know about herbicide Imprelis 
• Commercial Law Update: Insurer Permitted to Rescind Fire Insurance Policy Due to Misrepresentations on Application 


Steps to take if an employee is charged with a crime

John W. Whitman


Upon arriving at work, you discover that an employee has been arrested for “something.” As the day progresses, you learn that the arrest occurred at work. It’s time to put the coffee down and take steps to protect you business. When an employee is charged with a crime for conduct occurring during employment with your company or on your premises, you need to act quickly. Do not assume that it is “their problem.” The following points should be considered:

1. You should immediately contact your own counsel and inform them. Often, an attorney will have more success interacting with the police. In addition, if an internal investigation is required, the attorney can do so with the benefit of “privilege;” a legal principle that allows an attorney to obtain confidential information without being required to release said information to police. Legal privilege is not available to non-lawyers and, in fact, if you provide confidential information to a third party who is not an attorney, it can become admissible in court.

2. Do not engage in your own investigation and certainly do not remove or alter anything that may be evidence. This can result in civil liability and criminal prosecution.

3. You do NOT automatically have to give police access to your employees or property. You cannot instruct your employees to refuse to cooperate, but you can insist that the police conduct their investigation of your property unless they have a lawful basis to be there (i.e. they have a search warrant, an arrest warrant or exigent circumstances requiring emergency action). In short, under certain circumstances, you can ask the police to leave. Moreover, if an employee has given a statement, they are entitled to a copy of it. They are not, however, entitled to the officer’s notes. Thus if a statement is given, obtain a commitment from the police that a copy will be provided. There may be items that the police want, such as surveillance data, computer hard-drives or documents. You may have to relinquish them if there is a valid court order (search warrant). You do not have to give these things to the police just because they ask for them. These things may implicate your company in the crime or create civil liability. If you give them to the police, your “consent” will hinder your lawyer’s ability to protect you. While you do not want to alienate the police, you should clearly get the assistance of your own counsel before engaging in dialog with the police. Why answer questions until you know what is at stake?

4. Contact your insurance company if the crime in any way implicates your business (i.e. there has been an assault, theft from a client or co-employee, or property damage). Your insurance company may provide coverage for some of the legal and investigatory expenses that you incur. Remember that your insurance company may also have interests adverse to you, so again, get your lawyer involved as soon as possible. Remember that there is a difference between criminal and civil liability. Your rights will be different depending on your exposure. The criminal case will move much quicker than the civil case.

5. Do not interview the charged employee. This could seriously impact his/her ability to defend the charge. However, your lawyer should try to learn what the employee has said to the police.

6. If the employee is charged with a felony, there will probably be a preliminary examination. This is an evidentiary hearing where the State offers testimony and proof to show the Court that there is sufficient basis to “bind over” the employee/defendant. This is a hearing that your lawyer needs to attend. You have no right to ask questions or participate in plea negotiations, however, you should take advantage of the hearing to learn what the proofs show. Consider buying a copy of the transcript of the hearing if it appears that your business may have civil or criminal responsibility. The same recommendation applies to the criminal trial.

Your employee’s criminal conduct may cost you. You need to take action quickly when you learn about such an event. This punch list should be provided to your Risk Manager along with contact information for your counsel. When an employee is arrested, events will unfold quickly. The more you have planned for it, the better you will endure it.

Mr. Whitman is an attorney in the Ann Arbor office of Garan Lucow Miller who handles criminal defense cases. You can reach him by telephone, at(734)930-5600/(800)878-5600, or


What you need to know about…the herbicide Imprelis

Karen Libertiny Ludden


You may have heard about the new weedkiller Imprelis, either in a positive light, or in a negative one. When it was first released by chemical giant Dupont in 2010, it was hailed as the latest advancement in broadleaf herbicide technology. In 2011, however, Dupont pulled it from the market due to its alleged propensity to damage certain types of evergreens. At this point, insurance claims are spreading like the very weeds Imprelis was intended to combat, and class actions suits are cropping up nationwide. Here are the latest developments.

By way of background, Imprelis is a post-emergent, broadleaf pesticide that the EPA approved in 2010 for use by professional landscapers only. Its chemical subclass is pyrimidine carboxylic acid, and it contains a single active ingredient, Aptextor. It is intended to kill common broadleaf weeds like dandelion and clover, as well tougher weeds such as ground ivy and wild violets. Tested by the EPA in over 400 field trials since 2006, it was touted as a new generation of herbicide, with low toxicity to humans and animals, low application rates, and no impact on re-seeding.

Beginning in May and early June, however, complaints began to pour in that certain evergreens – primarily Norway Spruce and White Pines – in close proximity to Imprelis application areas were beginning to show signs of damage. Specifically, new growth on the ends of the trees were starting to bend and twist. Since Dupont’s initial press release on Imprelis explained that its application causes “bending and twisting of stems and the cupping of weeds,” commercial landscapers who had applied the expensive new product quickly turned their attention to Imprelis.

On June 17, 2011, Michael McDermott, Global Business Leader for DuPont Professional Products, issued a statement to “Turf Management Professionals.” McDermott acknowledged reports concerning “various unfavorable symptoms on certain species of trees,” most specifically Norway Spruce and White Pine trees following the application of Imprelis. He indicated that, in most cases, Imprelis was not applied alone, but rather “in a mixture with other herbicides, either pre-emergent, post-emergent and/or with a liquid fertilizer.” He also indicated that some of the reports that Dupont has been receiving demonstrated that “there may have been errors in use rates, mixing practices and/or applications to exposed roots, or the tree.” He stated that most lawn care professionals had not reported problems, but then cautioned that, until Dupont better understood the problem, Imprelis should not be applied “where Norway Spruce or White Pine are present on, or in close proximity to, the property to be treated.”

In the months that followed, however, thousands more claims poured in, so much so that by August, 2011, Dupont established a hotline and began sending out inspectors to catalog and consider possible remedies for the complaints. By September, Dupont had established a compensation program in an effort to address the growing number of class action suits, particularly in Midwestern states like Michigan and Illinois, which received near-record Spring rainfalls that some believe exacerbated the problem by spreading the herbicide further from its initial application location than expected.

The current problem for commercial insurers is that the Dupont reparations system, at least in this initial stage, can be cumbersome and slow. In the meantime, anxious landscapers and property owners who are watching 50 foot pine trees shrivel are filing insurance claims. Since Imprelis was an expensive product, it is often private golf courses and high-end landscaped homes that are seeing damage. Expecting coverage under any circumstances, they ask their insurers to compensate first, and sort it out with Dupont later. The problem with this approach is that the current Dupont compensation scheme does not have a mechanism for indemnifying or reimbursing insurers, and many CGL policies contain exclusions, such as the Recalled Product exclusion that should apply anyway. Faced with a flood of claims and lawsuits, insurers are debating how to respond, knowing that a consistent approach to claims handling is important, even though there can be different factual scenarios in play in each case.

Under the circumstances, there are a number of factors to consider, whether you are a commercial insurer, professional landscaper, or property owner:

• Despite the delays, Dupont’s national claims hotline is still the best place to start. This is because Dupont has been studying the problem and has established specific guidelines for these claims. Although Dupont’s current position is that it will consider claims even when its guidelines for treatment and/or removal of affected trees has not been followed, you can bet that following the guidelines increases the chance that Dupont will honor the claim.

• Many insurers are denying claims arising from the application of Imprelis due to various exclusions, but some insurers are hiring counsel on behalf of the insured to make contact with Dupont to facilitate the processing of claims. This helps the insured through the process and sometimes deflects expensive litigation against insurers.

• Because there are so many insurance claims coming in, most insurers are trying to handle them in a consistent manner, which requires nationwide collaboration by the various claims branches. Although delays can occur as a result, the careful attention to coverage issues means a more consistent processing system.

• There are a number of factual issues that Dupont has raised that should be considered while gathering information about the effect of Imprelis application. Specifically, Dupont is considering: whether the landscaper improperly mixed either the initial concentrations of Imprelis or improperly mixed it with other herbicides and/or fertilizers; whether the landscaper continued to apply the product after complaints were made; whether extreme weather patterns are to blame; whether the grading of the application site caused excessive runoff into nearby trees; and whether the tree is actually dead or simply affected for a single growing season. Insurers and insureds alike should be prepared to document their answers to these questions during the investigation process.

Unfortunately, Imprelis claims handling and litigation is a growing concern for insurers, insureds, and property owners nationwide. Staying abreast of developments is the best way to navigate the course.

Ms. Ludden is a commercial attorney in the Troy office of Garan Lucow Miller who handles Imprelis litigation and coverage analysis. You can reach her by telephone, at (248)6417600/(800)875-7600, or


Commercial Law Update


Insurer permitted to rescind fire insurance policy due to misrepresentations on application

In August, the Michigan Court of Appeals issued an unpublished decision permitting an insurer to rescind a fire insurance policy because of misrepresentations on the insurance policy application. In Great Lakes Mutual Ins Co v Kirschner, 2011 WL 3366407,the parties acknowledged that, while the defendants were listed ans the named individuals on the fire insurance policy, they did not “own” the premises. Title to the property was undisputedly quitclaimed to an LLC. The LLC was not a named insured. The Court held that, since the policy definition of “insured premises” applies where the insured party owns the premises, and the defendants admittedly did not, the premises could not qualify as “insured premises” under the policy language. Moreover, the policy language stated that the policy “may not be assigned without our written consent.” Since title to the property was transferred without the insurer’s written consent, defendants were precluded from seeking coverage for any claim submitted as a result of the fire.




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