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< Back Superior Court Sends Landlord’s Right to Subrogation Up in Flames Jessica Whelan December 8, 2023 at 4:00:00 PM ​ In Mutual Benefit Insurance Company et al v. Courtney Koser and Mickael Abels , the Superior Court of Pennsylvania considered whether a tenant’s “reasonable expectations” for coverage under a landlord’s homeowners’ insurance policy superseded Mutual Benefit Insurance Company’s (“Mutual Benefit”) claim for subrogation. See 2023 WL 8360563, Pa. Super. 252 (Dec. 4, 2023). In August 2023, tenants living in an apartment negligently caused fire damage to the building after leaving a candle burning unattended. Id. at *1. The building’s landlord was insured by a homeowners’ insurance policy issued by Mutual Benefit (the “Policy”), which covered the landlord’s damages. Id. Thereafter, Mutual Benefit filed a subrogation action against the tenants to recover the damages. Id. The tenants argued the apartment lease created a reasonable expectation of implied co-insured status under the Policy for damage to property owned by the landlord, precluding Mutual Benefit from pursuing a subrogation remedy. Id. at *2. Mutual Benefit disputed this interpretation, citing several lease provisions purportedly holding the tenants responsible for such property damage. Id. The Court reviewed these provisions, ultimately rejecting Mutual Benefit’s arguments in favor of the tenants’ “reasonable expectations” of coverage. The Court first concluded that although several lease provisions required the tenants to assume responsibility for property damage, these provisions did not obligate the tenants to procure liability insurance for damage to the property itself. Id. at *11. Rather, the provisions differentiated between the tenants’ obligation to insure their personal property in the apartment and the landlord’s obligation to insure his personal property and the property itself. Id. The Court then inquired whether the tenants could “reasonably expect” that the landlord would only seek coverage for fire damage from the Policy and not the tenants. Id. Relying on precedent, the Court concluded that absent a contrary agreement, the tenants could reasonably expect that the landlord’s agreement to maintain insurance for damage to the property afforded coverage—even for the tenants’ negligent acts causing fire damage. Id. at *12. Therefore, the Court held the tenants were entitled to additional co-insured status under the Policy. Id. The Mutual Benefit decision reflects Pennsylvania courts’ willingness to defer to a tenant’s “reasonable expectations” of coverage, even where a lease’s provisions appear to impose liability for property damage on the tenants. PA insurers should therefore be wary of lease provisions differentiating between the landlord and tenant’s insurance obligations for property damage, as the distinction may preclude subrogation. Mutual Benefit Insurance Company v. Koser .pdf Download PDF • 217KB Previous Next

Latest News ​ Superior Court Sends Landlord’s Right to Subrogation Up in Flames Read More ​ Second Department Emphasizes Importance of the Surrounding Factual Circumstances in Assessing Contractual Indemnity Claim Read More ​ Sales Data Alone Does Not Determine Venue Read More ​ Is OC’s Case Really Controlling? Read More ​ Can a Driver with the Right of Way be Responsible for an Accident in New York? Read More ​ Details Matter in Seeking Summary Judgement In New York Auto Cases Read More ​ Acquiescence by Silence: “If we do not hear from you” Language in Reservation of Rights Letter is Sufficient to Defeat Selection of Counsel Challenge in New Jersey Read More ​ Imprecise Policy Language Leads to Unintended Coverage in New Jersey Dog Bite Case Read More ​ Happy Thanksgiving From Your Friends At WCM! Read More ​ Is A Tattoo “Therapeutic or Cosmetic” for Coverage Purposes? Read More ​ Stairway Handrail Leads To An Issue of Fact Read More ​ First Department Takes Expansive View on both “Altering” Work and “Elevation-Related Risks” as Defined by N.Y. Labor Law Read More ​ No Lost Wages For No Lost Work! Read More ​ Absence of Work Logs Overturns Dismissal of Third-Party Claim Read More ​ Assignor Contract May Create Additional Insured Status Read More ​ Roller Skater’s Speculation Leads to SJ for United Skates on Appeal Read More ​ Right For The Wrong Reason May Not Be Right on Summary Judgment Read More ​ Third Department Rules Plaintiff Raises Insufficient Evidence of a Defective Condition and Constructive Notice Read More ​ Inadvertent Disclosure of Personal Information in Court Filing Held Not Actionable Read More ​ No Homeowner’s Coverage for Injury Claim by Resident Living with The Insured Read More

Latest News ​ Superior Court Sends Landlord’s Right to Subrogation Up in Flames Read More ​ Second Department Emphasizes Importance of the Surrounding Factual Circumstances in Assessing Contractual Indemnity Claim Read More ​ Sales Data Alone Does Not Determine Venue Read More ​ Is OC’s Case Really Controlling? Read More ​ Can a Driver with the Right of Way be Responsible for an Accident in New York? Read More ​ Details Matter in Seeking Summary Judgement In New York Auto Cases Read More ​ Acquiescence by Silence: “If we do not hear from you” Language in Reservation of Rights Letter is Sufficient to Defeat Selection of Counsel Challenge in New Jersey Read More ​ Imprecise Policy Language Leads to Unintended Coverage in New Jersey Dog Bite Case Read More ​ Happy Thanksgiving From Your Friends At WCM! Read More ​ Is A Tattoo “Therapeutic or Cosmetic” for Coverage Purposes? Read More ​ Stairway Handrail Leads To An Issue of Fact Read More ​ First Department Takes Expansive View on both “Altering” Work and “Elevation-Related Risks” as Defined by N.Y. Labor Law Read More ​ No Lost Wages For No Lost Work! Read More ​ Absence of Work Logs Overturns Dismissal of Third-Party Claim Read More ​ Assignor Contract May Create Additional Insured Status Read More ​ Roller Skater’s Speculation Leads to SJ for United Skates on Appeal Read More ​ Right For The Wrong Reason May Not Be Right on Summary Judgment Read More ​ Third Department Rules Plaintiff Raises Insufficient Evidence of a Defective Condition and Constructive Notice Read More ​ Wade Clark Mulcahy Expands its Geographic Reach to Florida with Addition of Trial Attorneys Maria E. Damanieras and Peter R. Restani Read More ​ Inadvertent Disclosure of Personal Information in Court Filing Held Not Actionable Read More

< Back Second Department Emphasizes Importance of the Surrounding Factual Circumstances in Assessing Contractual Indemnity Claim Mark Kindschuh December 8, 2023 at 4:00:00 PM ​ The Second Department recently highlighted the importance of surrounding factual circumstances in claims for contractual indemnity. In Zapototsky v. Ascape Landscape & Construction Corp. et al , NY Slip Op 06165 (2nd Dept. 2023), plaintiff sought to recover damages after he slipped and fell on a patch of ice between a parking lot and a store entrance at a strip mall. Simon, the mall landlord, had contracted with Ascape to handle snow and ice removal at the premises and on the abutting sidewalks. Simon moved for summary judgment on the crossclaims it had brought for contractual indemnification, breach of contract, and an award of attorney's fees, and Ascape cross-moved for dismissal of all claims. The Supreme Court in 2020 denied Simon’s motion and granted Ascape’s, and Simon appealed. The Second Department affirmed in part and reversed in part. As a general principle, when it comes to contractual indemnity “[t]he right to contractual indemnification depends upon the specific language of the contract.” Poalacin v. Mall Props., Inc. , 155 AD3d 900, 909 (2nd Dept. 2017). Furthermore, “[t]he promise to indemnify should not be found unless it can be clearly implied from the language and the purpose of the entire agreement and the surrounding circumstances ” Meadowbrook Pointe Dev. Corp. v F & G Concrete & Brick Indus., Inc ., 214 AD3d 965, 970 (2nd Dept. 2023). In the contract at issue in Zapotosky , Ascape agreed to indemnify Simon for third-party personal injury claims in any way relating to or resulting, in whole or in part, from Ascape’s performance or failure to perform under the contract. Their affirmative obligations included to salt and keep clear the store entrances and provide 24-hour snow removal until all walkways were slip-free following “snow events.” The contract language was unambiguous, and the Court’s analysis placed greater emphasis on the surrounding circumstances portion of the inquiry. The Supreme Court failed to recognize that, Simon “failed to eliminate triable issues of fact as to whether the plaintiff's claim related to or resulted from Ascape's performance or failure to perform its services under the contract.” Zapototsky , NY Slip Op 06165 at 2. Given factual issues concerning the circumstances of the plaintiff’s accident, Simon’s motion was rightly denied. On the other hand, the Supreme Court erred in granting summary judgment in Ascape’s favor dismissing the crossclaims. Specifically, Ascape “failed to establish as a matter of law that the plaintiff's accident did not relate to or result from Ascape's performance or failure to perform its services under the contract.” Just as the surrounding circumstances cast doubt upon Simon’s indemnity claim and warrantted a trial, so too did the circumstances prevent outright dismissal in Ascape’s favor. The primary takeaway for defense practitioners is to focus not only on the indemnity language in a commercial contract, but the specific factual circumstances of an accident, in preparing motions for summary judgment on contractual indemnity claims. Zapototsky v. Ascape Landscape And Construction Corp. .pdf Download PDF • 151KB Previous Next

< Back Sales Data Alone Does Not Determine Venue Brian T. Noel December 8, 2023 at 4:00:00 PM ​ When it comes to determining an appropriate venue, national sales data cannot be the sole determining factor in a quantity analysis, the Pennsylvania Supreme Court ruled last month in the case of Hangey v. Husqvarna . In Hangey , plaintiffs Ronald and Rosemary Hangey filed a complaint against Husqvarna Professional Products, Inc. (“HPP”), Trumbauer’s Lawn and Recreation, Inc (“Trumbauer’s”) and others in the Court of Common Pleas in Philadelphia County. The Hangeys alleged that Ronald was thrown off his mower outside his home. The mower then rolled over Ronald’s legs with the blades moving at high speed, thus causing severe and catastrophic injuries to his legs. The Hangeys subsequently amended their complaint to include other Husqvarna entities. HPP and Trumbauer’s filed preliminary objections to the amended complaint, arguing venue in Philadelphia was improper. The trial court conducted a quality-quantity analysis required under the Pennsylvania Supreme Court’s decision in Purcell v. Bryn Mawr Hosp. The trial court found HPP’s activities satisfied the quality prong but not the quantity prong, as only $75,310 out of HPP’s $1.393 billion in national revenue came from their direct sales in Philadelphia County (.005%). The case was then transferred to Bucks County. The Superior Court reversed, holding that the percentage of a defendant’s business in a particular county cannot be the sole evidence relevant to a quantity analysis. Instead, courts must consider all of the evidence presented, including the scope of a defendant’s business, in determining the quantity prong. Additionally, the Superior Court found that the sales amount was sufficient to be “considered habitual,” and ordered that venue was appropriate in Philadelphia. Last month, the Supreme Court affirmed the Superior Court’s decision. The Supreme Court noted it was clear the trial court’s decision was based only on the percentage of HPP sales made in Philadelphia County, which conflicted with precedent on this issue. The Court explicitly stated that the percentage of a company’s revenue cannot be the sole determining factor to establish whether a company regularly conducts business in that county. It also affirmed the Superior Court’s designation of Philadelphia as the proper forum, noting HPP’s sales to retailers and its distribution of products to two Philadelphia retailers that have physical locations in the county and are permitted to stock, display and sell HPP products on a regular basis. Plaintiffs routinely file their cases in Philadelphia, as it has a reputation as a plaintiff-friendly forum. But how much is enough when it comes to a business’s sales and activities for the purpose of venue? The Supreme Court, in a rather narrow decision, has now directed courts to consider the whole picture and not just national sales data. With this narrow decision, courts may see more challenges to venue with respect to national companies doing limited business in Philadelphia County. Stay tuned… Hangey v. Husqvarna Professional Products Inc. .pdf Download PDF • 565KB Previous Next

< Back Is OC’s Case Really Controlling? Chip George December 8, 2023 at 4:00:00 PM ​ In arguing that an insurance policy provides coverage, some plaintiffs, on the theory that “it just ain’t right for the insurer not to pay,” focus on distinguishable cases and ignore on-point decisions from other districts. Recently, in Peoples Trust insurance v. Diaz , Florida’s Fifth District Court of Appeal reminded the Bar that it will not hesitate to follow on-point decisions from its sister courts, even where those decisions distinguish its own case law. The takeaway: Review your opponent’s case law carefully and do not hesitate to argue on-point decisions from another district, even those distinguishing a decision from your own district, where the facts warrant it. People's Trust Insurance Company v. Diaz and Diaz .pdf Download PDF • 76KB Previous Next

< Back Excluded or Not Covered? That is the Question AndyMilana December 8, 2010 at 7:47:12 PM New York Insurance Law §3420(d)(2), which requires written notice of coverage denials “as soon as is reasonably possible,” has vexed the insurance industry. Courts have ruled that delays as short as 30 days violate the statute’s reasonableness standard. A failure to give timely notice results in a waiver of the potential coverage defense. But what happens if the occurrence giving rise to the claim is not covered at all under the policy form? Does late notice stymie the insurers ability to avoid a defense and indemnity obligation? Recently, the Second Circuit took up that issue in NGM Insurance Company v. Blakely Pumping, Inc., 593 F.3d 150 (2010). There, relying on the “auto” exclusion to a business owner’s policy, NGM disclaimed coverage to a company executive who crashed his pickup truck into plaintiff’s car. After publication of the disclaimer, the executive reminded NGM that the policy contained an endorsement extending coverage for the use of a “Hired Auto” or “Non-Owned Auto.” With that pushback, NGM issued a supplemental disclaimer, contending that the executive’s personal pickup was neither a “Hired Auto” nor a “Non-Owned Auto.” The trial court ruled that NGM had waived its right to disclaim coverage because, on the known facts, it had violated Insurance Law § 3420 (d)(2). But the Second Circuit, following Zappone v. Home Insurance Co., 55 N.Y.2d 131 (1982), determined that Insurance Law §3420(d)(2) applies only when the denial of liability is based upon an exclusion in the policy which, without the exclusion, would provide coverage. Then, the court determined that the definitions of “Hired Auto” and “Non-Owned Auto” did not qualify as exclusions, and thus held that NGM had not waived its right to assert that its policy did not cover the auto accident. The question of what constitutes an “exclusion” is often fact sensitive. But the critical distinction between an exclusion and an occurrence that is simply not covered must be kept in mind when facing the jeopardy of “late notice” in New York. If you would like more information about this decision, please contact Dennis Wade. http://caselaw.findlaw.com/us-2nd-circuit/1506043.html Previous Next

< Back Trial Court's Setting Aside Jury Verdict Affirmed by NY App. Div. AndyMilana April 21, 2010 at 2:14:13 PM In Beck v. Westchester County Health Care Corp., plaintiff underwent a surgical procedure at defendant’s medical center when she alleges to have contracted the Hepatitis C virus. At trial, plaintiff, who prior to the procedure tested negative for Hepatitis C, presented testimonial evidence that eight weeks after the procedure, she was diagnosed with the same Hepatitis C virus as the patient who immediately preceded her in the same operating room. Plaintiff also presented testimonial evidence that the incubation period for the disease coincided with the date of her injuries and that the amount and disposal of the narcotic administered by syringe on the previous patient. The jury found that the defendant medical center acted within good and accepted standards of care and treatment with respect to plaintiff. Plaintiff appealed the jury’s verdict. The court granted plaintiff’s motion to set aside the jury verdict and granted a new trial. The court found that the verdict was contrary to the weight of the evidence, which was in favor of plaintiff. Defendant’s appeal of the court’s decision was denied. Thanks to Katusia Lundi for her contribution to this post. http://www.nycourts.gov/reporter/3dseries/2010/2010_03051.htm Previous Next

< Back Being On Site Two Years Before The Date Of Loss, May Prevent Summary Judgement (NY) SuzanCherichetti May 5, 2023 at 4:28:23 PM Generally, liability for a dangerous condition on real property must be predicated upon ownership, occupancy, control, or special use of the property. However, the Second Department in Lyman v. Cablevision of Ossining Ltd. Partnership, et al., 2023 NY Slip Op 02116, (2023), recently held that Cablevision was unable to escape on summary judgment, when they did not own the property and their last visit was two years prior to the date of loss. In Lyman, plaintiff brought suit to recover personal injuries when he tripped and fell on an exposed cable wire located in a flower bed outside of a condo building, in November of 2016. Defendant Cablevision was the owner of the cable wire which the plaintiff tripped over. Cablevision moved for summary judgment, which the lower court granted, however on appeal it was overturned. The Second Department stated that although Cablevision did not own, occupy, control or make special use of the property, liability may be imposed upon Cablevision if they created the dangerous or defective condition. Specifically, the court pointed to the fact that a Cablevision employee or agent went to the subject condominium unit that occurred in 2012 and 2014 – four and two years before the subject incident – and there was no sufficient evidence to show that they did not create the allegedly dangerous condition. Thanks to Christopher Palmieri for his assistance with this post. Should you have any questions, please contact Tom Bracken. Previous Next

< Back The Unpredictable Nature of Pennsylvania Products Law AndyMilana March 29, 2013 at 6:52:55 PM Products liability law in Pennsylvania has become increasingly unpredictable over the years. The unpredictability, however, may finally be coming to an end. The Pennsylvania Supreme Court has recently granted allocator in Tincher v. Omega Flex where many predict the Court will finally rule on whether the strict liability analysis of Section 402A of the Second Restatement will be replaced by the Third Restatement. The Third Circuit has twice opined that the state Supreme Court is likely to adopt provisions of the Third Restatement, yet the Court has consistently failed to directly address this issue. If the Court does adopt the Third Restatement, this will mean a change in Pennsylvania products law. Currently, the Second Restatement focuses its analysis on the intended user and that user’s intended use of a product. The Second Restatement also does not include the concept of negligence. Conversely, the Third Restatement focuses its analysis on the foreseeable risk of harm of a product and whether an alternative design could have minimized or eliminated these risks. The Third Restatement also introduces the concept of negligence into the analysis. There are diverging opinions on whether the adoption of the Third Restatement would benefit plaintiffs or defendants more. Some speculate the Third Restatement would be more favorable to defendants as it requires the plaintiff to provide additional proof as compared to the Second Restatement. Others note the Third Restatement would benefit plaintiffs, specifically the injured bystander, as they are not intended users of a product a key portion of the Second Restatement’s analysis. However, regardless of the potential benefits to either plaintiffs or defendants, if the Court does definitively rule as to which Restatement applies; this will offer some much needed clarity to Pennsylvania products law. Special thanks to Colleen Hayes for her contribution to this post. For more information, please contact Nicole Brown at nbrown@wcmlaw.com .   Previous Next

< Back Owner Not Liable For Injuries To Tenant's Guests (NJ) AndyMilana January 30, 2020 at 12:21:21 AM The New Jersey Supreme Court recently issued a landmark ruling on the duty of a commercial property owner to maintain a leased property. In Baldwin Shields v. Ramslee Motors, the court considered whether the owner of a commercial property owed its tenant’s invitee a duty to clear snow and ice from the property’s driveway while the property is in the sole possession and control of the tenant. The clear and unambiguous lease agreement between the parties stated that the tenant was solely responsible for the maintenance and repair of the land and any structure of the premises, as if the tenant were the de factor owner of the leased premises. The tenant also testified at a deposition that they were responsible for clearing snow and ice from the property. The court ultimately held that the tenant was responsible for the removal of snow from the driveway, and that the property owner was not responsible since they had relinquished control of the property to the tenant. This case is notable since commercial landowners typically have a non-delegable duty to maintain their property. This case appears to carve out an exception when the tenant has exclusive control and possession of the property. Thanks to Heather Aquino for her contribution to this post. If you have any questions, please email Georgia Coats. Previous Next

< Back No Coverage for Damages from Carbon Monoxide (PA) AndyMilana November 14, 2018 at 9:46:36 PM A judge in the United States District Court Eastern District of Pennsylvania ruled that an insurance company does not have to indemnify a landlord whose tenants sued over carbon monoxide poisoning, In Foremost v. Nosam, Foremost sought declaratory judgment stating that it did not owe a duty to defend or indemnify, Nosam LLC in the state court action based on a pollution exemption in its policy. This case arose from the state court action in which plaintiff and her two children sued their Landlord and the building owner (Nosam LLC) after suffering carbon monoxide poisoning, allegedly from a faulty furnace in Sylvestre’s apartment. The malfunction in the furnace was allegedly caused by a neighboring chimney collapsing and falling into the plaintiff’s chimney. This allegedly caused a blockage in the heating unit at the plaintiff’s residence, causing the emission of carbon monoxide. Foremost disclaimed citing the policy which read “We will not pay for bodily injury or property damage…[arising out of the actual, alleged or threatened discharge, dispersal, release, escape of, or the ingestion, inhalation of absorption of pollutants.” The underlying plaintiffs later claimed that the emission was caused by an accidental fire when the heating system was converted to a gas system, which would trigger the exclusion to the policy exemption. The Court ruled, “ Although the underlying plaintiffs contend that they did not know the heating system had been converted to gas, there is no suggestion they did not knowingly and intentionally start the December 9, 2015, fire by turning on the furnace…There is no suggestion that any flames, or any part of, this controlled fire extended outside the sealed unit where it was designed to burn…Further, although the chimney collapse may have contributed to the buildup of carbon monoxide inside the residence, the unexpected collapse did not cause the fire. The fire, regardless of whether it was ignited by gas or oil, did not happen by chance or unexpectedly and was therefore not accidental. Although the buildup of carbon monoxide was accidental, it was not released by an accidental fire and the underlying plaintiff’s attempt to conflate the two requires a strained interpretation of that term." The salient distinction the Court makes is based on the carbon monoxide emission (obviously) being accidental, whereas the fire was started intentionally. Because the fire was started intentionally, Formost's policy exclusion applied, and Foremost owed no duty to defend or indemnify. Thanks to Jon Avolio for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next