News EDPA -- PA Law Governs PA Insurance Contract w/ California Based Claim. February 22, 2008 < Back Share to: In the case of PhotoMedex Inc. v. St. Paul Fire & Marine Ins. Co. , the tort action requiring indemnification originated in California, but the underlying insurance contract was issued in Pennsylvania. The question thus arose -- which state's law governs the Policy's interpretation? The EDPA ruled that the law most connected to the insurance policy, not the underlying tort, was the one to be applied. http://www.law.com/jsp/pa/PubArticleFriendlyPA.jsp?id=1203677127439 Previous Next Contact

News Allegation of "Negligent Misrepresentation" Fails to Trigger Coverage in PA January 12, 2009 < Back Share to: In Erie Insurance Exchange v. Maier, the Pennsylvania Superior Court recently held that a lawsuit did not allege an “occurrence” under the Erie policy, even though the allegations against the insured included a claim of negligent misrepresentation. The underlying lawsuit was filed by First National Bank, and its complaint alleged the purchaser (Erie's insured) and the seller of a house (a debtor to the bank) participated in a fraud upon the bank as a creditor. The bank claimed the parties misrepresented the true purchase price of the house in order for the seller to obtain additional cash from the transaction. The parties set the purchase price of the house at $650,000 and the bank agreed to forego its interest in the house that was higher than that amount. But the insured also paid the seller an additional $200,000 for “personal property” in which, conveniently for the seller-debtor, the bank had no security interest. A single count in the complaint alleged that the insured made a "negligent misrepresentation," and the insured alleged that was sufficient to trigger coverage under the Erie policy. But the court ruled that there was no “occurrence” under the policy because the bank acknowledged the insured knew that the sale price was undervalued. In fact, the Bank would be unable to prevail in the lawsuit without proving the insured was involved in an intentional fraud. Couching the claim in terms of the insured’s negligence did not trigger coverage, and thus, Erie had no duty to defend or indemnify the insured. The important point for insurers and counsel is that the the use of a "magic word" such as negligence in a pleading is not always enough to carry the day in coverage controversies. Thanks to Mendel Simon for his contribution. http://www.aopc.org/OpPosting/Superior/out/a30005_08.pdf Previous Next Contact

News WCM Obtains Judgment for Clients in Monroe County Property Damage Case. February 13, 2017 < Back Share to: Associate Peter Cardwell obtained judgments in favor of our clients in the Magisterial District Court of Monroe County in a property damage lawsuit. The case of Baranowski v. The Home Depot and Big E Transportation arose out of allegations by the plaintiff that his driveway was damaged after our clients made a delivery of retaining wall stone. At a hearing for the case, we argued that the plaintiff presented no evidence supporting his claim that cracks and dents in his driveway were, in fact, caused by our clients. In addition, we pointed to the fact that the plaintiff presented no invoices or quotes proving his alleged damages and needed repairs. We further submitted several photos of the plaintiff’s driveway showing no damage and what appeared to be normal every day wear and tear. We also presented two employees of our clients to testify as to delivery procedures and their investigation into the alleged damage. Ultimately, the court agreed with our position and found in favor of our clients. For more information about this post, please e-mail Bob Cosgrove. Previous Next Contact

News NJ Fee Shifting Applies Even to Out of State Coverage Litigation July 29, 2010 < Back Share to: New Jersey is generally considered a pro-policyholder state. Under New Jersey Court Rule 4:42-9(a)(6), a successful claimant may recover attorneys fees “in an action upon a liability or indemnity policy of insurance.” While the courts have some discretion when considering such fee applications, the trend has been to award attorneys fees to a successful policyholder in most circumstances. See, for example, our post on Baughman v. US Liability Insurance on July 16, 2010. How far does Rule 4:42-9(a)(6) extend? Does it apply where a piece of the declaratory judgment is litigated in another state? According to the New Jersey Supreme Court, the reach of Rule 4:42-9(a)(6) extends beyonds the borders of New Jersey and applies to coverage litigation filed in another state. In Myron Corporation v. Atlantic Mutual, this point was significant because an Illinois court – where two actions for declaratory relief had been filed by the insurer and later dismissed—would have followed the traditional American rule and denied the policyholder’s application for attorneys fees. Getting your coverage position right at the onset is critical when considering an insured’s request for a defense or indemnification under a liability policy. The consequences of a mistaken judgment can be significant if the insured prevails and recovers its attorneys fees in litigating the coverage dispute in addition to those associated with the underlying suit. If you have any questions or comments about this post, please email Paul at pclark@wcmlaw.com http://www.judiciary.state.nj.us/opinions/supreme/A5309MyronCorpvAtlanticMutual.pdf Previous Next Contact

News Street Smarts: Untangling Liability for Defective Conditions < Back Share to: So, you’ve been sued because someone was injured, or possibly damaged their personal property, due to a defect in the road or street next to your property. Are you responsible? While the specific circumstances of any given case will always be the factors that determine the ultimate answer, as a general matter, a property owner does not own the public street or road, and the municipality might be the real party at fault. Pennsylvania’s Political Subdivision Tort Claims Act states that “no local agency shall be liable for any damages on account of any injury to a person or property caused by an act of the local agency or an employee thereof or any other person.” 42 Pa.C.S. § 8541. There are exceptions however. See e.g. 42 Pa.C.S. § 8542(b)(6) (enumerating the street related exception). There is a body of caselaw concerning various iterations of the municipality’s responsibility for a public street. For example, the Pennsylvania Supreme Court stated that [u]nder Pennsylvania law “a municipality is required to construct and maintain its highways in such a manner as to protect travelers from dangers which, by the exercise of normal foresight, careful construction and reasonable inspection, can be anticipated and avoided.” Mitchell v. Rochester Borough , 395 Pa. 373, 378, 150 A.2d 338, 340 (1959). A municipality owes this duty not only to motor vehicles, but to pedestrians who, in the absence of sidewalks, have rights “equal” to those of motor vehicles on roadways. Neidlinger v. Haines , 331 Pa. 529, 532, 200 A. 581, 582 (1938). The type of precautions that are to be taken by a municipality in the construction and the maintenance of a safe highway is ascertained by examining the nature of the traffic which uses a roadway. Rodgers v. Shaler Township , 164 Pa.Super. 558, 560, 67 A.2d 806, 808 (1949). A municipality's duty “is not confined to maintaining the bed of . . . (a) road in a solid and safe condition and clear of obstructions, but extends to the erection of barriers or other devices for guarding unsafe and dangerous places on or along . . . (a) road.” Rodgers , supra. The question of whether a municipality has taken the requisite precautions which it owes to travelers is one for the jury. Mitchell , supra. Drew v. Laber , 477 Pa. 297, 300–01, 383 A.2d 941, 943 (1978). Another example would be Leiphart v. City of Philadelphia , 972 A.2d 1239 (Pa. Cmwlth. 2009) (in which the court found the municipality to be liable for the plaintiff’s injuries under the street exception because the municipality owned the street, oversaw work performed on the street, and inspected the work, thus making the risk of a fall reasonably foreseeable and giving the municipality actual notice of the dangerous condition); see also Redmond v. Dep't of Transportation , 194 A.3d 229, 231 (Pa. Commw. Ct. 2018). In a more recent case, the Pennsylvania Supreme Court handed down a ruling in Degliomini v. ESM Prods., Inc. , 253 A.3d 226, 228 (Pa. 2021). In Degliomini , a bicyclist was injured after he rode his bicycle into an unmarked and un-barricaded sinkhole “which measured sixteen square feet in area and six inches deep” during a charity ride; thereafter bringing an action in negligence against Philadelphia and other parties. Id . at 229. Though the Degliomini Court’s holding was focused on the enforceability of an exculpatory clause found in a release, the court stated the following with regard to the municipality (specifically Philadelphia in this case): [t]he common law cause of action for negligent breach of a municipality's non-delegable duty to repair dangerous street conditions is perhaps older than most of Philadelphia's streets themselves; recognized and enforced for over a century, the duty withstood the evolution of governmental immunity in Pennsylvania throughout the late-nineteenth and twentieth centuries, which otherwise shielded municipalities and their employees from tort liability in most circumstances as a rule with few exceptions. See, e.g. , Drew v. Laber , 477 Pa. 297, 383 A.2d 941, 943 (1978) (“Under Pennsylvania law a municipality is required to construct and maintain its highways in such a manner as to protect travelers from dangers which, by the exercise of normal foresight, careful construction and reasonable inspection, can be anticipated and avoided.”) (internal quotation omitted); Good v. Philadelphia , 335 Pa. 13, 6 A.2d 101, 102 (1939) (“[T]he liability of a municipality for injuries suffered as a result of defects in the highway arises only when it has notice, actual or constructive, of the existence of a dangerous condition.”); Lawrence v. City of Scranton , 284 Pa. 215, 130 A. 428, 430 (1925) (“The primary duty of keeping its streets in travelable condition is on the city. When public safety is concerned, this duty cannot be delegated to others.”) (internal quotation and citation omitted); Harvey v. City of Chester , 211 Pa. 563, 61 A. 118, 118 (1905) (“The primary duty of keeping its streets in travelable condition is on the city, and, while it may turn over their control to an independent contractor for specified purposes and limited time, it cannot by contract relieve itself indefinitely from its duty in that regard.”) Id . at 240–41. Though the common law cause of action referenced above has been replaced by Pennsylvania’s Political Subdivision Tort Claims Act (see above), the exception for street related claims remains and a municipality cannot in every circumstance avoid liability by way of immunity. Further, the Pennsylvania Supreme Court “has interpreted the Tort Claims Act Subsection 8542(b)(6) exception to immunity for dangerous conditions of municipally-owned streets consistently with Subsection 8522(b)(4) of the Sovereign Immunity Act (relating to waiver of immunity for Commonwealth real estate, highways and sidewalks), and held a municipality owes a duty of care to those using its property ‘to make its highways reasonably safe for their intended purpose,’ ‘such as to require that the condition of the property is safe for the activities for which it is regularly used, intended to be used or reasonably foreseen to be used[.]’” Degliomini at, 243 (citing McCalla v. Mura , 649 A.2d 646, 649 (Pa. 1994)). The takeaway from all this then, is that a public street defect alleged by a plaintiff might very well be the responsibility of the municipality and not (circumstances depending) on an adjacent property owner. Likewise, just because the municipality enjoys the benefit of immunity for some lawsuits in negligence, does not mean that it will be immune in every case and close attention to immunity exceptions must be paid and examined. Drew v. Laber .pdf Download PDF • 152KB Degliomini v. ESM Productions Inc .pdf Download PDF • 446KB 8542 Exceptions to governmental immunity .pdf Download PDF • 136KB Previous Next Ryan Hunsicker Ryan Hunsicker Senior Associate +1 267 239 5526 rhunsicker@wcmlaw.com Contact

News Duty To Defend Does Not Extend To Liability From “Lessor’s Risk” Due To Injury To Non-Tenants Off-Premises February 10, 2023 < Back Share to: The United States District Court for the Eastern District of New York recently granted an insurer’s motion for summary judgment and declaratory judgment that it did not have a duty to defend or indemnify the defendant landlord holding that the term “lessor’s risk,” as used in insurance policies, is an unambiguous term that does not cover tort claims from non-tenants injured off the premises. In Colony Insurance Company v. 28-41 Steinway, LLC, the Court addressed this issue on Colony’s motion for summary judgment and declaratory judgment that it did not have a duty to defend or indemnify 28-41 Steinway. This coverage dispute arose out of an underlying personal injury suit in which underlying plaintiff, Figueroa, alleged his foot was run over by an excavator while working on a project involving the sewer system at the premises, 28-41 Steinway Street, Astoria, New York. Colony argued that it was entitled to a declaration that it owed no duty to defend or indemnify 28-41 Steinway for any damages in the underlying action because the relevant policy included a “lessor’s risk only” limitation. According to Colony, the “lessor’s risk only” limitation precludes indemnification for tort claims by non-tenants and for injuries sustained outside of the premises. 28-41 Steinway argued, inter alia, that the policy’s “lessor’s risk only” language was undefined and ambiguous, therefore urging the Court to construe that term in its favor and against Colony. The Court noted that although 28-41 Steinway’s interpretation of “lessor’s risk only” may be correct based on the “purely textual meaning” of that term, the Court was required to look also to context, including “customs, practices, usages, and terminology.” The Court held that “lessor’s risk only,” as used in insurance, “has a specialized meaning that limits insurance coverage to damages sought by property tenants, or at the very least to injuries suffered on the landlord’s property.” Accordingly, based on the facts of the case, the Court granted Colony’s motion for summary judgment, holding that because it was undisputed that Figueroa was not a tenant and did not suffer an injury on the premises, the “lessor’s risk only” limitation applied to preclude coverage. This decision confirms two important matters for insurers. First, it holds “lessor’s risk only” is an unambiguous term with a specialized meaning. This is beneficial to insurers, as ambiguous terms are construed in favor of the non-moving party, and against the movant. Second, it reaffirms that insurance contracts are not to be interpreted solely based on their “purely textual meaning,” but in context, which includes the customs, practices, usages, and terminology as generally understood in the particular trade or business. Thanks to Erin Gallagher for her contribution to this post. Should you have any questions, please contact Tom Bracken. Previous Next Contact

News Trap Down Leads To Store Owner's Victory (NY) April 30, 2021 < Back Share to: In Vaughan v. Triumphant Church of Jesus Christ, 2021 NY Slip Op 02560 (2d Dept. 2021), a plaintiff fell down an open trap door in a deli and sued the owner of deli and the building owner. The building owner moved for summary judgment arguing that it did not control the premises and had no notice of the dangerous condition. "An out-of-possession landlord is not liable for injuries that occur on its premises unless the landlord has retained control over the premises and has a duty imposed by statute or assumed by contract or a course of conduct'" (Fox v. Patriot Saloon, 166 AD3d 950, 951). Further, it cannot be held liable for injuries caused by a defective condition on the property unless it either created the condition or had actual or constructive notice of it" (Rodriguez v. Sheridan One Co., LLC, 177 AD3d 801, 801). The lease agreement between the building owner and the deli-tenant was unclear as to whether the owner was responsible for maintaining the trap door. However, plaintiff’s deposition testimony showed that he walked over the closed trap door on the floor and a few moments later walked backwards, without realizing that the doors had been opened. The plaintiff ‘s testimony established that the building owner could not have had any actual or constructive notice of the dangerous condition because it happened so quickly. Thus, plaintiff could not argue that the building owner failed in their duty to prevent a dangerous condition from existing in the deli. Plaintiff’s arguments that the building owner knew that a trap door existed in the deli and it could possibly constitute a dangerous condition was unconvincing to the court. This case highlights the fact that actual and constructive notice (or the lack thereof) can be established by the testimony of a witness. If the time is so brief that a property owner could not have been made aware of a dangerous condition, then a court will likely find that they are not liable as a matter of law. Thanks to Raymond Gonzalez for his contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News Bi-Coastal Blow to Covid Related Restaurant Business Interruption Claims October 8, 2020 < Back Share to: During the first week of October two separate District Courts, for the Northern District of Georgia and the Central District of California, issued Orders granting the respective motions to dismiss filed by insurer defendants arguing that their policies provide no coverage for a restaurant insureds’ claim for business income coverage alleging losses stemming from Covid-19 closures. In California, Travelers prevailed on its motion seeking dismissal of the action initiated by its insured, Mark’s Engine Company No. 28 Restaurant in Los Angeles, alleging that Travelers owed coverage under its policy Business Income and Extra Expense for business income losses incurred due to the Covid-19 government mandated closures of all non-essential business in Los Angeles, which of course encompassed the closure of restaurants for everything by take-out and delivery. Travelers’ Business Income and Extra Expense term covered all losses due to any suspension of business operations due to a “direct physical loss or direct physical damage” to property. The policy also included a Virus Exclusion barring coverage for any “loss or damage caused by or resulting from a virus.” Mark’s Engine argued that the mandated closure of the restaurant evidenced physical damage to the property because it evidenced a “dire risk of exposure” to Covid-19 within and upon the restaurant property. In finding for Travelers that there was no coverage for the claim, the Court held that Plaintiffs’ theory of coverage relied upon an untenable premise that “deprivation of property” without any physical change to the condition of the property, constituted a direct physical loss or damage. The Court reasoned that while patrons were not permitted within the restaurant, the Insured never lost access to its property. Further, even if a direct physical loss was adequately alleged, the Virus Exclusion would bar all coverage. The reasoning employed by the Northern District of Georgia in finding no coverage on behalf of Allied Insuance was parallel to that of the Central District of California. There, Plaintiff Henry’s, an Atlanta restaurant and private party space, sought coverage under the Allied policy Business Income term which also covered business losses due to suspension of operations caused by direct physical loss or damage. The Allied policy also had a Virus or Bacteria exclusion. The Court likewise held that a government-mandated closure of the businesses did not equate to any “physical change at the Plaintiffs’ property”, and ruled that because Plaintiffs had not identified the presence of Covid-19 on the premises, “no physical change as a result of the virus’ presence can be argued.” Thus, no coverage was due and Allied’s motion to dismiss was granted. Business Interruption claims have been filed by restaurants in every jurisdiction, and there has been some concern regarding the risk of inconsistent rulings. These recent cases perhaps forecast a unity in the federal courts’ disposition of such claims in favor of insurance companies. Thanks to Vivian Turetsky for her contributions to this post. Any questions, please contact Georgia Coats. Previous Next Contact

News Warning Regarding Iranian Cyber Threat Issued by NY Financial Services Regulator (NY) January 10, 2020 < Back Share to: In recent years, the need for companies to take precautions with respect to cyber security, and risks insurers need to analyze in the cyber insurance space, have been widely-reported. Current events always seem to be relevant in this field. The recent news about the tensions between the United States and Iran are no exception. Due to the conflict with Iran, the New York Department of Financial Services (DFS) has issued a warning to banks, insurers and other businesses it supervises about an increased risk of cyber attacks orchestrated by hackers associated with the Iranian government as a result of the airstrike that killed Iran’s top general. DFS issued a letter to all regulated entities stressing the need for more stringent cybersecurity precautions in light of the mounting tensions between the U.S and Iran after the air strike that killed General Qasem Soleimani. Specifically the letter states “ DFS therefore strongly recommends that all regulated entities heighten their vigilance against cyberattacks…While currently there are no specific, credible reports of new Iranian-sponsored cyberattacks in the past few days, all regulated entities should be prepared to respond quickly to any suspected cyber incident.” DFS’ warning came on the same day that the U.S. Homeland Security issued its own warning about the mounting Iranian hacking threat. Relations with countries are always worth monitoring for obvious reasons, but insurers would be wise not to overlook the risks associated with cyberattacks. Thanks to Jon Avolio for his contribution to this post. Please email Michael Gauvin with any questions. Previous Next Contact

News Is Nothing Sacred? January 5, 2011 < Back Share to: It was reported today that congregants of a Catholic church on Long Island may have been exposed to hepatitis-A during Christmas morning services because an individual who handled the Communion wafers was infected with the disease. It seems almost inevitable that this will result in a lawsuit. The interesting twist is that if the Church were located in New Jersey instead of Long Island, it could potentially escape liability. That is because the courts of New York do not recognize the doctrine of “charitable immunity,” having definitively rejected it in 1957 in Bing v. Thunig. The concept, which is recognized in New Jersey, exempts corporations, societies, or associations organized “exclusively for religious, charitable or educational purposes” from negligence in many situations. http://www.nypost.com/p/news/local/mass_disease_feared_hgdsufbj4l3yQUwNaeBL3I Special thanks to Alex Niederman for his contributions to this post. For more information, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Emergency Car Crash Not Considered Negligent Driving October 25, 2011 < Back Share to: In Ardila v. Cox, et.al., (2011 NY Slip Op 07385) the plaintiff was driving eastbound on the highway when a car driving westbound swerved into oncoming traffic and collided with the plaintiff's vehicle. Defendant Balch was operating an oil tanker truck behind the plaintiff's vehicle. When he saw the cars collide, he applied the breaks and moved to the right. This caused him to crash into the plaintiff's vehicle. Balch moved for summary judgment under the emergency doctrine, which states that a driver faced with a sudden and unexpected circumstance which leaves no time for deliberation cannot be found negligent if his actions were reasonable and prudent. The Second Department held that a vehicle traveling in the opposite direction that suddenly crosses over into oncoming traffic is a classic emergency situation, implicating the emergency doctrine. Accordingly, the Court granted Balch's motion. http://www.nycourts.gov/reporter/3dseries/2011/2011_07385.htm Thanks to Georgia Stagias for her contribution to this post Previous Next Contact

News Insurance Broker’s Fiduciary Duty a “Fact-Specific” Question of Law for the Court October 3, 2017 < Back Share to: One particularly thorny area of the law with respect to insurance providers and brokers is the scope and breadth of any attendant fiduciary duties owed to an insured. In Ring v Meeker Sharkey Associates LLC, the New Jersey Superior Court Appellate Division recently upheld the trial court’s decision that the Plaintiffs’ homeowners’ insurance brokers did not owe a duty to advise the insureds of vulnerability in their coverage and a need for excess flood insurance. Ring is another case developing New Jersey’s insurance law following Hurricane Sandy. The Plaintiffs owned two beachfront homes along the Jersey Shore. For more than a decade, they secured both homeowners and flood insurance for the homes through Defendant Meeker Sharkey. In 2008, Plaintiffs moved their insurance accounts to Willis of New Jersey. In 2010, Plaintiffs’ moved their homeowners’ coverage back to Meeker Sharkey, but continued to secure flood insurance through Willis. In 2012, Hurricane Sandy ravaged Plaintiffs’ properties, causing catastrophic – and largely uncovered – losses to both. The crux of the ensuing litigation was Plaintiffs argument that as part of their transfer of homeowners’ insurance back to Meeker Sharkey in 2010, the firm undertook a review of Plaintiffs’ insurance coverage generally, and therefore owed a duty to alert Plaintiffs to their gap in flood insurance coverage, as well as a duty to affirmatively advise them to obtain excess floor insurance. The Ring Court decision underscores and reiterates than in New Jersey, the determination of whether a duty exists is a question of law to be determined by the courts, while also noting that there is no bright-line rule and that the inquiry is intensely fact-specific. Here, the Court found that the homeowners’ insurance broker did not have a duty to provide advice about flood insurance where the Plaintiffs engaged a separate entity, Willis, to secure its flood insurance. The fact that Meeker Sharkey knew or should have known of the gap in coverage did not create a duty to Plaintiffs under these circumstances. Ultimately, the Ring court was not called to determine whether Willis had breached the duty it owed. The question of whether or not that duty was breached is one of fact, for a jury. Thanks to Vivian Turetsky for her contribution to this post. Previous Next Contact