News College Security Program Creates Duty To Implement That Program Properly (PA) February 9, 2023 < Back Share to: In Doe v. Moravian College, 2023 U.S. Dist. Lexis 4027, 2023 WL 144436 (E.D. Pa. Jan. 10, 2023), the Court acknowledged that landlords can be found liable for the criminal conduct of other parties when the landlord establishes a program of security. In Doe, Plaintiff asserted a claim of negligence against her college alleging that the school failed to provide adequate security after she was allegedly sexually assaulted in a dorm. Generally, a landlord owes no duty to protect its tenants from the criminal conduct of other parties. However, the Court found that an exception to Pennsylvania’s standard negligence law applied when a landlord establishes a program of security, the tenants reasonably rely upon it, and the landlord negligent carries out the program. In Doe v. Moravian College, the court found that there is evidence that the college had implemented a security program in the dormitories by requiring school identification cards to enter the dormitories, they used residential advisors in their dormitories, and that security workers were employed by the school. The school, therefore, owed a duty to the Plaintiff as a landlord. The College argued that no duty was owed because courts have stopped imposing a duty of loco parentis upon colleges and universities. However, the Court differentiated the case because the tortious act took place in a campus dormitory. Ultimately, the Plaintiff's case failed when she had to show that the College breached a duty to the Plaintiff by showing that the operation of the security program was negligent. Here, the Court found that the Plaintiff failed to provide evidence of the breach through a negligent security program. Thanks to Jean Scanlan for her contribution to this post. Should you have any questions, please contact Tom Bracken. Previous Next Contact

News UIM Coverage Does not Apply to Rented Vehicles, According to Eastern District (PA) November 8, 2018 < Back Share to: In Achenbach v. Atlantic Specialty, the plaintiff was a passenger in a rental car being driven by her co-worker, when the vehicle she was traveling in was rear-ended by a truck driver. The rental car was rented through the plaintiff’s employer, while the plaintiff and her co-worker were on a work trip in Wisconsin. Plaintiff suffered injuries as a result of the accident, and the truck driver was uninsured. As a result, the plaintiff sought uninsured motorist benefits through the car rental agreement, which offered coverage of up to $25,000.00. Plaintiff settled with the rental car insurer for the policy limit. As the plaintiff’s claimed damages exceeded that amount, she also sought secondary coverage through her employer’s insurance policy with Atlantic Specialty. In attempts to recover from Atlantic Specialty, plaintiff’s counsel and Atlantic Specialty exchanged email communications about her eligibility from July 2013 to October 2015. Plaintiff then demanded payment of the full amount of Atlantic Specialty’s policy as settlement for her outstanding claim, which was denied. Atlantic Specialty claimed she was not eligible for uninsured motorist insurance under the policy. Plaintiff then brought suit for breach of contract, bad faith and promissory estoppel. Atlantic Specialty removed the matter to federal court and filed a motion to dismiss. The Court, finding that Wisconsin law applied, dismissed plaintiff’s bad faith claim, as Wisconsin law did not support a viable claim for bad faith based on failing to investigate her claim and making misrepresentations during the claim adjustment process. Plaintiff argued that defendant breached its contract with her employer by denying the claim. Defendant responded that the policy did not provide coverage for uninsured motorist benefits to rented vehicles. The Court found that the plain language of the policy limited uninsured motorist coverage to owned vehicles and excluded rental vehicles. Plaintiff’s reliance on the alleged assurances from the defendant that the policy covered rental vehicles did not change the plain and unambiguous language of the policy. This claim was dismissed as well. Finally, plaintiff brought a promissory estoppel claim based on the representations made by the defendant’s employees as to the availability of uninsured motorist coverage during the claim adjustment process, and that she relied on those representations to her detriment. The Court agreed that plaintiff plead sufficient facts to support this claim, as the emails between the parties supported the assertion that the defendant made an “express promise” that the uninsured motorist coverage was available to plaintiff, which was reasonable. Therefore, this claim was allowed to proceed. This is a cautionary tale to avoid making any promises or representations to claimants during the adjustment process before making coverage decisions. Thanks to Alexandra Perry for her contribution to this post. Previous Next Contact

News Caution! Insurers Beware of New Medicare and Medicaid Reporting Requirements! September 29, 2009 < Back Share to: Overview Medicare is the U.S. government health insurance program that primarily covers U.S. citizens aged 65 and over. Under the Medicare Secondary Payer (MSP) statute, it is well settled that Medicare almost always bears secondary liability for Medicare beneficiaries' medical claims, while private group health plans, liability insurers (including self-insured plans), no-fault insurers and workers' compensation insurers carry primary liability. In other words, Medicare can insist that such insurers pay first for medical expenses where coverage overlaps and thus limit Medicare 's obligation to any shortfall. Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) put in place a new reporting system to help the Centers for Medicare & Medicaid Services (CMS), the federal agency that administers Medicare, recover from Medicare beneficiaries and insurers when Medicare erroneously pays primary or when a beneficiary receives payment from both Medicare and an insurer for the same injury. Section 111 requires insurers to electronically report substantial claims information to CMS if they are liable for the medical expenses of an injured Medicare beneficiary, whether due to a court judgment or settlement. These insurers must begin testing "dummy" claims submissions in the fall of 2009 and then report live claims data in the second quarter of 2010, or risk incurring steep monetary penalties. Failure to comply with Section 111 could subject insurers to civil money penalties of $1,000 for each day of noncompliance for each claimant whose information they did not report. Statutory Language 42 U.S.C.A. § 1395y: (2) Medicare secondary payer (B) Conditional payment (i) Authority to make conditional payment: The Secretary may make payment under this subchapter with respect to an item or service if a primary plan described in subparagraph (A)(ii) has not made or cannot reasonably be expected to make payment with respect to such item or service promptly (as determined in accordance with regulations). Any such payment by the Secretary shall be conditioned on reimbursement to the appropriate Trust Fund in accordance with the succeeding provisions of this subsection. 1(ii) Repayment required: A primary plan, and an entity that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any payment made by the Secretary under this subchapter with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service. A primary plan’s responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient’s compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means. If reimbursement is not made to the appropriate Trust Fund before the expiration of the 60-day period that begins on the date notice of, or information related to, a primary plan’s responsibility for such payment or other information is received, the Secretary may charge interest (beginning with the date on which the notice or other information is received) on the amount of the reimbursement until reimbursement is made (at a rate determined by the Secretary in accordance with regulations of the Secretary of the Treasury applicable to charges for late payments). (iii) Action by United States: In order to recover payment made under this subchapter for an item or service, the United States may bring an action against any or all entities that are or were required or responsible (directly, as an insurer or self-insurer, as a third-party administrator, as an employer that sponsors or contributes to a group health plan, or large group health plan, or otherwise) to make payment with respect to the same item or service (or any portion thereof) under a primary plan. The United States may, in accordance with paragraph (3)(A) collect double damages against any such entity. In addition, the United States may recover under this clause from any entity that has received payment from a primary plan or from the proceeds of a primary plan’s payment to any entity. The United States may not recover from a third-party administrator under this clause in cases where the third-party administrator would not be able to recover the amount at issue from the employer or group health plan and is not employed by or under contract with the employer or group health plan at the time the action for recovery is initiated by the United States or for whom it provides administrative services due to the insolvency or bankruptcy of the employer or plan. (iv) Subrogation rights: The United States shall be subrogated (to the extent of payment made under this subchapter for such an item or service) to any right under this subsection of an individual or any other entity to payment with respect to such item or service under a primary plan. (v) Waiver of rights: The Secretary may waive (in whole or in part) the provisions of this subparagraph in the case of an individual claim if the Secretary determines that the waiver is in the best interests of the program established under this subchapter. (vi) Claims-filing period: Notwithstanding any other time limits that may exist for filing a claim under an employer group health plan, the United States may seek to recover conditional payments in accordance with this subparagraph where the request for payment is submitted to the entity required or responsible under this subsection to pay with respect to the item or service (or any portion thereof) under a primary plan within the 3-year period beginning on the date on which the item or service was furnished. Section 411.37 Amount of Medicare recovery when a primary payment is made as a result of a judgment or settlement: 2 (a) Recovery against the party that received payment-- (1) General rule. Medicare reduces its recovery to take account of the cost of procuring the judgment or settlement, as provided in this section, if-- (i) Procurement costs are incurred because the claim is disputed; and (ii) Those costs are borne by the party against which CMS seeks to recover. (2) Special rule. If CMS must file suit because the party that received payment opposes CMS's recovery, the recovery amount is as set forth in paragraph (e) of this section. (b) Recovery against the primary payer. If CMS seeks recovery from the primary payer, in accordance with § 411.24(i), the recovery amount will be no greater than the amount determined under paragraph (c) or (d) or (e) of this section. (c) Medicare payments are less than the judgment or settlement amount. If Medicare payments are less than the judgment or settlement amount, the recovery is computed as follows: (1) Determine the ratio of the procurement costs to the total judgment or settlement payment. (2) Apply the ratio to the Medicare payment. The product is the Medicare share of procurement costs. (3) Subtract the Medicare share of procurement costs from the Medicare payments. The remainder is the Medicare recovery amount. (d) Medicare payments equal or exceed the judgment or settlement amount. If Medicare payments equal or exceed the judgment or settlement amount, the recovery amount is the total judgment or settlement payment minus the total procurement costs. (e) CMS incurs procurement costs because of opposition to its recovery. If CMS must bring suit against the party that received payment because that party opposes CMS's recovery, the recovery amount is the lower of the following: (1) Medicare payment. (2) The total judgment or settlement amount, minus the party's total procurement cost. 3 Overseas Insurers What this means for overseas insurers is unclear. The MMSEA statute is silent as to its application to overseas insurers, but CMS has stated informally that the reporting requirements apply to overseas insurers when they pay the bodily injury claims of Medicare beneficiaries. There are, however, serious questions as to whether CMS can lawfully extend its regulatory authority over non-U.S. companies in all circumstances. The Foreign Commerce Clause of the U.S. Constitution, the presumption against extraterritorial application of federal statutes and potential conflicts with privacy laws of other countries provide some of the strongest arguments against application of Section 111 to overseas insurers. The viability of each argument is dependent upon the factual circumstances of each claims transaction. Relevant factors include the type of insurance coverage involved, the insurer's U.S. contacts, the identity and location of the insured and how and where payment to the claimant is made. Special thanks to Georgia Stagias for her contributions to this post. Previous Next Contact

News A Burden as Light as New-Fallen Snow July 8, 2010 < Back Share to: New York's Second Department (covering Brooklyn, Queens, Long Island, and several counties north of the City) has issued a ruling "to discuss and clarify what a snow-removal contractor must show to establish its prima facie entitlement to summary judgment." The seminal case in this area of the law is Espinal v. Melville Snow Contractors, 98 NY2d 136, where New York's highest court ruled that "a contractual obligation, standing alone, will generally not give rise to tort liability in favor of a third party." In other words, the typical slip-and-fall plaintiff will generally not have a viable claim against the snow removal contractor. However, the court set out three exceptions to this general rule, to wit, (1) where the contractor negligently "launches a force or instrument of harm;" (2) where the plaintiff detrimentally relies on the contractor's performance of its duties; and (3) where the contractor has entirely displaced the owner's duty to maintain the property safely. In Foster v. Herbert Slepoy Corp., (dediced June 22, 2010), the plaintiff slipped and fell on snow/ice in the driveway/parking lot of the building where she lived. She filed suit against the both the owner/manager and against the contractor, Kerry Clancy. The plaintiff admitted at her deposition that she did not know of Clancy's role as the contractor nor even of Clancy's existence before filing suit. Clancy moved for summary judgment. The Foster court ruled that Clancy demonstrated his prima facie entitlement to summary judgment merely by coming forward with proof that the plaintiff was not a party to his contract and that he therefore owed no duty of care to the plaintiff. In other words, the contractor was not required to negate the possible applicability of the Espinal exceptions because there was nothing in the plaintiff's complaint or bill of particulars that alleged that any of the exceptions applied. The court explained that the initial burden on the contractor in moving for summary judgment is "governed by the allegations of liability made by the plaintiff in the pleadings." Here, once the contractor made his initial showing, the burden then shifted to the plaintiff to show that there was a question of fact as to the applicability of one of the three Espinal exceptions. In short, the contractor contemplating summary judgment must look to the pleadings to see if an Espinal exception is addressed. If it is not, the initial burden of making out a prima facie entitlement to summary jdugment is as light as new-fallen snow. Previous Next Contact

News Putting Car Collision Defenses to Rest (NY) June 21, 2019 < Back Share to: In New York, liability is almost certain against the driver of a vehicle that hits another vehicle in the rear. The reason is that the ‘stop short’ defense is not admissible by courts, as drivers should follow other vehicles at a safe enough distance that they can avoid colliding with a vehicle that happens to stop short. However, exceptions are made under the “Emergency Doctrine.” In Kabir v Yousuf the defendant hit a vehicle in the rear and injured the plaintiff, who was a passenger of his vehicle. At trial, the defendant asked the court to charge the jury with the “Emergency Doctrine” defense. The lower court denied the application and the defendant appealed. The Second Department reversed and held that the court erred in not allowing the jury to hear the charge. The Appellate Division found that the defendant driver hit a vehicle that had stopped short when the driver of the first vehicle noticed “six to seven mattresses sprawled all over the highway.” The appellate court reasoned that “where some reasonable view of the evidence establishes that an actor was confronted by a sudden and unforeseen occurrence not of the actor's own making, then the reasonableness of the conduct in the face of the emergency is for the jury.” Applying this principle to the facts of this motor vehicle accident, the Court held that the reasonableness of defendant’s conduct in the face of the emergency was for the jury to determine, even though it was the driver of the first vehicle that was actually faced with this emergency. A new trial on liability was ordered. Thanks to George Parpas for his contribution to this post. Please contact Georgia Coats with any questions. Previous Next Contact

News Federal Judge Slams the Brakes on Breach of Contract Claim Against Allstate for Vehicle Defect (PA) February 20, 2020 < Back Share to: Last Friday, an Eastern District of Pennsylvania judge held in Marella v. Allstate Insurance Co. that Allstate had no duty to fix the underlying mechanical issue that caused an insured’s vehicle to spontaneously accelerate and had caused two accidents because preexisting mechanical issues were not covered under the insurance policy. In November 2019, Marella’s vehicle spontaneously accelerated causing her to crash into a wall. Allstate covered the cost of the repairs caused by collision but took no action to have the underlying mechanical defect fixed. One month later, the vehicle once again spontaneously accelerated and caused Marella to crash into a store, causing her severe injuries. She then sued Allstate for breach of contract alleging that Allstate failed fix the mechanical issue, or at least very least, warn her that that it would not fix the issue. Under the insurance policy, Allstate must repair damage caused by collisions, acts of nature, and theft. The Court found that because Allstate repaired the damage caused by the collision with the wall, it had fulfilled its contractual obligation to Marella. Since nothing in the policy required Allstate to make repairs to the vehicle to fix the underlying mechanical issue causing the spontaneous acceleration, the Court granted Allstate’s motion to dismiss. The Court went further to indicate that Marella should have asked for relief under tort law, not contracts, citing to the Restatement (Second) of Torts § 323, which states that “a defendant may be liable for negligence when it ‘undertakes, gratuitously or for consideration, to render services to another’ and it does not exercise reasonable care in rendering these services.” However, since she did not, and because “[i]n non-civil rights cases, district courts have no obligation to offer leave to amend before dismissing a complaint unless the plaintiff properly requests it”, the Court had no option but to dismiss the case. Thus, this case illustrates the importance of a close reading of an insurance policy to determine what is actually covered under the policy. Thanks to Priscilla Torres for her contribution to this post. Please email Colleen E. Hayes with any questions Previous Next Contact

News Time is Ticking .... New Decision Issued on Untimely Disclaimers (NY) May 3, 2018 < Back Share to: The New York Appellate Division has confirmed that an insurer must immediately disclaim on late notice grounds even if it is in the midst of investigating whether other policy provisions apply. In AIU Ins. Co. v. Veras, the insurer prepared a disclaimer of coverage letter once it learned that the insured had failed to notify it of the claim in a timely manner. The insurer then waited 15 days to issue the disclaimer letter because it was continuing to investigate whether other policy provisions applied to bar coverage for the claim. The insured argued in a declaratory judgment action that the insurer had waived its right to disclaim on late notice grounds because it had waited too long to issue the disclaimer letter. The court agreed and ruled that the carrier’s 15-day delay constituted a waiver because an insurer has to immediately deny coverage on late notice grounds. The court disregarded the insurer’s ongoing investigation. The court did not discuss the impact of its ruling on the “one disclaimer” rule which requires an insurer to rely on all grounds for disclaiming coverage in one letter. Thanks to Mendel Simon for his contribution to this post. If you would like more information please write to mbono@wcmlaw.com   Previous Next Contact

News Missouri Court Affirms Arbitration Award For Damages For STI Contracted In Vehicle June 17, 2022 < Back Share to: In M.O. v. Geico General Insurance Company and Government Employees Insurance Company, a Missouri appellate court affirmed the confirmation of a large arbitration award stemming from a claim by a plaintiff that she sustained damages when she contracted HPV while having unprotected sex with her partner in his vehicle. Plaintiff submitted a settlement offer to her partner’s automobile insurer GEICO, asserting that its insured negligently infected her in his automobile, and that the GEICO policy provided coverage for her injuries. GEICO denied coverage and rejected her settlement offer. Plaintiff and the insured subsequently agreed to arbitrate plaintiff’s claims and an arbitrator found that the insured negligently infected plaintiff and awarded her $5.2 million in damages. Plaintiff filed an action to confirm the award while GEICO moved to intervene. The trial court confirmed the award and GEICO appealed asserting, among other things, that it was not given a meaningful opportunity to defend its interests or move to vacate the arbitration award. The Missouri Court of Appels, Western District, affirmed the trial court’s decision and found that GEICO had an opportunity to defend this matter during the arbitration and had no right to re-litigate the issues once the arbitration award was affirmed. GEICO also filed a declaratory judgment action in which it asserts that plaintiff’s damages have no nexus to the “ownership, maintenance, or use” of the vehicle, and that her injuries were caused by an intervening cause, namely her own failure to have protected sex. A decision regarding the coverage issues is pending. While the M.O. v. GEICO decision was procedural in nature, the case raises an interesting coverage issue that will be decided by a Missouri federal and could have a potential impact on automobile coverage in other states. WCM will monitor the coverage developments and provide an update in the future. Thank you to Gabriella Scarmato for her contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News The "Open and Obvious" Doctrine Has Natural Growth. August 23, 2010 < Back Share to: In Melendez v City of New York, the 13 year-old plaintiff fell off the ledge at the top of a waterfall within the grounds of Bronx River Park. The plaintiff went beyond a pipe rail fence and walked out onto the ledge of the waterfall. He then slipped and fell into the water. After a trial on the issue of liability, the court granted the City's motion to set aside the verdict. In affirming this decision, the First Department held that the waterfall and slippery ledge were both "open and obvious." Plaintiff's opposition relied on Westbrook v WR Activities-Cabrera Mkts. 5 AD3d 69 (2004), where the First Department previously rejected the open and obvious doctrine. In the oft-cited Westbrook decision, the court concluded the doctrine merely negated a duty to warn of the hazard, not the duty to maintain premises in a reasonably safe condition. Now, in Melendez, the court has adopted the post-Westbrook rule that the doctrine can apply to "natural geographic phenomena". This holding follows other Departments that have applied this exception to natural conditions including a whirlpool, a ten-foot cliff and a ravine. http://www.nycourts.gov/reporter/3dseries/2010/2010_06392.htm Special thanks to Bill Kirrane for his contributions to this post. If you haven an questions, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Plaintiff’s Pothole Predicament Prevails on Appeal (NY) August 15, 2019 < Back Share to: In Karpel v National Grid Generation LLC, plaintiff alleged a trip and fall over a raised edge in the roadway. At the time of the fall, excavation work was being done in the vicinity. After discovery, the defendants moved for summary judgment arguing that the alleged defective condition was trivial and therefore not actionable, or was open and obvious and not inherently dangerous. The Supreme Court granted the defendants’ motion, and the plaintiff appealed. The Appellate Division Second Department overturned the lower court’s decision. The Appellate Division held that defendants did not meet their prima facie burden. A defendant seeking dismissal of a negligence complaint on the basis that the alleged defect is trivial must make a prima facie showing that the defect is, under the circumstances, physically insignificant and that the characteristics of the defect or the surrounding circumstances do not increase the risks it posed. The hole measured approximately four-feet wide, eight-feet long, and at least one-inch deep. Although there were orange markings around its perimeter, the Court found the argument unconvincing. “Proof that a dangerous condition is open and obvious does not preclude a finding of liability ... but is relevant to the issue of the plaintiff's comparative negligence.” The Court held the hole was inherently dangerous, even if open and obvious, and therefore, not sufficient to be granted summary judgment. Thanks to Paul Vitale for his contribution to this post. Please contact Georgia Coats with any questions. Previous Next Contact

News When Being Special is not so Special (NY) August 21, 2019 < Back Share to: An injured plaintiff cannot bring a lawsuit in New York against his/her employer, since that person's remedy should be through workers' compensation, not through a Supreme Court lawsuit. Simple enough, right? But sometimes, whether a person is an "employee" is a nuanced questions. Plaintiff, Faunaude Matthews, was injured at the Metropolitan Museum of Art (MET) when he fell from the top of a file cabinet in an attempt to retrieve documents he needed for the job he was performing for Bright Star Messenger Center, LLC. Matthews was employed by Bright Star and was assigned to work for Metropolitan Data Corp. Metropolitan Data was contracted by the MET to do the job that Matthews was performing that resulted in his injuries. Matthews filed suit for personal injuries he allegedly sustained from the fall and named Bright Star, Metropolitan Data and the MET as defendants. Metropolitan Data alleged it was Matthew’s “Special Employer” so Workers’ Compensation Law (WCL) barred his claims against it. The court referenced Matthews own testimony that established he was Metropolitan Data’s “Special Employee” as a temporary employee hired by his general employer, Bright Star, and his work was supervised and controlled by Metropolitan Data. The Court further noted, Matthews received Workers’ Compensation benefits from Bright Star, therefore, suit was barred against Bright Star and Metropolitan Data, who established entitlement to summary judgment based on the WCL defense. Thanks to Jon Avolio for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Plaintiff's Comparative Negligence Does Not Trigger an Employer's Contractual Indemnification Obligation (NY) September 7, 2012 < Back Share to: In a bid to trigger an employer’s contractual indemnity provision, some defendants are arguing that the plaintiff’s comparative negligence constitutes the employer’s negligence. While creative, this argument, as discussed by the Second Department in Arrendal v. Trizechahan, is flawed and does not comport with the intent of indemnity provisions. In Arrendal, the plaintiff, a Daisy Subway employee, was injured while placing garbage into a trash compactor. He commenced suit against Trizechahan, the owner of the building, who in turn filed a third party claim against Subway Real Estate Group for contractual indemnification. Subway Real Estate Group then sued Daisy Subway, the plaintiff’s employer. The indemnity provision in the lease provided that Subway Real Estate Group would indemnify Trizechahn from losses caused by an agent or licensee of Subway Real Estate, which plaintiff was. It also provided that Subway Real Estate would indemnify Trizechahn from losses caused by employees of Daisy Subway, which plaintiff was. Trizechahn argued that plaintiff’s comparative negligence constituted negligence and, thus, triggered Subway’s indemnity obligations. The Supreme Court bought this argument, but the Second Department did not. It held that the term "negligence," as employed by the lease does not encompass the comparative negligence of the injured plaintiff. Rather, the indemnification provision would only be triggered in the event of a finding of negligence by the indemnitor’s agent or employee for a tort committed against the plaintiff. Thanks to Gabriel Darwick for his contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com . Previous Next Contact