Wade Clark Mulcahy LLP

News Recent Wave Of High Jury Verdicts In Premises Liability Cases March 4, 2022 < Back Share to: Highlighted by a recent decision by CVS Pharmacies, to close around 900 stores across the country after a Georgia court upheld a $43 million premises liability verdict against the company, there has been a noted increase in high verdicts across the United States. These premises liability cases have involved a number of issues, including criminal acts and inadequate security. The string of recent results has led some commercial insurers to refine their underwriting standards to ensure that their retail business have adequate security measures in place. Nationwide, verdicts in excess of $10 million appear to be on the rise. Verisk, which compiles insurance data from around the country, reported that the average size of jury awards climbed almost 1,000% from 2010 to 2018, to about $22 million. The increase in these verdict amounts has led to some insurance companies reconsidering their policies to increase their levels of reinsurance in areas with plaintiff-friendly jurisdictions. Thanks to Alexander N. DiMeo for his contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News Importance of Written Underwriting Guidelines October 27, 2008 < Back Share to: A New York Appellate Court recently allowed an insurer to rescind its policy, ab initio, because the written underwriting guidelines supported the carrier's claims that the same policy would not have been written if the insured had accurately described its loss history. Insurers that discover the insured made an incomplete or inaccurate disclosure in applying for coverage should certainly consider filing for recision. But in order to prevail at the motion practice stage, extrinsic evidence beyond the underwriters' testimony is often the difference maker. http://www.courts.state.ny.us/ad4/court/Decisions/2008/06-06-08/PDF/0574.pdf Previous Next Contact

News PA Supreme Court Rejects Two Civil Procedure Changes That Would Have Impacted Insurers. November 20, 2009 < Back Share to: The PA Supreme Court Rules Committee has apparently declined to proceed with two proposed changes to the rules of civil procedure that would have impacted insurers. The first proposal, Recommendation 240, would have amended Rule 1020 to require pleading a single cause of action to recover for personal injury and property damage arising from the same accident. This would have had a large impact on subrogation cases (especially in the auto context) where a carrier paid a property damage claim, but then the insured wished to proceed with a personal injury action. Under the now rejected amendment, all of the claims would have had to have been brought in the same lawsuit. Recommendation 239 has also been tabled. Under this recommendation, Rule 212.3 and 212.5 would have been amended to give the court more authority to require the presence of an insurance representative at pre-trial and settlement conferences. Previous Next Contact

News Stylish Setback: Tory Burch's Coverage Denial Amid New Jersey's COVID-19 Shutdowns December 15, 2023 < Back Share to: Insurance coverage for commercial retail stores is an essential safeguard against potential risks and unforeseen circumstances. However, within these policies, exclusions can significantly impact the extent of coverage, especially when it comes to clauses pertaining to 'contamination.' In the case of Tory Burch, LLC v. Zurich American Insurance Company in the Superior Court of New Jersey, Appellate Division, Plaintiff Tory Burch sought to appeal an order granting defendant Zurich American Insurance Company’s motion to dismiss because coverage was not afforded under the policy. Tory Burch is an American women’s fashion brand with over 300 stores globally, with three located in New Jersey. Tory Burch purchased an all-risk insurance policy from Zurich for the policy period from December 31, 2019 to December 31, 2020, and renewed for the period from December 31, 2020 to December 31, 2021. The policy insures against “direct physical loss of or damage to” Tory Burch’s property. The policy also contains an exclusion barring coverage for “contamination”, meaning “the actual presence of any foreign substance… bacteria, virus, disease causing or illness causing agent…”, including the inability to use or occupy property. As we all know, in response to the global COVID-19 pandemic, Governor Phil Murphy of New Jersey declared a state of emergency and issued executive orders to suspend all non-essential business operations, including retail stores such as Tory Burch. As a result, Tory Burch was forced to close its business to the public from March to May 2020. Tory Burch alleges it suffered substantial losses of business and income due to the executive orders. Defendant Zurich denied Tory Burch’s claim, stating that there was no coverage for COVID-19 losses and that the contamination exclusion barred coverage. Tory Burch then sued Zurich in New Jersey’s Union Superior Court in March 2021 for breach of contract. In response, Zurich filed a motion to dismiss which was granted by the trial court. Tory Burch appealed, arguing that the executive orders constituted physical loss or damage to the business, and that the contamination exclusion did not bar coverage. Tory Burch argued that it was the executive order that closed the business, not COVID-19. As such, Tory Burch argued that the contamination exclusion should not apply. The Appellate Court rejected this argument and upheld the trial court’s order. The Appellate Court reasoned that the governor’s orders prevented Tory Burch from operating its business, but it did not “physically deprive the company from possessing it” so there was no direct or physical loss. The Appellate Court also found that the contamination exclusion applied because COVID-19 was the cause of the governor’s orders, and therefore coverage was barred. Plaintiff further argued that the Policies’ Contamination Exclusion violated the doctrine of regulatory estoppel, and the trial court should have barred defendant from invoking the Exclusion. The basis of Plaintiff’s argument was that the insurance industry misrepresented the scope of the Exclusion language as it sought approval of the Virus Exclusion from regulators by claiming the Exclusion would not result in a reduction of coverage. However, the appellate court affirmed the trial court’s findings that the doctrine of regulatory estoppel cannot serve to estop the exclusion based on what defendant represented to another sovereign. The appellate court held that the record was devoid of any evidence of a false statement or misrepresentation to a regulatory body regarding the scope of the virus exclusion and rejected Plaintiff’s argument. The holding in this case directly follows the reasoning of a previous New Jersey case, Mac Property Group LLC v. Selective Fire & Casualty Insurance Co. , 278 A.3d 272 (N.J. Super. Ct., App. Div. 2022). COVID-19 has impacted various commercial businesses. Case law is now emerging that provides some insight for how the courts will handle the pending insurance claims related to various aspects of COVID-19. Tory Burch LLC v. Zurich American Insurance Company .pdf Download PDF • 173KB Previous Next Contact

News Does OSHA Give Employees A Right Of Action? Question Addressed In PA May 26, 2023 < Back Share to: In Jane Doe v. Eugene Scalia, appearing in front of the Court of Appeals Third Circuit, plaintiff Jane Doe presented a matter of first impression to the court which found that the OSHA Act mandates the dismissal of a §662(d) claim once the Department has completed its enforcement proceedings. The case decided whether Section 13(d) of the OSHA Act gives employees a private right of action to remediate dangers in the workplace specifically, whether an employee may maintain an action against the Secretary of Labor seeking relief for dangerous working conditions after the Department of Labor has completed enforcement proceedings. Plaintiffs are employees at a Meatpacking Plant located in Dunmore Pennsylvania. The Plant’s workers argued that they were exposed to COVID-19 for the first time in early 2020. As the virus spread, plaintiffs became concerned that the Plant had taken inadequate COVID-19 prevention measures. Plaintiffs notified OSHA who proceeded to conduct a “non-formal” inspection which proceeded through a document exchange. Plaintiffs repeatedly notified OSHA expressing dissatisfaction with the inspection, which they claimed had not addressed the dangers they were facing. In the OSH Act of 1970, Congress created the Occupational Safety and Health Administration (“OSHA” or “the Agency”) to develop and enforce workplace safety standards. In general, OSHA, rather than private litigants, is responsible for assuring workplace safety. In furtherance of that objective, the OSH Act funnels safety grievances through OSHA’s administrative processes. Various sections of OSHA establish authority to conduct workplace inspections, authorize the ability to issue “citations”. In addition to the OSH Act’s standard enforcement procedures, Congress also provided expedited mechanisms in § 662 for remedying workplace hazards requiring immediate attention. The expedited mechanisms provide that the Secretary may seek injunctive relief against an employer and an employee may seek a writ of mandamus against the Secretary to address “imminent danger[s]” in the workplace. Id. § 662(a), (d) and, in relevant part here, § 662(d) authorizes a limited private right of action. In its decision, the court held that § 662(d) “private right of action” gives no indication that Congress intended the “such further relief” language to permit employees to challenge OSHA’s determinations outside of the imminent-danger context. Instead, the “such further relief” language is linked to the injunctive remedy. Id. § 662(d). In deciding this the court acknowledged that it appreciate Plaintiffs’ concern that this interpretation of § 662(d) means that it will provide an avenue for relief in only limited circumstances but affirmed that such a limitation is exactly what Congress intended in enacting § 662. The proper reading of § 662 is that Congress inserted § 662(d) as a safeguard against a failure by OSHA to address an imminent danger while its own enforcement proceedings are ongoing. Thanks to Dominika Rybaltowski for her contribution to this post. Please contact Heather Aquino with any questions.   Previous Next Contact

News WCM Wins Dismissal Involving Overseas Trip Sponsored By Charitable/Religious Organization (NY) June 5, 2017 < Back Share to: Senior Partner Paul Clark and Associate Peter Luccarelli III successfully convinced the Appellate Division, First Department to reverse a New York County trial court’s decision denying our client’s motion for summary judgment in an alleged sexual assault case. Lerner involved a claim of a 19 year old participant in an overseas trip by our client, a charitable and religious organization. At the end of the day’s sponsored activities, plaintiff and several other trip participants, all of whom were of legal drinking age, retired to the hotel bar. At the hotel bar, plaintiff met, and later left with other male hotel guests who were not members of the trip. Hotel personnel later found plaintiff disoriented in a hallway, and the investigating officers determined that she may have been sexually assaulted and possibly drugged by her assailants. Plaintiff filed suit against our client for allegedly failing to properly supervise her and prevent her assault at the Hotel after all sponsored activities were over. We moved for summary judgment on the basis that there was no duty to supervise an adult who drank in a hotel bar not owned, maintained, or controlled by our client. We further argued that any duty of care owed by our client to plaintiff was severed by the acts of the criminal third-parties who were unknown to our client. The trial court initially denied our motion on the basis that our client failed to prevent plaintiff from drinking excessively. On appeal, the First Department unanimously reversed the trial court order and granted our motion for summary judgment. The First Department held that even assuming a duty to prevent an adult plaintiff from drinking excessively, there was nothing our client could have done to prevent plaintiff’s alleged assailants from perpetrating an unforeseeable—and unfortunate—criminal act against her. If you have any questions about this post, please email Paul at pclark@wcmlaw.com . Previous Next Contact

News NJ Court Rejects Appeal of Order Confirming Arbitration Ruling that a Pennsylvania Auto Insurer Was Not Subject to the NJ Deemer Statute March 22, 2024 < Back Share to: In Comprehensive Pain Solutions of New Jersey, PC a/a/o William Beard v. Omni Insurance Company , the New Jersey Appellate Division recently rejected an appeal of a Law Division judge’s decision to deny an application to vacate a personal injury protection (“PIP”) arbitration award under the Alternative Procedure for Dispute Resolution Act (APDRA). The lawsuit arose from the plaintiff’s PIP claim against Omni Insurance Company (“Omni”) for reimbursement of bills for medical treatment rendered to Omni’s insured, William Beard. Mr. Beard was a Pennsylvania resident who was injured in a New Jersey car accident. Omni is a Pennsylvania automobile insurer which is not licensed or authorized to do business in New Jersey. Beard's policy had a $5,000 limit for medical expense benefits, which was exhausted when plaintiff submitted the bills. The legal dispute centered on whether Omni was subject to New Jersey’s "deemer" statute, N.J.S.A . 17:28-1.4, which generally requires insurance companies authorized to conduct automobile insurance business in New Jersey to provide certain coverages in out-of-state policies when the insured vehicle is operated in New Jersey. Plaintiff claimed that despite the exhaustion of the PIP limits, Omni was required to provide PIP coverage up to $250,000 per accident as prescribed by N.J.S.A. 39:6A-4(a). The DRP denied the claim, finding that the limits were exhausted, and Omni was not subject to the deemer statute since it was not licensed or authorized to do business in New Jersey. Plaintiff sought to vacate the award through a summary action in the Superior Court, asserting that the DRP committed prejudicial error by misapplying the law to the facts. The judge agreed with the DRP and denied the application, finding that Omni did no business in New Jersey and that its parent, which was a New Jersey company, had no control over or relationship with Omni. The Appellate Division dismissed plaintiff’s appeal, finding that N.J.S.A. 2A:23A-18(b) bars appellate review of a trial judge's decision to confirm, vacate, or modify an arbitration award except in rare circumstances that did not apply in the case. In so holding, the Court observed that appellate review is “generally not available” to challenge a trial judge’s order issued in cases under the APDRA and that absent “rare circumstances”, an appellate court has no jurisdiction to do anything other than recognize that the judge acted within his or her jurisdiction. The Court found that the Law Division judge properly exercised his authority under the APDRA and adhered to the statutory grounds in confirming the arbitration award. Accordingly, the Court dismissed the appeal for lack of jurisdiction. This case highlights the limited power that courts have to review arbitration awards and provides persuasive authority for the holding that an out of state insurer will not be required to provide higher limits under New Jersey's PIP statute if they are not licensed or authorized to do business in the state. Comprehensive Pain Solutions of New Jersey PC v. Omni Insurance Company .pdf Download PDF • 168KB Previous Next Contact

News Surveillance Footage Key To Establishing Open And Obvious Defense (NY) September 9, 2022 < Back Share to: New York courts generally hold that a landowner has no duty to warn of open and obvious dangers. In Lebron v. City of New York, the Appellate Division, Second Department recently addressed whether an inspection pit that plaintiff fell into on the defendants’ property was an open and obvious, and not inherently, dangerous. The defendants introduced surveillance of the accident as evidence of the nature of the condition, but the Supreme Court denied their motion for summary judgment. On appeal, the Second Department observed that: "A landowner has a duty to exercise reasonable care in maintaining [its] property in a safe condition under all of the circumstances, including the likelihood of injury to others, the seriousness of the potential injuries, the burden of avoiding the risk, and the foreseeability of a potential plaintiff's presence on the property". However, "there is no duty to protect or warn against an open and obvious condition that, as a matter of law, is not inherently dangerous" or "where the condition on the property is inherent or incidental to the nature of the property and could be reasonably anticipated by those using it". Based on this framework and the evidence provided by the defendants, the Second Department reversed and held that the inspection pit that plaintiff fell into was an open and obvious condition and the Supreme Court should have granted defendants’ motion for summary judgment. The Lebron decision serves as a reminder that the open and obvious defense can serve as a complete defense in applicable cases and that video surveillance of an accident can be beneficial to establish this defense. Thank you to Corey Morgenstern for his contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News When Policy Exclusions Apply, Brokers Beware May 11, 2018 < Back Share to: Last week in Houston Gas Co. v. Cavan Corp. of NY, Inc., the First Department reminded insurance brokers of potential exposure should a policy they procure for an insured fail to cover a liability. In July 2012, Cavan was retained to act as construction managers for a building project in Manhattan. For their services, Cavan was to be paid a flat $600,000 fee. Unfortunately for Cavan, when a subcontractor sued for an injury on the job site, they learned their commercial general liability policy contained an exclusion for losses arising out of construction management services performed for a fee. The First Department reversed the denial of Houston Casualty Company’s motion for summary judgment, and ruled the exclusion barred coverage. However, the First Department also denied Ducey’s—Cavan’s insurance broker—motion to dismiss, and granted Cavan’s motion to add a causes of action for negligence, breach of contract, and negligent misrepresentation against Ducey. In a unanimous decision, the Appellate Court reiterated that individuals who are denied coverage for losses are entitled to recover damages from the insurance broker under a breach of contract theory if the policy obtained does not cover a loss for which the broker contracted to provide insurance, and the insurance company refuses to cover the loss. In addition, an insured may sue a broker under a negligence theory should the broker fail to exercise due care in a brokerage transaction. Last, a negligent misrepresentation cause of action may arise when a special relationship exists between the customer and the broker and the customer reasonably relies on the broker’s representations. Here, Cavan claimed it met annually with Ducey over the course of many years to discuss insurance needs and claimed it relied on Ducey’s advice, which was a sufficient factual pleading to suppot a claim for negligent misrepresentation. The Houston Cas. Co. Court cited our firm’s recent victory in Dae Assocs., LLC v. AXA Art Ins. Corp. in support of this last point. In Dae Assocs., LLC, the insured merely alleged a longstanding relationship, which is insufficient on its own to establish a special relationship. Cavan’s allegations rose to the level of a potential special relationship. While these cases provide further help to insurers in asserting disclaimers of coverage based on policy exclusions, they also should serve as a warning to the potential exposure for brokers in the event of successful disclaimers. Thanks to Nick Schaefer for his contribution to this post. Please write to Tony Pinto for more information. Previous Next Contact

News NY City Liable When Police Bust Drug Dealer? April 16, 2012 < Back Share to: A municipality is generally not liable for negligent police protection absent a “special relationship” with the plaintiff. A special relationship can be established if the municipality assumed an affirmative duty to act, had knowledge that inaction could lead to harm, had direct contact between its agents and the injured party, and the injured party justifiably relied on the municipality’s affirmative undertaking. This principle was tested in Matican v. City of New York. The plaintiff had been arrested after purchasing drugs from a certain drug dealer. While in custody, the plaintiff agreed to become a confidential informant to help the police arrest the dealer. The plaintiff did so under the proviso that the police would arrest the dealer under the pretext of an ordinary traffic violation and that, if the dealer made bail and came after the plaintiff, the police would protect him. The next day, the plaintiff called the dealer to meet at their agreed spot. Each time they had met at this spot in the past, the dealer made an illegal U-turn. Instead of living up to the arrangement and stopping the dealer for making an illegal U-turn, the police swarmed the dealer’s car by emerging from three separate police cars. They then tore the car apart, eventually finding the drugs in the dealer’s underwear. When the dealer made bail, he went after the plaintiff for ratting on him. Although the Supreme Court granted summary judgment to the City, the Second Department reversed, finding that there were issues of fact as to whether the City assumed an affirmative duty to (1) protect the plaintiff by concealing his identity when they arrested the dealer, and (2) to protect the plaintiff from retaliation. Thanks to Gabriel Darwick for his submission. Previous Next Contact

News Harm but no Foul: School not Liable for Injury During Gym Class (NY) September 25, 2009 < Back Share to: In Paragas v. Comsewogue Union Free School District, the infant plaintiff was injured when he accidentally collided with another student during gym class. Plaintiff brought an action against the school district for negligent supervision. Stating that the school's standard of care to be exercised toward the student is that of a reasonably prudent parent, the Appellate Division found that the defendant provided adequate supervision. The children in the gym class were playing an age-appropriate game and the supervising teacher had several years of experience. Moreover, any alleged inadequacy in the supervision was not a proximate cause of the accident. The collision was accidental and more intense supervision would not have prevented it. Accordingly, the Appellate Division determined that the trial court properly granted defendant's motion for summary judgment dismissing the complaint. Thanks to Stephanie Chen for her contribution. http://www.courts.state.ny.us/reporter/3dseries/2009/2009_06521.htm Previous Next Contact

News Education Doesn't End with High School At Group Home for Charitable Immunity Act in NJ December 16, 2010 < Back Share to: “A rose by any other name would smell as sweet.” Yet, when it comes to application of the Charitable Immunity Act every effort is made to re-label and rename the essential nature of an eligible organization to avoid the immunity offered. In a tragic case involving the death of a developmentally disabled young resident of a community group home, his estate tried to portray the home as other than an educational organization. The decedent had been a resident from age eight to twenty-one. He had attended elementary and secondary education with the program. Even after attaining the age of eighteen, he was still subject to an Individual Habilitation Plan that addressed his continuing life skills development. This Plan included a goal with respect to small convenience store purchases. It was during an outing to a convenience store that the decedent choked on a bagel, which ultimately resulted in his death. Despite arguments that the educational scope of the organization should be limited in time to when the decedent attended school, the Court found as a matter of law that his continued participation in life skills training fell within the home’s educational mission. However, since the organization’s by-laws listed its organizational purpose as exclusively “charitable,” the Court also looked at the home’s entitlement to immunity under this more generic qualifier. While an exclusively “educational” organization need not prove its “charitable” status through funding information, this is not so for a more broadly defined charitable organization. Although the organization raised less than 2% of its revenue from charitable donations (about $1.1 million), the court disagreed that a pre-set revenue percentage factor would be determinative of the charitable status of the organization. The Court concluded that the combination of educational and charitable elements for the group home clearly placed it within the ambit of the Act. See Komninos v. Bancroft Neurohealth, Inc., http://www.judiciary.state.nj.us/opinions/a4041-09.pdf If you would like more information, please contact Denise Ricci at dricci@wcmlaw.com Previous Next Contact