News Footing the Bill Does Not Necessarily Entitle Insurers to Privileged Documents (PA) February 15, 2013 < Back Share to: A recent decision in the Eastern District of Pennsylvania suggests increased hostility to the adoption of an absolute rule that insurers are co-clients with their insureds for the purposes of discovery in declaratory judgment actions. In the case of CAMICO Mutual v. Heffler, Radetich, & Saitta, LLP, CAMICO insured the defendant accounting firm’s administration of class action settlement funds and agreed to defend same under a reservation of rights when sued for misappropriation of proceeds. However, in the midst of funding the firm’s defense, CAMICO elected to pursue a separate action for declaratory judgment stating that its coverage obligations under the policy were limited to $100,000. Litigation proceeded apace in both cases until CAMICO propounded discovery demands upon the firm seeking the production of documents created in the defense of the misappropriation action. Unsurprisingly, the firm took exception, prompting CAMICO to file the subject motion to compel. While the firm argued that the responsive documents were insulated from disclosure by the attorney-client privilege, CAMICO countered by asserting that its common interest in the underlying defense gave rise to an exception. Applying the substantive law of Pennsylvania, Judge Jan E. DuBois of the Eastern District noted that both state and federal courts have consistently split on the issue. Specifically, Judge DuBois explained that while some courts in both jurisdictions recognize an absolute co-client relationship between insurer and insured, Pennsylvania’s appellate courts have recently endorsed a case-by-case approach that focuses on how the parties interact with the joint attorneys and each other. Adopting the second standard, Judge DuBois ultimately held that a co-client relationship did not exist because the firm independently retained defense counsel before CAMICO involved itself in the claim. As a result, CAMICO’s shared interest in the defense, without more, was insufficient to constitute a waiver of the attorney-client privilege and the motion was denied. Although CAMICO’s consideration of the attorney-client privilege in coverage disputes is limited to those circumstances where defense counsel is independently retained, the decision illustrates a growing trend against an absolute rule in Pennsylvania. To be sure, however, the court itself recognized that its decision does not preclude the possibility of a co-client relationship in all cases. Special thanks to law clerk Adam Gomez for his contribution to this post. For further information, please contact Paul Clark at pclark@wcmlaw.com Previous Next Contact

News Failure to Read Policy No Longer Fatal in New York January 9, 2013 < Back Share to: Everyone knows that insurance policies do not make for good beach reading. Yet under long standing New York law, an insured was presumed to have read and understood the content of his or her insurance policy. Traditionally, if an insured had not objected to the policy upon delivery, under most circumstances, the insured was barred from suing the insurance broker for procuring insufficient insurance. Surprisingly, New York’s highest court recently declined to adopt this precedent in American Building Supply Corp. v. Petrocelli Group, Inc. Plaintiff hired the defendant, a broker, to obtain a commercial general liability policy that it was required to maintain pursuant to a lease. According to the plaintiff, it requested insurance coverage for losses involving injuries to its employees. Plaintiff allegedly advised the broker that only its employees used the insured building. But the policy contained an exclusion that provided: “This insurance does not apply to any actual or alleged ‘bodily injury’, ‘property damage’, ‘personal injury’ or ‘advertising injury’ to ... A present, former, future or prospective partner, officer, director, stockholder or employee of any insured.” Neither the plaintiff nor the broker read the insurance policy. One of plaintiff’s employees was subsequently injured at the insured premises. Plaintiff commenced an action against the insurer for coverage, but the appellate court upheld the exclusion. Plaintiff then sued its broker for negligence and breach of contract, alleging the broker had procured insufficient insurance. The broker moved for summary judgment, arguing that the plaintiff’s claim is barred because it accepted the policy without complaint. The Court of Appeals rejected the broker’s argument. The Court began by noting that it previously “left open the question of whether a plaintiff who has received an insurance policy and had an opportunity to read it and had not requested any changes is barred from recovery.” While the Court recognized that an insured should read its policy (and the failure could lead to comparative fault), it also recognized that many insureds “look to the expertise of [their] broker[s] with respect to insurance matters.” As such, the Court adopted the more “forgiving” rule, holding that an insured’s failure to read or comprehend an insurance policy does not bar an action for negligence against the insured’s insurance broker. This decision will certainly have an impact on broker litigation in New York. Thanks to Steve Kaye for his contribution to this post. If you have any question, please wrote to Mike Bono at mbono@wcmlaw.com .       Previous Next Contact

News 1st Party Replacement Cost Reimbursement Must Wait For Completion of All Repairs (NJ) August 31, 2017 < Back Share to: The adjustment of a first party claim for property damage resulted in a curious dispute between the homeowner and its insurer. In Hall v. Cumberland Insurance, the dispute arose out of windstorm damage to plaintiff’s home. The homeowner submitted a claim to Cumberland, and both retained independent adjusters to estimate the repair costs. Both adjusters agreed that the roof needed replacement and portions of the home’s interior repaired. Despite a dispute between the adjusters as to the replacement cost of the repairs, Hall agreed to the value placed by his insurer. Cumberland then deducted from the replacement cost depreciation and deductible. The plaintiff signed a proof of loss, and his insurer issued a check for the balance. Trouble came after the plaintiff had his roof repaired. At that point, he sought reimbursement for the replacement cost for just that component of his damages. Based upon its policy language that would allow for such a payment but only after the actual repairs were complete for the damaged building, Cumberland declined. Rather than completing all repairs and then seeking replacement cost reimbursement, the plaintiff filed suit. The Court found that the homeowner’s policy was clear. The insurer was not required to make piecemeal payments each time a component of the home was repaired. Inasmuch as the plaintiff sought payment only for a portion of the adjusted repairs, the insurer had no obligation to make any further payment. Both the lower court and appellate court took issue with the plaintiff’s lack of diligence in the litigation in general – missing deadlines and even failing to file opposition to Cumberland’s summary judgment motion. Only after the motion was granted did the plaintiff seek reconsideration. This dilatory attitude after a premature turn to the courts over a dispute that was at best a total of $5,000 likely had an impact on the ultimate outcome of the decision. Thanks to Sathima Jones for her contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com . Previous Next Contact

News Pennsylvania Federal Courts Respond To The Government Shutdown October 10, 2013 < Back Share to: In the wake of the October 1, 2013 government shutdown, federal courts across Pennsylvania have started preparing for what lies ahead. Although the federal courts have enough resources to support the courts for ten business days from the start of the shutdown, it is imperative for the courts to have a plan in the event that the shutdown outlasts their reserved funds. Thus far, courts are required to distinguish between essential and non-essential employees, the former being furloughed, and the latter working without pay through the shutdown. This has proven to be particularly difficult because the courts are already working with minimum employees and to have to furlough any employees would disrupt the basic functioning of the court. For this reason, federal courts in both New York and Pennsylvania have deemed all of their employees to be essential. Generally, the chief judges are free to choose how their courts will handle the government shutdown. For example, U.S. District Judge Joy Flowers Conti has delegated the power to plan for the shutdown to a select committee of judges and other interested parties. However, even with the shutdown looming over the federal courts, nearly all are hoping to continue with their regular schedule. Therefore, even those attorneys who have been furloughed by federal agencies, aside from those who represent non-emergency civil cases, are expected to appear on their scheduled dates in order to ensure the continued functionality of the federal courts during the shutdown. Special thanks to Colleen Hayes for her contributions to this post. For more information, please contact Nicole Y. Brown at nbrown@wcmalw.com . Previous Next Contact

News Injured Snow Tuber Successfully Maneuvers through Summary Judgment Motions (NY) February 27, 2019 < Back Share to: In Jamjyan v. West Mountain Ski Club, Inc., the plaintiff was injured at a snow tubing park. She commenced this personal injury action against the defendants, the owners and operators of the tubing park, alleging that a park attendant caused the accident by prematurely unhooking the tow rope from the snow tube the plaintiff was sitting in while being towed to the top of the hill. The defendants moved for summary judgment dismissing the complaint on the ground that the action was barred by the doctrine of assumption of risk. The Supreme Court denied the motion, and the defendants appealed. The Appellate Division, Second Department reviewed the facts and concurred with the lower court’s decision in its granting of summary judgment. Although there is an inherent danger in skiing and snowboarding, the other prong of the test was that the defendant was not reckless or engaged in conduct not inherent in the activity. Assumption of risk is not an absolute defense, but a measure of a defendant's duty of care. Here, in opposition to the defendants' prima facie showing, the plaintiff raised a triable issue of fact as to whether the allegedly unexpected action of the tubing park attendant, in prematurely unhooking the plaintiff's snow tube from the tow line, created a dangerous condition over and above the usual dangers that are inherent in the sport of snow tubing. Plaintiff also provided an affidavit from an expert stating that the defendants’ actions were not reasonable and would foresee a dangerous condition. Thanks to Paul Vitale for his contribution to this post. Previous Next Contact

News We Didn’t Start the Fire: First Dept. Reverses Trial Court and Grants Summary Judgement to Landlord February 9, 2017 < Back Share to: New York City real estate is often a Darwinian landscape with cramped living spaces and high prices. Despite this, if you are not prepared to deal with the conditions, a hundred other people will gladly stand in line to do so. However, disputes often arise between a tenant and landlord/management for injuries allegedly sustained within the premises due to appliances, stairways, and/or maintenance. In the matter of Sandra Kaplan v. Tai Properties, LLC, et al, a tenant plaintiff sustained a burn to her head when she used a match to try to light a burner on the top of her gas stove because the stove’s igniter did not work. The Supreme court’s denial the defendants’ motion for summary judgment was unanimously reversed by the First Department Appellate Division. The plaintiff herself had bought the stove and had it installed. The lease between the parties required the landlord to repair and maintain any appliance provided by the landlord, but imposed no specific duty to repair or maintain appliances supplied by the tenant. The Court found that since no duty to repair the appliance was imposed by statute, by regulation or by contract, the defendants were not liable. Plaintiff’s allegation that the accident was related to a condition created by defendants in the course of a gas pipe replacement project in the building was unsupported by the evidence. Defendants demonstrated that the project was performed by a licensed contractor, pursuant to permits, and was inspected and certified as safe when it was completed which was two year before the accident. The property manager also testified that the project did not involve any work on plaintiff’s stove, except to make sure that there was gas service with no leaks. This case demonstrates that merely because an injury was sustained within the premises is not enough to create fault. Further, management companies and landlords that follow proper procedures and document the same, can significantly increase their chances of dismissal in an instance when the alleged occurrence was not their creation and fault. Thanks to Justin Pomerantz for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News There's Still No FSMA Will. January 19, 2012 < Back Share to: The more things change, the more they stay the same (with apologies to Heraclitus). We have spilled much ink (or at least web space) writing on the FSMA and the lack of budgetary clout to support its ambitions. According to recent reports, an additional $1.5 billion is required to fully fund the FSMA's lofty ambitions. We think it is doubtful, in the current political and economic climate, that the funding will arise (unless, of course, there's a major food borne illness catastrophe). In the meantime, the FSMA will largely remain a toothless tiger. For more information about this post or WCM's product recall practice, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Art Dealers Are Not Professionals? October 29, 2009 < Back Share to: On October 22, 2009, Judge Eileen Bransten dismissed a complaint by a disgruntled art dealer, charging another art dealer with fraud, negligent misrepresentation, and unjust enrichment. Plaintiff Seung, a Korean art dealer, claimed that New York art dealer Mary Dinaburg represented that a work by Julian Schnabel was worth at least $500,000. On that basis, Seung purchased the work for $380,000. But, soon after concluding the purchase, Seung began to do her own due diligence as to the Schnabel’s worth. Seung discovered that some months earlier the work sold at Philips de Pury for $156,000 (against estimates of between $60,000 and $80,000) and that the likely market value was no more than $110,000. Understandably unhappy, Seung charged Dinaburg with fraud and related theories of misrepresentation. But Judge Bransten saw things differently: “In the context of an arm’s length transaction, Seung’s blind reliance on Dinaburg’s alleged statements of the painting’s value is not reasonable as a matter of law.” In dismissing the charge of negligent misrepresentation, Judge Bransten held that art dealers, unlike professionals such as lawyers and engineers -- absent special circumstances -- do not owe a special duty of care to their clients. While Judge Bransten carefully reviewed existing case law on the distinction between “puffery” and actionable misrepresentations, it seems clear that the court placed great weight on the fact that Seung, a sophisticated buyer, failed to conduct any of her own due diligence before agreeing to the purchase. http://www.nylj.com/nylawyer/adgifs/decisions/102709bransten.pdf Previous Next Contact

News Governmental Standards Not Necessarily A Safe Haven For Products Liability Claim (PA) July 8, 2016 < Back Share to: Is evidence of a product’s adherence to governmental standards admissible in strict liability cases in Pennsylvania? Short answer, maybe. The Pennsylvania Superior Court was faced with this issue in Webb v. Volvo Cars of North America. In Webb, a tangled logic examined whether such evidence, which might be admissible with respect to a negligence claim, should be permitted in an action based in solely in strict liability. Seemingly at odds were the Supreme Court decision of Tichner v. Omega Flex, Inc. that Volvo argued would permit such evidence and plaintiff's reliance upon Lewis v. Coffing Heist Division and Gaudio v. Ford Motor Co. that would prohibit it. In Webb, the trial court allowed evidence that the defendant’s product design adhered to governmental standards. The jury returned a defense verdict, and the plaintiff appealed. The Pennsylvania Superior Court concluded that the trial court erred by not instructing the jury to disregard the governmental standards evidence and granted the plaintiff a new trial. So does this ruling mean that the introduction of the evidence was improper? It would seem that the Court addressed that issue, right? Well not exactly. The issue was whether or not the Pennsylvania Supreme Court overruled Lewis and Gaudio, the cases that prohibited the admission of governmental standards evidence, with its decision in Tincher v. Omega Flex. The Webb Court left the “admission” question on the table. That said, until the issue reaches the Pennsylvania Supreme Court it seems that defendants should continue to inform juries of how their products were produced in accord with those standards created by the state and federal government. Thanks to Marcus Washington for his contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com . Previous Next Contact

News No Good Deed Goes Unpunished In A Snow Storm (NY) February 4, 2021 < Back Share to: The case of Edwin Coreano v 983 Tenants Corp., 2021 NY Slip Op 00289 (2nd Dept. 2021) involves a slip and fall on a stairway during an ongoing snowstorm. After discovery was complete, the defendant building owner moved for summary judgment arguing that he should not be held liable under the “storm in progress” rule. The trial court denied the summary judgment and defendant appealed to the Second Department. The Second Department affirmed the lower court decision. Under the “storm in progress” rule, a property owner will not be held liable for accidents occurring as a result of snow or ice on its property until an adequate period of time has passed after the storm has ended, giving the property owner an opportunity to clean up the hazardous snow or ice. However, a caveat of this rule is that if a storm is ongoing, and a property owner chooses to remove some snow during the storm, then he must do it with reasonable care or he could be held liable for creating or exacerbating the natural hazards caused by the storm. Defendant made efforts to clean the snow during the storm, and failed to show that his efforts did not create or exacerbate the hazardous conditions causing plaintiff’s accident. This case confirms that a property owner can wait until a storm passes to begin to clear snow, and will not be held liable for a slip and fall accident during a storm in progress. However, if the property owner chooses to take affirmative steps to clean the snow or ice during the storm, then he runs the risk of liability if he creates or exacerbates a hazardous condition. Thanks to Raymond Gonzalez for his contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News Proposal in NY Could Require Business Interruption Coverage for COVID-19 Pandemic April 3, 2020 < Back Share to: A bill proposed in the New York State Legislature might have a far-reaching impact for insurers. On March 27, 2020, the New York State Legislature introduced a bill that would require every policy of insurance insuring against loss or damage to property to include coverage for business interruption during the COVID-19 pandemic. The proposed bill seems to be an attempt to force insurers that provide loss of business coverage to indemnify the insured for COVID-19 related closures and losses. Bill A10226 provides in relevant part: Every policy of insurance insuring against loss or damage to property, which includes the loss of use and occupancy and business interruption, shall be construed to include among the covered perils under that policy, coverage for business interruption during a period of a declared state emergency due to the coronavirus disease 2019 (COVID-19) pandemic. The bill indicates that coverage is subject to policy limits, and that it only applies to policies issued to insureds with less than 100 employees. Given the fact that almost every business in New York is impacted by COVID-19, this proposed bill might have an alarming impact for insurers. Thanks to John Lang for contributing to this post. Please email Heather Aquino with any questions. Previous Next Contact

News Don't Admit That! Notice To Admit Cannot Include Ultimate Issue in Case (NY) July 11, 2013 < Back Share to: Parties often utilize a Notice to Admit in anticipation of trial, in order to stipulate to agreed upon issues, thereby saving time, expense and needless disputes prior to and during trial. However, if an issue is not necessarily "agreed upon," then a Notice to Admit is, technically, an inappropriate device. In Ramcharran v. Airport Services New York , LLC, a plaintiff asked the Court to deem, via Notice to Admit, that on the date of loss, "the motor vehicle owned and operated by the defendants was in contact with the plaintiff." Plaintiff served this Notice pre-discovery, and defendants clearly had objections to that unconfirmed admission. After moving for a protective order as per the CPLR, Judge Hart in Queens Supreme Court denied defendant's motion. The Second Department reversed, citing both the inappropriate use of the protective order, and more importantly to attorneys, the defendants' timely objection thereto via CPLR 3103 motion. The lesson here is that the defendant's motion for a protective order was timely - had counsel waited several months to so move, it is unclear when the Second Department would have been as receptive. As an aside, attorneys should always read Notices to Admit carefully, as they may contain one prejudicial admission buried within several innocuous admissions, in an effort to "sneak a fastball past" opposing counsel. While such a tactic could be considered unfair dealing, it's always better to spot such dealing earlier than later. Special thanks to Brian Gibbons for his contribution. For more information contact Denise Fontana Ricci at dricci@wcmlaw.com .   Previous Next Contact