News Insurers Cannot Mandate IME's on First-Party Claims Without Court Order (PA) December 11, 2019 < Back Share to: In a case we have been monitoring since we posted about it in February, the Supreme Court of Pennsylvania recently held that an automobile insurance policy provision regarding independent medical examination requirements was void and against public policy because it conflicted with 75 Pa.C.S. §1796(a) of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”). The Court answered a certified question from the United States Court of Appeals for the Third Circuit asking: “Does an automobile insurance policy provision, which requires an insured seeking first-party medical benefits under the policy to submit to an independent medical exam whenever the insurer requires and with a doctor selected by the insurer, conflict with 75 Pa.C.S. §1796(a) of the PA MVFRL, such that the requirement is void as against public policy?” Sayles v. Allstate Ins. Co., No. 58 MAP 2018, 2019 WL 6138409 (Pa. Nov. 20, 2019). The underlying action, Sayles v. Allstate Insurance Company began in 2015 when Sayles was injured in an automobile accident and required medical treatment. She sought reimbursement from her insurance company, Allstate. Allstate sent Sayles a letter stating that Sayles was required to submit to an IME, which would be completed by a physician of Allstate’s choosing. Sayles refused to submit to the IME, and Allstate declined to pay her claim for medical benefits. Sayles then sued Allstate in the Court of Common Pleas of Pike County and alleged that Allstate’s IME requirements violated 75 Pa.C.S. §1796(a), which reads, in pertinent part: General rule.--Whenever the mental or physical condition of a person is material to any claim for medical, income loss or catastrophic loss benefits, a court of competent jurisdiction or the administrator of the Catastrophic Loss Trust Fund for catastrophic loss claims may order the person to submit to a mental or physical examination by a physician. The order may only be made upon motion for good cause shown. The order shall give the person to be examined adequate notice of the time and date of the examination and shall state the manner, conditions and scope of the examination and the physician by whom it is to be performed. If a person fails to comply with an order to be examined, the court or the administrator may order that the person be denied benefits until compliance. Among other things, Sayles argued that §1796 allows the judge to order an IME and delineate the matter, conditions and scope of the IME; as opposed to Allstate’s IME clause at issue, which she argued allows the insurer to have unilateral authority and control of all aspects of the IME. The Court rejected Allstate’s contention that §1796 does not apply when an insurance company has its own IME clause, and subsequently found that the legislature’s deliberate statutory design cannot be bypassed by clauses of automobile insurance contracts. Further, the Court rejected the argument that Allstate’s IME clause language followed the Pennsylvania Insurance Department’s (“Insurance Department”) form policy language, and stated “[o]ur Court has made clear that the Insurance Department cannot, by regulation, legally approve an insurer's use of policy language which conflicts with the express requirements of the MVFRL as enacted by the General Assembly.” See Ins. Fed'n of Pa. v. Pa. Dep't of Ins., 585 Pa. 630, 889 A.2d 550 (2005) (holding that the Insurance Department did not have legal authority to enact a regulation which mandated that all insurance coverage disputes involving uninsured or underinsured motorist coverage be subject to binding arbitration, inasmuch as neither the MVFRL nor the Uninsured Motorist Act allowed imposition of such a requirement). The Court held that §1796 governs, because the statute was “intended to set the irreducible requirements all insurers issuing policies of automobile insurance in this Commonwealth must meet in order to compel their insured to submit to an IME when the insured does not voluntarily comply with the insurer's request to do so.” See 75 Pa.C.S. §1796(a) (section applies “[w]henever the mental or physical condition of a person is material to any claim for medical ... benefits”) (emphasis added). The Court found that §1796 is meant to prevent harassment and upward intrusion of an unwarranted examination and ultimately held that Allstate’s IME policy provisions conflict with, and are repugnant to, the statutory protections under §1796. Accordingly, insurers cannot enforce IME policy provisions that allow the insurer to unilaterally select the physicians, as it impacts the insureds’ significant privacy interests. Going forward, a Court Order will be required, which means significantly more litigation (and associated fees) will be forthcoming in first-party MVA claims in Pennsylvania. Thanks to Emily Finnegan for her contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Multiple Additional Insured Endorsements Create Multiple Avenues to AI Status. February 23, 2018 < Back Share to: In Vargas v City of New York, the First Department was called to reconsider the Supreme Court’s decision that Liberty Insurance Underwriters had a duty to defend and indemnify the City of New York, NY Transit Authority and the MTA as additional insureds to a CGL policy issued to its insured, L&L, a subcontractor on a construction project. The underlying action involved personal injury claims arising out of a construction accident. The City Defendants hired E.E. Cruz as a general contractor. E.E Cruz subcontracted some of the work to L&L, Liberty’s named insured. The contract between L&L and E. E. Cruz required L&L to procure additional insured coverage for the City Defendants. The Liberty Policy included four separate Additional Insured Endorsements, providing some conflicting requirements. Endorsements 1-3 each defined an additional insured as a party “required by written contract signed by both parties prior to any occurrence in which coverage is sought.” While Endorsement 4 provided that any party “with whom you [L&L] have agreed to add as an additional insured by written contract” qualified for AI status. Liberty disclaimed coverage to the NYC Defendants in reliance upon the Endorsement 4’s requirement of an executed, written contract. But the Court affirmed the lower court’s ruling that this endorsement did not serve to vitiate the laxer requirements in Endorsements 1-3. The First Department also found that Liberty had waived its right to assert any reliance upon the Lead Exclusion because its disclaimer was untimely, noting that the insurer would not have even needed to undertake an investigation to assert the lead exclusion where the complaint made clear on its face that the injured party alleged he was exposed to harmful lead dust. The Vargas decision is a reminder and a warning that a later, more stringent endorsement will be entirely without teeth – and ultimately useless - if related endorsements remain a part of the Policy. Thanks to Vivian Turetsky for her contribution to this post.   Previous Next Contact

News Middle Car In “Chain Collision” Can Escape On Summary Judgment February 10, 2023 < Back Share to: Defending a rear-end collision when plaintiff is in a stopped car can be difficult, the cards are stacked against you and generally speaking, so is the law. Plaintiff only needs to establish that they were stopped as prima facie showing that the operator of the rear vehicle was negligent. However, the Second Department has recently held that, the same rules do not apply for a “middle” car in an accordion accident. In the matter of Liya Robinson v. New York City Transit Authority and Ghilan Noman Ali, 2023 N.Y. Slip Op 00683, Ms. Robinson brought suit to recover for personal injuries resulting from a multiple car pileup. Here, Ms. Robinson was sitting at a red light, when a New York City Bus struck her from the rear, resulting in two other cars being struck. Ms. Robinson brought suit against the NYCTA, as well as the drivers of the two vehicles in front of her. While it may seem clear that the two front vehicles would have no liability in such an action, and in fact summary judgment was held awarded in their favor, the court widened its holding, specifically stating that “in a chain-collision accident, the defendant operator/owner of the middle vehicle may establish prima facie entitlement to judgment as a matter of law by demonstrating that the middle vehicle was properly stopped behind the lead when it was struck from behind by the rear vehicle and propelled into the lead vehicle.” Id., citing Nicola v Nicolas, 208 AD3d 791, 793. Thus, the mere fact that the insured was in a rear-end collision and was not the lead, is not dispositive of the action. In fact, if they were in the middle of the collision, they may be able to successfully obtain summary judgment and share no liability whatsoever. Thanks to Christopher Palmieri for his assistance in this post. Should you have any questions, please contact Tom Bracken. Previous Next Contact

News First Department Follows the Second Department’s Lead in Dismissing Personal Injury Claims Based on Assumption of Risk March 8, 2016 < Back Share to: Recently, the Second Department dismissed a plaintiff's claim for personal injuries sustained while playing basketball at school. See, WCM Blawg, Of Interest, “Court Swats Away Basketball Injury Claims Under Assumption of Risk Doctrine” March 3, 2016. Just a week later, the First Department ruled similarly in Blumenthal v. Bronx Equestrian Ctr., and reversed a Supreme Court, Bronx County, decision which denied summary judgment to the defendants. In Blumenthal, plaintiff was thrown from a horse during a recreational ride at the defendant park owned by The City of New York, and through a stable operated by the Bronx Equestrian Center. The defendants moved for summary judgment based on the assumption of risk doctrine. The Court found that “[t]here is no evidence that defendant stable was reckless, nor were there any concealed or unreasonably increased risks.” Id. Furthermore, the Court found that “[t]he risk of a horse acting in an unintended manner resulting in the rider being thrown is a risk inherent in the sport or horseback riding”. Id. The Court then addressed the claims against the City of New York which were based in premises liability. Plaintiff claimed that there were defects in the birdle path on which she was riding that contributed to the accident. The Court found that the City did not owe plaintiff a duty of care as the agreement between the City and the defendant stable placed that duty onto the stable. Finally, the Court found that there is no provisions of the agreement between the defendant City and the defendant stable that would allow plaintiff to be a third-party beneficiary to the terms of the contract. This decision shows that the assumption of risk defense will release a landowner or facilities operator from liability for any injury resulting from a voluntary recreational activity, despite (unsubstantiated) claims that defective conditions contributed to the incident. Thanks to Dana Purcaro for her contribution to this post. Please email Brian Gibbons with any questions.   Previous Next Contact

News New York Governor Signs New Law Prohibiting Insurers From Refusing To Issue Or Renew Policies Based Solely On Breed of Dog October 4, 2012 < Back Share to: On October 30, 2021, New York Governor Kathy Hochul signed Senate Bill 4254, preventing insurance companies from discriminating against homeowners based on the breed of dog they own. The new law provides, “with respect to homeowners’ insurance policies…no insurer shall refuse to issue or renew, cancel, charge or impose an increased premium or rate…based solely upon harboring or owning any dog of a specific breed or mixture of breeds.” The law is scheduled to take effect in January 2022 and will apply to all policies issued, renewed, modified, or altered after the effective date. The law has received praise from members of the New York legislature and animal rights groups. Assembly member Deborah Glick commented, “For too long, people have been discriminated against by insurance companies based solely on the breed of their companion dog - forcing them to choose between stable housing and their companion animals based on the misguided belief that dog breeds determine behavior, rather than proper training and socialization.” However, New York law still allows insurance companies to cancel, increase rates, or refuse to issue policies if a dog is declared “dangerous” based on “sound underwriting and actuarial principles reasonably related to actual or anticipated loss experience.” Navigating these interrelated rules may pose a challenge to insurers. Companies will no longer be able to base underwriting and premium decisions on a particular dog breed and may have to evaluate the specific behavior, history, and training of homeowners’ dogs on a case-by-case basis. To address an increased risk that may be associated with dog ownership, some insurers have included dog bite exclusions in homeowners’ policies while others offer separate Canine Liability insurance. New York homeowners’ insurers should consider how the new law impacts their underwriting and risk assessment for homeowners’ policies and the type and extent of coverage provided to dog owners in the future. Thank you to Alexandra Deplas for her contribution to this post. Please e-mail Andrew Gibbs with any questions. Previous Next Contact

News NY Appellate Court Holds Plaintiff Not Culpable In Case Involving Falling Ladder September 17, 2009 < Back Share to: In Hauptner v Laurel Dev., LLC, the plaintiff was sitting at his deck when a ladder from an adjoining construction site fell and struck him. The plaintiff moved to dismiss the defendants’ affirmative defenses based on culpable conduct arguing that the defendants failed to show how the plaintiff caused or in any way contributed to the ladder falling into his yard. The lower court denied the plaintiff’s motion, but the Appellate Division reversed, stating that the affirmative defense was totally devoid of merit because there was no evidence whatsoever that the plaintiff expected that a ladder from the neighboring construction site would fall into his backyard. Thanks to Bill Kirrane for his contribution to this post. http://www.nycourts.gov/reporter/3dseries/2009/2009_06458.htm Previous Next Contact

News More Money to Fund US Lawsuits? New Investment Opportunities Abound. December 8, 2009 < Back Share to: One of the few curbs on US lawsuits is the cost as, for all sides, a lawsuit is an expensive proposition. To date, US lawsuits have been limited by the absence of third-party litigation funding companies (as can be found in Australia or the UK). Apparently, that is about to change and a new $200 million dollar litigation fund has been established. Whether this is just the tip of the iceberg is a question that cannot yet be answered. http://www.law.com/jsp/pa/PubArticlePA.jsp?id=1202436085724&src=EMC-Email&et=editorial&bu=The%20Legal%20Intelligencer&pt=TLI%20AM%20Legal%20Alert&cn=tli_am_alert_20091207&kw=Litigation%20Funding%20Beginning%20to%20Take%20Off Previous Next Contact

News Advice to NJ Jurors: Don't Talk on the Elevator March 10, 2010 < Back Share to: In a recent criminal trial in New Jersey, Police Officer Fine testified on behalf of the State. After he concluded his testimony -- and right before closing arguments -- the officer encountered one of the jurors on the courthouse elevator. The juror told the officer "you did fine." He then added “the defense lawyer was kind of crazy" (according to the juror) or "defense attorneys can be a__holes" (according to the officer). The jury convicted the defendant of cocaine possession shortly thereafter. At some point during deliberations, the police officer reported his conversation to the prosecutor, who then reported this to the judge. The judge conducted a hearing on the issue, and determined the juror exhibited a bias he did not reveal during voir dire, and further, failed to follow the court's instructions to refrain from forming any opinions or reaching any judgment about the evidence until after the case had concluded and the jury had been charged on the law. The Court declared a mistrial, vacated the conviction, and granted the defendant a new trial. The Appellate Division affirmed the decision, agreeing that the juror improperly failed to disclose his prejudicial views during voir dire. Typically, jurors say whatever they can during voir dire in an effort to get excused from a jury. It seems like this juror had a big mouth but bad timing. If you would like further information about this post, please contact Mike Bono at mbono@wcmlaw.com http://www.leagle.com/unsecure/page.htm?shortname=innjco20100302280 Previous Next Contact

News Additional Insured Language On A Certificate Of Insurance Held Insufficient To Alter Policy Language & Create A Defense And Indemnification Obligation February 3, 2012 < Back Share to: In Chipotle Mexican Grill, Inc. v. RLI Ins., 2021 N.Y. Slip Op 06604 (2d Dep’t, November 24, 2021), the New York Appellate Division, Second Department, recently addressed the issue of whether additional insured language in a Certificate of Insurance created a coverage obligation on the part of an insurer. In that case, Chipotle hired Piece Management, Inc. (“PMI”) to perform rodent prevention services at one of its restaurants. PMI provided a Certificate of Insurance naming Chipotle as an additional injured under its policy. The underlying plaintiff, an employee of PMI, was injured after falling from a ladder while performing the work. Chipotle sought defense and indemnification in the case as an additional insured under PMI’s policy, but the insurer denied coverage. Chipotle filed suit but the trial court held that PMI’s insurer was not obligated to defend and indemnify Chipotle in the underlying lawsuit. The Second Department affirmed, holding that the insurer was not obligated to defend or indemnify Chipotle since Chipotle was not an additional insured under the PMI policy. Although the court recognized that Chipotle was named an additional insured on the Certificate of Insurance provided by PMI and the policy contained an additional insured endorsement, that endorsement required that the primary insured (PMI) “agreed in writing in a contract or agreement that such person or organization be added as an additional insured” on the policy. Since Chipotle and PMI did not have a written agreement wherein PMI agreed to name Chipotle as an additional insured under PMI’s policy, the additional insured coverage in the policy was not triggered. The court added that the Certificate of Insurance was for informational purposes only, conferred no rights upon the holder, and “did not amend, alter, or extend the coverage afforded by the policy.” The takeaway from this case is that the understanding of the parties regarding risk transfer must be reduced to writing, particularly if an additional insured endorsement requires that to trigger coverage. PMI probably assumed that it’s insurer would cover Chipotle, but its failure to understand the policy requirements led to significant consequences for Chipotle and its insurers, and the likely loss of business by PMI. Please e-mail John Diffley with any questions. Previous Next Contact

News Are Law Schools Padding Their Employment Stats? October 24, 2012 < Back Share to: You don’t have to be an economist to know that the job market is in difficult shape. The employment prospects for newly minted lawyers are especially pessimistic, a bitter pill for law school graduates to swallow after paying more than $150,000 in law school tuition. The American Bar Association rules govern a law school’s publication of employment statistics for its recent law graduates. Employment as a barista at Starbucks or a cashier at Barnes and Noble is worthy employment but it does not pay the law school tuition debt. So the pressure mounts for the law schools to publish reassuring employment numbers for their recent graduates. A former employee at Thomas Jefferson Law School alleges that she was pressured to massage those figures by her supervisor. According to the employee, she would routinely skirt the rules of the A.B.A. to paint a rosier employment picture than actually existed. Regardless of the truth of these allegations, the employment landscape for young lawyers is still challenging. The publication of accurate employment figures is critical for ensuring that the supply of young lawyers has some relationship to the actual demand for their services. Anyone think that maybe we have too many lawyers in the world? If you have any questions or comments about this post, please email Paul at pclark@wcmlaw.com Previous Next Contact

News App. Div: School's are Not Insurers of Student's Safety During Recess May 8, 2012 < Back Share to: In Benavides v Uniondale Union Free School Dist., the infant-plaintiff - a second-grade student - commenced an action against his school for inadequate supervision after he was pushed down a slide by a fellow student during recess. The school established its entitlement to summary judgment by showing the playground was adequately supervised and that the level of supervision was not a proximate cause of the subject accident. In affirming the decision, the Appellate Division stated schools cannot reasonably be expected to continuously supervise and control all movements and activities of its students and cannot be held liable for every thoughtless or careless act by which one pupil may injure another. Notably, the Second Department considered the plaintiff's 50-h hearing testimony. Typically, trial courts have required a hearing to determine if an infant is swearable (understands the obligation to testify truthfully) before considering any testimony. Here, the plaintiff's attorney claimed that the testimony was inadmissible because of his client's age. However, the court refused to consider the plaintiff's argument stating it was improperly raised for the first time on appeal. Thus, as the swearability of an infant plaintiff does not present a pure question of law appearing on the face of the record, the Courts have the discretion to consider an infant's testimony at face value without such a hearing. Thanks to Bill Kirrane for this post. If you have any questions or comments about this post, please email Paul at pclark@wcmlaw.com Previous Next Contact

News PA Supreme Court to reconsider major UIM stacking decision. October 18, 2007 < Back Share to: In a rare move, the Supreme Court will reconsider its April 2007 decision in which it ruled that insurance companies must have their customers reject stacked underinsured motorist coverage each time they add a vehicle to their policy. http://www.law.com/jsp/pa/PubArticleFriendlyPA.jsp?id=1192611804884 Previous Next Contact