News NY 1st Dept: Undisclosed Notice Witness Can't Defeat Summary Judgment Motion November 9, 2009 < Back Share to: In Garcia v. Good Home Realty, the plaintiff claimed that she slipped and fell on wet stairs in the defendant's building. She initially testified that she did not know the source of the water, but later submitted an affidavit that the steps appeared recently mopped. In support of its summary judgment motion based on lack of notice, the property owner submitted an affidavit from its porter who stated that he had not mopped the stairs that morning. In opposition, the plaintiff submitted an affidavit from her brother-in-law who stated that he noticed the soapy condition of the stairs shortly before the accident. The Appellate Division held that the affidavit was insufficient to defeat the motion because the brother-in-law had not been previously disclosed as a witness and that submitting an affidavit from an undisclosed notice witness was improper. Thanks to Bill Kirrane for his contribution to this post. http://www.nycourts.gov/reporter/3dseries/2009/2009_07938.htm Previous Next Contact

News Plaintiff Missed the Mark in Her Claim Against Target (NJ) October 16, 2019 < Back Share to: In Elzogby v. Target Corp., 2019 WL 3886940 (Aug. 19, 2019), the United States District Court for the District of New Jersey granted summary judgment in defendant Target’s favor because it found that Target did not have notice of an alleged slippery condition, and the mode-of-operation rule did not apply. The decision’s impact is twofold. First, it demonstrates that the court will not be persuaded by a plaintiff’s argument that a defendant has constructive notice only because of its “ample resources.” Second, it demonstrates the narrow reach of the mode-of-operation rule. Elzogby brought a claim against Target seeking to recover money damages after she slipped and fell on an allegedly wet floor in a Target store. The facts indicated, however, that after her fall Elzogby continued shopping and eventually purchased items. While she shopped, her brother filed an incident report. When asked what the cause of the accident was, Elzogby’s brother reported “water,” but he was “unsure.” Target filed a motion for summary judgment, which the court granted. The court first reasoned that Elzogby’s conclusory allegation that Target had constructive notice because of its "ample resources," cameras, and ability to monitor patrons, was not supported by the facts. Elzogby failed to allege specific facts that Target had constructive notice of the water. She did not show how long the water was on floor, or that anyone other than Elzogby saw the water. Next, the court disagreed with Elzogby’s contention that the mode-of-operation rule applied. Under the mode-of-operation rule, the plaintiff is relieved of proving that the defendant had notice of a dangerous condition where, as a matter of probability, a dangerous condition is likely to occur because of the nature of the business. The mode-of-operation rule generally applies to slip and fall cases that occur in self-service restaurants. In such cases, courts have determined that the nature of the business—usually pouring a drink—creates a high probability of a slippery condition. In Elzogby, however, the mode-of-operation rule did not apply because Elzogby failed to show a causal nexus between the water she allegedly slipped on and a self-service component of Target. Her fall did not occur while she was using a self-service drink station. She did not show that the alleged liquid was from Target and further, she did not fall near any self-service drink station. Although not binding precedent, Elzogby demonstrates the New Jersey District Court’s reluctance to find negligence based on vague conclusory claims. The court did not agree that a store had constructive notice simply because of its “ample resources.” The court also refused to expand the mode-of-operation rule beyond the circumstances of a self-service restaurant. Thanks to John Lang for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Illusory CGL Policy Not Against Public Policy in NY November 12, 2009 < Back Share to: In 720-730 Fort Wash. Ave. Owners Corp. v. Utica First Insu. Co., Utica denied coverage for an underlying tort action wherein a subcontractor’s employee was injured when a concrete block fell on him while working on 702-730 Fort Washington’s construction site. The policy had exclusions for bodily injury to any employee or any liability arising out of any roofing operations. The property owner argued that the exclusions rendered the insurance policy illusory and against public policy since it did not provide any of the insureds with the usual construction site coverage required under its agreement with the general contractor and subcontractors. The Court ruled that Utica’s policy was misleading and did not provide the coverage necessary to protect Fort Washington from the construction site risks and the vicarious liability imposed by the Labor Law. However, the exclusions were judicially upheld and the inadequate insurance policy was found to not have violated any regulation or statutorily declared public policy. The Court suggested that the passing of a statute or regulation mandating the issuance of a “uniform construction site insurance policy” would reinforce the public policy goals sought under New York Labor Law; however, the Legislature has yet to act as such. In the meantime, the Court reminds insureds of the need to perform a due diligence review of the policy, citing the maxim caveat emptor – let the buyer beware. Thanks to Chris O'Leary for his contribution to this post. http://www.nycourts.gov/reporter/3dseries/2009/2009_29443.htm Previous Next Contact

News We’ve Got You Covered: PA Superior Court Distinguishes Longstanding Interpretation of “Severability” Clauses September 27, 2013 < Back Share to: Recently, the Pennsylvania Superior Court narrowly construed the “Separations of Insureds” clause of a commercial umbrella policy to overcome the presumption in PMA v. Aetna Casualty and Surety Ins. Co. that Employer’s Liability Exclusions are applicable to all insureds. In Mutual Benefit Ins. Co. v. Politopoulos, property owners who leased space to a restaurant in which they were also corporate officers demanded coverage for an employee’s slip and fall as additional insureds under a commercial umbrella policy. Shortly thereafter, the insurer sought a judicial determination that no coverage was owed, arguing that under the Supreme Court’s precedent in PMA, all insureds were subject to the policy’s Employer’s Liability Exclusion. The trial court, albeit reluctantly, agreed with the insurer’s reliance on PMA and granted summary judgment in its favor. Nevertheless, the owners appealed to the Superior Court and invited it to overrule or otherwise reinterpret PMA in light of more than forty years of intervening case law. Although declining the overture, the Court explained that the law in PMA was distinguishable insofar as the insurance contract at issue contained a materially different “Separation of Insureds” clause. Specifically, the Court explained that PMA operates to transpose the Employer’s Liability Exclusion to all remaining insureds even where the terms of the insurance contract provide coverage for each “severally and not collectively.” In contrast, the policy in Politopoulos stated that coverage applies “as if each named insured were the only named insured” and “separately to each insured against who a claim is made or suit is brought.” While similar in intent, the Court explained that the first provision’s use of “severally” legally implies a connection between the insureds whereas the second directs the courts to evaluate coverage as if the other parties did not exist. As a result, the Court reversed, concluding that the precise policy language in Politopoulos overcame the presumption in PMA such that coverage for the owners was entirely unrelated to the Employer’s Liability Exclusion. By all accounts, PMA has long stood for the proposition that an exclusion or limitation of coverage applicable to one insured may inure to the detriment of another. However, the Superior Court, by way of Politopoulos, seems to have suggested that precise policy language reigns over all in coverage disputes notwithstanding oft-quoted rules of construction. Thanks to law graduate Adam Gomez for his contribution to this post. If you have any questions, please email Paul at pclark@wcmlaw.com . Previous Next Contact

News Lessor Can’t Pass the Buck to the Lessee August 8, 2018 < Back Share to: In Bonnie Sanders v. Angela Dukes, Sanders was staying with her friend on the second story of a rooming house in Philadelphia. As Sanders left the room her shoe got caught in a loose metal strip on top of the staircase. Dukes’ husband was the property manager for the rooming house, and went there monthly. He never made any repairs to the stairs or the metal strip. At the close of plaintiff’s case at trial, Dukes moved to dismiss arguing that the tenant (plaintiff’s friend) was aware of the dangerous condition, therefore, alleviated Dukes’ own liability for the condition. The court rejected the argument, and found that the Dukes, as the lessor was liable for a dangerous condition in the common area that could have been discovered by exercising reasonable care. Since Sanders was a lawful guest, Dukes owed her a duty of care. This case reminds us that a lessor often owes a duty of care to those that enter the premises, regardless of any duty owed by the lessee. Thanks to Robert Turchik for his contribution to this post. Previous Next Contact

News New Guidance on Statute of Limitations in PA July 23, 2021 < Back Share to: On July 21, 2021, the Pennsylvania Supreme Court in Rice v. Altoona-Johnston issued a pivotal decision concerning the applicable statute of limitations in Pennsylvania for claims stemming from alleged sexual abuse. By way of background, in 2016, Rice, after reviewing a PA Grand Jury Investigative report, which detailed findings that hundreds of children were victimized by over fifty individual priests or religious leaders in Pennsylvania, commenced a lawsuit based on alleged abuse she sustained during the 1970s and 1980s. After the trial court dismissed her lawsuit based on the applicable statute of limitations, Rice appealed, claiming the trial court misapplied the law. Rice’s ability to appeal the trial court’s decision was aided by a subsequent Supreme Court of Pennsylvania decision, Nicolaou v. Martin, which held that a plaintiff’s efforts to investigate a defendant for alleged abuse was sufficiently reasonable to toll the applicable statute of limitations. With the Nicolaou decision serving as the foundation, the Superior Court reversed the trial court’s decision, thereby allowed Rice to continue with her claims even though her claims were filed some 35 years after the traditional statute of limitations. On appeal, the Pennsylvania Supreme Court analyzed, inter alia, whether the Superior Court erred by overruling precedent and holding a plaintiff may bring a secondary cause of action for civil conspiracy where the primary cause of the harm is time-barred. To analyze this question, the Court recognized a cause of action accrues when an injury is inflicted and the clock “begins to run as soon as the right to institute and maintain a suit arises; lack of knowledge, mistake or misunderstanding do not toll the running of the statute of limitations”. While a plaintiff may be time-barred if he or she fails to commence a lawsuit before the clock expires, the Court analyzed whether the discovery rule or fraudulent concealment doctrine applied to save Rice from failing to file the lawsuit before the applicable statute of limitations expired. First, the Court held the discovery rule tolls the statute of limitations, which delays the point at which the plaintiff is charged with a duty to file suit. With respect to Rice, the Court reasoned the statute of limitations began to run, at the latest, when Rice was last assaulted; therefore, Rice had two years from that date to discover other actors potentially liable for her injury. Although Rice argued there was no reason for her to know of the Diocese’s involvement, the Court determined the Nicolaou decision was distinguishable from the Rice matter. Specifically, the Court held that because Rice’s claims against the Diocese are based on the alleged abuse, Rice was on inquiry notice as a matter of law regarding the Diocese’s potential involvement. Next, the Court held the fraudulent concealment doctrine is based upon estoppel and has its basis in equity. Essentially, the fraudulent concealment doctrine applies where fraud prevents a plaintiff from knowing he or she was defrauded; as such, the cause of action does not exist until the plaintiff becomes aware of the fraud. However, the Court determined the superior Court failed to consider Rice’s due diligence obligations. Assuming the truth of the Diocese’s misrepresentations as alleged in the complaint, the Court held none of the alleged misrepresentations misdirected Rice from her knowledge that she was assaulted. As such, she was obligated to inquire into other potential claims. While the Diocese was obligated to disclose, the Diocese’s failure to disclose does not excuse Rice’s failure to conduct any investigation into the Diocese as an additional cause of her injuries. Ultimately, the Court ruled the discovery and fraudulent concealment doctrines were inapplicable and reversed the Superior Court decision. While the Superior Court’s decision in Rice opened the door for otherwise time-barred claims, the PA Supreme Court’s decision clearly provides such claims are time-barred. This decision will have a ripple effect on other pending lawsuits in Pennsylvania as some state and federal Pennsylvania courts stayed matters alleging civil conspiracy and fraud stemming from alleged sexual abuse pending the outcome of the Rice decision. For example, in Suminski v. The Diocese of Erie, which is pending before the U.S. District Court for the Western District of Pennsylvania, the plaintiff brought claims against the Diocese of Erie alleging the Diocese of Erie participated in a systematic cover up, as the Diocese of Erie was made aware of the alleged abuse. Citing the PA Grand Jury Report, the plaintiff asserts the following claims: negligence for failure to supervise, negligence for breach of fiduciary duty, negligence for failure to provide a secure environment, negligence for failure to control conduct of the servant, negligence for failure to warn, fraud, fraudulent concealment and civil conspiracy. On October 15, 2020, the case was stayed pending the outcome in Rice. It will be interesting to see how these lawsuits develop. Thanks to Lauren Berenbaum for her contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News Sham Entities Means The Veil Gets Pierced (PA) December 6, 2019 < Back Share to: A Pennsylvania Superior Court recently affirmed a trial court’s decision, in Sereda v. Ctr. City Acquisitions LLC, imposing personal liability on the sole owner of a limited liability company which constructed a new house that had issues with respect to the floors and windows. The Serenadas purchased a new house from Ctr. City Acquisitions, LLC, which, with respect to its ownership, was owned, operated, and controlled by a single individual. The sale of the home included a one-year warranty. Soon after the sale, the homeowners noticed substantial gaps in the wood flooring, as well as a sealant and caulking issue with respect to the windows. The sole owner of Ctr. City was the only individual the Serenadas saw, contacted, or interacted with regarding warranty repairs. Eventually, the warranty repairs stopped, and Ctr. City tendered an offer of $2,500 to resolve the floor issues, which was valued at $37,000. Plaintiff filed suit to recoup the cost of the repairs. The Court found that (a) the sole owner created the LLC as a “sham” entity, as the entity did not have employees, an operating agreement, and that he was the “sole actor to this entire transaction”; and (b) similarly, under a “participation theory”, the sole owner was personally liable as he personally entered into the transaction and was objectively aware of the faulty repairs and further refused to abide by the warranty, despite knowledge that the issues existed that warranted repairs. This decision serves as a warning to sole proprietors, as Courts have increasingly been willing to pierce the veil. Thanks to Matt Care for his contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News The Attorney Client Privilege Remains Under Siege in Coverage Litigation April 5, 2024 < Back Share to: In Cadaret Grant & Co. v. Great Am. Ins. Co., No. CV216665GRBAYS, 2023 WL 4740184 (E.D.N.Y. July 25, 2023) plaintiff Cadaret sought coverage under the terms of a Financial Institution Bond issued by Great American Insurance Company for losses suffered by its clients after a representative of Cadaret engaged in a fraudulent investment scheme in which he used Cadaret client funds for his own personal purposes. Great American ultimately denied coverage, and Cadaret commenced a declaratory judgement action. In the context of the litigation, Cadaret filed a motion to compel the production of documents withheld from discovery by Great American on the grounds of attorney-client privilege and the work product doctrine. Great American denied coverage on April 22, 2021, and the coverage action was commenced eight months later. The documents at issue were generated prior to both dates. The individuals whose names appear on the documents are: (1) Timothy Markey a claims adjuster working for Great American; (2) Michael Graziano, Esq., an attorney working as outside counsel for Great American at the law firm of Eckert Seamans, and (3) John Ellison, Esq. an attorney working for Cadaret at the law firm of Reed Smith. The bulk of the documents at issue were emails exchanged between Markey and Graziano between February 27, 2020, and February 12, 2021, which reveal Graziano’s involvement in Great American’s investigation of Cadaret’s claims. These emails include Markey's transmission of information regarding Cadaret's claims to Graziano and those asking that Graziano draft, for Markey, correspondence to be sent under Markey's name to counsel for Cadaret. The remaining documents at issue are an email transmitting a draft of GAIC's coverage position, a seventeen-page letter dated March 22, 2021, from Graziano to Markey containing Graziano's legal opinion regarding coverage, and two emails following that letter. Great American claimed that the emails exchanged prior to the March 22 letter were protected by attorney-client privilege. The court, however, found that many of the documents “are nothing more than transmittal emails that either refer to requests for information, or the forwarding or downloading of such information.” Id. at 5. Further, the court found that “while these first twenty documents reflect communications between GAIC claims representative Markey and GAIC outside counsel Graziano, they demonstrate work performed by Graziano as a claims investigator rather than as legal counsel. They reflect discussions between Markey and Graziano, typically led by Markey, which culminate in typical requests for information regarding Cadaret's claims. Such documents reveal counsel working in an investigatory role.” Id. For these reasons, the court held that none of the first twenty claimed emails/documents were protected by attorney-client privilege. As for the other documents, the court found that only the letter from Graziano to Markey dated March 22, 2021, falls within the claim of privilege because it shows Graziano’s legal analysis and opinions and was therefore primarily legal, rather than investigatory in nature. The proceeding email contained no legal analysis and therefore was not privileged. The court found that the remaining documents prepared after the March 22 letter were essentially scheduling emails, and therefore also not privileged. The court ultimately granted Cadaret’s motion to compel, except for the March 22 letter. The moral of the story? If you want your communications with coverage counsel to remain privileged, remember that it is your job to decide whether coverage is owed; you are in the business of deciding claims. If you ask your coverage counsel what to do, you will likely lose the benefit of the attorney client privilege. Special thanks to Mimi Osisek for her contributions to this post. For more information about the post or to learn more about WCM’s multi-state coverage practice, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Cadaret Grant And Co v. Great American Insurance Company .pdf Download PDF • 876KB Previous Next Robert J. Cosgrove Robert J. Cosgrove Executive Partner +1 267 239 5526 rcosgrove@wcmlaw.com Contact

News Charitable Immunity for University Upheld by NJ App Div in Student Death December 29, 2009 < Back Share to: In Ozrech v. Fairleigh Dickinson University, Ozrech fell to his death from his fourth floor dormitory window. The fall was alcohol related, which was in violation of Fairleigh Dickinson’s (FDU) alcohol policy, and the FDU police failed to properly enforce the policy. Because of these facts, the lower court held that FDU was not engaged in the charitable objectives it was organized to advance, and Ozrech was not a beneficiary of such objectives, and as such FDU was not entitled to immunity under the charitable immunity act. Following trial, FDU appealed, arguing it was entitled to immunity under the charitable immunity act and the Appellate Division agreed, holding that FDU’s failure to properly enforce their alcohol policies did not negate Ozrech’s status as a beneficiary of FDU’s educational works and as such immunity should apply. The court noted that the statutory elements required to support a claim of immunity are (1) that the entity asserting immunity was formed for nonprofit purposes, (2) that it is organized exclusively for religious, charitable, or educational purposes, and (3) that it promoted such purposes at the time of the injury to the plaintiff, who was then a beneficiary, to whatever degree, of its charitable works. There was no dispute that FDU satisfied the first two elements. The question was whether Ozrech was a beneficiary at the time of the accident. The Appellate Division reasoned that the act must be liberally construed, and that at the time of the accident, the person must be receiving the benefits of the charitable organization, at least to some degree. New Jersey Courts have previously held that the term “educational” in the context of the act does not mean solely scholastic activities. Merely being a student engaging in educational pursuits at a university makes someone a per se beneficiary under the act. Furthermore, Ozrech’s accident happened in university run housing, where he was provided with the educational opportunity to live with other students, share experiences and broaden his horizons. Ozrech was deemed to be receiving educational benefits and thus FDU was entitled to immunity under the charitable immunity act. Thanks to Alison Weintraub for her contribution to this post. http://www.judiciary.state.nj.us/opinions/a5919-07.pdf Previous Next Contact

News Recent Lawsuit Raises Novel Legal Issues Involving Fashion Oriented NFTs January 28, 2022 < Back Share to: Counterfeit handbags have plagued the fashion industry for decades. Now, top fashion brands face novel intellectual property threats with the rise of virtual fashion items. On January 14, 2022, Hermès International and Hermès Paris, Inc. filed suit against artist Mason Rothschild for his creation and sale of “METABIRKINS” as non-fungible tokens (NFTs). According to the complaint, “Defendant’s METABIRKINS brand rips off Hermès’ famous BIRKIN trademark by adding the generic prefix “meta” to the famous trademark BIRKIN.” Indeed, the artist’s NFTs depict the iconic Birkin silhouette in a variety of patterns and textures – albeit entirely virtually. Notwithstanding their metaphysical nature, these NFTs allegedly constitute trademark infringement and dilution of the famous Birkin Mark. Hermes’ fears that as more luxury brands explore the NFT space, consumers may believe the NFTs to be affiliated with them. They also fear that NFT usage will devalue their name and have consumers “think less highly of them.” In contrast, the artist believes the First Amendment vests him with the right to make and sell these NFTs, “just as it gave Andy Warhol the right to make and sell art depicting Campbell’s soup cans.” He released the following statement concerning the lawsuit: Rothschild's statement released on Instagram. The Hermes case is particularly of interest to artists, collectors, and insurers alike, as it is one of the first to center on trademark issues with fashion oriented NFTs. Considering how obscure copyright and trademark law can be without NFTs, this first-of-its-kind matter is one to keep a close eye on. WCM will monitor this interesting development and report on any significant developments. Thank you to Alexandra Deplas for her contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News Killer Whales Are Not People. February 9, 2012 < Back Share to: We've been following the killer whales-as-people controversy. The federal court has now weighed in. Killer whales are not people. So, they don't get the benefit of the 13th Amendment's prohibition against slavery. Sorry, Shamu. For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com .   Previous Next Contact

News Covid Cases Looming? Maybe Not. Some States Are Giving Companies The Antibodies To Fight Covid-19 Lawsuits June 26, 2020 < Back Share to: On Friday, June 19, 2020, Senate Majority Leader Mitch McConnell, stated a potential second COVID-19 “rescue” package could be in the works. McConnell said he wants to prioritize investing in” future generations” in this legislative package. If passed, this would be the second piece of legislation by Congress to aid families and businesses impacted by the COVID-19 coronavirus pandemic. On March 27, President Trump signed in law H.R. 748, the “Coronavirus Aid, Relief and Economic Securities Act” (CARES Act). McConnell stated that his priority was to ensure that the next package included “liability shields” for universities and corporations that would protect such institutions from COVID-19 related lawsuits. The Senator didn’t give much specifics about his goal to “invest” in the future, but some states aren’t waiting around for McConnell to elaborate. States like Tennessee and Iowa are already passing laws to make it harder for an individual to prevail in a negligence action stemming from the pandemic. On June 16, 2020, the Tennessee House of Representatives passed legislation that would require a person to demonstrate with clear and convincing evidence that an entity operated with gross negligence or willful misconduct, causing a person to contact the coronavirus. The law would also require a person to show that the business did not act in substantial compliance with any federal or state public health guidance. Similarly, on June 5, 2020, Iowa Legislature passed a law that covers meatpacking plants, hospitals, and nursing homes from claims by employees, customers, and family members, for coronavirus-related hospitalizations or deaths. The new bill directly separates and limits who can file lawsuits against a business for COVID-19 related illnesses. There is no doubt that these new legislations raise the bar for liability for coronavirus exposure at certain businesses. However, this is an uncharted territory for insurance companies and lawyers. It is safe to say that the world of personal injury law is entering a new phase, just as we are. Thanks to Irving Fayman for his contribution to this post. Please email Heather Aquino with any questions. Previous Next Contact