News App. Div: Detrimental Reliance Exception to Espinal Rule Can Be Inferred From Conduct of Contracting Party. July 6, 2012 < Back Share to: In All Am. Moving & Stor., Inc. v. Andrews, a property damage action arising out of a warehouse fire, defendant Allstate Sprinkler Corp entered into an inspection services contract with the tenant D'Agostino Supermarket. Allstate moved to dismiss the plaintiff-owner's action arguing that, under the Espinal v. Melville Snow Contractors decision, its contractual obligation to the tenant did not give rise to tort liability in favor of a third party. In affirming the denial of the motion, the First Department carefully analyzed the Espinal rule. There are three exceptions to the Espinal rule: 1) where a contracting party launches a force or instrument of harm, 2) where the party enters into a comprehensive and exclusive service agreement, and 3) where a third party has detrimentally relied on the continued performance of the contracting party's duties. The Appellate Division agreed that the first two exceptions where inapplicable. However, the Court held there was a question of fact as to whether the plaintiff, a beneficiary of the contract, detrimentally relied on Allstate's continued performance of its contractual duties. In doing so, the Court pointed to Allstate's admitted failure to inspect the sprinkler system for months before the fire and its failure to report to the owner that it had found the sprinkler system shut off during several inspections. Thus, rather than point to evidence that the owner had in fact relied on the contracting party, the Court utilized evidence of the contracting party's wrongdoing to infer that such reliance existed. Special thanks to Bill Kirrane for his contributions to this post. For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News NJ Appellate Division Upholds Summary Judgment for Property Owner (NJ) October 29, 2020 < Back Share to: The case of Rienzi v. Giacoman arose out of a trip and fall in front of Mr. Giacoman’s three-family building. Giacoman lived on the first floor of the building with his brothers and leased the other two apartments to tenants. He paid a monthly mortgage in addition to utilities and testified that the rent he collected barely covered his monthly expenses. The trial court granted Giacoman’s motion for summary judgment at the close of discovery. In New Jersey, owners of residential properties owe no duty to maintain abutting sidewalks, but commercial property owners do. The issue in this case was whether the property was residential or commercial. New Jersey courts have essentially held that if the owner profits from the property by collecting rent that exceeds carrying costs, the property will be deemed commercial. Specifically, there is a four part test employed by courts to determine whether the property is residential or commercial: (1) the nature of the ownership, including whether the property is owned for investment or business purposes; (2) the predominant use of the property, including the amount of space occupied by the owner on a steady or temporary basis, to determine whether the property is utilized in whole or in substantial part as a place of residence; (3) whether the property has the capacity to generate income, including a comparison between the carrying costs with the amount of rent charged to determine if the owner is realizing a profit; and (4) any other relevant factor when applying “commonly accepted definitions of ‘commercial’ and ‘residential’ property.” Applying this law to the facts in Rienzi¸ the appellate division was satisfied that the property was not “commercial” because Giacoman lived there and barely profited off the rent collected. Moreover, no commercial enterprises operated any business out of the property. Use of properties by their owners varies widely, and there are a lot of close calls when it comes to determining whether a property is “commercial” or “residential.” Here, the property was deemed “residential” even though the owner profited slightly from collecting rent – something to keep in mind for potential defenses. Thanks to Mike Noblett for his contribution to this post. If you have any questions or comments, please contact Colleen Hayes. Previous Next Contact

News NY's First Department Addresses Distributor's Liability In Strict Products Action June 26, 2009 < Back Share to: In Fernandez v. Riverdale Terrace, et. al, the First Department dealt with the liability of distributors in strict products liability cases. In Fernandez, the plaintiff sustained injuries while cleaning a defective building trash compactor. The general contractor had purchased the compactor from subcontractor Action, who pursuant to the sale, was obligated to install the compactor. Action chose the make and model of the subject compactor, purchased it directly from an entity related to the manufacturer at a "distributor" price, and then subcontracted the installation of the compactor to that entity. In affirming the lower court’s denial of Action’s motion for summary judgment, the First Department reaffirmed that a party who sustains an injury from a defective product may seek relief against the product manufacturer or others in the distribution chain if the defect was a substantial factor in causing the injury. Consequently, a distributor of a defective product is subject to strict liability, regardless of whether they merely took an order or shipped a product, and never actually inspected, controlled, installed or serviced the product. Since Action failed to submit evidence to establish that it was not a distributor, and only asserted that it did not design, manufacture, install or maintain the compactor, its motion was denied. The court’s decision implied that Action actually stepped into the shoes of the distributor. Thanks to Lora Gleicher for her contribution to this post. http://www.courts.state.ny.us/reporter/3dseries/2009/2009_05167.htm Previous Next Contact

News PA Superior Court Analyzes The "Regular Use" Exclusion November 5, 2012 < Back Share to: In Rother v. Erie Insurance, Patrick Rother was injured in a car accident. At the time of the accident Rother was living with his mother but was driving his father’s car. Two weeks before the accident, Rother’s father had given him permission the use the car to commute to work for the indefinite future. After Rother recovered liability benefits from the other driver’s policy, he and his mother initiated an action seeking a declaration that Erie Insurance was obligated to provide underinsured motorist coverage under his mother’s policy. Erie contended that coverage was excluded under the “regular use” exclusion in the policy. The trial court granted summary judgment in favor of Rother. Erie appealed. On appeal, the Superior Court first noted that, generally, policy exclusions should be narrowly construed. Next the Court held that the duration of Rother’s use of the car was irrelevant in determining if the test for “regular use” had been met. Further, the fact that Rother’s father had placed restrictions on the use of the car would not preclude there being a finding of “regular use.” The Court held that the determining factor was there was no indication that Rother’s use of the car was on a temporary basis. As such, the test for “regular use” had been met and there was no coverage under Erie’s policy. Thanks to Colleen Hayes for her contribution to this post. http://www.law.com/jsp/pa/PubArticlePA.jsp?id=1202576475740 Previous Next Contact

News Trivial Sidewalk Defect? Hire an Engineer! February 3, 2016 < Back Share to: Trip and falls are among the most common causes of action in the practice of insurance defense. When a plaintiff alleges a trip and fall due to a sidewalk defect, defendants should consider whether that defect could be considered “trivial.” If a defect can be considered trivial, defendants may benefit from retaining an expert engineer to opine on why the defect should be classified as such. In Rosen v. Fifth Lenox Terrace Assoc., the plaintiff alleged that she tripped over a two-inch gap between two concrete flags on a sidewalk abutting a building in Manhattan. In their motion for summary judgment in which they argued that the alleged defect was trivial, defendants submitted pictures of the sidewalk and an affidavit from their expert, a licensed professional engineer, who concluded that the raise between the sidewalk flags was less than ¼ of an inch, with a depth of up to one inch. Additionally, defendant’s expert stated that the area where the plaintiff fell had no jagged edges and no features that would cause a specific tripping hazard. The plaintiff opposed the motion arguing that whether a defect is considered “trivial” is a factual issue that should be left to a jury to decide. The Court reasoned that when seeking a dismissal based on a defect that is merely trivial, defendants must show that the defect is “physically insignificant and that the characteristics of the defect . . . do not increase the risks it poses.” Furthermore, the Court must examine all facts surrounding the physical characteristics of the defect including the “width, depth, elevation, irregularity and appearance of the defect along with the time, place, and circumstance of the injury.” The Court granted the defendants summary judgment motion holding that the expert report and photographs successfully established the trivial nature of the alleged sidewalk defect. When dealing with a sidewalk defect, defense counsel should always consider whether the defect could be considered trivial. Hiring an engineer to help further establish this argument will usually be necessary to succeed on summary judgment. Thanks to Jeremy Seeman for his contribution to this post.       Previous Next Contact

News New York To End No Prejudice Rule June 24, 2008 < Back Share to: New York is one of the few (if not the only) state in which a carrier need not prove that an insured's late notice prejudiced the carrier in order to disclaim on that ground; Governor Patterson recently introduced a bill which changes that. It passed both the Assembly and is expected to pass the Senate shortly. The long and the short of the legislation is that 180 days after the legislation is signed, NY will join the majority and carriers will only be able to disclaim on late notice if they were materially prejudiced by the late notice. In addition, injured parties will be able to bring declaratory judgment actions challenging a late notice disclaimer before having to obtain a judgment. Moreover, if a primary personal lines policy or a statutorily mandated policy is in play, the injured party will have the right to obtain coverage information FROM THE CARRIER prior to commencing litigation. Previous Next Contact

News Signed Releases Cook Plaintiff's Harrassment Suit Against McDonald's (NY) July 25, 2013 < Back Share to: It is not uncommon for a party who signs a pre-suit release to have "buyers remorse" and decide to file suit anyway. The issue recently arose in Nelson v. Lattner Enters. Of N.Y., where, despite signing a release, plaintiff sued a McDonald’s franchisee and the McDonald’s Corporation for sex discrimination and sexual harassment. Plaintiff was a restaurant manager for the franchisee for approximately six years, and reported to the Corporation that her supervisor, Lattner, repeatedly subjected her to sexual harassment. During a meeting in December 2007, plaintiff signed a handwritten settlement agreement, consenting to leaving her employment and releasing all claims in exchange for severance payment and medical benefits. In a subsequent meeting, plaintiff signed a typed settlement agreement and release which comprehensively released all defendants from any liability in exchange for severance pay of $18,688.10 and continued medical benefits. When bringing suit against the defendants, plaintiff claimed that the signed releases were not valid and should be void because she signed them under duress. The trial court dismissed plaintiff’s action and the Second Department affirmed the dismissal of the claims. Even assuming that plaintiff was under duress when signing the handwritten first agreement, the Court found that she was not under duress when signing the second typed agreement. In the second meeting, plaintiff was unable to demonstrate any unlawful act that compelled her to sign. Further, the Court noted that the typed agreement indicated in bold that she should consult with an attorney, that she had 21 days to consider the agreement, and that she could even revoke the release up to seven days after signing it. Notwithstanding the language in the agreement, the Court also found that plaintiff’s conduct waived her objections and ratified the agreement by accepting and retaining the benefits for nearly two years before bringing suit in 2009. Thanks to Jung Lee for his contribution to this post. If you would like more information please write to Mike Bono. Previous Next Contact

News Abuse of Process Finding Against Insurer Reversed October 7, 2009 < Back Share to: Rutgers Casualty Insurance Company v. Kennedy addressed a dispute over a claim for personal injury protection benefits filed by Christopher Kennedy, premised on a policy of insurance purchased by his sister-in-law, Alice Kennedy. Rutgers sued Alice and Christopher seeking damages and a declaration voiding the policy on grounds of legal and equitable fraud. Alice counter-claimed against Rutgers for malicious use of process and malicious abuse of process. In the case before the Court, Rutgers appealed from a $392,630 judgment based on the jury's verdict in favor of Alice on her counter-claim for malicious abuse of legal process, and from the trial court's order denying Rutgers' motion for judgment notwithstanding the verdict. On appeal, Rutgers contended that the trial court should have dismissed the malicious abuse of process claim because plaintiff did not prove any "further acts" beyond the filing of the complaint; that Rutgers was entitled to invoke the litigation privilege; and that plaintiff did not prove a "special grievance." The Appellate Division reversed the trial court because it agreed with Rutgers that plaintiff failed to prove one of the elements of a cause of action for malicious abuse of process, i.e., a further improper act beyond the initial filing of the complaint. They also agreed with Rutgers that the trial court improperly permitted plaintiff to introduce evidence of the number of claims Rutgers investigated for possible fraud and the number of fraud complaints that Rutgers filed against other insureds. Thanks to Sheila Osei for her contribution to this post. http://www.judiciary.state.nj.us/opinions/a4195-07.pdf Previous Next Contact

News Breach of Implied Contract Allegation Against An Academic Institution Not Specific Enough When Disciplinary Disputes Are Involved February 2, 2017 < Back Share to: In Jones v. Trustees of Union College, the plaintiff was expelled from Union College as a result of his confession to arson in the second degree. After accepting an adjournment in contemplation of dismissal in the criminal case, Jones then alleged that he had falsely confessed to setting the fire and should not have been expelled from the College. He further alleged that upon his expulsion the College had breached its contract, because Jones had agreed to pay tuition in exchange for educational services. Defendants moved to dismiss for failure to state a claim. The trial court held, and the appellate court affirmed that there is an implied contract upon acceptance to an educational institution. However, where a disciplinary dispute arises, the question becomes whether the institution substantially complied with its own rules and regulations, as opposed to making an arbitrary determination. As such, the appellate court found that plaintiff failed to allege with the requisite specificity the terms of the implied contract that were breached, and did not state a claim. http://decisions.courts.state.ny.us/ad3/Decisions/2012/512204.pdf Previous Next Contact

News Sometimes, De Minimus Contacts Equals Maximum Damage Award! (PA) March 12, 2021 < Back Share to: In a recent en banc opinion, the Pennsylvania Superior Court found that a couple should not be prevented from suing in their choice of venue even where only a small percentage of the defendant company’s $1.4 billion in revenue is derived there. In Hangey, et al. v. Husqvarna Professional Products, Inc., et al. plaintiffs, husband and wife, brought suit after Mr. Hangey fell off a Husqvarna lawn mower and both of his legs were maimed when the lawn mower’s blades did not stop. Mr. Hangey purchased the lawn mower in Bucks County, Pennsylvania and the incident occurred at the Hangeys’ home in Wayne County, Pennsylvania. However, the Hangeys brought suit in Philadelphia County, Pennsylvania—which is known as an extremely favorable plaintiff’s forum. Husqvarna filed preliminary objections arguing—among other things—improper venue. Discovery revealed that Philadelphia did not fall within Husqvarna’s target market area, Husqvarna did not conduct regular business in Philadelphia, Husqvarna was not incorporated in Philadelphia, and only 0.005% of Husqvarna’s sales came from its authorized dealer in Philadelphia County. As such, the trial court granted Husqvarna’s preliminary objections raising improper venue. The Pennsylvania Superior Court, however, reversed the trial court’s decision in its en banc opinion. The Pennsylvania Superior Court reasoned that although Husqvarna’s business in Philadelphia could be categorized as de minimus, it was nonetheless regular, continuous, and habitual, and therefore sufficient for proper venue. The opinion indicated that trial court must consider several factors when considering appropriate venue and not just a defendant’s business revenue. Two judges on the Pennsylvania Superior Court dissented, saying that the trial court did not abuse its discretion and that the trial court has “considerable discretion” when determining proper venue. Thank you to John Lang for his contribution to this post. Should you have any questions, please contact Tom Bracken. Previous Next Contact

News TBI Prompts $45 Million Verdict in NY County June 28, 2018 < Back Share to: Recently, a New York County Jury awarded over $45 million to a woman and her family for injuries sustained when she was struck by a Target shopping cart that was pushed from four stories high by two teenagers. In Hedges v. Target, plaintiff, a philanthropist was standing outside of a Costco store with her son paying for parking when the metal shopping cart fell almost 80 feet onto her. The cart was pushed from an elevated pedestrian platform that connected various stores within the complex. Plaintiff went into cardiac arrest and suffered severe brain and neck injuries. She was in a coma for some time following the accident and suffered permanent brain damage. At the time of trial various defendants had settled out or been dismissed from the case and the trial proceeded with the defendant property owners and security company as well as the two juveniles who were convicted following the incident. The trial went on for five weeks and the jury reached a verdict within only four hours of receiving instruction. The jury found that the property owners and security company were negligent as well as the juvenile offenders, with the bulk of the liability falling onto the various property owners of the shopping complex. Reportedly, it was the testimony of plaintiff’s long time friend that solidified the verdict and proved to the jury just how significant plaintiff’s injuries were. Plaintiff’s friend testified at length about how the brain damage had changed plaintiff and the person she was before the accident. Coupled with the testimony of her physicians, the jury was persuaded awarding both plaintiff and her son and husband damages for past and future pain and suffering totaling over $45 million. This is one of the higher verdicts to come down in recent time and one of the first for Judge St. George who is new to the Supreme Court. The decision shows just how persuasive lay testimony can be in a case where the injuries may be more subjective and not as easy to quantify through medical testimony. Attorneys for the defendants plan to appeal the denial of post trial motions to dismiss and for directed verdicts. Thanks to Dana Purcaro for her contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News No Duty to Defend: Insurer Need Not Defend Insured Against Unjust Enrichment Claim (NY) July 22, 2022 < Back Share to: The Southern District of New York reaffirmed that New York liability insurance policies that provide coverage for bodily injury and property damage of the insured against a third-party generally do not afford coverage to the insured against unjust enrichment claims. In Godfrey v. Executive Risk Indemnity Inc., the Court rejected Plaintiffs’ motion for a declaratory judgment that would require defendant insurance company to defend and indemnify Plaintiffs against an unjust enrichment claim made by a third-party in an underlying action. There, a third-party contractor renovated Plaintiffs’ New York City home where faulty water sprinklers went off, damaging a substantial portion of the apartment, requiring further renovation. The unforeseen renovation spiked up the final cost of the remodel. After Plaintiffs refused to pay the additional cost of the renovation, the third-party contractor sued the Plaintiffs alleging unjust enrichment in attempt to collect the remaining balance. The Southern District of New York granted Defendant-insurer’s motion for summary judgment, concluding that New York Insurance policies regarding Personal Liability Coverage only covers damages for personal injury and property damage, not claims against the insured of unjust enrichment or breach of contract by a third-party. Despite the allegation of unjust enrichment being directly related to property damage that occurred in the Plaintiffs’ home, the Court emphasized that such relation does not establish an allegation of property damage in and of itself. Thus, because the Insurance Policy does not provide coverage against unjust enrichment claims, the Insurance Company has no duty to defend or indemnify Plaintiffs, its insured, in such suits. This ruling highlights the duties and non-duties insurers have to their insured based on both the individual insurance policy and New York’s general insurance law. Additionally, merely because an action is related to damages that would be covered by the policy does not necessarily mean the insured may reasonably expect the policy to cover that action. Thanks to Alexa Schimp for her contribution to this article. Should you have any questions, please contact Heather Aquino. Previous Next Contact