News Unambiguous Limitations In Agency Agreement Enforced By NJ Appellate Division. December 22, 2009 < Back Share to: Traverso v. Guthaim, et al, was an insurance coverage case involving a dispute between, Charles Heidt , Inc, an insurance agency, and Encompass Insurance Company. Pursuant to the terms of an Agency Agreement , Encompass authorized Heidt to bind certain kinds of insurance contracts issued by Encompass, but subject to various limitations and underwriting quidelines. The trial court granted Encompass' Motion for a directed verdict finding that Heidt's authority to bind coverage was clearly and unambiguously limited by the Agency Agreement and the underwriting guidelines issued by Encompass, and that Heidt exceeded its authority when it attempted to add a three-family house to the insured's existing homeowner's policy. The Appellate Division affirmed . http://www.judiciary.state.nj.us/opinions/a1562-07.pdf Previous Next Contact

News New Jersey Tolerates Mulligans December 4, 2013 < Back Share to: Here, in America, among friends, mulligans are part of the game. In fact, President Clinton refused to count "do-overs" when calculating his score. In Scotland, by contrast, a mulligan off the tee, even among friends, is known as "Hitting Three." In Schick v. Ferlito, the New Jersey Supreme Court ruled that taking a mulligan when another golfer was in the "line of fire" (and failing to yell fore) constituted "reckless" conduct, and thus liability attached. In other words, in the context of recreational sports, to constitute a tort, conduct must exceed the level of ordinary negligence. A recent New Jersey decision, Corino v. Duffy, et. al., seemingly endorsed the free grant of mulligans among playing partners. Corino suffered a serious eye injury after being struck by a mulligan sliced off the tee box adjoining the fairway on which Corino was playing. According to Corino, he carefully watched the threesome on the adjoining tee hit their drives. Unaware that Duffy's playing partners allowed Duffy to take a mulligan, Corino took dead aim on his iron shot to the green, only to be struck by Duffy's mulligan. In light of Schick, Duffy sued the threesome claiming that all three engaged in reckless conduct by allowing a mulligan in the first instance, and then failing to yell fore as Duffy's shot sliced toward Corino. As the matter unfolded, Duffy's playing partners turned against him, claiming that Duffy struck the mulligan that injured plaintiff, and that they had no duty to yell fore. The trial court agreed. Reading the Rules of Golf strictly, the court ruled that only the "player" who strikes the errant shot has the duty to yell fore. Beyond that, the court suggested that only a jury could make a determination of whether Duffy's failure to yell fore constituted reckless conduct. Presumably, the court felt that, unlike Schick, Corino was not directly in the "line of fire," and thus presented a much closer question of fact. While it's true that the Rules of Golf impose upon the player the duty to yell fore when an errant shot is struck, the rules also mandate that the ball must be played as it lies. If Duffy had followed the rules, Corino would have played on without injury. And that is the irony of New Jersey's golf jurisprudence.   Previous Next Contact

News Gym Member Tries to Race Past Waiver (PA) February 2, 2018 < Back Share to: Recently, in Vinson v. Fitness International LLC., a Pennsylvania court evaluated whether release and waiver language found in a membership agreement shielded a fitness center from liability when a member slipped and fell at the fitness center. Plaintiff fell over a wet and worn floor mat at was injured. Prior to joining, plaintiff signed a membership agreement that stated that a member acknowledges that they gave up any claim or demand due to injury, whether by active or passive negligence on the part of the fitness center. The notice introducing the release was in bold and capital print. Defendant sought summary judgment arguing: (1) Plaintiff could not demonstrate that Defendants created or had notice of the condition; (2) Plaintiff identified no expert and expert testimony was required for Plaintiff to meet her burden; and (3) upon signing the membership agreement and joining the fitness center, Plaintiff executed a valid waiver of all future claims of negligence. In response to this argument, Plaintiff alleged that the waiver was void as against public policy. The court turned to prior decisions addressing the validity of a waiver clauses, namely Evans v. Fitness & Sports Clubs, LLC. In that case, the court determined that a waiver of liability only violates public policy if it involves a matter of interest to the public or the state, including matters involving an employer-employee relationship, public service, public utilities, common carriers, and hospitals. In the Evan case, the court determined that the agreement at issue in that case related solely to the private affairs of those parties and did not affect a matter of interest to the public or the state, and therefore did not contravene public policy. After reviewing the law and applying the facts at hand, the Vinson court decided the waiver clause was identical to clauses that the court previously ruled on, and found the waiver in this case to be valid and enforceable. The court granted summary judgment based solely upon Defendant’s claim that Plaintiff executed a valid waiver of all future claims of negligence when she signed the membership agreement and joined the club. Thanks to Chelsea Rendelman for her contribution to this post and please write to Michael Bono with any questions. Previous Next Contact

News Handicap Ramp is not “Special Use” of the Curb December 2, 2016 < Back Share to: Although a landowner is responsible for maintaining sidewalks that abut its property, it is not responsible for curbs or ramps unless there is a defect on the curb/ramp that was created by the landowner or due to the landowner’s special use. In Lebron v. City of New York, the plaintiff fell on the curb cut and handicapped ramp area outside Bronx Lebanon Hospital. The First Department concluded that Bronx Lebanon did not derive a special benefit from the curb cut and handicapped ramp area where plaintiff fell because the area was accessible and used by the general public, and there was no evidence that the curb cut and ramp were installed by Bronx Lebanon or its predecessor. The duty to maintain an area of special use is not dependent on a finding that the landowner actually installed or repaired the area, only that it derived the special benefit. This decision shows the physical limitations of premises liability and can be beneficial in arguing summary judgment motions in cases where an accident occurs on a defect near, but not on, a property owner’s abutting sidewalk. Thanks to Lauren Branchini for her contribution to this post. Previous Next Contact

News Scheindlin Affirms Onerous E-Discovery Standards Applicable to Federal Litigation. February 3, 2010 < Back Share to: In Zubulake v. UBS Warburg, LLC, 229 F.R.D. 422 (S.D.N.Y. 2004), the Southern District of New York set certain standards for e-discovery. These standards have become the standards for federal litigation across the U.S. On January 15, 2010, the Southern District of New York revisited Zublake, in Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, No. 05 Civ. 9016 (SAS), 2010 WL 184312 (S.D.N.Y. Jan. 15, 2010). In Pension Committee, the Court reemphasized the standards previously set, and cautioned litigants to view them as "guidance" that should not be ignored. The consequences of ignoring the "guidance", and failure to implement certain standards range from monetary sanctions for negligent failure or case dismissal for willful/bad faith failures. In between negligent and willful/bad faith, is of course, gross negligence for failing to implement certain discovery standards. The Court provided several examples of discovery "failures" that constitute gross negligence, namely: 1. Failure to issue a written litigation hold; 2. Failure to identify the "key players" and ensure their electronic and paper records are preserved; 3. Failure to cease deletion of e-mail or preservation of records of former employees in a party's control; and 4. Failure to preserve backup tapes of "key players" or other employees if that is the sole source of that employees' records. The appropriate consequences for grossly negligent failures range from mandatory to permissive adverse inference jury charges. In providing some specific examples of gross negligence and the consequential sanctions, the Pension Committee court warns those that attempt to permit employees to engage in self-collection/preservation (without attorney guidance), or to limit the number of employees involved. According to the decision, the only way to ensure compliance with the Pension Committee standards is for retained counsel to meet with "key players" early on to discuss preservation, identify other employees who may have necessary records (however incidental they may seem), and issue/implement a litigation hold to those individuals. If you have any questions about this article or ESI, please contact Bob Cosgrove. Special thanks to Cheryl Fuchs for her contributions to this post. http://ralphlosey.files.wordpress.com/2010/01/05cv9016-january-15-2010-amended-opinion.pdf Previous Next Contact

News Insurance Disputes Being Filed More Often in Federal Courts November 15, 2018 < Back Share to: Lex Machina, a LexisNexis company, announced the release of its first annual Insurance Litigation Report, which encompasses data on more than ninety-three thousand insurance cases pending in federal court since 2009. The Insurance Litigation Report showcases data and tends involving disputes between an insurer and a policyholder, a beneficiary, or another insurer asserting the rights of a policy holder. The report includes analytics from both the broad insurance data set as well as five common insurance types: Automobile, Homeowners, Life, Uninsured/Underinsured, and Business Liability. The report shows that there has been a major increase in the numbers of filed federal insurance cases in the last several years. The report also confirmed that federal courts are far more likely to rule in favor of insurers than claimants. The two areas that had the biggest jump were automobile claims and homeowner claims. Automobile claims rose by thirty nine percent, uninsured/underinsured motorist claims rose by fifty percent, and homeowner’s claims rose by eighty percent. While claims are going up, insurers tend to be satisfied due to the insurer friendly outcomes in federal courts. For instance, insurers were victorious in eighty-five percent of duty to indemnify cases and in eighty percent of duty to defend cases. However, if cases went to trial, claimant prevailed more than fifty five percent of the time. We suspect the federal courts offer "incentives" to both plaintiffs and defendants, since plaintiff's appreciate the expedited nature of federal courts, whereas, insurer-defendants enjoy the "friendly confines" of stricter federal courts and statically more favorable outcomes. Thanks to Melisa Buchowiec for her contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Pennsylvania Superior Court Addresses Condition Precedent For An Insurer’s Duty To Indemnify (PA) August 8, 2019 < Back Share to: In Nationwide v. Arnold, the Pennsylvania Superior Court recently addressed a policy’s business pursuits exclusion, as well as the conditions under which an insurer may be required to indemnify its insured. By way of background, Nationwide insured August Arnold under a personal umbrella policy. Nationwide commenced a declaratory judgment action seeking a determination that it was not obligated to defend and indemnify Arnold in a lawsuit filed by CMC against, among others, Arnold. CMC commenced its action against Arnold following the unsuccessful prosecution of a qui tam action (i.e., a whistleblower action brought under the False Claims Act) brought on behalf of the United States by Arnold against, inter alia, CMC. Nationwide argued that its policy’s business pursuits exclusion barred coverage to Arnold for the CMC lawsuit. The trial court ultimately concluded that Nationwide had a duty to defend and indemnify Arnold, as the business pursuits exclusion was not applicable. Nationwide appealed. On appeal, the Superior Court first affirmed that the business pursuits exclusion would not act as a bar to coverage. In reaching this determination, the court reasoned that an activity would fall under a business pursuits exclusion if it had “1) continuity, and 2) a profit motive”. Further, a profit motive may be shown “by such activity as a means of livelihood, a means of earning a living, procuring subsistence or profit, commercial transactions or engagements”. Looking to the instant facts, the Superior Court concluded all of the conduct for which CMC complained were actions taken by Arnold outside of his job and, therefore Nationwide’s business pursuits exclusion would not bar coverage on this basis. However, the Superior Court concluded that the trial court erred in ordering that Nationwide had a duty to indemnify Arnold. The Superior Court concluded that Nationwide could only be required to indemnify Arnold once it was determined that Arnold had been found liable for a covered claim. Thus, as this condition had not been met, Nationwide could not yet be required to indemnify Arnold. Accordingly, this case offers clarification on a policy’s business pursuits exclusion, as well as reconfirms that there cannot be a finding regarding an insurer’s duty to indemnify, until there has been a determination that the insured is liable for a covered claim. Please email Colleen E. Hayes with any questions. Previous Next Contact

News To Avoid Further Litigation On “Settled” Matters, It Is Essential That A Settlement Agreement Does Not Leave Loose Ends January 14, 2022 < Back Share to: Settlement agreements typically signify the end of a legal dispute. However, to avoid a headache and potential for further litigation on “settled” matters, it is essential that the settlement agreement does not leave any loose ends. In Cincinnati Insurance Company v. Acadia Insurance Company, 2021 WL 6071718 (4th Dep’t 2021), a woman fell on property owned by 60 LBC, insured by Plaintiff Cincinnati Insurance. 60 LBC hired a contractor to clear snow and ice from the area where the woman fell. Pursuant to the snowplow contract, the contractor was required to defend and indemnify 60 LBC for any injuries and to list 60 LBC as an additional insured. As such, the contractor procured coverage from Defendant Acadia Insurance. Of course, the woman sued 60 LBC for negligence, and 60 LBC consequently requested defense and indemnity from Acadia Insurance on the basis that it was an additional insured on the contractor’s policy. However, Acadia Insurance disclaimed coverage to 60 LBC on the ground that it was not an additional insured. Subsequently, in the litigation that ensued, 60 LBC was defended by Cincinnati Insurance. During the litigation, Cincinnati Insurance brought a third-party action against the contractor, asserting a breach of contract based on contractor’s failure to defend or indemnify 60 LBC and obtain coverage for 60 LBC as an additional insured. Eventually, the underlying personal injury action was settled in an agreement whereby the woman received $350,000 from the contractor (paid by Acadia) and $50,000 from 60 LBC (paid by Cincinnati). After the settlement, Cincinnati commenced an action against Acadia for breach of contract, alleging Acadia breached the contractor’s insurance policy by disclaiming coverage to 60 LBC as an additional insured. Acadia moved to dismiss the complaint, contending that 60 LBC’s coverage claim against Acadia was encompassed in the settlement and was barred by res judicata. Upon review, the Appellate Division, Fourth Department held that that 60 LBC’s coverage claim against Acadia was not barred by res judicata because it was not encompassed in the settlement. The settlement made no mention of any claims directly against Acadia Insurance by 60 LBC or anyone else, nor did the stipulation of discontinuance. Essentially, Cincinnati Insurance’s cause of action against Acadia Insurance was considered to be separate and distinct from the disputes discussed in the settlement because Acadia Insurance was never sued for wrongly disclaiming coverage to 60 LBC. Therefore, since the settlement was inapplicable, the Fourth Department permitted Cincinnati Insurance—having paid $50,000 on behalf of 60 LBC—to proceed against Acadia Insurance on the coverage claim as a subrogee of 60 LBC. This alarming overlook by the party(ies) finalizing settlement left an insurer subject to further coverage litigation and significant exposure. It is a painful lesson to learn, given the ability of the party(ies) to initially conclude the matter and mitigate loss when the underlying suit was being settled. Thanks to Drew Fryhoff for his contribution to this post. Should you wish to discuss, please contact Thomas Bracken. Previous Next Contact

News Reasonable Expectations Doctrine Requires UIM/UM Coverage at Full Limits April 19, 2024 < Back Share to: In Motil v. Wausau Underwriters Insurance Company, the Appellate Division recently shed some light on the novel issue of whether an individual is entitled to UIM coverage as a “covered driver” injured in a car accident while driving a “covered vehicle” with an identified alternate garaging address under the parents’ auto policy. The parties then cross-moved for summary judgment, and the judge subsequently granted the Plaintiff’s motion, ordering the defendant to provide $100,000.00 in UIM coverage and denied the defendant’s motion. The defendant appealed and the Appellate Court affirmed the trial court’s decision on April 5, 2024. The plaintiff sustained serious bodily injuries in an automobile accident while driving a 2014 Jeep Cherokee owned by her father, Charles Motil. Plaintiff settled with the tortfeasor for the policy limit of $15,000.00. The plaintiff requested UIM coverage from the defendant, but coverage was denied on the grounds that plaintiff was a non-resident family member, and therefore was subject to the limit of liability step-down provision in the UM coverage endorsement of her parent’s policy, which was $15/$30k, making the limits equal to the tortfeasor limits. Wausau further claimed that plaintiff was neither a named insured nor a family member within the meaning of her parent’s policy and therefore not entitled to UIM benefits. The parent’s mailing address was in Bridgeton, and the plaintiff was named in the declaration as a covered driver under “driver information” and memorialized that the Jeep had an alternate garaging address in Blackwood. Plaintiff then filed a declaratory judgment action seeking $100,000.00 in UIM coverage from the defendant, Wausau Underwriters Insurance Company. The parties ultimately cross-moved for summary judgment, and the judge subsequently granted the Plaintiff’s motion, ordering the defendant to provide $100,000.00 in UIM coverage and denied the defendant’s motion. The defendant appealed and the Appellate Court affirmed the trial court’s decision on April 5, 2024. The Appellate Court affirmed and stated that neither the declaration nor the policy provided a distinction of UIM coverage for a “covered auto” with an identified alternate garaging address. Additionally, the declaration did not alert the plaintiff that as a covered driver operating a vehicle garaged at a separately identified alternate address, she did not qualify as a “family member” who was a “resident” of her parent’s household. The court reasoned that the drafters could have unambiguously included the language in either the declaration or the policy alerting that a covered driver with an identified garaging address was subject to the step-down in coverage. The Court stated that the lack of clarity and distinction in the declaration and policy created ambiguity and fairly leads to the presumption that a covered driver is entitled to UIM coverage, regardless of the UIM step-down provision. Therefore, pursuant to the language of the declaration, the policyholder has a reasonable expectation that the plaintiff, as a covered driver, was entitled to the same UIM policy coverage. The Court ruled that due to the ambiguity and contradiction between the declaration and the policy obfuscates the application of the step-down, the “reasonable expectations doctrine” controls in this case. Under this doctrine, the interpretation of insurance contracts must accord with the reasonable expectations of the insured. Britney Motil v. Wausau Underwriters Insurance Company .pdf Download PDF • 174KB Previous Next Contact

News Call Your Next Witness Podcast- Jessica Zimmerman July 15, 2021 < Back Share to: Today's guest on the Call Your Next Witness podcast, Jessica Zimmerman, is a former prosecutor, civil defense attorney and third-party administrator. She now works directly for an insurance company. Her varying perspectives viewing the world of litigation, both as a litigator and risk manager, give Jessica unique insights toward how we evaluate and defend claims. Did Jessica envision a career in insurance right out of law school? Certainly not -- yet, she's been in this industry for much of her career, and has explored various opportunities throughout. This should be an insightful, practical and "real" interview for any young professional considering a career in the litigation and/or risk management world. Previous Next Contact

News “Use Soft Words and Hard Arguments.” — English Proverb. April 10, 2020 < Back Share to: Want to learn the techniques mediators use to get a deal done? Want to prepare more effectively for mediating your case? Join us for a CE/CLE Presentation entitled Behind the Curtain: An Insider’s Guide to Mediation on Thursday, April 16, 2020 at 4:00 pm. Partner Dennis will share some of the insights developed while he studied how to become a mediator at the Center for Advance Dispute Resolution in Washington, DC., and while representing clients at mediations over the years, The course is designed for lawyers, insurance professionals, including brokers, agents and other claims professionals. Please contact Chelsea Rendelman if you would like to register for this event. Previous Next Contact

News Tag, You're It - Too Dangerous for Children? (NY) October 27, 2016 < Back Share to: We live in a litigious era. One of the unfortunate side effects of this, however, has been restrictions on what supervised activities children may participate; many organizations now fear that any injury, no matter how slight, will result in protracted litigation. Luckily for New York children, the First Department has declined to extend such liability to one of childhood’s most dangerous games—tag. In Chynna A. v. City of New York, infant-plaintiff, a seventh-grader, sustained a thumb injury after colliding with another student while playing tag during gym class. Defendants’ motion for summary judgment was denied by the trial court leading to an appeal. The First Department unanimously reversed the trial court’s ruling and ordered that all claims against the remaining defendants be dismissed. The court described the collision as being “sudden and unexpected,” and concluded that no amount of supervision could have prevented the injury. Thus, the gym teacher’s supervision of the students playing tag was not a substantial cause of plaintiff’s injury The First Department rejected plaintiff’s “speculative theories” that tag was too hazardous for plaintiff’s gym class. There was, the First Department continued, no evidence that the plaintiff was injured because of overcrowding in the gym, the gym’s small size, or because students were engaging in unruly behavior, unchecked by supervising teachers. Moreover, there had been no evidence of similar, prior injuries sustained by students in earlier games of tag, which was played regularly at the school. This case serves as a reminder that, for now, New York courts will recognize and acknowledge that some injuries are inherent to childhood activities, and that, absent evidence of prior notice of injury or dangerous conditions, children may continue to be children. Thanks to Peter Luccarelli for his contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com . Previous Next Contact