News Pennsylvania Superior Court Finds Employers Have No Duty to Protect Electronically Stored Personal Information January 3, 2020 < Back Share to: In Dittman v. UPMC, breach of contract and negligence actions were brought against an employer when employees’ personal information was stolen from the employer’s computer system and used to file fraudulent tax returns and steal tax refunds. Particularly, the names, birth dates, social security numbers, tax information, addresses, salaries, and bank information of approximately 62,000 UPMC employees and former employees were accessed and stolen from UPMC’s computer system. The information stolen was personal information that UPMC required employees to provide as a condition of employment. The employees filed a class action lawsuit, arguing that UPMC had a legal duty to protect their personal and financial information and that UPMC failed to properly encrypt the data and establish adequate firewalls to protect the information in its network. UPMC filed preliminary objections to the complaint, arguing that the employees lacked standing to assert these claims on behalf of an individual who had not yet been injured and that the negligence and breach of contract claims failed as a matter of law. The trial court sustained the preliminary objections and dismissed the claims. On appeal, the Superior Court agreed with the trial court that UPMC did not owe a duty of reasonable care in its collection and storage of the employees’ data. In coming to that conclusion, the Superior Court weighed five factors. First, the Superior Court found that the relationship between the parties, that of employer and employee, weighed in favor of imposing a duty on the employer. Second, the Court reasoned that employers have an obvious need to collect and electronically store the personal information of their employees. Although the foreseeability of a data breach is a substantial risk, the utility of electronically storing information outweighs the risk. Next, the Court reasoned that it was unnecessary to have a judicially imposed duty requiring employers to incur significant costs to increase security when there is not true way to prevent security breaches altogether. Finally, the Court found that it was not in the public interest to impose a duty and expend judicial resources, as there was already legislature to address the issue. Thanks to Alexandra Perry for her contribution to this post and please write to Mike Bono if you would like more information. Previous Next Contact

News Bagel Shop is not Liable for its Unruly Consultant’s Antics June 14, 2016 < Back Share to: Under the doctrine of respondent superior, an intentional tort “committed by an employee can result in liability for his or her employer” if the employee was acting “within the scope of the employment” at the time of the commission of the tort. In Villongco v. Tompkins Square Bagels, plaintiff was seated with his friends at a bagel shop when a waitress asked him to leave. Plaintiff then directed a vulgar slur against the waitress and exited the shop. Upon learning of this insult from the waitress, defendant, who was hired by the bagel shop as a “consultant,” followed plaintiff out of the bagel shop. The consultant and plaintiff began arguing about fifty feet away from the bagel shop. Ultimately, the consultant struck plaintiff resulting in personal injuries. At the time of the altercation, the consultant had stopped working at the bagel shop for the day. Plaintiff sued the bagel shop based on theories of respondent superior and negligent supervision/hiring. The bagel shop moved for summary judgment arguing it cannot be held liable for the consultant’s actions as they were not performed in furtherance of the business of the bagel shop. The Supreme Court, New York County granted the bagel shop summary judgment finding the altercation did not occur while the consultant was performing his duties at the bagel shop, and the defendant and plaintiff were not on the bagel shop premises at the time of the altercation. Business owners should instruct their employees how to handle potential altercations with customers. However, if the altercation does not happen within the scope of the employee’s work duties, a business owner has a strong defense that it is not liable for the altercation. Thanks to Caroline Freilich for her contribution to this post.         Previous Next Contact

News The Perils of Frosting April 3, 2009 < Back Share to: In Barrera v. City of New York, an infant plaintiff sought to recover against the City for injuries allegedly sustained when she slipped and fell on cake frosting on a staircase at her elementary school. The primary basis for recovery was that the defendant was on actual and/or constructive notice of the hazardous condition because the defendant was aware of a bake sale that was taking place in the school. In upholding the lower courts decision that granted the defendant summary judgment, the Second Department noted that the defendants' general awareness that bake-sale items might fall on the school premises was insufficient to establish constructive notice of the particular condition at issue. Thanks to Lora Gleicher for her contribution to this submission. http://www.courts.state.ny.us/reporter/3dseries/2009/2009_02551.htm Previous Next Contact

News WCM is pleased to announce that effective July 1, 2013, Brian Gibbons has been promoted to Counsel. July 1, 2013 < Back Share to: New York, NY A former prosecutor in the Bronx and WCM attorney since 2009, Mr. Gibbons defends individuals and businesses from a variety of general liability claims. He also handles first party property matters during the claim investigation and in litigation. A New York native, Mr. Gibbons is a graduate of Boston College and St. John’s University School of Law. He is an active member of the Regis Bar Association and a new member of the Nassau County Bar Association. Previous Next Contact

News In NY Carrier Must Disclaim When It First Learns Of Late Notice Basis For Disclaimer, Cannot Wait For Further Investigation. January 20, 2012 < Back Share to: The question of when a carrier must disclaim coverage in New York for a bodily injury claim is a most litigated issue. New York Insurance Law 3420(d) requires a liability insurer to give the insured written notice of a disclaimer “as soon as is reasonably possible.” However, New York also has a “one disclaimer” rule, which requires a carrier to list all grounds for disclaiming coverage in the disclaimer or it will waive any other basis that may be available. The Appellate Division, First Department recently reversed its prior rule and held that a carrier must disclaim when it first learns of a late notice basis for disclaiming coverage, even it the carrier is investigating other possible reasons that coverage may not be afforded. In George Campbell Painting v. National Union Fire Ins. Co. (116389/08) it was not in dispute that notice of the loss was untimely, and that the carrier was aware of the late notice when it first received notice of the loss from a purported additional insured. The carrier, however, investigated whether the entity giving notice of the loss was actually an additional insured. The Appellate Division held that the disclaimer based on late notice, issued four months after the carrier received notice, was untimely, despite the ongoing investigation that was being conducted by the carrier. How this duty-to-disclaim-immediately rule can be reconciled with the single disclaimer rule was left unanswered by the court. No doubt additional appellate litigation on the subject will ensue! Previous Next Contact

News Third Circuit Distinguishes Between “Commercial Solicitation” and “Professional Services,” Finding No Duty to Defend in Defamation Lawsuit January 5, 2024 < Back Share to: In Republic Franklin Insurance Company v. Travelers Casualty Insurance Company of America , the Third Circuit applied New Jersey law to determine whether a CGL Policy’s Financial Professional Services (FPS) Exclusion relieved an insurer of its obligations to an insured for a defamation lawsuit. 2023 WL 8446103 (3d Cir. Dec. 5, 2023). In 2014, Orchestrate sued Borden-Perlman (“B-P”) in Texas for defamation. Id. at 1. Orchestrate claimed a former employee, now working for B-P, made false statements about Orchestrate’s insurance practices to solicit Orchestrate’s clients to B-P. Id. B-P was insured under a CGL policy issued by Travelers (the “Policy”) and an E&O policy from Republic. Id. Thereafter, a New Jersey court ruled Republic was obligated to defend B-P in the Texas lawsuit. Id. Republic then sued Travelers, claiming Travelers had duties to defend and indemnify B-P for the Texas lawsuit under the Policy. Id. at 2. The Policy required Travelers to defend and indemnify B-P for any suit seeking damages for “personal injury,” including defamation. Id. at *1. Nevertheless, the FPS Exclusion barred coverage for “personal injury” from the insured’s provision of “financial professional services” to others. Id. On appeal, the Third Circuit analyzed whether the Texas lawsuit claims “flowed directly” from B-P’s “professional services,” defined by the Policy as advising and recommendations related to insurance. Id. at * 3. The Court concluded the allegations raised—that B-P’s employee told clients Orchestrate failed to process claims, provide promised discounts, and use correct insurance forms—surpassed “general commercial solicitation.” Id. Rather, the statements involved insurance advice and recommendations, constituting “professional services.” Id. Accordingly, the Court held the FPS Exclusion applied, relieving Travelers of the duties to defend and indemnify. Id. The Court emphasized that this outcome complied with an insured’s expectations of dual insurance: the E&O policy would cover professional liability, while the CGL policy would be limited to business liability. Id. , n. 8. Republic is informative for New Jersey insurers, as it indicates that courts will not extend the scope of CGL and E&O policies’ respective areas of coverage beyond what is necessary to comply with the insured’s expectations. Republic Franklin Insurance Company v. Travelers Casualty Insurance Company of America .pdf Download PDF • 141KB Previous Next Jessica Whelan Jessica Whelan Associate +1 267 665 0877 jwhelan@wcmlaw.com Contact

News NY Court Stuffs Suit for Fall on Open and Obvious Defect on Basketball Court April 29, 2016 < Back Share to: In New York, one of the primary defenses of a landowner to a premises claim is that the alleged defect or condition was "open and obvious" so the plaintiff could have avoided it. In Wallace v. City of New York, an experienced basketball player was injured when he tripped over a crack or hole in an outdoor basketball court inside a New York City park. The court found that plaintiff voluntarily chose to play basketball on an outdoor court that had an open and obvious defect on its surface and as such, plaintiff voluntarily assumed the risk presented by this defect. The court relied on photographs of the defect and the plaintiff's testimony that the defect was not blocked or obscured before he stepped on it in support of its finding that the defect was open and obvious. Although the plaintiff attempted to create an issue of fact through expert affidavits, the First Department rejected them, finding that the experts' assertions were speculative or unsupported by any evidentiary foundation or industry standard. Thanks to Jorgelina Foglietta for her contribution to this post and please write to Mike Bono for more information. Previous Next Contact

News Sworn Denial of Process Warrants Evidentiary Hearing July 21, 2023 < Back Share to: After a default judgment has been entered in a plaintiff’s favor, under the right circumstances, the defendant’s fight has only just begun. Pursuant to CPLR 5015(a)(4) and 3211(a)(8), a plaintiff may move to dismiss and vacate a judgment on grounds that the court lacked personal jurisdiction. Under 5015(a)(4), such a motion to vacate can be made at any time. In Tijuan Aikens v. Valentina Kouchnerova, et al., 2023 NY Slip Op 03218 (2d Dep’t June 14, 2023), the Court was faced with a plaintiff who was allegedly injured in 2008 by a slip and fall at premises owned by the defendant. In 2010, within the time permitted, the plaintiff filed a suit for damages suffered as a result of personal injuries. But the court never reached the merits since the defendant failed to answer or otherwise appear. In 2011, the plaintiff filed a motion for entry of default judgment, which the court granted. The court entered a sum of $100,000 after an inquest in 2013. In 2019, the Supreme Court denied the defendant’s motion to vacate under CPLR 5015(a)(4), determining that personal jurisdiction existed by way of proper service of process. The Supreme Court adhered to the rule that “[o]rdinarily, the affidavit of a process server constitutes prima facie evidence that the defendant was validly served.” See Wachovia Bank, N.A. v. Greenberg, 138 AD3d 984, 985. But the presumption of proper service created by a server’s affidavit is rebuttable. The mere denial of service is insufficient on its own to rebut such a presumption. But fortunately for the defendant, under Deutsche Bank Natl. Trust Co. v DaCosta, “a sworn denial of service containing specific facts generally rebuts the presumption of proper service. . . and necessitates an evidentiary hearing” See Deutsche Bank Natl. Trust Co. v. DaCosta, 97 AD3d at 631. Under oath, the defendant twice denied receiving service of process at properties located in Florida and New York. The two sworn denials were specific and convincing enough to warrant vacating the judgment and ordering that an evidentiary hearing be held. The Court’s holding serves as a warning and underscores the importance of lawyers performing their due diligence before waiving jurisdictional defenses early in litigation. CPLR 5015(a)(4) and 3211(a)(8) can combine to form a valuable and lucrative shield. Thanks to Mark Kindschuh for his contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News No Safety Equipment Provided, No Assumption of Risk February 3, 2012 < Back Share to: In Charles v. Uniondale School District, the plaintiff, a high school lacrosse player, was struck by a passed ball during pre-season lacrosse practice. Because it was pre-season the plaintiff had not yet been provided with a helmet and facemask. Under New York law, it is well established that a participant engaging in a sporting or recreational activity consents to commonly appreciated risks that are inherent in and arise out of the nature of the sport. Such participants may be held to have consented to such risk by their participation in the injury-causing event that is an apparent or reasonably foreseeable consequence. Based on the above, the school district moved for summary judgment, but the Supreme Court, Nassau County denied the motion holding that although being struck with a passed ball is a known risk inherent in the sport of lacrosse, there was a question of fact as to whether the school district increased the risk of harm by failing to provide the plaintiff with head and face protection during practice. The Appellate Division Second Department affirmed the lower court's decision. Thanks to Ed Lomena for his contribution to this post. If you would like more information about this post, please contact Nicole Brown at nbrown@wcmlaw.com . http://www.nycourts.gov/reporter/3dseries/2012/2012_00479.htm Previous Next Contact

News Conditional Indemnification: Some Get it, Some Don't. November 12, 2010 < Back Share to: In Vovchik v. Metropolitan Development Partners, II, LLC, the plaintiff, an employee of High-Rise was injured when he fell into a 10-12 foot ditch while wheeling along an 80-pound concrete core-drilling machine at a construction site. Metropolitan was the owner, Gotham was the general contractor, and High-Rise was its subcontractor. In its contract with Gotham, High-Rise agreed to indemnify Metropolitan and Gotham. Accordingly, the court stated that Metropolitan and Gothem could be indemnified if they were not negligent. With respect to the Metropolitan, its only involvement was weekly progress updates. Accordingly, the court found that Metropolitan could not have been negligent, and granted it an award of conditional indemnification. Gotham, however, created a ramp at the site that plaintiff had to avoid while wheeling the machine. As such, a jury could find it liable for plaintiff's accident to some extent. Accordingly, the court denied its motion for conditional indemnification against High-Rise. http://www.law.com/jsp/nylj/CaseDecisionNY.jsp?id=1202474622127 Previous Next Contact

News Non-cumulation Clause “Leads” The Way for Insurer Victory (NY) February 15, 2013 < Back Share to: At issue in this appeal is whether Allstate’s insurance policy required Allstate to pay a second full policy limit or whether plaintiffs' losses were encompassed by the per occurrence limit in single insurance policy. As was the case here, most lead-based paint claims involve exposure, injuries, and/or damage that take place or continues through several policy periods. As such, exposure/injuries/damage may not be known by a claimant at the time of the exposure/injury/damage takes places, the precise date or dates when the exposure/injury/damage took place is often very difficult to pinpoint. In November 1991, Allstate issued an insurance policy to Tony Wilson, the owner of an apartment building in Rochester, New York. The insurance policy had a per-occurrence limit of $500,000, and was renewed for two additional one-year periods. In 1993, two children were exposed to lead paint while living in an apartment in Wilson’s building, with one suffering injuries due to the lead exposure. The mother of those children later commenced an action against, among others, Wilson, seeking damages for injuries sustained by the child as a result of exposure to lead. According to Wilson's deposition testimony, he attempted to remediate the lead paint after learning that the children had been exposed to the substance, however, the extent of his remediation attempts were never made clear in the record. In 1994, two more children of a subsequent tenant were exposed to lead in the same apartment involved in the first litigation. A separate action was commenced to recover damages for injuries sustained by those subsequent children. While the second action was pending, the original action settled for $350,000, which Allstate paid pursuant to its policy. Allstate then took the position that the non-cumulation clause in the policy limited its liability for all lead exposures in the apartment in question to a single policy limit of $500,000, offering the plaintiffs in the second action the remaining $150,000 of coverage to settle the action. Plaintiffs believed they could also seek $500,000 from a different policy year, and as such, commenced the declaratory judgment action to resolve that issue. Allstate appealed the lower court’s decision granting plaintiffs' cross-motion seeking a declaration that the amount of insurance coverage to which plaintiffs were entitled was the full policy limit of the second policy. In Nesmith v. Allstate, the Appellate Division, Fourth Department, likened these lead exposure facts with those of a recent decision in the First Department involving asbestos, Mt. McKinley Ins. Co. v. Corning Inc. In Mt. KcKinley Ins. Co., the court concluded that "any group of claims arising from exposure to an asbestos condition at a common location, at approximately the same time may be found to have arisen from the same occurrence.” Here, the Fourth Department reversed the lower court’s decision, finding that the evidence established the two sets of children lived in the same apartment at different times, less than a year apart. Despite Wilson’s testimony that he attempted to remediate the lead hazard, there was nothing in the record establishing that he removed all of the lead paint from the subject apartment. Accordingly, the Court found the lead paint that injured the second set of children was the same lead paint that was present in the apartment when the first set of children lived there, and concluding that the lead exposure arose from the same occurrence. As the lead exposure was viewed as a single occurrence within the meaning of the policy, all plaintiffs’ losses were encompassed by the single $500,000 per occurrence limit. Special thanks to Joe Fusco for his contribution to this post. For more information, please contact Paul Clark at pclark@wcmlaw.com .       Previous Next Contact

News An Issue Of First Impression For PA: Are Minor Children Bound To Arbitration Agreements Signed On Their Behalf? June 9, 2023 < Back Share to: In Santiago v. Philly Trampoline Park LLC, the Superior Court of Pennsylvania was tasked with deciding an issue of first impression in the state: whether a parent’s role as a natural guardian entitles that parent to bind their minor child to an arbitration agreement and waive that child’s right to seek redress for injuries in a court of law. Santiago v. Philly Trampoline Park, LLC., 291 A.3d 1213, 1216 (Pa. Super. Ct., 2023). The case involved several parents bringing separate claims against the defendant, Sky Zone, a Philadelphia trampoline park. Id at 1217. In 2019, a mother and his two daughters visited Sky Zone and signed a “Participant Agreement, Release and Assumption of Risk” (the “Agreement”). Among other things, the agreement provided that “if I or any of my children are injured in any way, this waiver prevents and prohibits any recovery of money from any Sky Zone related entity.” After one of the children was injured at the facility, her father filed a complaint on behalf of his child. Sky zone moved to compel the arbitration agreement, signed by the other parent, contending that the Agreement was a valid agreement that both the parents and child were within its scope. The Court noted that as a general rule of contract law, only the parties to an arbitration agreement may be compelled to arbitrate. That said, a party can still be compelled to arbitrate under an agreement, regardless of whether she signed it, if common law principles of agency and contract support such an obligation on her part. Whether an agency relationship exists is a question of fact, the burden of proof weighing on the party asserting the agency relationship. An agency relationship may exist by: 1) express authority; 2) implied authority; 3) apparent authority; and/or 4) authority by estoppel. Relevant to this case is “apparent authority,” which exists where the principal, “by word or conduct” causes people with whom the agent deals to believe that the principal has granted the agent authority to act. The focus is on the principal’s conduct to determine whether an agency relationship exists, for the purposes of this analysis, the purported agent’s conduct is irrelevant. After analyzing the issue of whether an agency relationship existed as between spouses through apparent authority and finding one did not exist because the principal had no interaction with Sky Zone, the court moved to the novel question of this case. . At the outset, the court acknowledged that the minor children could not have entered into the arbitration agreement themselves, as minors lack the capacity to contract in their own right. Id. As such, the court held that minors also lack the capacity to “grant express authority to an agent to contract on their behaves, rendering any such resulting contracts voidable.” The court held that, “Natural guardianship confers no inherent right to intermeddle with the property of the minor child, and the natural guardian has no inherent authority to demand or power to receive, hold or manage the minor’s property unless the natural guardian has also been appointed as guardian of the minor’s estate.” Id. This is an interesting decision that we expect to be appealed. Thanks to Hannah Garber for her contribution to this article. Should you have any questions, contact Matthew Care. Previous Next Contact