News When Policy Exclusions Apply, Brokers Beware May 11, 2018 < Back Share to: Last week in Houston Gas Co. v. Cavan Corp. of NY, Inc., the First Department reminded insurance brokers of potential exposure should a policy they procure for an insured fail to cover a liability. In July 2012, Cavan was retained to act as construction managers for a building project in Manhattan. For their services, Cavan was to be paid a flat $600,000 fee. Unfortunately for Cavan, when a subcontractor sued for an injury on the job site, they learned their commercial general liability policy contained an exclusion for losses arising out of construction management services performed for a fee. The First Department reversed the denial of Houston Casualty Company’s motion for summary judgment, and ruled the exclusion barred coverage. However, the First Department also denied Ducey’s—Cavan’s insurance broker—motion to dismiss, and granted Cavan’s motion to add a causes of action for negligence, breach of contract, and negligent misrepresentation against Ducey. In a unanimous decision, the Appellate Court reiterated that individuals who are denied coverage for losses are entitled to recover damages from the insurance broker under a breach of contract theory if the policy obtained does not cover a loss for which the broker contracted to provide insurance, and the insurance company refuses to cover the loss. In addition, an insured may sue a broker under a negligence theory should the broker fail to exercise due care in a brokerage transaction. Last, a negligent misrepresentation cause of action may arise when a special relationship exists between the customer and the broker and the customer reasonably relies on the broker’s representations. Here, Cavan claimed it met annually with Ducey over the course of many years to discuss insurance needs and claimed it relied on Ducey’s advice, which was a sufficient factual pleading to suppot a claim for negligent misrepresentation. The Houston Cas. Co. Court cited our firm’s recent victory in Dae Assocs., LLC v. AXA Art Ins. Corp. in support of this last point. In Dae Assocs., LLC, the insured merely alleged a longstanding relationship, which is insufficient on its own to establish a special relationship. Cavan’s allegations rose to the level of a potential special relationship. While these cases provide further help to insurers in asserting disclaimers of coverage based on policy exclusions, they also should serve as a warning to the potential exposure for brokers in the event of successful disclaimers. Thanks to Nick Schaefer for his contribution to this post. Please write to Tony Pinto for more information. Previous Next Contact

News Pick Your Battles Carefully: Injured Party Has DJ Complaint Dismissed But Still Lacks Coverage (NY) August 19, 2016 < Back Share to: In litigating declaratory judgment actions in New York, an insurer is often faced with the important strategic issue of whether to name all of the underlying litigants as parties to that DJ action. Likewise, the named parties also have the choice of litigating the substantive coverage issues or sitting on the sidelines. That issue was recently at the forefront of Hermitage Ins. Co. v. 186-190 Lenox Rd., LLC. On January 30, 2009, Smith was injured in a slip and fall on property owned by 186-190 Lenox Road, was insured by Hermitage, but Hermitage received its first notice of the accident on June 11, 2012. As such, Hermitage disclaimed coverage on late notice grounds and commenced a declaratory judgment action, naming both Lenox and Smith as defendants. Hermitage moved for a default judgment against Lenox and Smith. Smith opposed the motion, arguing that she was not properly served, and even if she was, the action against her should be dismissed as abandoned because Hermitage did not move for a default judgment within one year of her failure to answer. Smith did not oppose Hermitage's request for a default judgment against Lenox, and Lenox did not answer or oppose the motion. The trial court granted the motion for a default judgment against Lenox and found that there was no duty for Hermitage to defend or indemnify Lenox against the claims made by Smith. It also awarded Smith the procedural relief she sought, severing and dismissing the complaint against Smith as abandoned. On Appeal, Smith sought to challenge the judgment that Hermitage had no duty to defend Lenox, but the Appellate Division, First Department found that Smith lacked standing to appeal from the order granting a default judgment against Lenox. Smith, as a named party, could have opposed Hermitage's coverage position but instead only sought dismissal on procedural grounds. Thus, Smith was not aggrieved by that portion of the order that declared that Hermitage was not obligated to defend and indemnify Lenox in the underlying action. Thanks to Jorgelina Foglietta for her contribution to this post and please write to Mike Bono for more information. Previous Next Contact

News Good Record Keeping Stressed In New York Premises Liability Case (NY) March 25, 2022 < Back Share to: We have previously reported on the importance of good record keeping to help preserve a potential notice defense in New York premises liability cases. In Buffalino v. XSport Fitness, the Appellate Division, Second Department recently addressed these issues in a case in which the plaintiff was injured when the arm and foot pedal of an elliptical machine she was using came loose. She alleged that the gym owners had notice of the dangerous condition. The trial court disagreed and awarded summary judgment to the gym. On appeal, the Second Department observed that “[T]o meet its initial burden on the issue of lack of constructive notice of an alleged defective condition, a defendant must offer evidence as to when the subject area was last inspected relative to the time when the incident occurred. It added that when a defect is latent and would not be discoverable upon a reasonable inspection, constructive notice may not be imputed. The Second Department reversed, holding that the defendant failed to provide “specific” evidence as to when the elliptical machine was last inspected, and that “mere references” to the testing of the equipment is insufficient to establish lack of constructive notice. The court also held that the defendant failed to establish that the dangerous condition was latent. This decision serves as a reminder that as a commercial property owner, it is important to maintain inspection and maintenance records as the failure to do so could result in the loss of a potentially significant defense in a premises liability lawsuit. General testimony as to inspections, absent supporting documents, will not carry the day in court. Thank you to Corey Morgenstern for his contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News Court Cleans Up Definition of Employee Under Worker's Comp Law (NJ) August 24, 2012 < Back Share to: One of the key issues in dealing with workers' compensation benefits is who is considered to be an “employee” under the law. Recently, the Appellate Division determined that an employee is not necessarily someone who comes to clean your home. In Lukasik v. Holloway, the Appellate Division reversed the judgment of the workers’ compensation judge who found that a cleaning woman was an employee of the owners of the home where she was injured. The cleaning woman, Luz Lukasik, had contracted with the homeowners to clean their home once per week for the sum of $100. On the first day of her scheduled cleaning she was injured, sustaining a fractured hand and wrist. Thereafter, she returned to work, but had others do the cleaning at her direction. The workers’ compensation court found that Lukasik was an employee under the statute, and that she was entitled to more than 110 weeks of benefits due to her injuries. The Appellate Division reversed, holding that Lukasik was an independent contractor because she retained primary control over what work she would do, when she would do it, and how the work would be performed. Additionally, Lukasik was not substantially financially dependent upon the homeowners for her income, nor were her services somehow integral to the homeowners’ regular business. Lukasik was merely cleaning their home. While the Appellate Division specifically stated that it did not find that cleaning people are always independent contractors, this opinion does clarify where the line will be drawn. Thanks to Christina Fullam-Emerson for her contribution to this post. If you would like further information, please write to mbono@wcmlaw.com       Previous Next Contact

News Cyber Rules About to Get Real. August 17, 2017 < Back Share to: We have previously reported on NY's onerous cyber rules. The rules go into effect by month's end. Specifically, n August 28, 2017, insurance companies that do business in NY will be obligated to institute policies and procedures that preserve and protect PII of clients, insureds, and other entities in accordance with 23 NYCRR §500 (et seq.). The rationale of the policy was explained by the Superintendent of the DFS: Consumers must be confident that their sensitive nonpublic information is being protected and handled appropriately by the financial institutions that they are doing business with. DFS designed this groundbreaking proposed regulation on current principles and has built in the flexibility necessary to ensure that institutions can efficiently adapt to continued innovations and work to reduce vulnerabilities in their existing cybersecurity programs. Regulated entities will be held accountable and must annually certify compliance with this regulation by assessing their specific risk profiles and designing programs that vigorously address those risks. Insurance companies, and other covered entities, are required to perform cybersecurity assessments in accordance with a written policy developed by the covered entity, that includes: • An evaluation of encryption of data containing PII (both in transit and at-rest); • The development of a Crisis Response Team (“CRT”) to respond to a breach; • TFA or MFA; • Identify and assess internal and external cybersecurity threats; • Utilize defensive infrastructure in conjunction with appropriate policies and procedures to protect PII; • Capability of detecting and responding to any intrusion; • Ability to fulfill the statutorily required breach notification statutes. Moreover, the regulations require a specific policy that regulates 14 different aspects of the covered entities operations. If this is not enough to develop specific in-house policies, the regulations also require that insurance companies ensure that other entities it does business with and transfers materials containing PII, to maintain and adhere to strict cybersecurity regulations that include a requirement for TFA, encryption, written policies, and periodic assessments of the efficacies and compliance to the policies. The insurance company is required to promulgate a policy for its third-party service providers that complies with the above requirements. If not, the insurance company may be held liable. Furthermore, we note that this will soon be the policy in all 50 states. It is easier to implement these changes and requirements now as opposed to being forced to implement the policies at a rush and possibly not achieving full compliance. Special thanks to Matt Care for his contributions to this post. For more information about this post please e-mail Bob Cosgrove. Previous Next Contact

News WCM obtains SJ on Labor Law Action in Suffolk County December 20, 2023 < Back Share to: On December 20, 2023, WCM obtained sumamry judgment on behalf of our homeowner-client in Suffolk County Supreme Court, largely based on the one and two-family dwelling exemption to the Labor Law. When there is common law and Labor Law § 200 claims, an owner may be held liable of he/she either created the dangerous condition that caused the accident or had actual or constructive notice of its existence. However, a “property owner has no duty to protect or warn against an open and obvious condition, which as a matter of law is not inherently dangerous… or where the allegedly dangerous condition can be recognized simply as a matter of common sense.” Rivas-Chirino v. Wildlife Conservation Socy. , 64 Ad3d 556, 557 (2009). Plaintiff, who had been hired as a laborer to work on renovating our client’s home, was injured when, after attempting to pull a piece of sheetrock from the bathroom wall, the remaining sheetrock fell onto him, causing him to slip and step into a hole in the bathroom floor. SJ Decision 12.20.23 .pdf Download PDF • 111KB In a recent decision on our summary judgment motion, the Court determined that the defendant had established a prima facie entitlement to summary judgment dismiss the Labor Law § 200 and common law negligence claims against him. The Court found that Plaintiff failed to raise any triable issues refuting Defendant’s argument that the hole was both open and obvious and constituted an ordinary hazard of Plaintiff’s employment. Notably, Plaintiff himself had testified that he was aware of the hole prior to his accident, as his work including the demolition and repairment of the existing floors, toilers, and sinks located within the bathroom. Previous Next Brian Gibbons Brian Gibbons Partner +1 332 345 7164 bgibbons@wcmlaw.com Contact

News Fore? NY Court Rules on Golfer's Duty to Warn June 2, 2009 < Back Share to: A friendly round of golf between two doctors took an unfortunate turn when plaintiff Azad Anand was struck in the eye by an errant shot struck by his friend, defendant Anoop Kapoor. In Anand v. Kapoor, New York’s Second Department Court granted the defendant’s motion for summary judgment, holding that the plaintiff assumed the risk of being struck by an errant shot when he voluntarily participated in the game. The Court held that, even if there was no assumption of the risk, the plaintiff was at such a “great an angle away from the defendant and the intended line of flight that he was not in the foreseeable danger zone.” Thus, the defendant owed no duty to plaintiff to warn him of his intent to hit the ball. Some may say that the Court simply took pity on the defendant, in not adding insult to injury for defendant’s bad shot. In any event, the decision gives the struggling golfer one less worry. http://www.courts.state.ny.us/courts/ad2/calendar/webcal/decisions/2009/D19706.pdf Previous Next Contact

News Buckle Up! New York Now Requires All Passengers 16 and Up To Wear Seat Belts October 22, 2020 < Back Share to: NEW YORK’S NEW SEAT-BELT LAW REQUIRING ALL OCCUPANTS INSIDE A MOTOR-VEHICLE TO BUCKLE UP TAKES EFFECT ON NOVEMBER 1, 2020 https://nypost.com/2020/08/11/new-york-will-now-require-seat-belts-for-all-car-occupants/ On November 1, 2020, New York will become the 30th state to require all occupants inside a vehicle over the age of sixteen to wear seatbelts. The new law will now make it mandatory for back-seat passengers to wear a seat belt along with the front occupants. Presently, the law only required front seat occupants. Buses and emergency vehicles are exempt from the new law, but not taxis. This law comes after studies conducted by the National Highway Traffic Safety Administration found that you are less likely to suffer serious injuries or death if you wear a seat belt. In 1984, New York was the very first state to enact a seat-belt requirement in the United States and legislation has always promoted New York citizens to wear seatbelts. Time will tell how the new law will impact the way in which plaintiff’s damages are assessed and allocated. Currently, in New York, a defendant in an auto negligence case may raise a “seat-belt defense.” This defense affords a defendant the opportunity to prove through expert testimony that the plaintiff’s injuries wouldn’t have been as severe, as claimed, if plaintiff was wearing a seatbelt at the time of the accident, regardless of where the plaintiff was positioned inside the vehicle. The party claiming injury has a duty to mitigate damages, meaning they must show that they acted reasonably to limit the amount of harm. This duty essentially limits the amount of damages a defendant potentially must pay to the injured party. Typically, the duty to mitigate only applied to actions the injured party takes after an accident. Now that the new law requires all occupants to wear seatbelts, the duty to mitigate damages applies to the actions of everyone over the age of 16 inside a vehicle prior to the occurrence of an accident. Thanks to Irving Fayman for his contribution to this post. If you have any questions or comments, please contact Thomas Bracken. Previous Next Contact

News Speculative Evidence Is Not Sufficient In A New York Slip And Fall Case (NY) December 3, 2021 < Back Share to: To prevail on a summary judgment motion in a slip and fall action, a defendant has the initial burden of showing that it (a) did not create the hazardous condition and (b) did not have actual or constructive notice of its existence. In order to prove lack of constructive notice, a defendant must proffer evidence as to when the site was last cleaned or inspected prior to the accident. Conversely, a plaintiff may prove constructive notice by establishing that the alleged defect was visible, apparent, and existed for a sufficient length of time prior to the accident so that the defendant had time to discover and remedy it. However, a plaintiff’s claim will fail if their proofs are speculative, and they cannot satisfy the burden of proof with sufficient evidence. These issues were addressed in the recent Bronx County decision of Torres v. Sanitation Salvage Corp., 73 Misc. 3d 1214(A), 154 N.Y.S.3d 218 (N.Y. Sup. Ct. 2021). Plaintiff in that case was allegedly injured when she slipped on fruit and vegetable residue on a ramp at the Hunts Point Terminal Market. The market was owned by the City of New York and leased to Hunts Point, which then leased individual units to various produce vendors, including plaintiff’s employer. Hunts Point moved for summary judgment, asserting that it hired a sanitation service to clean the exterior areas of the market and that the area where plaintiff fell was cleaned just an hour prior to the accident. In her opposition, plaintiff argued that because her clothes were wet after the fall, a condition must have existed on the ramp that caused her to fall. However, the court determined that such evidence was insufficient to defeat the motion because there were no prior complaints made to Hunts Point and plaintiff testified at deposition that she never observed any residue in the area where she fell. Because plaintiff relied on “mere speculation” as to the cause of the fall and failed to show that the condition existed for a sufficient period of time prior to her accident, the court granted the motion and dismissed the claims against Hunts Point. The takeaway from Torres is that a New York slip and fall plaintiff cannot rely on mere speculation to sustain their burden of proof and must have concrete evidence to establish the element of constructive notice. Thank you to Gabriella Scarmato for her contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News Residential Exception to Sidewalk Law Tested March 26, 2009 < Back Share to: Section 7-210 of the Administrative Code of the City of New York (the New Sidewalk Law), states that the owner of real property is liable for any injury to property or personal injury that is caused by the failure of the owner to maintain the sidewalk in a reasonably safe condition. This section contains an exemption for one, two, or three-family residential real property that is (1) in whole or part, owner occupied, and (2) used exclusively for residential purposes. In Story v. The City of New York, this exemption's scope was tested. Plaintiff Wilma Story allegedly was injured as a result of a trip and fall accident in front of a building in Brooklyn. This property was owned by Morris and Judith Lowinger and had been used as their place of residence as sole occupants for the past 40 years. The property, however, had a sign on it for their son's law practice and Equinox Company. The Lowingers moved for summary judgment in the action asserting the exemption to Section 7-210. In deposition testimony, undisputed by the plaintiff or co-defendants, the son stated that he used his parent's address simply as a mail drop and official listing and conducted no business there. The Supreme Court, Kings County, finding for the Lowingers, held that the purpose of the New Sidewalk Law would be subverted if the exemption did not apply to the defendants because there was no business use other than a mail listing and a sign. Thanks to Michael Monteith for his contribution to this post. http://www.courts.state.ny.us/reporter/3dseries/2009/2009_29112.htm Previous Next Contact

News Out Of Possession Landlord Not Liable For Injuries On Its Premises August 8, 2011 < Back Share to: Absent a contractual obligation to make repairs or a retention of control over the property, an out-of-possession landlord cannot be held liable for personal injuries sustained on its premises. The Second Department reiterated this principle when affirming the trial court's decision in Sciammarella v. Manorville Postal Associates, where the plaintiff, a U.S. Postal Service employee sustained personal injuries. Sciammarella fell after stepping into a hole on premises leased by the U.S. Postal Service. Defendant moved for summary judgment and established its prima facie entitlement to summary judgment on the basis that it was an out-of-possession landowner with no control or contractual obligation to maintain the premises. Thanks to Alison Weintraub for her contribution to this post. Previous Next Contact

News Defendant Accused Of Assault with Firearm Entitled To Coverage Under Homeowner’s Policy (NY) January 12, 2017 < Back Share to: In the world of insurance coverage, it’s well known that the duty to defend is broader than the duty to indemnify. Just how broad is the subject of many lawsuits, but a Third Department decision handed down today is an excellent example of how common perceptions are stretched to find coverage under an insurance policy. In Guzy v. New York Central Mutual Fire Insurance Company, an insured sought coverage under his homeowner’s policy after being sued by in a personal injury action by a plaintiff who claimed that the insured intentionally shot him in the abdomen. After receiving the claim, his insurance company disclaimed coverage based on the policy’s exclusion for “expected or intended conduct.” In response, the insured, who had been arrested and charged for allegedly shooting the plaintiff, filed a declaratory judgment under his policy. Although the plaintiff claimed the shooting was intentional, the court held that the exclusion did not relieve the insurer of its duty to defend. In doing so, the court reasoned that despite the plaintiff’s allegations, the shooting could be reasonably interpreted as being accidental because a cause of action for assault can be established through recklessness or criminal negligence. The broadness of an insurer’s duty to defend is well-known, but Guzy is an excellent example of how far courts can go in upholding the duty to defend. Thanks to Michael Gauvin for his contribution to this post. Please email Brian Gibbons with any questions.       Previous Next Contact