News NY's First Department Says No Coverage to Named Insured for Claim by Subcontractor's Employee January 14, 2010 < Back Share to: In a 3-2 opinion, New York's First Department has just ruled, in a case of first impression, that a general liability policy’s employee exclusion bars coverage for a bodily injury claim to a worker hired by the insured’s subcontractor. In Nautilus v. Matthew David, et al., the insured managed a corporate party on Randall’s Island in New York. The insured hired a subcontractor to provide services for the party and the subcontractor then hired the worker who was later injured while falling from a vehicle on the event grounds. The insurance policy at issue excluded coverage for injury to “employees” -- defined as any person “hired by, loaned to, leased to, contracted for, or volunteering services to the insured, whether or not paid by the insured.” The court ruled that even though the injured worker had not been directly hired by the named insured, the worker had been “contracted for” by the insured because the subcontractor that hired the worker had been retained by the insured to provide services for the event. See Nautilus v. Matthew David, et al. http://www.courts.state.ny.us/reporter/3dseries/2010/2010_00296.htm Previous Next Contact

News NJ Supreme Court Rules that Consumer Fraud Act Claims Are Preempted By Product Liability Act June 2, 2008 < Back Share to: The Vioxx litigation has consumed a great deal of judicial resources in New Jersey where the drug's manufacturer is headquartered. It has also clarified many unsettled areas of law. In McDarby v. Merck, the New Jersey Supreme Court examined a punishing jury verdict against Merck that included an award in excess of $4,000,000 just for attorney's fees and costs for its violation of the Consumer Fraud Act ("CFA"). Under the CFA, a successful plaintiff can recover treble damages, attorneys fees and costs if an unconscionable commericial practice is proven. In contrast, New Jersey's Product Liability Act ("PLA") permits recovery if a product manufacturer fails to adequately warn prescribing physicians of the risks of a drug's use but without any provision for the recovery of enhanced damages. The question presented in McDarby was whether the PLA provided the exclusive remedy for claims of economic loss sustained by the plaintiffs or whether the CFA with its enhanced damages could be also be utilized. The issue was far from academic since the multi million dollar award of attorneys fees and costs hinged on the Supreme Court's decision. In McDarby, plaintiffs' theories under the CFA and PLA overlapped. To support their CFA claim, plaintiffs argued that Merck's failure to "be truthful in the marketing of [Vioxx]" represented a misrepresentation designed to mislead consumers. To support their PLA claim, plaintiffs argued that Merck provided inadequate warnings regarding the cardiovascular risks of Vioxx, a claim that seemed remarkably similar to their CFA claim. The PLA states that it is the exclusive remedy for harm caused by a product. The Supreme Court agreed with Merck that, under both theories of liability, plaintiffs were seeking recovery based on Merck's failure to provide adequate warnings, a classic product liability claim. Under New Jersey's statutory product liability scheme, the sole and exclusive remedy is provided in the PLA. Thus, the PLA preempts the CFA when a product liability claim is made. Bottom line: in an action under the PLA, successful plaintiffs are limited to tort damages alone and cannot obtain treble damages, attorneys fees or costs under the CFA. http://www.judiciary.state.nj.us/opinions/a0076-a0077-07.pdf Previous Next Contact

News "Innocent" Misrepresentation Leads to Policy Rescission for Homeowners (NY) December 9, 2016 < Back Share to: A New York appellate court recently dealt with the issue of whether a homeowner's policy could be rescinded, despite proof of fraud. In Joseph v. Interboro Insurance Company, the plaintiffs needed to obtain homeowners insurance prior to closing on a residential property in Brooklyn. Their mortgage broker contacted an insurance broker to obtain a policy based upon representations the plaintiffs made in their loan application that they would occupy the premises as their primary residence. The plaintiffs signed the application, and on the date of closing, a homeowners' insurance policy was issued by the defendant. After a fire occurred at the premises, the defendant discovered that the plaintiffs did not occupy the premises as their primary residence and rescinded the policy, contending that the plaintiffs, through a material misrepresentation, induced the defendant to issue a policy that it normally would not have issued. The plaintiffs sued the insurer for breach of contract and negligence, but the trial court awarded summary judgment in favor of the insurer. On appeal, plaintiffs admitted that they did not intend to reside in the premises, but claimed they did not read the application and therefore did not make a willful misrepresentation. The Second Department rejected that argument, finding that under New York law, a material misrepresentation justifies rescission, even if innocently made. Thanks to Josh Gornitsky for his contribution to this post and please write to Mike Bono for more information. Previous Next Contact

News Unsigned Contract Can Result in AI Coverage December 28, 2016 < Back Share to: When a blanket additional insured endorsement provides coverage as required in a “written contract,” the First Department says the contract does not need to be signed. In Zurich Am. Ins. Co. v Endurance Am. Speciality Ins. Co., an employee of Kras Interior Contracting Corp. was injured while in the scope of his employment. The employee sued the property owner and Newmark, the property owner’s agent. Newmark hired Kras via a purchase order, which stated, “By accepting the order, vendor hereby agrees to become bound by the terms of the agreement.” The purchase order required Kras to procure insurance and name Newmark and the property owner as additional insureds. Although the purchase order contained signature lines, it was never executed. Newmark’s insurer tendered the defense of its insured and the property owner to Kras’s insurer, and eventually initiated a declaratory judgment action to establish the defendants’ entitlement to coverage as additional insureds. Kras’s insurer argued they did not qualify as additional insureds because the purchase order was not signed and, therefore, there was no contract in place. The First Department noted that the blanket endorsement merely required a “written contract,” but did not require that the contract be executed. Accordingly, the court held that Newmark and the owner were additional insureds. When it comes to evaluating additional insured coverage, both the endorsement and the contract must be carefully scrutinized. The importance of undertaking this analysis cannot be underemphasized given the frequency with which litigation follows the above pattern—worker is injured on the job, sues the property owner and its agents, who then seek coverage as additional insureds to the worker’s employer’s policy. Thanks to Chris Soverow for his contribution to this post.       Previous Next Contact

News Policy Terms And Statute Of Limitation Applied To Bar Breach Of Contract And Bad Faith Claims (PA) July 17, 2013 < Back Share to: In Thompson v. Certain Underwriters at Lloyd’s, the Philadelphia Court of Common Pleas granted Lloyd's motion for judgment on the pleadings and ruled that Thompson's breach of contract and bad faith claims against Lloyd’s were barred by a suit limitation provision in the policy at issue, as well as the expiration of the applicable two-year statute of limitations. Accordingly, the court dismissed Thompson’s claims with prejudice. Plaintiff Lopez T. Thompson filed a claim against his insurance policy issued by Certain Underwriters at Lloyd's following a fire at his property. Lloyd’s sent an adjuster to inspect the property and estimate the damages. Thompson claims that he then contacted Llyod’s approximately 9 months later, demanding that his claim be settled. Lloyd’s denied the claim shortly thereafter and Thompson responded by filing a writ of summons a few months later and a complaint five months after that alleging that the damage to his property was covered under his insurance policy. Numerous amended complaints, objections and cross-claims were filed throughout the next year, until the court recently granted Lloyd’s motion for judgment on the pleadings. The court noted that Thompson’s breach of contract claim failed to meet the policy’s requirement that such claims be brought within one year after the date of loss, barring his claim in light of Thompson’s failure to submit any proof that Lloyd’s had waived the suit-limitation provision. Further, the court stated that even in light of Lloyd’s "long silence" regarding Thompson's claim, the time limitation described in the policy started running, at the very latest, when Lloyd’s denied the claim, thus making Thompson’s claim untimely by more than a year. As Thompson failed to provide a reasonable explanation as to why he did not commence his suit until 2012, the court dismissed the breach of contract claim. Finally, the court pointed to the applicable two-year statute of limitations and held that Thompson's bad faith claim was also barred. The court noted that the statute of limitations also began to run against Thompson’s bad faith claim when Lloyd’s denied the claim. Special thanks to Nicole Pedi for her contributions to this post. For more information, please contact Nicole Y. Brown at nbrown@wcmlaw.com . Previous Next Contact

News PA Superior Court addresses piercing of corporate veil. October 29, 2007 < Back Share to: The state of PA's corporate veil piercing law had been unclear. Fletcher Hartley v. Szymanski attempts to resolve the lack of clarity. In the decision, the court focused on principles of equity and justice and not rigid legal formality. http://www.superior.court.state.pa.us/opin.htm Previous Next Contact

News Plaintiff Fails to Satisfy NJ Threshold Statute September 9, 2016 < Back Share to: In New Jersey, motor vehicle accident plaintiffs must establish they were permanently injured to satisfy a defendant’s threshold motion. In Peek v. Luo, the plaintiff was struck by a motor vehicle while riding his bike. Plaintiff filed suit alleging permanent injuries, and served an affidavit from his treating physician stating that he sustained scarring of his lung and decreased lung function. However, plaintiff did not serve a medical expert report certifying that he sustained a permanent injury. The defendant filed a motion for summary judgment, arguing that the plaintiff failed to meet the requirements of the verbal threshold statute in New Jersey, which requires the plaintiff to establish that he sustained a permanent injury. The trial court granted defendant’s motion, finding the treating doctor’s affidavit was insufficient. The plaintiff filed a motion for reconsideration, along with an expert report from a second medical doctor opining that the plaintiff sustained a permanent injury. The court denied plaintiff’s motion for reconsideration, noting that the plaintiff should have served the expert report during the discovery period. On appeal, the court agreed that the plaintiff’s motion for reconsideration should have be denied since, at the time of the initial dismissal, plaintiff had not yet provided objective, credible evidence proving a permanent injury. This case highlights the importance of the defense monitoring whether a claimant has met the requirements of the verbal threshold statute. The case also highlights the importance of serving a timely medical expert report. Thanks to Heather Aquino for her contribution to this post.       Previous Next Contact

News New Jersey Courts Further Clarify Occupancy November 13, 2013 < Back Share to: In Shah v. Phoenix Insurance Company, the Appellate Division again addressed the question of "occupancy" in determining whether parties are entitled to uninsured motorist benefits. The plaintiffs in Shah were injured when they were struck by a car while walking towards their vehicle, which was insured by the defendant insurer. At the time of the accident, their vehicle was owned by the employer of one of the plaintiffs. The employer, a corporation, was listed as a named insured on the policy issued by the defendant. The uninsured motorist provision of the policy stated that if the vehicle owner is a corporation, anyone “occupying” the covered vehicle is considered an insured. At the time of the accident, plaintiffs were approximately two car lengths away from their vehicle and had already unlocked the vehicle via the remote security system contained on the vehicle’s key. Plaintiffs argued that they were entitled to named insured status under the policy, which provided a more flexible definition of “occupying” the vehicle to include “getting in”. After considering the undisputed facts and reviewing the policy under the appropriate “plain language” standard, the lower court found that “occupying” meant to be physically inside the insured vehicle. The Appellate Court affirmed the lower court ruling and referred to the line of cases where claims for uninsured motorist benefits were denied based upon the broken nexus between the injured party’s occupancy of the vehicle and the subsequent accident. Thanks to Emily Kidder for her contribution to this post.   Previous Next Contact

News Homeowner's Exception And Mixed Use May 26, 2010 < Back Share to: Generally, Labor Law Section 240(1) imposes absolute liability on homeowners and general contractors. The Legislature carved out an exception for owners of one-and two-family dwellings who are not in a position to realize, understand and insure against the responsibilities of absolute liability imposed by Labor Law Sections 240(1) and 241(6). The exception, however, does not apply to single-family residences that are used for commercial purposes In Chester Lenda v. Breeze Concrete Corp. the defendant homeowner moved for summary judgment seeking dismissal of the plaintiff's Labor Law 240(1) and 241(6) claims arguing that he was entitled to the protection of the homeowner's exception because he planned to use the residence for potential overflow for family guests during vacations. The lower court denied the motion and the Appellate Division, Second Department upheld the denial noting that the evidence showed that a caretaker, employed by the owner, lived in the residence rent free as part of his compensation for maintaining two of the owner's other properties. Thus, the court held that the owner’s use of the property was strictly commercial. In cases of mixed use, the court’s determination on whether the homeowner's exception applies is based on the site and purpose test. This test takes into account the intention of the homeowner at the time of the injury and not their hopes for the future. Thanks to Ed Lomena for his contribution to this post. http://www.courts.state.ny.us/reporter/3dseries/2010/2010_04341.htm Previous Next Contact

News WCM Announces New Resident Partner in New Jersey Office January 19, 2018 < Back Share to: Wade Clark Mulcahy takes pleasure in welcoming Vito (“Tony”) Pinto as Resident Partner of its Springfield, New Jersey, office. Tony brings 25 years of litigation experience to the firm's New Jersey litigation practice and possesses expertise in the defense of premises liability, property damage, construction defect and environmental matters in state and federal courts. He has also handled many significant and sophisticated compliance and enforcement actions as well as private party cost recovery and multi-party cost allocation proceedings. Tony is joining WCM upon the happy graduation of Denise Ricci from WCM partner to caregiver for her grandchildren and to pursue charitable works throughout New Jersey. Prior to joining WCM, Tony was a partner at a regional law firm where he served on that firm's Management Committee and was in charge of recruitment. Before entering private practice, Tony served as Law Clerk to the Honorable James J. Petrella, Presiding Judge of the New Jersey Appellate Division. He received his law degree, with Honors, from the George Washington University National Law Center and his bachelor's degree from Franklin and Marshall College.   Previous Next Contact

News Pennsylvania Federal Court Rejects An Insured’s Tactical Delay In Moving To Amend A Declaratory Judgment Complaint January 28, 2022 < Back Share to: In Giant Eagle, Inc. v. Am. Guarantee & Liab. Ins. Co., the Western District of Pennsylvania addressed whether the plaintiffs in an insurance declaratory judgment action would be permitted to seek leave to amend their complaint where they intentionally delayed seeking such relief for tactical reasons. Plaintiffs Giant Eagle, Inc. (“Giant Eagle”), a supermarket chain, and HBC Service Company Giant Eagle, filed a declaratory judgment action seeking a ruling that its excess insurers owed a duty to defend and indemnify Giant Eagle in four underlying opioid lawsuits. Giant Eagle was initially granted partial summary judgment after arguing that its excess carriers’ duty to defend was triggered by Giant Eagle’s payment of litigation defense costs. Several insurers moved for reconsideration, and the court vacated its partial summary judgment ruling, holding that Giant Eagle failed to show that there was no genuine issue of material fact in dispute. Giant Eagle moved to certify an interlocutory appeal and for leave to file an amended complaint. The court denied Giant Eagle’s motion for leave to amend, concluding that the company had unduly delayed its effort to amend and that it had known the facts it was trying to add to the complaint at the time of its original filing. The court ruled that Giant Eagle’s efforts were strategic in nature and that it had delayed seeking the amendment until the outcome of its partial summary judgment motion, since the amendment would have delayed such relief. This case serves as a reminder that parties seeking to amend pleadings should promptly move to do so and that waiting for a tactical advantage could result in the loss of the right to make the amendment. Thank you to Mason Bailey for his contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News Call Your Next Witness - Dr. Ron Grelsamer February 24, 2022 < Back Share to: Orthopedic Surgeon and Author -- both with regard to orthopedic surgery, and to his expertise on the Beatles -- and all around interesting guy to speak with, Dr. Ronald Grelsamer is a true renaissance man. He recently joined me as a guest on the Call Your Next Witness podcast. Frankly, we could have done an entire podcast on the Beatles. (For example, any Beatles fan is familiar with the Red and Blue albums -- but which songs should have been included on those greatest hits albums, and were left off? That topic alone could prompt hours of debate.) But before we delved into the Beatles, we discussed orthopedic surgery, and specifically, what attorneys should be looking for when assessing a knee injury, both before and after surgery, to gauge whether there is a causation issue. This part of the interview is a must-listen for both plaintiff and defense attorneys in the personal injury world. We also had a frank conversation about the personal injury "machine," and what the defense and insurance industries can do to discourage medically unnecessary surgeries, which Dr. Grelsamer encounters from time to time in his role as an expert orthopedist. Dr. Grelsamer's publications, including his Beatles audiobook, can be purchased here, and the podcast interview can be found here, or downloaded wherever you listen to podcasts. Just search for Call Your Next Witness. If you're interested in being a guest, please contact Brian Gibbons or Georgia Coats.   Previous Next Contact