News School Cannot Control Student's Every Movement (NY) May 15, 2013 < Back Share to: Although a school acts in loco parentis, it - like parents - cannot protect every child against every injury. In Donnelly v. St. Agnes Cathedral School , the parents of an eleven year old student brought an action against his school alleging premises liability and negligent supervision after a fire door closed on his fingertips. The undisputed facts of the case showed that the plaintiff had approached the door walking forward but turned around when he heard someone call him. He extended his hand to hold the door open. Unfortunately, his fingers were pinched within the hinged side of the door and the doorjamb when the door closed. Based upon these facts the Second Department reversed the lower court's denial of summary judgment. Although the plaintiff alleged that the school failed to regularly inspect the door, this was disproven by the school citing a State mandated fire safety inspection one month prior. Additionally, the plaintiff's engineer provided only a conclusory and speculative opinion that the door closed too quickly. Finally, there was no factual basis for a finding that the school had either actual or constructive notice of any defect with the door. The Court also summarily dismissed the negligent supervision claim recognizing that the school could not reasonably be expected to continuously supervise and control all of the student's movements and activities. A school can only be expected to provide supervision to guard against foreseeable injuries. In the instant matter, the plaintiff failed to raise a triable issue of fact as to the foreseeability of the plaintiff's injury. Special thanks to Georgia Stagias for her contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com .       Previous Next Contact

News NY Dealer Pleads Guilty In Fake Art Scheme September 20, 2013 < Back Share to: We previously posted about the indictment of Glafira Rosales, the art dealer indicted by the US Attorney's office in New York for her participation in an expansive scheme to sell fake art works to galleries, including the Knoedler Gallery. Rosales has now plead guilty to a number of significant felonies, including conspiracy to sell the fake art, money laundering, and tax crimes. Rosales claimed that she obtained the art -- purported to be painted by Modernist masters such as Pollack and Rothko -- from two anonymous collectors from Switzerland and Spain. Instead, all of the fake works were produced by a single painter who worked out of his garage in Woodhaven, Queens. The paintings were then treated so that they would have the false patina of age. According to the US Attorney's office, Rosales was paid approximately $33.2 million for the fake art. She agreed to forfeit that amount as part of her guilty plea, but it remains to be seen how much of that amount is actually recoverable. We were interested to see how the US Attorney's office was going to prove that the works were indeed fake, but that point is now moot. Indeed, during her plea Rosales admitted that the paintings were "fakes created by an individual in Queens." No doubt her statement will be used by the plaintiffs in the civil lawsuits filed against Rosales and the galleries, and the question of interest to now follow is whether the galleries are found liable. Please write to Mike Bono if you would like further information. Previous Next Contact

News NJ App. Div. Affirms No Cause Verdict In Favor Of WCM In Insurance Broker E&O Case. March 15, 2010 < Back Share to: In Credit Suisse First Boston v. Lehman, et al, the plaintiff's had sought in excess of $5.5 million in damages from an insurance broker represented by WCM partner, Robert Ball, and a wholesaler. Plaintiffs alleged that the insurance broker and wholesaler failed to procure the appropriate insurance policies to cover a New Orleans hotel owned by Credit Suisse which was the subject of multiple mold claims. After a 6 week trial, the jury found the insurance broker negligent , but that the negligence did not proximately cause any alleged damages. On appeal , the New Jersey Appellate Division affirmed the verdict finding no error in the jury charge, " little question" that the insurance policies procured required the carrier to defend and indemnify Credit Suisse, and that Credit Suisse's decision to settle the underlying claims without suing the insurance carrier " highly questionable". The latter point had been the basis of WCM's lack of proximate cause argument to the jury. If you have any questions regarding this trial or appeal , please contact Robert Ball in our New Jersey office. http://www.judiciary.state.nj.us/opinions/a2031-08.pdf Previous Next Contact

News Guidance Provided for Choice of Law Analysis for Coverage Disputes in NJ September 20, 2012 < Back Share to: The outcome of a conflict of laws analysis is often difficult to predict. But a recent Appellate Division decision may provide some guidance as to how allocation of coverage issues are decided in New Jersey where there is a conflict of laws. In the consolidated appeals of In The Matter Of The Liquidation Of Integrity Insurance Company/Sepco Corporation and In The Matter Of The Liquidation Of Integrity Insurance Company/Mine Safety Appliances Company, the Appellate Division was faced with the issue of which state’s laws should apply when apportioning insurance coverage in the mass tort context. Both Sepco Corporation, a California-based company, and Mine Safety Appliances Company, based in Pennsylvania, were insured under excess policies with Integrity, a New Jersey insurance company, in the mid-1980s. After Integrity’s Liquidator filed its liquidation plan, both Sepco and Mine Safety filed proofs of claim with the Liquidator for coverage under the policies. The Liquidator denied the claims based on the utilization of an “all-sums” (joint and several) allocation methodology. Under that methodology, “the insured may recover in full under any triggered policy that it chooses and leave the selected insurer to pursue cross-claims against other triggered carriers whose policies are also available.” While both California and Pennsylvania utilize this approach, New Jersey has rejected the joint and several allocation method for a pro-rata allocation method. The denials were referred to a Special Master, who affirmed the Liquidator’s decisions in both matters, citing New Jersey’s compelling interest in having its own law applied to the claims because Integrity was being liquidated pursuant to New Jersey law, and because the pro-rata approach was more equitable as to other claims filed against Integrity than was the joint and several approach. The Special Master’s determinations were affirmed by the trial court. On review, the Appellate Division affirmed the trial court’s decision to apply New Jersey law. While refusing to state a blanket rule that the law of the insurer’s home state would govern the analysis, the Appellate Division found that the balance of the equities favored applying New Jersey law to the claims against Integrity, who was in its twenty-fifth year in the liquidation process, even though the policy language confusingly seemed at times to favor an “all-sums” approach. The best way to guard against uncertainty is to add a provision as to choice of law; otherwise, an unintended and unexpected interpretation of policy terms may result. Thanks to Christina Emerson for her contribution to this post. If you would like further information please write to mbono@wcmlaw.com .     Previous Next Contact

News Concurrent Clause Exclusion Basis For Insured’s Bad Faith Claim. May 24, 2013 < Back Share to: The Pennsylvania Middle District Court recently held that concurrent clause exclusion provisions in insurance policies are unenforceable under Pennsylvania law. In Donahue v. State Farm, the plaintiff purchased homeowner’s insurance through State Farm Fire & Casualty Company. The policy insured the plaintiff’s home and provided a variety of coverage for the plaintiff’s dwelling and personal property. Additionally, the policy included numerous exclusions. One exclusion was the “Water Damage” exclusion. Essentially this exclusion barred coverage for any loss resulting from water or sewage overflow or back-up. As the insured wanted coverage for such potential losses, a “Back-Up Of Sewer” endorsement was added to the policy. Subsequently, the plaintiff’s sewer backed-up and caused damage to the plaintiff’s property. The plaintiff made a claim for coverage. State Farm denied coverage claiming that the property damage was caused by flood waters, for which coverage was excluded under the policy. In response to the denial of coverage, the plaintiff instituted a bad faith action against State Farm. State Farm filed a motion to dismiss. Ultimately, the Court concluded that the plaintiff had adequately pled a bad faith cause of action. In reaching its determination, the Court noted that State Farm had based its denial of coverage on concurrent causes. The Court stated, under Pennsylvania law, “concurrent clause exclusion provisions are unenforceable in the presence of an affirmative grant of coverage.” Thus, the plaintiff was able to proceed with his bad faith claim against State Farm. Thanks to Colleen Hayes for her contribution to this post.   Previous Next Contact

News It’s Not Your Fault (PA) February 22, 2019 < Back Share to: In Precision Underground Pipe Servs. v. Penn Nat’l Mut. Cas., Verizon entered into a contract with Parkside to install an underground conduit for Verizon’s fiber optic cable in Villanova, Pa. Under this agreement, Parkside was required to name Verizon as an additional insured and to indemnify Verizon. Parkside subsequently contracted with Precision to provide additional labor. Under this agreement, Precision was required indemnify Parkside and Verizon and name them as additional insureds on their Penn National policy. The Penn National policy included an “Automatic Additional Insureds-Owners, Contractors, and Subcontractors" endorsement, which stated the following would constitute an additional insured under the policy: “[a]ny person(s) or organization (s) . . . with whom you are required in a written contract or agreement to name as an additional insured, . . . caused, in whole or in part, by: (1) your acts or omissions; or (2) the acts or omissions of those acting on your behalf in the performance of your ongoing operations”. An employee of Precision suffered injury while working at the work-site and filed a complaint against Verizon and Parkside. Penn National refused to provide a defense and indemnity to Verizon and Parkside. In determining whether Verizon and Parkside were entitled to defense and indemnity, the court looked to the underlying complaint. The court reasoned the complaint lacked any indication that Precision committed any act or omission that lead to the plaintiff’s injury. Specifically, the plaintiff’s complaint alleged wrongdoing on the part of Verizon and Parkside but did attribute fault Precision. Therefore, the court concluded no additional insured coverage was provided under the policy because there were no allegations that the plaintiff’s injuries were caused by Precision. Thus, this opinion emphasizes the importance of scrutinizing the underlying complaint’s language when dealing with duty-to-defend matters. Thanks to Rachel Thompson for her contribution to this post. Please email Colleen Hayes with any questions. Previous Next Contact

News How Timely Is Timely in Removal to Federal Court? (PA) June 12, 2013 < Back Share to: Judge Ludwig of the USDC, EDPA, was recently faced with the question of when removal from state court to federal court is proper. In the case of Alston v. Wal-Mart, Alston commenced a slip and fall lawsuit in the PA Court of Common Pleas, Philadelphia County, a venue that is consistently rated as one of the worst defense venues in the country. The case was originally filed as an arbitration court case and in its affirmative defenses Walmart alleged that plaintiff could not seek damages in excess of $50,000 (the arbitration court’s jurisdictional limit) or $75,000 (the minimum amount required to remove the case to federal court on diversity grounds). As the case progressed, it quickly became apparent that plaintiff’s demand exceeded $75,000. Wal-Mart thereafter removed the case to federal court. Plaintiff’s counsel objected and argued that the removal was untimely as it took place more than thirty days after service of the complaint. Wal-Mart argued that the removal was, in fact, timely because it was not until the plaintiff made it clear that the demand exceeded $75,000 that Wal-Mart was aware of its right to remove the case. Judge Ludwig sided with Wal-Mart. He held that the removal was timely as it was not until the value of the demand was made clear that Wal-Mart was on notice of its to remove the case. So what’s the takeaway from all of this? We suggest that if you have a case in state court which you would otherwise seek to remove to federal court but in which the value of the case does not seem to exceed $75,000, you ask the plaintiff to stipulate to a $75,000 award cap. If the plaintiff refuses, you probably then have the right to remove the case to federal court. If you have any questions about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News PA Court Holds COVID-19 Excluded From “Property Damage” Coverage Under All-Risk Property Insurance Policy January 14, 2022 < Back Share to: In a recent case from the Eastern District of PA, Maggios Famous Pizza, Inc. v. Selective Ins. Co. of the Sw., the court granted the defendant’s summary judgment against the plaintiff who sought coverage under an all-risk property policy. Finding that COVID-19 related loss of business did not qualify as actual damage to the property required by the policy. The plaintiff in the case owned a large pizza and dining restaurant. The Pennsylvania Governor instituted a stay at home order in response to the COVID-19 pandemic. The large establishment was limited to takeout and delivery. Prior to the pandemic, the plaintiffs purchased property insurance from an insurance company in 2019. The plaintiff subsequently submitted a claim for “losses caused by the COVID-19,” which was denied by the defendant insurance company. The court found in favor of the insurer finding that the Insurance policy does not cover the losses caused by COVID-19. After reviewing the policy as written, the court reasoned this outcome based on three different theories. First, the insurance policy does not cover pure economic loss. The plaintiff’s policy covers direct physical loss to the property, here although the plaintiffs were limited in conducting business the property did not suffer damage. Second, the policy as written requires physical loss, not a loss of certain uses. The plaintiff’s claimed that when they were forced to serve only takeout, they lost used of the physical property. Again, the policy only is activated for physical damage to the property. Lastly, the insurance policy expressly excludes coverage for all losses caused by virus. The insurance policy is an “all-risk “policy, meaning it pays for all sources of damage except sources that are specifically excluded. Although not the insurance company’s intention, COVID-19 is a virus and consequentially falls under the exclusion. The insurer’s policy language dictates this outcome even if it is an all-risk policy. The exclusion was properly interpreted by the Court and denied the Covid-19 “property” claims. Thanks to Kevin Riley for his contribution to this article. Should you wish to discuss Covid-19 insurance claims, feel free to contact Thomas Bracken. Previous Next Contact

News CPSC Issues Interim Report on Chinese Drywall. November 24, 2009 < Back Share to: The CPSC's Interagency Task Force on Chinese drywall has just issued an interim report. In the report, the CPSC notes that it has found hydrogen sulfide and formaldehyde in the affected drywall. The CPSC believes that the sulfide is causing the reported corrosion and that the combination of sulfide and formaldehyde may account for the claims of sickness. This latter opinion is caveated, however, by the fact that the reported levels of formaldehyde and sulfide are below known irritant levels. http://www.cpsc.gov/info/drywall/nov2009execsum.pdf Previous Next Contact

News WCM Welcomes Steve Kim and Craig Chaney to our NJ Office August 2, 2022 < Back Share to: WCM is pleased to announce the return of Steve Kim, and welcomes Craig Chaney, both at the rank of counsel in our New Jersey office. Steve previously worked for WCM as a litigation associate from 2014 – 2019. During that time, he handled complex, large exposure cases, consistently achieving favorable results for our clients. Steve returns having gained further experience in managing, training, and leading a legal team consisting of young associates, paralegals and legal assistants related to personal injury defense of high-profile clientele. Craig is a skilled litigator with over two decades of experience in insurance defense and insurance coverage litigation. He is a trial attorney whose practice focuses on defense of complex general liability claims and premises liability claims. Steve and Craig present a strong addition to WCM’s defense practice in New Jersey. Previous Next Contact

News D&O Policy Language Mandates Advance Of Limits For Criminal Defense Case (PA) April 15, 2022 < Back Share to: In the insurance coverage case, Dougherty v. Nat39, l Union Fire Ins. Co. of Pittsburgh PA., plaintiff petitioned for a special injunction seeking an advance to cover his criminal defense costs and expenses under a policy issued by defendant to the International Brotherhood of Electrical Workers, Local 98 (“Local 98”). Relevant here, Dougherty was indicted for alleged financial improprieties as an officer of Local 98, with a federal criminal trial commencing in May of 2022. Dougherty argued that a specific provision of a D&O policy provided that the insurer was contractually obligated to advance the policy limits prior to the start of the trial. Dougherty argued affirmative injunctive relief is necessary because he would be left without the ability to cover defense costs at a “critical juncture” in his federal criminal proceeding, allegedly implicating constitutional rights. He also indicated trial consultants – presumably expensive - are needed to put forth a meaningful defense. Moreover, Dougherty stated he currently owed past fees to his attorneys and was unsure if they would continue with his defense without assurance of payment. By way of context, an injunction is typically only issued if irreparable harm (among other factors) can be shown. The Court recognized the need for swift resolution, stating “there is a possibility that the merits . . . will [] be decided by mediation” but that resolution would come too late to prevent irreparable harm given that the federal criminal trial begins May 5, 2022. The Court examined the specific policy language at issue, which provided, in relevant part: Regardless of whether the defense is so tendered [by Local 98], the Insurer shall advance Defense Costs (excess of the Retention amount) of such claim prior to its final disposition. The Court acknowledged the word “shall” imposed a duty on the defendant to advance the defense costs because Dougherty presented a “Claim” as defined by the policy, i.e., “a criminal proceeding which is commenced by return of an indictment.” Defendant opposed the petition by arguing Dougherty failed to provide notice, which was quickly discounted by the Court. Defendant further argued the exclusion pertaining to Dougherty’s knowledge of his wrongful conduct applied; however, the Court deemed this circular because Dougherty is presumed innocent. This case is unique in that a special injunction was utilized to obtain what amounts to a declaratory judgment. Thanks to Richard Dunne for his contribution to this article. Should you wish to discuss, please feel free to contact Matthew Care. Previous Next Contact

News Slippery When Wet: Defendant Fails to Gain Summary Judgment Because Water Did Not Come From Pool but Leaky Pipes (NY) May 21, 2021 < Back Share to: In O'Brien v. Asphalt Green, Inc., the plaintiff allegedly was injured when she slipped and fell on a wet condition on the pool deck at an indoor swimming facility, which was operated by the defendant, Asphalt Green, Inc. The defendant moved for summary judgment dismissing the complaint, contending that the plaintiff assumed the risk, and that it cannot be held liable for the plaintiff's accident since the wet condition was necessarily incidental to the use of an indoor pool. The Supreme Court denied the defendant's motion, and the defendant appeals. The Appellate Division, Second Department, upheld the lower Court’s decision holding defendant cannot obtain summary judgment by relying on the cases in which courts have dismissed personal injury claims arising out of slipping on water around pools based on the reasoning that such water was necessarily incidental to the use of the area. Here, the slippery condition that allegedly caused the plaintiff's fall resulted from brown water that dripped from what the plaintiff described as an overhead pipe, rather than from water splashed from the pool. The defendant failed to establish that water accumulation on an indoor pool deck from condensation that had formed and dripped from overhead pipes or ductwork was necessarily incidental to the use of an indoor swimming. Further, the defendant failed to make a prima facie showing of entitlement to judgment as a matter of law based upon the doctrine of primary assumption of risk. Under the doctrine, participants are not deemed to have assumed risks that are concealed or unreasonably increased over and above the usual dangers that are inherent in the sport. The hazardous condition of an indoor pool deck wet from condensation that had formed and dripped was not open and obvious and created a risk beyond that inherent in the sport of swimming in an indoor swimming facility nor does the doctrine exculpate a landowner from liability for ordinary negligence in maintaining a premises. Thanks to Paul Vitale for his contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact