News If It Looks Like A Disclaimer And Sounds Like A Disclaimer, It’s A Disclaimer September 1, 2011 < Back Share to: In the previous post, we addressed the case of QBE Insurance Co. v. Jinx-Proof, where the New York Supreme Court held that as assault and battery exclusion was applicable to deny coverage even when the underlying plaintiff alleged negligent acts of the insured, if the alleged action was rooted in intentional tortuous behavior. Another issue in that case was whether QBE properly disclaimed coverage to the insured. The insured argued that QBE never properly disclaimed coverage. QBE sent the insured two “reservation of rights” letters regarding the underlying suit. The court noted that, while reservation of rights letters may not be effective notices of disclaimer, there is no magic formula that separates a reservation of rights letter from a denial of coverage. The QBE letters clearly denied coverage for assault and battery claims, indicating that QBE “will not be defending or indemnifying you under the General Liability portion of the policy for the assault and battery allegations.” The was sufficient because QBE notified the insured “with a high degree of specificity the ground or grounds on which the disclaimer is based.” This decision supports the argument that it is the content of any communication that is important, not the title of the communication. While a specific denial of coverage letter is still preferred, as long as the carrier informs the insured “with a high degree of specificity the ground or grounds on which the disclaimer is based” the communication should be sufficient. If you would like more information regarding this post, please contact David Tavella at dtavella@wcmlaw.com . http://pdf.wcmlaw.com/pdf/jinx-proof.pdf Previous Next Contact

News Arson By Principal Burns LLC (NY) August 5, 2011 < Back Share to: When an insured intentionally damages or destroys insured property, there is little question that a claim made by that insured for such damage would not be covered. But a more interesting question is created where there is an "innocent" co-insured or business partner who seeks coverage for the loss. The issue recently surfaced in JMM Properties, LLC v. Erie Ins. Co. The carrier insured a building owned by a limited liability company. Jeffrey Truman, one of the LLC’s three principals, intentionally set the insured property on fire in order to recover the insurance proceeds. After the insurance company denied coverage based on Truman’s arson, the insured’s other two partners sued for coverage, arguing that the criminal acts by Truman did not constitute acts by the insured-LLC because Truman's acts were not authorized by the LLC. But the court disagreed and ruled that the insurer properly denied coverage. First, the LLC’s operating agreement granted Truman the power to manage the LLC’s business, including the power to file insurance claims. Therefore, Truman’s filing of a false insurance claim was deemed a false filing by the LLC which defeated coverage. The court also ruled that Truman’s criminal conduct in setting fire to the building bound the LLC. As is the case with corporations and partnerships, a principal’s criminal acts can bind the LLC which is a hybrid of a corporate entity and a partnership. Thanks to Mendel Simon for his contribution to this post. If you would like more information, please write to Mike Bono. Previous Next Contact

News Employee Exclusion Ambiguous? Sometimes. (NY) February 21, 2013 < Back Share to: In Essex Ins. Co. v. George E. Vickers, Jr. Enterprises Inc., the insurer sought a declaration that it was not obligated to defend or indemnify its insured or the owner of a construction project for an incident involving one of a subcontractor's employees. The incident involved Miguel Pinon, an employee of Paul Michael Contracting, which was hired by George Vickers, the insured general contractor. On June 25, 2005, Pinon, while on his lunch break at a beach not far from the construction site, dove into the water and broke his neck. The Workers' Compensation Board denied Pinon benefits on the basis that the accident did not occur in the course of his employment. After Pinon sued, Vickers and Lynn sought indemnification and defense from Essex, who disclaimed on the basis that even though Pinon was not injured during the course of his employment, the employee exclusion still barred coverage. In opposition to plaintiff's motion for summary judgment, Vickers and Lynn argued that the word "employee" in this context was ambiguous because the policy did not define "employee" and that it was open to interpretation as to whether the parties intended for a worker acting outside the scope of his employment to be considered an "employee" within the meaning of the employee exclusion. The Supreme Court agreed with the insured and proerty owner and denied the insurer's motion. The Second Department affirmed. Another issue that arose during the case was whether the property owner had been named an additional insured on Vickers' policy. Vickers purchased a commercial liability policy from plaintiff ending March 25, 2004. Lynn was named as an additional insured on that policy. However, the renewal quotation for the policy beginning on March 26, 2004, stated "no additional insureds." In the insurance application to renew the policy for 2005 to 2006, Vickers listed Lynn as an additional insured. However, the renewal quotation for that coverage period stated that the quote included "NO AI's." The property owner moved for reform of the policy to add them as additional insureds based on mutual mistake. They argued that Vickers included them as additional insureds on the application for 2005-2006, that plaintiff did not refuse the request, and that plaintiff had previously granted Vickers' request to add Lynn as additional insureds on the 2003-2004 policy. Once again, the Supreme Court and Second Department agreed with Lynn, the property owner, and granted their request for reformation. Special thanks to Gabriel E. Darwick for his contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com .   Previous Next Contact

News NJ Supreme Court Rejects Harassment Suit: "Just Say No" August 14, 2008 < Back Share to: In a rare victory for the defense in an action for sexual harassment, the New Jersey Supreme Court affirmed the dismissal of a case brought by two female students against the Princton Theological Seminary. The students alleged that they were harassed by an older alumnus of and contributor to the Seminary who resided in close proximity to the campus. In ruling against the students, the Supreme Court emphasized that the pair failed to demonstrate that they were victims of "severe and pervasive" harassing conduct. Further, in evaluating whether this burden was met, it stressed that the offending conduct should be measured against "a reasonable person" standard, not the subjective effect of the actions on a given plaintiff. But the most encouraging part of the opinon was the court's reliance on good, old fashioned common sense. With no legal citation given or required, the court noted: "it is important in that regard that neither of these women used her own authority to tell Miller to 'go away.' They cannot rely on the prospect of a money damages award from the Seminary to replace their own obligation to simply tell Miller that they had no interest in him romantically or even as a casual acquaintance." Well said. http://lawlibrary.rutgers.edu/decisions/supreme/a-64-07.opn.html Previous Next Contact

News PIP Subrogation Rights Changed in New Jersey. February 2, 2011 < Back Share to: < ![CDATA[PIP Subrogation Rights Changed in New Jersey.]]> Previous Next Contact

News Court Holds Plaintiff’s Expert Lacks Factual Basis (… and is Inconsistent with Plaintiff’s Theory of Liability Anyway) May 24, 2024 < Back Share to: Last week, an appellate court in New Jersey affirmed summary judgment in favor of defendants in a slip and fall case that took place in a Wawa parking lot. Brueck v. Wawa, Inc., & Sherwin Williams Company, et al , No. A-0249-22, 2024 WL 2235537, at *1 (N.J. Super. Ct. App. Div. May 17, 2024). Plaintiff Edward Brueck slipped and fell on a yellow parking line on a rainy day. He commenced suit against Wawa, the paint supplier Sherwin-Williams, and Asphalt Pavement Services (“ASP”) which had striped the lot. Id. To substantiate his claim, Plaintiff produced an expert report from Wayne F. Nolte, Ph.D (“Nolte”). Over seven weeks after the accident, Nolte inspected the scene of the fall on a clear day. He “sprayed water on the line” and measured “the Coefficient of Friction Value,” which he then compared to the guideline set forth by the American National Standards Institute. Id . at 2. Nolte stated that rain was an expected environmental condition, but on the date of the accident the paint was not sufficiently slip resistant to hold Plaintiff’s foot in place. He further opined that site was in a “hazardous condition” on the date of the incident due to the presence of oils and greases along the painted line, which ultimately caused the slick condition that resulted in Plaintiff’s fall. Id. at 2. Defendants Wawa and Sherwin-Williams produced their own expert reports that challenged plaintiff’s expert’s conclusions and methodology. Additionally, during Nolte’s deposition he stated that he had not seen any oil or grease during his inspection but “assumed” there were oils and greases present due to the traffic coming in and out of Wawa, and, based on his co-efficient of friction measurements. Id . at 3, 4. The lower court granted summary judgment for the defendants, holding that plaintiff’s expert’s theory of liability “fell apart” without facts supporting the presence of oil or grease, “rendering his report unhelpful to a jury and therefore inadmissible.” Id . at *3. The Appellate Court affirmed, noting that plaintiff’s expert’s conclusions were inconsistent with Plaintiff’s theory of liability. Specifically, Plaintiff alleged he slipped due to rain on the painted line, yet Nolte concluded that oils and greases created the slick condition that caused Plaintiff’s fall. The Court also found Nolte’s opinion inconsistent with the facts, as no witnesses testified about seeing oil or grease in the parking lot, Nolte never tested any paint, oil or grease that may have been present, and, he did not test the co-efficient of friction against oil or grease – instead he sprayed water and then measured the co-efficient. Id . at *5. This case serves as a helpful reminder to heavily scrutinize expert evidence when it comes to liability, particularly where the expert’s theory differs or especially contradicts the theory of the Plaintiff. It also shows the importance of moving a court to preclude such evidence at trial. Edward Brueck v. WAWA Inc. and Sherwin Williams Company .pdf Download PDF • 165KB Previous Next Brian T. Noel Brian T. Noel Partner +1 267 331 3891 bnoel@wcmlaw.com Contact

News Insurer's Duties Defined by Its Policy Not by Its Insured's Contracts Says NJ Appellate Division June 30, 2010 < Back Share to: In construction venues, contracts requiring subcontractors to name owners and general contractors as additional insureds on liability policies are common. But what happens when the terms of the contract do not match the express language of the subcontractor’s general liability policy additional insured endorsement? The answer boils down to whether the terms of the insurance policy are clear and unambiguous. If so, the insurer’s duty to the additional insured is defined by its policy language rather than the contract language between its insured and the party with whom it contracted. Only when there is an ambiguity in the insurance policy language will the court turn to extrinsic evidence such as the insured’s contract to clear up the gray areas of coverage. In Jeffrey M. Brown Associates, Inc. v. Interstate Fire & Casualty Company, -- N.J.Super. – (App. Div. 2010), New Jersey Appellate Division clarified this position in a coverage dispute between insurers of a general contractor and a subcontractor. The subcontractor’s insurance policy included a blanket endorsement naming as an additional insured “any entity the Named Insured is required in a written contract to name as an additional insured” for liability arising out of work performed by the named insured. However, the policy clearly stated that the insurance provided was “excess over any other insurance.” In contrast, the general contractor’s policy other insurance provision specified that it was primary except when other primary insurance was available. The court concluded that regardless of contractual language between the general contractor and subcontractor requiring the subcontractor’s policy to be primary, the plain and unambiguous language of the policies would govern the respective duties of the insurers. Thus, the subcontractor’s policy was excess to that of the general contractor’s primary coverage, and the settlement of $750,000 in the underlying action was covered entirely by the GC’s $1million policy. If you have any questions or comments about this post, please contact Denise Ricci at dricci@wcmlaw.com . Jeffrey M. Brown Associates, Inc. v. Interstate Fire & Casualty Company, -- N.J.Super. – (App. Div. 2010), http://www.judiciary.state.nj.us/opinions/a2325-08.pdf Previous Next Contact

News Progressive Facing Class-Action Lawsuit for Stiffing Thousands on Totaled Cars (NJ) January 6, 2011 < Back Share to: As we've recently seen, some courts have seen the wisdom in treating insurance policies as individual contracts. But that may or may not be the case for Progressive Insurance, which faces a class action lawsuit in New Jersey Federal Court for allegations that it stiffed thousands of customers on fees such as title transfer and registration transfer fees when covering insureds’ claims for cars that were deemed totaled. The lawsuit sounds in breach of contract as plaintiff’s are alleging that Progressive and New Jersey Insurance Co. violated their policies by failing to pay the costs of those fees as part of the actual cash value of their vehicles. Plaintiff’s argued that an ACV policy indemnifies insureds such that the payment for the loss of a legally titled and registered vehicle legally operable in New Jersey necessarily includes, at minimum, an amount sufficient to legally operate a vehicle in New Jersey, just as the insureds did prior to the loss. Plaintiff’s attorneys are currently arguing that the case meets the requirements for Rule 23 certification, including that a class action is a superior means of resolving the claims. We will continue to monitor this case, Ferrara et al. v. Progressive Garden State Ins. Co., C.A. No. 2:20-cv-01183 (SRC)(CLW). Thanks to Jonathan Avolio for his contribution to this post. Please email Mike Gauvin with any questions. Previous Next Contact

News Close Only Counts in Horseshoes, Hand Grenades, and the Duty to Defend (NY) November 21, 2018 < Back Share to: In New York, it is well-settled an insurer’s duty to defend arises whenever the allegations in a complaint are even potentially within the language of the insurance policy. The duty to indemnify is narrower, as even where there is a duty to defend, there may still be an issue of fact as to whether the underlying occurrence was within the scope of coverage. The Second Department recently reiterated how broadly Courts will interpret the scope of these obligations. In One Reason Rd., LLC v. Seneca Ins. Co., Inc., a landlord sought coverage from Seneca as an additional insured under a tenant’s policy for an underlying personal injury action. Seneca argued the policy did not cover the claim because the alleged accident did not occur on the portion of the property which had been leased to the tenant and the policy only applied to liability arising out of ownership, maintenance or use of “that part of the premises.” However, the Court held Seneca owed the landlord both a duty to defend and indemnification. Although the alleged injury was a slip and fall on snow and ice in the parking lot, the Court observed the tenant had leased a portion of the warehouse and parking lot and “any necessary easements, privileges or rights of way over the adjoining premises.” Taken together with the tenant’s obligations to contribute to the maintenance of common areas and the extremely broad interpretation of the phrase “arising out of,” the Court held the accident occurred on a portion of the property which was part of the tenant’s lease. The ruling is a salutary reminder that courts can be creative in finding coverage even when an insurer believes they have limited the coverage grant in their policies. Thanks to Nicholas Schaefer for his contribution to this post. Please email Vito A. Pinto with any questions. Previous Next Contact

News Written Notice Rule Not Applicable to Municipal Landlord July 13, 2009 < Back Share to: In Dick v. Wappinger, plaintiff filed an action to recover damages for personal injuries against the Town of Wappinger when she fell at the entrance to the NYS police barracks in Wappinger Falls. The Town leased the building to the NYS police pursuant to a written lease. The Town moved for summary judgment on the ground that it did not receive prior written notice of the defect. The Supreme Court, Dutchess County, granted the motion. On appeal, the Appellate Division, Second Department, reversed. The Appellate Division ultimately found that when a municipality leases property and acts as a landlord, it is subject to the same principles of tort law as a private landlord. Accordingly, the plaintiffs were not required to establish prior written notice to the Town of the alleged defect in order to maintain an action against the Town. Two Justices dissented from the majority opinion, arguing that there are only two exceptions to the written notice rule: 1) where the municipality created the defect; or 2) where a special use is found. The dissenting Justices argued that the majority's ruling improperly created a third exception: where the municipality functions in a proprietary capacity. Thanks to Robin Green for her contribution to this post. http://www.nycourts.gov/reporter/3dseries/2009/2009_04371.htm Previous Next Contact

News Making A Federal Case Out Of A $462 Claim December 14, 2007 < Back Share to: An insurer removed a suit to Federal court seeking recovery of a $462 dental bill by an insured. Plaintiff, an attorney, recently won a $45 million settlement from the same insurer. The insurer, fearing a new class action suit, retained a high-powered law firm, and removed the case to Federal court. http://www.law.com/jsp/article.jsp?id=1197540284638 Previous Next Contact

News New NY Insurance Disclosure Obligations Effective December 31, 2021 (NY) July 6, 2017 < Back Share to: On December 31, 2021, New York State Governor signed into law a new act implementing much more rigorous insurance disclosure obligations than previously existed. While defendants in New York have always been required to disclose applicable insurance policies and coverage limits, defense attorneys had some flexibility as to the timing of such disclosures. Unless plaintiffs attorneys pressed the issue, it was often not necessary to disclose the full insurance policy as long as the policy information and limits were disclosed, or possibly provided along with the declarations page only (redacted as to the insured’s premiums). The newly-signed Comprehensive Insurance Disclosure Act modifies the insurance disclosure rules contained within CPLR §3101(f) by compelling strict and rigorous disclosure of the complete primary, excess, and umbrella policies implicated by a claim. The below changes will require swift action from defense counsel as well as carriers to obtain and disclose information regarding all currently-pending claims and all new claims moving forward within 60 days of the law taking effect: 1. Defendants will be required to provide plaintiffs with complete information for any insurance agreement through which a judgment could be satisfied within 60 days after serving an answer. This requirement extends to a complete copy of all applicable policies, including declarations, insuring agreements, conditions, exclusions, endorsements, and any other documents bearing upon coverage, including applications for insurance. 2. Defendants must disclose any other lawsuits that have already reduced or eroded, or could potentially reduce or erode, any policy limits, including the amount of attorneys fees that have eroded or reduced the face value of the policy, along with contact information for the attorney who received such legal fees. 3. Defendants must disclose the contact information of the claims adjusters, including the telephone number and email address. This includes third-party administrators and people within the insuring entity to whom the third-party administrator must report. 4. Additionally, the newly-added section, CPLR §3122-b, requires that all insurance disclosures made pursuant to CPLR §3101(f) must be certified by both the party themselves and the attorney to ensure that the information disclosed is accurate and complete. This would require an affirmation or an affidavit. The new disclosure obligations of CPLR §§ 3101(f) and 3122-b are effective throughout the life of an action, and defendants are directed to provide updated information within 30 days of receiving any information that would render the prior disclosure inaccurate or incomplete. The disclosures as detailed above are to be completed by March 1, 2022 for all currently pending actions, and within 60 days of service of an answer for all future new actions. Although there is already an amended version of the Comprehensive Insurance Disclosure Act in the works, if adopted the amended bill would likely leave in place the rigorous certification requirements. The amended version would relax some requirements, by lengthening the notification period from 60 days to 90 days, and eliminating the requirements to share insurance applications (which often contain an applicant’s private personal financial information) and related lawsuits. It is unclear at this time what type of penalties might be enacted for failure to disclose, and how rigorously the courts will enforce these new requirements. However, unless and until the new Comprehensive Insurance Disclosure Act is amended, all defense counsel and claims adjusters must take action to review their case loads and comply by the operative disclosure deadlines. At this time, we recommend that all carriers promptly review the following list of “action items” and cooperate with defense counsel in preparing to timely make the required disclosures by the March 1, 2022 deadline: • At the inception of a case, identify all policies at issue, procure copies of all policies at issue, and identify any lawsuits that have reduced or eroded the policies. • Disclose the above information to defense counsel. • Continuously monitor the policies at issue and immediately report any changes to defense counsel. • Provide name, telephone number, and e-mail address for claims adjusters (including TPAs). • Provide up-to-date contact information throughout litigation for insured. • Put the insured on notice that they will be required to prepare a certification in cooperation with defense counsel, and also advise that their insurance application will be turned over to plaintiff’s counsel. Thanks to Shira Straus for her contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact