News This (Watered Down) Bud's For You? (NJ) April 5, 2013 < Back Share to: First, the self-proclaimed King of Beers suffered the indignity of being purchased by a Belgian-Brazilain brewing company, InBev, in 2008. It now finds itself the target of a series of lawsuits filed throughout the country alleging that Anheuser-Busch cheated consumers by misrepresenting the alcohol content of its products. One such suit was filed in New Jersey by plaintiff Brian Wilson. The complaint highlights the sophisticated equipment used by the brewing company that can precisely measure the alcohol content, and claims that the company saves money by watering down the beer during the fermentation process. Because it is alleged that the alcohol content is lower than the amount represented on the bottle labels, the claim is that this practice violates the New Jersey Consumer Fraud Act, as well as other statutes. Frankly, with the incredible variety of specialty craft beers available in the marketplace, Bud drinkers do not strike me as discerning consumers. I think it is also doubtful that Bud buyers made their purchases aware of -- and based on -- the claimed alcohol content on the label, and that a potential 5% difference would have impacted their decision. But it will be interesting to see how this develops. If you would like further information, please write to Mike Bono. Previous Next Contact

News Second Department Explains the High Bar Required to Strike Answer January 5, 2024 < Back Share to: In its recent decision in Lifrieri v. Gambale , the Appellate Division, Second Department, sent the strong message that motions to strike an answer, pursuant to CPLR § 3126, will only be granted in limited circumstances. Lifrieri , NY Slip Op 06521 (2nd Dept. 2023). Plaintiff filed an action against her landlord, after a window she was opening in her apartment building, swung inward, hit her, and caused her to fall backwards and suffer serious injuries. Plaintiff appealed a Richmond County Supreme Court order that denied her motion to strike defendant’s answer for failure to comply with discovery demands and for spoliation of evidence. Alternatively, she moved for the imposition of sanctions against defendant for the alleged spoliation. On appeal, the Second Department explained that generally, “The determination of whether to strike an answer pursuant to CPLR § 3126 is addressed to the sound discretion of the trial court.” Lifrieri , NY Slip Op 06521, citing Pinto v Tenenbaum , 105 A.D.3d 930, 931 (2nd Dept. 2013). However, the remedy should be employed sparingly. The Court, citing Pinto , explained that “absent a clear showing that the failure to comply with discovery demands is willful, contumacious, or bad faith conduct” an answer should not be stricken. In the instant matter, Lifrieri’s main grievance concerned her landlord’s failure to produce a home inspection report from 2014. But in the Court’s view, the trial court “providently exercised its discretion in denying that branch of the plaintiff's motion which was to strike the defendant's answer on the ground that the defendant spoliated.” Lifrieri , NY Slip Op 06521, at 1. Namely, defendant’s failure to furnish the report did not leave Lifrieri unable to prove her claim, and its omission by the defense was not the result of “willful, contumacious, or bad faith conduct.” Id . The key takeaway for civil litigators in New York State is to pinpoint the legal standard and common law interpretation of the CPLR before filing spoliation motions. Although plaintiff’s counsel in Lifrieri was frustrated by the absence of the report, a motion to strike an answer under CPLR § 3126 is an extreme measure that is only warranted in extreme circumstances. Lifrieri v. Gambale .pdf Download PDF • 136KB Previous Next Contact

News New Jersey Juries Not Required to Award Compensatory Damages March 23, 2010 < Back Share to: In Kozma v. Starbucks Coffee Company et al., a 50-year old man slipped and fell after getting some coffee at Starbucks. The jury found Starbucks 60% liable and plaintiff 40% liable. Although the allocation of fault fell in plaintiff’s favor, the evidence that came out during trial, namely that plaintiff had prior work injuries similar to the injury claimed at the time of the Starbucks slip-and-fall, that plaintiff had traveled to both Florida and his home in the Poconos after the accident, and that he had even played a few rounds of golf, led the jury to return a verdict with no monetary damages awarded to the plaintiff. Plaintiff disagreed, and appealed the verdict solely on the issue of damages, arguing that the instruction that the jury was allowed to return an award of zero dollars was erroneous. The Appellate Division found that the jury instructions were proper and deferred to the trial court jury and its “infusion of community notions of justice” into its verdict. Thanks to Alison Weintraub for her contribution to this post. http://www.judiciary.state.nj.us/opinions/a3908-08.pdf Previous Next Contact

News Reasonable Expectations Doctrine Must Be Alleged To Overcome Motion To Dismiss (PA) October 14, 2021 < Back Share to: On October 1, 2021, the United States District Court for the Eastern District of Pennsylvania, in Jeffers Farms, Inc. v. Liberty Insurance Underwriters, et al., analyzed whether an insurance policy’s “prior acts exclusion” barred coverage. By way of brief background, Liberty Insurance Underwriters Inc. (“Liberty”) issued two insurance policies providing directors, officers and company liability coverage to Jeffers Farms, Inc. (“Jeffers”). The policies provide coverage to Jeffers, as well as Jeffers’ directors and officers, for any losses they become legally obligated to pay as a result of claims made against them during the covered period. In June 2018, the Estate of Ann J. Hogarty (the “Estate”) filed a lawsuit against Jeffers demanding Jeffers issue 60 shares of Class A stock to the Estate as required by a 1961 amendment to Jeffers’ bylaws. The Estate also alleged Jeffers failed and refused to issue the requested A shares and Jeffers, “through its officers and directors over the years, . . . engaged in misrepresentation and fraud to prevent the transfer of the A shares of stock to Ann Hogarty, and after her death, to her Estate”. Subsequently, Jeffers sought coverage for the underlying lawsuit. In response, Liberty disclaimed coverage. As a result, Jeffers commenced the instant lawsuit alleging Liberty breached the terms of the insurance policy and acted in bad faith in violation of 42 Pa.C.S.A. § 8371. Liberty then filed a motion to dismiss. The court first considered whether Jeffers sufficiently alleged a breach of contract claim. Specifically, the court analyzed whether Jeffers plausibly alleged Liberty is obligated to defend it in the underlying lawsuit. In making this determination, the court considered Pennsylvania’s well-established principle that an insurer has a duty to defend if the complaint potentially comes within the policy’s coverage. In its motion to dismiss, Liberty argued the policies’ prior acts exclusion bars coverage. In pertinent part, the exclusion provides, Liberty “shall not be liable under any Insuring Clause in this Coverage Part for Loss on account of any Claim made against any Insured…based upon, arising out of, or attributable to any Wrongful Act taking place in whole or in part prior to 02/18/2016”. Based on the plain language of the policies, the court determined that, pursuant to the exclusion, coverage is not triggered for a claim based on a “wrongful act” that took place prior to February 18, 2016. Since the underlying action alleges acts and omissions that began in 1961, the court reasoned the policy’s wrongful act exclusion precludes coverage and therefore, there is no duty to defend Jeffers. Accordingly, the court granted Liberty’s motion to dismiss with respect to Jeffers’ breach of contract claim. Since bad faith claims cannot survive a determination of no coverage, in a footnote, the court noted Liberty had good cause to deny coverage. Thus, the court dismissed Jeffers’ bad faith claim as well. In response to Liberty’s motion to dismiss, Jeffers argued Pennsylvania’s “reasonable expectations” doctrine applies. The court disagreed. Focusing on the specific allegations in the complaint, the court determined the complaint fails to allege any information regarding Jeffers’ procurement of the insurance policies or whether the policies it obtained differed from what Jeffers bargained for. Further, the court noted Jeffers failed to allege any specific conduct attributable to Liberty that created an expectation that the claims alleged in the underlying action would be covered under the policies. Finally, the court concluded that Jeffers mere mention of this doctrine in its response to Liberty’s motion to dismiss was insufficient to overcome the plain language of the policy. Ultimately, the court granted Liberty’s motion to dismiss. However, the court permitted Jeffers leave to amend its complaint to include allegations about its reasonable expectations of the policies’ coverage. Thanks to Lauren Berenbaum for her contribution to this post. Please contact Lauren with any questions. Previous Next Contact

News City Not Taking the Fall for Sidewalk Slip (NY) October 4, 2019 < Back Share to: In Gomez v. New York City, plaintiff tripped and fell on a defect in the sidewalk in front of 39-05 103rd Street in Queens and sued as a result of her injuries. Plaintiff commenced this action amongst several defendants including the City of New York. The City moved for summary judgment dismissing the complaint and all cross claims asserted against it on the ground that it was shielded from liability by Administrative Code of the City of New York § 7-210. Under § 7-210, also known as the City Sidewalk Law, the City shall not be held liable for injuries arising from a defective sidewalk; rather, the abutting property owner shall be liable for such for injuries except when they occur due to defects on sidewalks abutting one-, two-, or three-family residential properties that are owner occupied and used exclusively for residential purposes. In response to the City's motion for summary judgment, two of the other defendants attempted to raise a triable issue of fact as to whether the subject defect was created by the City's affirmative act of negligence. In their oppositions, they contended that the photographs of plaintiff's accident location demonstrated that the alleged defect was created when a City-owned parking meter was removed from the sidewalk. The Appellate Division, Second Department determined that the defendants failed to raise a triable issue of fact as the plaintiff did not describe the defect as a hole that would have supported a parking meter post. The court also relied on how the defendants submitted no other evidence in support of this speculative theory that the defect was caused by the removal of a parking meter. This decision serves as an important reminder that there has been a shift in liability from the City to property owners in particular sidewalk defect cases. Thank you to Caitlin Larke for her contribution to this post. Please email Colleen E. Hayes with any questions. Previous Next Contact

News Partial Labor Law Victory for Property Owner Where Code Provision Was Inapplicable to Facts of Case February 21, 2012 < Back Share to: In Fernandez v. Stockbridge Homes, LLC, 402886/08, NYLJ 1202542556067, at *1 (Sup., NY, January 25, 2012), Stockbridge Homes hired Sanita Construction Company to constructing four single-family homes. Plaintiff was an employee of Sanita Construction in the process of moving wooden forms that he used to construct a retaining wall. Plaintiff alleged that he was standing on top of the retaining wall where there were no scaffolds or safety equipment, and that he fell backward to the ground. Two non-party witnesses testified that there was scaffolding in place on either side of the wall and that plaintiff jumped off the retaining wall. Stockbridge moved for summary judgment seeking to dismiss the Labor Law 200, 241(6) and 240(1) causes of action asserted against it arguing that it had no control over the plaintiff, that plaintiff did not cite to an applicable industrial code provision, and that plaintiff was the sole proximate cause of his own accident. The court granted Stockbridge’s motion with respect to the Labor Law 200 and 241(6) causes of action, finding that Stockbridge did not control plaintiff’s work and that the industrial code provision cited applied to the approval and maintenance of certain safety devices that were not actually utilized at the site. The court denied the motion with respect to Labor Law 240(1) since there was a question of fact as to whether there were scaffolds in place and whether plaintiff fell backward or jumped off the retaining wall. http://www.newyorklawjournal.com/CaseDecisionNY.jsp?id=1202542556067 Previous Next Contact

News Denying Coverage Based On An Insured’s Untimely Report Must Be Assessed On A Case-By-Case Basis (PA) November 8, 2013 < Back Share to: The Pennsylvania Supreme Court recently held that an insurance company must prove prejudice before denying underinsured motorist benefits. In Vanderhoff v. Harleysville Insurance, Forester Vanderhoff rear-ended a car driven by Ryan Piontkowski, while both vehicles were waiting at a busy intersection. A factual dispute in the case was whether Piontkowski stopped suddenly to yield to an unidentified vehicle, which would have been considered an underinsured motor vehicle under the Motor Vehicle Financial Responsibility Law. Almost eight months after the accident, Vanderhoff filed a claim for underinsured motorist benefits with his insurance company, Harleysville. Vanderhoff’s policy, however, included a provision that required prompt notice and a 30-day reporting requirement for coverage to be triggered under the policy. Furthermore, Vanderhoff had failed to allege the existence of the unidentified vehicle until several months after the accident had occurred. The case went to arbitration and Vanderhoff was awarded $500,000. However, Harleysville appealed the award citing Vanderhoff’s delay in reporting the accident and the unidentified vehicle. Vanderhoff argued that Harleysville needed to show, with concrete evidence, that it was prejudiced by Vanderhoff’s actions. Ultimately, the Pennsylvania Supreme Court held that, although an insured filing an untimely report was not in and of itself prejudicial, an eight month delay in reporting the alleged unidentified motor vehicle had in fact prejudiced the insurer. The Court, however, noted a caveat to this ruling by stating that, in general, future cases involving untimely reporting should be examined on a case-by-case basis. Special thanks to Colleen Hayes for her contributions to this post. For more information, please contact Nicole Y. Brown at nbrown@wcmlaw.com . Previous Next Contact

News Special Benefit of Special Employees (NY) August 23, 2018 < Back Share to: In James v Crystal Springs Water, the Appellate Division, Second Department unanimously affirmed a lower court ruling granting defendant’s motion for summary judgment. In James, plaintiff was allegedly injured in an accident that occurred while working at the premises owned by defendant, Crystal Springs Water. He was employed by nonparty Manpower Group US, Inc. and received workers’ compensation benefits pursuant to a Manpower insurance policy. Plaintiff sued Crystal Springs to recover damages for personal injuries. The Court affirmed that an employee who is entitled to receive workers’ compensation benefits may not sue his or her employer based on injuries sustained by the employee, and, for the purposes of the Workers’ Compensation Law, a person may be deemed to have more than one employer. Citing Pena v. Automatic Data Processing, Inc., the Court stated, “The receipt of Workers’ Compensation benefits from a general employer precludes an employee from commencing a negligence action against a special employer.” While a person’s categorization as a special employee is usually a question of fact, a determination of special employee status may be made as a matter of law where undisputed critical facts compel that conclusion and present to triable issue of fact. While no single factor is decisive, principal factors include who has the right to control the employee’s work, who is responsible for the payment of wages and furnishing of equipment, who has the right to discharge the employee, and whether the work being performed was in furtherance of the special employer’s or the general employer’s business. Citing to Munion v. Trustees of Columbia University, the Court found that the most significant factor is who controls and directs the manner, details, and ultimate result of the employee’s work. Crystal Springs established that it controlled and directed the manner, details and ultimate result of plaintiff’s work. Plaintiff submitted an affidavit asserting that he received no supervision from Crystal Springs which the Court found to be insufficient to raise an issue of fact as it contradicted his own deposition testimony. The workers’ compensation law is a complete bar to a plaintiff’s ability to sue his or her employer and the special employee doctrine allows special employers to be cloaked under the same veil of immunity. Thanks to Mehreen Hayat for her contribution to this post. With an y questions, please email Brian Gibbons. Previous Next Contact

News Amazon: The Benefits of Brick and Mortar Stores Without Any of the Responsibility (NY) January 29, 2021 < Back Share to: Who is responsible when you order a defective product from the middleman? Due to the COVID-19 pandemic, the world has seen the importance of online shopping. Websites such as Amazon have thrived during this time while in person shopping remains impossible in certain parts of the globe. But what happens when that item you ordered from Amazon is defective in some way and the buyer sustains damages to person or property? New York has seen a growing number of cases regarding this exact topic. At the outset, Amazon sells its goods in three ways: (1) Amazon sells, processes, and ships the products; (2) a third-party sells, processes and ships the product but Amazon does not take possession of the product; and (3) a third-party sells the product and Amazon fulfills the order by storing, processing, and shipping the product through its “Fulfillment by Amazon” logistical program. It is through this last scenario that Amazon has found trouble with liability within the courts of New York. The “Fulfillment by Amazon” program allows sellers to store their inventory at Amazon’s warehouse until the product is purchased, upon which time Amazon retrieves the product, packages it, and ships it, giving Amazon significant control over these products. According to New York law, anyone in the distribution chain of a defective product may be liable, including retailers and distributors. In the recent case, State Farm Fire and Casualty Company v Amazon.com Services Inc., 2020 N.Y. Misc. LEXIS 10352, 2020 NY Slip Op 20326 (Sup. Ct.), a subrogating carrier brought suit against Amazon for property damages sustained as a result of a fire caused by a defective thermostat ordered through Amazon. The thermostat was ordered through the above mentioned “Fulfillment by Amazon” program. Amazon argued that it merely stored the product rather than took control of it. However, the court determined that Amazon exercised sufficient control through this program by storing the product and maintain possession at its warehouse. However, because Amazon’s contract with the seller included an indemnification clause, Amazon could seek indemnification from the seller. While this case was decided in the trial court of New York and is contradictory to two federal decisions in New York, this case connotes the shift in how courts are viewing Amazon and other websites in products liability cases when such sellers maintain sufficient control over third-party products. As similar cases loom on the horizon in Texas and Pennsylvania, courts are leaning more towards holding these internet giants accountable for defects. Thanks to Gabriella Scarmato for her contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News PA Statute Prevails Over Policy Language November 10, 2016 < Back Share to: A Pennsylvania Federal Court recently dealt with the competing interests of the Pennsylvania No Fault statutes and policy language in respect of an insurers ability to compel IME. Scott v. Travelers Commercial Insurance Co., arose from a motor vehicle accident in which Scott was injured and subsequently submitted a claim for first-party medical benefits. The policy has a provision that requires Scott, as often as reasonably required by Travelers, to submit to physical examinations by physicians and cooperate with the settlement, investigation, or defense of any suit. Travelers subsequently scheduled Scott for an IME. Scott responded, through counsel, that he would be willing to consider an IME, in the absence of a court order, if they sent him the name of three proposed doctors. Travelers did not do so and Scott did not attend. Subsequently, Travelers notified Scott’s counsel that they were relying on the policy language and scheduled another IME. Counsel for Scott responded that Scott would not attend unless a panel of three doctors were chosen and then parties could mutually choose one. After Scott did not attend the second schedule IME, Travelers stopped paying benefits, which gave rise to the bad faith and breach of contract actions in this case. The bad faith claim was booted as the statute of limitations had already tolled. But Scott prevailed on the breach of contract action, with the court holding that Travelers breached the contract by failing to continue to pay medical benefits, notwithstanding Scott’s refusal to attend an IME outside of his chosen procedure. The court relied upon § 796 of the Motor Vehicle Financial Responsibility Law, which requires insurance carriers to obtain a court order, with a showing of good cause, in order to compel an insured to submit to any mental or physical evaluation for any medical, income, or loss claim. The court held that the statute trumped the policy language and because Traveler’s failed to obtain a court order to compel Scott’s attendance to the IME, Traveler’s non-payment of claims was a breach of the insurance policy. Thanks to Matt Care for his contribution to this post and please write to Mike Bono for more information. Previous Next Contact

News NJ Insurer's Bad Faith Failure to Settle Issue for Fact Finder July 29, 2010 < Back Share to: When a jury returns a verdict well in excess of an insured’s policy limit after an insurer refused an offer to settle within the limit, a bad faith claim is not a matter of strict liability. In fact, the determination of whether the insurer acted in bad faith is a fact sensitive question that generally will require a plenary hearing or trial. In Wood v. New Jersey Manufacturers Ins. Co., the plaintiff postal worker alleged cervical and lumbar injuries were caused when she backed into a fence and a dog jumped up on her. She had cervical and lumbar surgeries and contemplated further surgery as the trial approached. A court appointed arbitrator had awarded the plaintiff $600,000 attributing 90% to the insured for a net award against the insured dog owner for $540,000, $40,000 above the policy limit. The defense rejected the arbitrator’s award, and at trial, the jury awarded a total of $2.4 million with an allocation of 51% to the insured (49% to the co-defendant property owner) for a net verdict of $1.4 million. Notably both the claims adjuster and the defense attorney had recommended settlement within the policy limit, but this had been rejected by the insurer’s Major Claims Committee. In an appeal by the insurer of summary judgment on the bad faith claim, the Appellate Division reversed and ordered further proceedings that would address the insurer’s reasonableness in their evaluation of the claim. The court recognized that an insurer could disagree with its counsel and even its adjuster’s evaluation of the case. A full hearing would give the insurer an opportunity to explain why it did so and allow a fact finder to fully assess the credibility and persuasiveness of the witnesses. Thus, an insurer is not expected to be “gifted with the powers of divination or of accurate prophecy,” and it will not automatically be held in bad faith when a jury awards an amount in excess of the policy limit. On the other hand, the insurer will need to be prepared to persuade a fact finder of the reasonableness of its actions. If you have any questions or comments about this post, please email Denise at dricci@wcmlaw.com . See Wood v. New Jersey Manufacturers Ins. Co. at http://www.judiciary.state.nj.us/opinions/a1768-08.pdf Previous Next Contact

News Misinformed Medical Expert Leads to Defense Verdict (NJ) February 9, 2016 < Back Share to: In Lopez v. Larsen, plaintiff alleged personal injuries as the result of an automobile accident in 2009. Plaintiff came under the care of a pain management specialist, but failed to advise her doctor of injuries sustained in a prior motor vehicle accident in 2004. Plaintiff’s doctor served as a medical expert at the time of trial. His report and trial testimony indicated that plaintiff’s present injuries were causally related to the 2009 accident. During cross examination, plaintiff’s expert testified that he was not advised that plaintiff had been involved in any prior accidents and opined that disclosure of the prior injuries could have caused him to change his opinion. After plaintiff rested her case, defense counsel moved for a directed verdict arguing that plaintiff’s expert failed to provide a comparative analysis of her pre and post-accident injuries. The trial judge denied defendant’s motion. The jury found in favor of the plaintiff at the close of trial. On appeal, the Court found plaintiff’s medical expert was not capable of isolating the injuries sustained in the 2009 accident because he had been given no records of any pre-accident medical treatment, which was obviously relevant here. Without a proper comparative medical analysis, the jury was given no information by which it might assess the injuries sustained by plaintiff in several accidents. Plaintiff was required to present the jury with a medical analysis in order to meet her burden of proof on causation. Having not done so, the appellate court reversed and remanded, holding that the trial judge should have granted a directed verdict for the defendant. Lopez reminds us that the plaintiff has the burden of proof with respect to causation. A pre-existing injury, even when disclosed, can disrupt the casual chain. Plaintiffs can get around this pitfall by alleging an exacerbation injury. However, when the prior injury is not disclosed to a doctor, a defense directed verdict is an achievable goal. Thanks to Steve Kim for his contribution. Please email Brian Gibbons with any questions. Previous Next Contact