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News Art Gallery’s Covid-Related Losses Are Not Covered By Insurance Policy January 7, 2022 < Back Share to: In 10012 Holdings, Inc., d/b/a Guy Hepner v. Sentinel Insurance Company, LTD., the United States Court of Appeals for the Second Circuit affirmed the District Court’s decision to dismiss plaintiff’s claim for failure to state a proper basis for relief. Guy Hepner, a New York City-based fine arts gallery displaying the works of Andy Warhol, Pablo Picasso, and many others, filed suit against its insurer Sentinel for breach of contract after Sentinel denied coverage under its policy for financial losses suffered by Guy Hepner as a result of government mandated Covid-19 restrictions. At various times during the current Covid-19 epidemic, New York has suspended the operations of non-essential businesses in an attempt to quell the spread of the Covid-19 virus. Guy Hepner argued that the financial losses it suffered due to closing its doors should be covered under various provisions dealing with property damage. These sections generally provide coverage where the insured’s business is unable to operate due to property damage, and as a result, the insured suffers financial losses. However, the United States District Court for the Second Circuit ruled in favor of Sentinel, stating that because Guy Hepner “alleges only that it lost access to its property as a result of COVID-19 and the governmental shutdown orders, and not that it suspended operations because of physical damages to its property”, Guy Hepner’s losses were not covered by the policy. This ruling is one of many examples in which the courts have refused to interpret insurance policy sections dealing with businesses losses caused by property damage as also encompassing business losses caused by government shutdown initiatives. Thanks to Brian Zappala for his contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News School District Fails to Slip Away from Liability for Plaintiff's Fall (NY) November 27, 2019 < Back Share to: In Williams v. Island Trees Union Free Sch. Dist., a New York court addresses the level of evidence required for a defendant to claim it lacked constructive notice of a dangerous condition. In Williams, the plaintiff allegedly slipped and fell on clear liquid in the south cafeteria of Island Trees High School, which was under the control of the Island Trees Union Free School District. According to plaintiff, the accident occurred when she was walking in the cafeteria toward an "Aquafina" vending machine and both of her feet slipped out from underneath her. She then fell to the ground where she noticed a puddle of water which was approximately two inches wide and three to four feet long trailing from her spot on the ground to the vending machine. Plaintiff commenced an action to recover damages for personal injuries against the School District and Dover Gourmet Corp., the company with which the School District allegedly contracted with to stock the vending machine. Plaintiff alleged the School District was negligent in, among other things, maintaining the premises. The School District subsequently moved for summary judgment dismissing the complaint asserted against it. The New York Supreme Court granted the School District's motion. In response, plaintiff appealed. The New York Appellate Division, Second Department determined that the School District had failed to demonstrate, on a prima facie level, that it did not have constructive notice of the alleged water condition that caused plaintiff to fall. The court reiterated that "to meet its initial burden on the issue of lack of constructive notice, the defendant must offer evidence as to when the area in question was last cleaned or inspected relative to the time when the plaintiff fell." In this case, the Court found that the School District failed to provide evidence regarding any specific cleaning or inspection of the area in question relative to the time when plaintiff's accident occurred. Accordingly, the Court reversed the lower court’s order. This decision serves as an important reminder that it is crucial for a moving party to adequately demonstrate that it lacked constructive notice of a condition that allegedly caused a plaintiff's accident when making a motion for summary judgment. Thank you to Caitlin Larke for her contribution to this post. Please email Colleen E. Hayes with any questions. Previous Next Contact

News GEICO Challenges Deemer Statute in New Jersey December 14, 2018 < Back Share to: Geico has challenged a New Jersey State Statute requiring auto policies issued out of state to provide a minimum amount of bodily injury liability coverage when the insured drivers are involved in accidents in New Jersey. The case is Guerline v. Brian v. Richards, case number 081799, in the New Jersey Supreme Court. As of December 7, 2018, the New Jersey Supreme Court justices had granted Geico’s petition for certification of a state Appellate Division panel’s August ruling directing the insurer to provide a minimum of $15,000 in bodily injury liability coverage for claims against its Florida-based policyholder who was involved in a motor vehicle accident in Newark, NJ in 2013. Even though the Florida-based policyholder’s auto policy did not include any bodily injury coverage, the appellate panel found that, under a decades old New Jersey law dubbed the “Deemer statute,” Geico was still required to supply the minimum amounts of such coverage included in a standard auto policy issued in the Garden State ($15,000 per person or $30,000 for more than one person per accident). The Supreme Court justices will decide the following question: Does the Deemer statute apply to an automobile insurance policy written in Florida for a Florida resident who had an accident in New Jersey, where the Florida policy did not include any bodily injury liability coverage? The Supreme Court of New Jersey’s decision will have a major impact on motor vehicle litigation in New Jersey. Thanks to Jon Avolio for his contribution to this post. Please email Brian Gibbons with any questions.         Previous Next Contact

News Insured Contract Exclusion Requires A Third-Party October 28, 2022 < Back Share to: In Stevanna Towing, Inc., et al. v. Atlantic Specialty Ins. Co., No. 21-1420, 2022 WL 12241451 (3d Cir. Oct. 21, 2022), a Stevanna employee was injured when the boat he was deckhand on— which was being piloted by an employee of Georgetown Sand & Gravel—bumped into a barge. Stevanna, among others, resolved the suit with the employee and then sought reimbursement for the costs associated with its defense and settlement. Atlantic Specialty Insurance Company (“Atlantic”) denied coverage. Among the many issues was whether the insured contract exception to the employer-liability exclusion applied to provide coverage to certain additional parties. The Atlantic policy’s definition of insured contract included “that part of any other contract or agreement pertaining to [Stevanna’s] business . . . under which [Stevanna] assume[d] the tort liability of another party to pay for ‘bodily injury’ . . . to a third person or organization.” The court stated that for the exception to apply, Stevanna needed to have assumed the tort liability for injuries caused by another party; however, the indemnification agreement in question was for liability for injuries “caused in whole or in part by the negligence of Stevanna, its agents and employees.” Hence, as the “insured contract” did not expressly purport to assume the tort liability of another party, the court held the exception for insured contracts did not apply. Also noteworthy was the Third Circuit’s refusal to entertain the argument that Atlantic waived the implementation of the employer-liability exclusion by not referencing it in its denial letter nor in its answer to the complaint. The court stated “those omissions do not amount to an implied waiver under Pennsylvania law.” Thanks to Richard Dunne for his contribution to this article. Should you have any questions, contact Matthew Care. Previous Next Contact

Prosecuting a successful subrogation case requires more than just an insurance background. WCM attorneys have extensive experience interviewing witnesses and assessing documentary proof in order to assess whether a claim will withstand judicial scrutiny and ultimately appeal to a jury. Creativity and aggressiveness are the hallmark of WCM as subrogation counsel. In addition to handling fire and flood losses and construction mishaps, WCM lawyers also have expertise in bringing subrogation actions to recover for damage to fine art, including suits against galleries and storage facilities. WCM attorneys also have significant experience representing clients located across the world to recover stolen property, particularly jewelry, art and other valuable collectibles. Subrogation and Recovery Prosecuting a successful subrogation case requires more than just an insurance background. WCM attorneys have extensive experience interviewing witnesses and assessing documentary proof in order to assess whether a claim will withstand judicial scrutiny and ultimately appeal to a jury. Creativity and aggressiveness are the hallmark of WCM as subrogation counsel. In addition to handling fire and flood losses and construction mishaps, WCM lawyers also have expertise in bringing subrogation actions to recover for damage to fine art, including suits against galleries and storage facilities. WCM attorneys also have significant experience representing clients located across the world to recover stolen property, particularly jewelry, art and other valuable collectibles. Practice Lead Michael A. Bono Executive Partner +1 212 267 1900 mbono@wcmlaw.com Download Download

News Court Prevents Deposition of Counsel in Coverage Dispute (PA) January 29, 2016 < Back Share to: In JCT Leasing LLC. V. Travelers Casualty Insurance Company, Plaintiffs sued their insurer, seeking damages for breach of contract and bad faith arising out of a fire claim. Plaintiffs sought to depose defendant’s coverage counsel, and the court needed to evaluate whether attorney-client privilege barred his deposition. After plaintiffs submitted a claim to Travelers for fire at their property, Travelers retained Ernest Koshineg, Esq. to advise them on whether plaintiffs’ claim was covered. Upon advice from counsel, Travelers notified plaintiffs that it was rescinding their policy, as the policy was issued based on the representation that a sprinkler system was in the warehouse, when in fact there was not. Plaintiffs notified defendant that they intended to depose Koshineg and required him to bring materials he prepared while assisting in the claims investigation and policy rescission process. Defendant moved for a protective order, which was ultimately granted. Plaintiffs argued that Koshineg worked as part of the defendant’s claims adjusting team and should be considered to be an investigator for the insurer because he became involved so early on in the matter. But the Court found that Mr. Koshineg played a traditional lawyer’s role of providing legal advice to a client, and did not serve as a member of defendant’s claims investigation team and thus the attorney–client privilege applied. Plaintiffs further argued that even if privilege existed, it had been waived because the Vice President, who advised the plaintiffs of their policy rescission testified that in drafting the rescission letter, he relied on the advice of counsel. But the Court found that defendant had not waived the privilege because the defendants did not assert "reliance on course" as an affirmative defense to the lawsuit. Thanks to Chelsea Rendelman for her contribution to this post and please write to Mike Bono for more information. Previous Next Contact

News WCM Obtains Unanimous Arbitration Decision in Serious Philadelphia Segway Accident. September 28, 2019 < Back Share to: WCM Partner Bob Cosgrove and Philadelphia associate Lauren Berenbaum recently obtained a unanimous decision regarding the enforceability and validity of a liability waiver, which contained a California choice of law provision. In Robert Palmer and Sandra Palmer v. Freetime, Inc. d/b/a Wheel Fun Rentals and William T. Robbins, III, plaintiff Robert Palmer (“R. Palmer”) was significantly injured while operating a Segway during a tour led by Freetime, Inc. d/b/a Wheel Fun Rentals (“Freetime”) in the Philadelphia area. Though R. Palmer signed Freetime’s liability waiver (which contained a California choice of law provision) before going on the tour, R. Palmer argued that the waiver was unenforceable and thus did not release Freetime from claims of negligence. After immense discovery and litigation, the parties jointly agreed to pose this sole legal question regarding the validity and enforceability of the liability waiver to a three-panel arbitration consisting of a well-known lawyer and two former Justice of the Pennsylvania Supreme Court. The panel was charged with determining, as a matter of law, whether the express terms of the purported waiver drafted by Freetime were sufficiently specific to immunize it from liability for its alleged negligent conduct. After submitting their respective briefs, the parties participated in an oral argument before the panel. After considering the parties' respective briefs and arguments, the panel unanimously decided the waiver satisfied the requirements of California law. For more information about this post, please contact rcosgrove@wcmlaw.com . Previous Next Contact

News Late Notice (Without Prejudice) Lives In Many Pollution Cases August 21, 2013 < Back Share to: When the New York State legislature abolished the no-prejudice rule in 2009, it greatly increased the burden on insurers to establish prejudice as an element of the late notice defense. But a recent decision in the Supreme Court, New York County, serves as an important reminder to insurers that, in pollution cases, New York’s no-prejudice rule often still applies when the insured gives late notice. For policies issued before January 17, 2009, a failure to satisfy the notice requirement of an insurance policy vitiates the policy, and the insurer is not required to demonstrate that they were prejudiced by the late notice. Whether late notice was provided to an insurer is of particular relevance in pollution cases, because claimants often commence lawsuits with actual or constructive knowledge of the problem. In Travelers Indemnity v. Orange and Rockland Utilities, Index No. 603601/02, the insured sought coverage for the investigation and remediation of pollution and contaminates at gas plants owned or previously owned by the insured from 1852 through 1965. Travelers or its predecessors afforded coverage to the insured under policies issued between 1955 through 1978. The Travelers policies required that notice be provided “as soon as practicable.” Although the insured was aware of its potential liability as far back as 1981, it did not provide notice to Travelers until 1995. Justice Eileen Bransten -- applying the no-prejudice rule -- held that notice is a condition precedent to coverage, and therefore Travelers properly disclaimed coverage based on receiving late notice of the underlying pollution and contamination. The breach of the condition vitiated coverage, relieving Travelers of any duty to defend the insured. As such, in pollution cases, an insurer should always consider whether late notice is a viable defense to coverage, and, if so, immediately disclaim coverage. http://www.courts.state.ny.us/Reporter/pdfs/2013/2013_31585.pdf Previous Next Contact

News Pennsylvania Court Rules On The Effectiveness of An Insurer’s Cancellation of a Policy June 14, 2016 < Back Share to: In Philadelphia Showcase Lounge, LLC, et al. v. Landmark American Ins. Co., et al., the Pennsylvania Superior Court was asked to analyze the effectiveness of a cancellation of an insurance policy. Landmark American Ins. Co. insured Philadelphia Showcase Lounge, LLC, which operated a bar/restaurant. The Policy was in effect from December 24, 2011 to December 24, 2012, at 12:01 a.m. On November 28, 2012, Landmark sent a renewal quotation at the same price and on the same terms to Showcase. Showcase made no effort to renew the Policy. Rather, Showcase looked to secure quotes from other insurance companies in December 2012. On December 24, 2012, at approximately 1:00 p.m. there was a fire at the Property. Following the loss, on December 24, 2012 at 7:21 a.m., Showcase attempted to bind coverage with Landmark. However, Showcase was informed that the Policy expired at 12:01 a.m. on December 24, 2012. Showcase attempted to seek coverage under the Policy for the loss by commencing a lawsuit. Eventually, all parties moved for summary judgment. Showcase argued that since Landmark never sent a notice of midterm cancellation or nonrenewal pursuant to Pennsylvania statute 40 P.S. Section 3403, the Policy remained in effect. Conversely, Landmark argued Showcase was not entitled to protection under Section 3403 and, thus, the Policy was properly cancelled. The trial court agreed with Landmark. On appeal, Showcase argued the lower court erred in failing to apply the protections of Section 3403. Section 3403 requires insurers to provide written notice to insureds 60 days in advance of “midterm cancellations or nonrenewals”. In analyzing the validity of Showcase’s appeal, the Superior Court ultimately concluded Section 3403 was not applicable. The Court reasoned that the Policy was in effect from December 24, 2011 to December 24, 2012, 12:01 a.m. At no time during the Policy period did Landmark terminate the Policy. Also, Landmark did not provide notice to Showcase that it intended to non-renew the Policy. Conversely, Landmark sought to renew the Policy by sending a renewal quotation. However, Showcase opted not to accept the renewal offer. Thus, the Court concluded, since Section 3403 does not prescribe a responsibility onto insurers to send out a nonrenewal notice if the insured fails to respond to or reject the insurer’s prior renewal offer, Section 3403 was not applicable under the circumstances. Additionally, the Policy’s Cancellation Endorsement also did not require such action. Therefore, since Landmark was not in violation of any applicable statute and had cancelled the Policy in accordance with the Policy’s terms, the Policy was not in effect at the time of the fire. This case illustrates the importance of ensuring that policy cancellations not only comply with the language of the applicable policy but also any relevant statutes – as statutory noncompliance could result in coverage, notwithstanding an insurer’s intent to cancel. Thanks to Colleen Hayes for her contribution to this post.         Previous Next Contact

News Happy Holidays from Your Friends at Wade Clark Mulcahy! December 22, 2021 < Back Share to: 2021 has presented us all with new challenges. Some anticipated, and some, well, of the Omicron variety. WCM continues to grow, in large part due to the loyalty and collaboration of our friends and clients in the United States and abroad. Please accept our Holiday E-Card, offering our gratitude and best wishes for a better 2022. A Happy and Healthy Holiday Season to all! Previous Next Contact

News NY Appellate Court Refuses To Deny Summary Judgment On Lengthy Delay Of Notice In Insurance Case May 5, 2023 < Back Share to: The Supreme Court of New York, Appellate Division, First Department, recently denied opposing motions for summary judgment in a coverage declaratory judgment action, holding that despite a several-year delay in providing notice, there existed issues of fact as to whether the plaintiffs gave notice as soon as reasonably proper under the circumstances. The action involves plaintiffs National Interstate Insurance Company (“National”) and New York Crane & Equipment Corporation (“NY Crane”) National Interstate v. Interstate Indemnity, who sought an order declaring that NY Crane is entitled to defense and indemnification in an underlying action from defendant Interstate Indemnity Company (“Interstate”), who insured 1690 Broadway Concrete Corp. (“Broadway”). Interstate had disclaimed coverage to NY Crane on the basis that NY Crane had failed to provide timely notice. In this appellate action, the First Department held that the trial court had properly denied both motions for summary judgment. The First Department reiterated the standard that where an insurance policy requires that the insured provide notice as soon as practicable, that notice must be provided within a reasonable time under the circumstances of the case. Although the First Department categorized the several-year delay in this action as “lengthy,” it noted that the record raised issues of fact as to when the plaintiffs, with due diligence, should have known that Interstate was Broadway’s insurer. The First Department also held that there were issues of fact as to whether the plaintiffs gave notice to Interstate as soon as reasonably practicable under the specific circumstances of the case. This decision is problematic for insurers because it shows that even a several-year delay in providing notice to an insurer can be considered “reasonable” depending on the circumstances of the case. This opens insurers up to potentially lengthy discovery and litigation regarding the specific circumstances of notice in cases where it may appear clear that the delay was unreasonably long. Further, it lengthens the tail of claims. Thanks to Erin Gallagher for her assistance in this post. Should you have any questions, please contact Tom Bracken. Previous Next Contact

News Jurors with Laptops? December 2, 2010 < Back Share to: In a recently published decision, NY Supreme Court Justice Donna Mills refused to overturn a jury verdict based on a claim of juror misconduct. Unhappy with an adverse verdict, defense counsel claimed that certain jurors, who were seen by all to have “open laptops” during the trial, must have learned, via the internet, of defendant’s unsavory past, thus explaining the adverse verdict. Justice Mills rejected the argument because defense counsel had neither requested a limiting jury instruction nor objected to the lack of instructions regarding the internet’s use to investigate facts not in evidence. Moreover, beyond producing copies of the adverse publicity, defense counsel offered no proof that any jurors had in fact viewed the toxic information. As insurance defense lawyers, we mainly represent clients who live and work beneath the radar. But from time to time, we represent insureds who have well-documented and often very unflattering internet histories. Justice Mills’s decision reminds us to be ever vigilant in determining what, if any, “presence” our clients have on the net and, if so, to take adequate precautions if the matter proceeds to trial. But bear in mind, no matter how stern the trial court’s warnings, there is really nothing to prevent a curious juror from surfing the web at night. If you would like more information about this post, please contact Dennis Wade at dwade@wcmlaw.com . Previous Next Contact