News Bank Burned by Document Retention Policy Years After Plaintiff Slips on Ice (NY) June 29, 2016 < Back Share to:   In Sarach v M&T Bank Corp, the Fourth Department recently issued discovery sanctions to a defendant who destroyed surveillance footage pursuant to their normal business practice months before litigation even began. Plaintiff allegedly sustained injuries in 2009 when he slipped and fell on the ice next to a decorative water fountain outside the defendant’s bank. The plaintiff commenced the action on March 1, 2012, but on August 10, 2010, he sought an order under CPLR 3102(c) for pre-action disclosure and preservation of evidence. Defendant initially opposed the plaintiff’s request, but represented to the Supreme Court that it had already voluntarily undertaken to preserve certain evidence, including accident reports, photographs, and surveillance tapes. Ultimately, the defendant “consent[ed] to an order of preservation” and so in October of 2010, the court granted plaintiff’s application and ordered the defendant to preserve all “photographs [and] video tapes, including but not limited to security and surveillance video related to the subject accident.” Once the case was brought and discovery commenced, the plaintiff requested surveillance films related to the accident. In response, the defendant stated that those materials had not been preserved. Apparently, it was bank policy to overwrite surveillance video tapes after 90 days, and so surveillance footage from the date of the plaintiff’s accident would have been destroyed approximately 14 months before the court’s order of preservation. However, the defendants did produce several photographs that had been taken after the plaintiff’s accident. The defendants also submitted an affidavit from a vice-president at that branch of the bank stating that she conducted a diligent search of the bank’s records and all the photographs and videos in their possession at the time of the preservation order had been produced. Accordingly, in August of 2014 plaintiff moved pursuant to CPLR 3126 to strike the defendant’s answer on the grounds that the defendant violated the Court’s 2010 order of preservation. The court granted plaintiff’s motion, and the defendant appealed to the Fourth Department. According to a majority of the Fourth Department, the trial court was overly harsh, and it abused its discretion by striking the defendant’s answer. While the Fourth Department agreed with the Supreme Court’s finding that the defendant “willfully fail[ed] to disclose information,” it also noted that this particular failure did not leave the plaintiff “prejudicially bereft of the means of prosecuting his action.” Because the defendant’s actions did not entirely prejudice the plaintiff’s ability to maintain his claim, the Fourth Department held that the defendant’s answer should not be stricken, but instead, an adverse inference charge with could be given at trial with respect to the unavailable footage. In dissent, Associate Justice John Curran argued that his colleagues in the Fourth Department overlooked the fact that the video surveillance was destroyed pursuant to normal business practice. While Justice Curran noted that the majority was “rightfully concerned about the perceived misrepresentation in the affidavit from defendant’s counsel seeming to ensure that surveillance video had been preserved,” the defendant’s actions were not willful and contumacious, and so the penalties of CPLR 3126 should not apply. Accordingly, Justice Curran argued that, instead of an adverse inference charge, the better remedy would have been to preclude the defendant from introducing evidence at trial of the destroyed video’s content as part of its direct case. Despite the split among the Justices of the Fourth Department, the lesson here is clear: take your discovery obligations seriously. Even though the surveillance footage was destroyed pursuant to standard business practices months before the order was issued, the bottom line is that the defendant consented to the order of preservation and failed to challenge the order after it was issued by the Court. Therefore, the majority was “unable to conclude that defendant’s failure to comply with the order was anything but willful.” Defense counsel should certainly have investigated its client's business practices before submitting to a preservation order. Thanks to Evan King for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News New Claims At The End Of Discovery Are Insufficient (NY) June 2, 2023 < Back Share to: In Smith v. 3173 Gas Corp. (2d Dept. 2023), the plaintiff sustained injury when she slipped on an entrance/exit ramp as she left a gas station. It was established during testimony that it had been raining at the time of the accident and the ramp was wet. After depositions were completed, but before the Note of Issue was filed, the defendant moved for summary judgment arguing that he could not be held liable because it was still raining at the time of the accident [Derosa v. Zaliy, 189 A.D.3d 1355 (2d Dept. 2007)]. Plaintiff’s counsel then submitted an amended bill of particulars alleging new claims that the ramp itself was defective. The trial court granted defendant’s motion, and plaintiff appealed, alleging that the amended claims were enough to present to a jury. The Second Department affirmed the trial court’s decision, holding that summary judgment in favor of the defendant was proper because the ramp was not defective since it was wet, and it was still raining when the plaintiff fell [Medina v. Sears Roebuck & Co., 41 A.D.3d 798(2d Dept. 2007)]. The Second Department further held that although plaintiff’s amended bill of particulars was proper since it was served prior to the filing of the Note of Issue, it nonetheless failed to provide triable issues of fact to sustain a claim against the defendant. Plaintiff submitted an expert’s report which failed to show how the condition of the ramp itself was the proximate cause of plaintiff’s fall, and plaintiff’s affidavit not only contradicted his prior deposition testimony, but also failed to establish that the ramp itself was the proximate cause of plaintiff’s fall. This case highlights a litigation strategy that is seen from time to time in negligence torts. A plaintiff will proceed through discovery and depositions, and if there is strong evidence to establish a viable defense at trial (or enough evidence for a strong argument on dismissal via summary judgment), then plaintiff will allege new claims or theories on the accident. Of course, plaintiff has the right to amend his bill of particulars before filing the Note of Issue, but often times, it is used as a tactic to create triable issues of fact to defeat summary judgment proceedings and sustain the viability of a claim. The defendant in this case properly highlighted the fact that plaintiff’s new allegations and theories of the accident contradicted her prior testimony and even then, still could not sustain her claim. Thanks to Raymond Gonzalez for his contribution to this article. Should you have any questions, contact Tom Bracken. Previous Next Contact

News A Reasonable Disclaimer Doesn't Ensure Non-Payment of Fees in NJ. July 16, 2010 < Back Share to: In the case of Baughman v. US Liability Insurance, US Liability disclaimed coverage to its insured. The claim arose out of mercury exposure and the questions presented included whether: (a) exposure to [/i]indoor mercury contamination was "traditional environmental pollution", or (b) whether medical monitoring constituted "damages" and whether exposure to harmful substances comprises "bodily injury." The Court ruled in favor of the insured and insured's counsel sought to recover its fees in both the underlying case and the declaratory judgment action. The federal court granted both applications. In granting the fees in the declaratory judgment action, the federal court used its discretion under New Jersey Court Rule 4:42-9(a)(6) and held that although the disclaimer was reasonable, because it was declared wrong by the court, the carrier was on the hook for the entire bill. To make matters worse, because insured's counsel took the case on a contingency basis, the carrier was forced for pay a 35% lodestar enhancement. If you have any questions about this decision, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . http://pdf.wcmlaw.com/pdf/Mercury.pdf Previous Next Contact

News Electrician's Fall Not Covered By New York's Labor Law April 21, 2009 < Back Share to: In Romeo v. Property Owner (USA) LLC, et al., plaintiff, an electrician, was injured when, while walking on a raised computer floor, he stepped on a floor tile that suddenly dislodged, causing his right foot to fall through the opening and strike the concrete sub-floor 18 inches below. Plaintiff sued the property owner and general contractor, alleging violations of Labor Law 200, 240(1), and 241(6). The Supreme Court, New York County granted the defendants' motion to dismiss. The Appellate Division, First Department found that plaintiff's injury did not involve an elevation-related hazard, as defined by 240(1). Plaintiff's 200 claim (common law negligence) was unsupported by evidence that the owner and general contractor either had notice of the tile condition or that they directly controlled and supervised the electrical work. Plaintiff testified that his work instructions came only from a supervisor who was also employed by the electrical subcontractor. As to the 241(6) claim, the First Department found that the Industrial Code 23-1.7(b)(1) (hazardous openings) provision relied upon by plaintiff was inapplicable. The opening in question was not of significant depth and size to warrant the protection of the provision. Plaintiff's reliance upon Industrial Code 23-1.7(e)(2) (work area debris and tripping hazards) was also held to be inapplicable because he was not injured as a result of tripping over debris, dirt, tools or materials. Ultimately, the First Department unanimously affirmed the lower court's ruling in favor of the defendant. Thanks to Robin Green for her contribution to this post. http://www.nycourts.gov/reporter/3dseries/2009/2009_02848.htm Previous Next Contact

News Pennsylvania Federal Court Continues Trend Of Finding No Coverage For Covid-19 Business Interruption Losses December 3, 2021 < Back Share to: As we have reported, policyholders have largely been unsuccessful in convincing Federal courts to declare that coverage exists for business interruption claims as a result of the COVID-19 pandemic. The United States District Court for the Eastern District of Pennsylvania continued this trend in its recent decision in Delaware Valley Management, LLC, et al. v. Continental Casualty Company. The plaintiffs in that case owned and operated a group of medical practices and sought coverage under an “all-risk” policy for economic losses suffered as a result of COVID-19 shutdowns. Plaintiffs alleged that they were required to suspend all surgeries and invasive procedures that could be delayed without risk to patient health. Plaintiffs remained in business but were allegedly forced to “considerably limit their business” as a result of the COVID-19 executive orders. Plaintiffs’ insurance policy included Business Income Coverage and Civil Authority Coverage. In relevant part, the policy provided coverage for all lost income sustained by the insured during a “necessary suspension” of “operations” during the “period of restoration” stemming from a “direct physical loss of or damage to” covered property. The Civil Authority coverage required that an action of civil authority that was caused by “a direct physical loss of or damage to a premises other than the Covered Property”, prohibits the insured’s access to the covered property. The insurer denied coverage and plaintiffs filed suit for breach of contract and declaratory judgment. The court ultimately granted the insurer’s motion for summary judgment, finding that plaintiffs had suffered no “physical damage to or loss of” their covered property to trigger coverage under the policy. In so holding, the court rejected plaintiffs’ interpretation of “loss” to include a partial loss of use of their facilities. The court also rejected plaintiffs’ argument that public fear of indoor establishments due to the pandemic caused a “physical loss of or damage to” the property to trigger coverage, instead holding that physical loss or damage requires a “distinct, demonstrable, physical alteration of the property” to trigger coverage. The court observed that pure economic losses were intangible and do not constitute property damage. The court further held that since plaintiffs did not experience a “period of restoration,” the policy did not provide business interruption coverage for the claims. Finally, the court noted that the policy’s Civil Authority coverage requires that a civil action be taken in response to physical loss or physical damage. Since plaintiffs had not alleged such damage to their property or any nearby properties, the Civil Authority coverage did not apply. The Delaware Valley Management case continues the favorable trend of courts finding no coverage for COVID-related business losses where no physical damage or loss can be shown by a policyholder. This remains an ongoing issue throughout the country and WCM will continue to monitor and report on the developments. Thank you to Mason Bailey for his contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News Conclusory Expert's Opinion Insufficient To Stave Off Summary Judgment In Escalator Case January 25, 2008 < Back Share to: In Parris v. Port of New York Authority and Otis Elevator, 2008 NY Slip Op 00197, AD and New York Co. Index 121678/03, plaintiff claims to have suffered injuries when the escalator at the Port Authority Bus Terminal he was riding suddenly "jerked" and "pulled" causing him to fall backwards and hit his head. Defendants moved for summary judgment arguing that even if a mechanical defect existed, there were no records of prior complaints and service maintenance records equally reflected no problems. Plaintiff opposed this motion by submitting an affidavit of an expert engineer. This expert, who never conducted an on-scene inspection, averred that plaintiff's accident could have been due to warn parts. While the trial court denied summary judgment, finding a question of fact was raised by this expert, the Appellate Division - First Department disagreed, finding the expert's findings to be factually unsupported and too speculative. On an awkward note, the trial judge, Justice Rolando T. Acosta, was recently promoted to the Appellate Divison - First Department and now sits with the very judges that reversed him. http://www.nycourts.gov/reporter/3dseries/2008/2008_00197.htm Previous Next Contact

News Parental Immunity Offers a Thin Shield in NJ February 15, 2009 < Back Share to: Parental immunity shields a parent from liability for negligent supervision but not for willful or wanton failure to supervise. Yet, even where negligent supervision is claimed, the immunity will only apply where the parent’s conduct implicates customary child-care issues or a legitimate exercise of parental authority or supervision. The distinction was recently addressed by a New Jersey Appellate Court in Thorpe v. Wiggan. The case involved the tragic death of a four year old child who was left in a smoke filled car strapped in his car seat, with no means of escape when the car became engulfed in fire. The father, who suffered significant burns over his body, gave two conflicting statements about the events that led to his son’s death. In the version accepted for purposes of an in limine motion, the father described leaving his son in the car while he got out to inspect the source of the smoke. When the car burst into flames, he was unable to get his son out. The court reasoned that the father was not immune from negligence in this case where the father’s actions had nothing to do with a parent’s “unique philosophy of child-rearing” or the parent’s care for his child’s physical, moral, emotional, and intellectual growth. It simply had to do with a parent who failed to remove his son from the car before the fire erupted. Thanks to Denise Ricci for her contribution. http://lawlibrary.rutgers.edu/courts/appellate/a1995-07.opn.html Previous Next Contact

News Hurricane Irene Raises Homeowner Policy Issues September 9, 2011 < Back Share to: A recent article in the Insurance Journal discussed the difficult questions relating to whether special deductibles should apply to homeowners’ insurance policies for damages caused by Hurricane Irene. The issues arise from whether or not Hurricane Irene was in fact a Hurricane, or whether it was a tropical storm when it struck various states in the Northeast. Benjamin Lawsky, Superintendent of Financial Services explains that the storm hit the New York City area with winds at approximately 60 mph, which would categorize it as a tropical storm. The distinction is that with winds below 74 mph, that storm would be determined to be a tropical storm, and accordingly special hurricane deductibles would not be applied saving homeowners thousands of dollars. Hurricane deductibles can range anywhere from one to five percent but can be higher in coastal areas. In New Jersey, Commissioner of Insurance Thomas Considine stated that hurricane deductibles would not apply to policy holders in the State, and any attempt by insurers to levy such deductibles would be a violation of the New Jersey Administrative Code. In Connecticut, hurricane deductibles are permitted only on coastal properties, and depending on the insurer, hurricane deductibles could be levied simply by the issuance of a hurricane warning. In Vermont, especially hard hit during the storm, policies do not contain the hurricane deductible language, and thus consumers would not have to consider this aspect of their homeowners’ policy. As the cleanup from Hurricane Irene continues, it is important for policy holders to take note of the deductibles that should apply based upon State directives and the language in their policies. Thanks to Andrew Marra for his contribution to this post. If you have any questions about this post, please contact Greg Vetter at gvetter@wcmlaw.com . Previous Next Contact

News Court Rules Against Homeowners For Staircase Fall (NY) July 21, 2017 < Back Share to: In Lee v Acevedo the plaintiff fell backwards down a basement staircase inside the defendants' home. The plaintiff testified at a deposition that she was standing on a landing at the top of the staircase, attempting to close a bedroom door that opened onto the landing and she fell after she stepped backwards and her foot did not step on the landing. The plaintiff further testified that there were no handrails to grab onto to prevent her fall. The plaintiff filed a lawsuit alleging that the size and the configuration of the landing at the top of the basement staircase constituted a dangerous condition since there was insufficient room to safely close the bedroom door. The plaintiff also alleged that the defendants were negligent in failing to provide a handrail on either side of the staircase. The defendants moved for summary judgment dismissing the complaint, arguing that a dangerous condition did not exist and that, in any event, the negligence alleged in the complaint was not a proximate cause of the accident. Suffolk County Supreme Court granted the defendants’ summary judgment motion, but on appeal, the Appellate Division reversed. The Appellate Court’s decision reaffirmed the duty owed by a landowner, holding that a landowner has a duty to maintain his or her property "in a reasonably safe condition in view of all the circumstances, including the likelihood of injury to others, the seriousness of the injury, and the burden of avoiding the risk." However, an owner “has no duty to protect against an open and obvious condition provided that, as a matter of law, the condition is not inherently dangerous." Applying this standard, the court found that the defendants failed to establish their prima facie entitlement to judgment as a matter of law. The decision finds that the deposition testimony failed to eliminate all issues of fact as to whether the conditions alleged in the complaint were inherently dangerous. Also, the court ruled against the defendants on their proximate issue argument. The court found that the plaintiff's testimony that she reached out to grab something as she was falling, but there was nothing to grab onto, demonstrated that an issue of fact exists as to whether the absence of a handrail was a proximate cause of her injury. Interestingly, the court implied it expected other proof to be submitted, such as an expert report, perhaps due to plaintiff's argument that the size and configuration of the landing created the unsafe condition. Thanks to George Parpas for his contribution to this post and please write to Mike Bono for more information. Previous Next Contact

News Hidden Defect Must Be Made Transparent (NJ) October 9, 2019 < Back Share to: In Cabrera v. Fairleigh Dickinson, the court considered whether a defendant owed a duty to alert an independent contractor to the existence of a hidden defect on the property. Defendant FDU hired KB Electric Services to change lights on the roof of its property. Defendant FDU was aware of a defect on the roof but failed to warn anyone at KB of the danger. The plaintiff was an employee of KB and he fell from the roof due to the defect, sustaining personal injuries. Of note, it was undisputed that a dangerous condition existed on the roof and that the defendant was aware of the defect. Accordingly, at issue was whether or not defendant FDU owed a duty of care to KB and KB’s employees. In New Jersey, the law carves out an exception to the requirement that premises be made safe for an independent contractor when the contractor is invited onto the land to perform a specific task in respect of the hazard itself. Based on this case law, the defendant argued that they did not owe a duty of care to KB. However, in this case, the defect on the roof was hidden and only known to defendant. The Appellate Court ultimately found that the defendant had a duty to warn the plaintiff of the dangerous condition. Thanks to Heather Aquino for her contribution to this post. Please email Georgia Coats with any questions.   Previous Next Contact

News Faulty Workmanship Is Not An Occurrence (PA) October 27, 2016 < Back Share to: Construction defect claims raise insurance coverage questions when the damages sought are essentially for the work of the insured. A federal court judge in the Eastern District of Pennsylvania recently ruled that an insurer had no duty to provide coverage or defend its insured, a contractor, for its negligent roof installation. The case State Farm Fire and Casualty Co. v. Kim’s Asia Construction, stemmed from an underlying lawsuit filed by Powerline Imports, Inc. alleged that the State Farm's insured, Kim’s Asia Construction negligently installed a new roof that leaked during minor rain storms. Kim’s Asia sought defense and indemnification from State Farm for the claim. State Farm began defending Kim Asia’s under a reservation of rights but subsequently filed a declaratory judgment action. State Farm argued that the underlying complaint essentially amounted to a claim of property damage based on faulty workmanship against its insured and that allegations of negligence against the insured did not bring the action within the scope of coverage. The court agreed with State Farm, ruling that State Farm had no duty to defend or indemnify Kim’s Asia under the policy. The court cited the well-established four corners rule namely that “an insurer’s duties under an insurance policy are triggered by the language of the complaint against the insured.” See Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888, 896 (Pa. 2006). In comparing the four corners of the underlying complaint to the insurance policy, the court held that leaks that arose from the contactor’s negligent installation of the roof were not entitled to defense or indemnity under the policy. Although Kim’s Asia argued that the leaks arose from alternative sources and were based upon claims of negligence, the analysis of the underlying complaint did not contain a causal nexus between the property damage and a fortuitous event, as required by the policy. The court, parsing the language of the complaint, arrived at the conclusion that the only claim alleged within the underlying complaint was faulty workmanship which does not qualify as an occurrence under the policy. Thanks to Sathima Jones for her contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com . Previous Next Contact

News NJAD Finds Attempted Suicide Operates to Exclude Coverage for MV Collision August 12, 2010 < Back Share to: On June 10, 2004, plaintiff was severely injured when a vehicle operated by defendant crossed the double-yellow line and struck his car head on, causing both cars to roll and become total losses. The plaintiff’s vehicle was insured by Proformance Insurance Co. ("Proformance"), while the Defendant’s vehicle was insured by New Jersey Manufacturers Insurance Co. ("NJM"). Defendant’s policy with NJM policy obligated the insurer, in pertinent part, to "pay damages for bodily injury or property damage for which any insured becomes legally responsible because of an auto accident [but] . . . [w]e have no duty to defend any suit or settle any claim for bodily injury or property damage not covered under this policy." The policy excluded liability coverage for any insured "[w]ho intentionally causes bodily injury or property damage." It appears that the defendant told the responding police officer that “after he viewed [plaintiff’s] a vehicle traveling toward him in the opposite lane, he let go of the steering wheel and his vehicle traveled into the oncoming lane, striking the plaintiff’s vehicle head on”. When asked by the trooper why he had let go of the wheel, the defendant responded that he "wanted to hit the other vehicle," and when asked the reason, Thomas said he "wanted to end it all." Accordingly, the trooper classified the accident as an attempted suicide. Thus, NJM declined coverage based on the policy exclusion for any insured "[w]ho intentionally causes bodily injury or property damage”. Plaintiff’s insurer, Proformance, filed a declaratory action against NJM and defendant seeking a ruling that NJM had wrongfully disclaimed coverage to defendant, and was obligated to defend or indemnify its insureds. The court found that Proformance failed to show that the language of NJM's exclusion would fairly support more than one meaning and, therefore, the plain language of the policy should apply. In this case it is undisputed that Thomas was speeding and he let go of the wheel after seeing Hammer's vehicle approaching in the opposite direction. Hammer's injury was an "inherently probable consequence" of Thomas' conduct. The court found that the record sufficiently demonstrated Thomas' subjective intent to cause some degree of injury. Thus, the court's decision upholding NJM’s declination of coverage was affirmed. Thanks to Sheila Osei for her contribution to this post. http://www.judiciary.state.nj.us/opinions/a0209-08-a0742-08.pdf Previous Next Contact