News Plaintiff’s Typo Leads To No Liability Coverage For The Insured July 17, 2012 < Back Share to: On June 27, 2003, Merrimack Mutual Fire Insurance Company had an insurance policy in effect providing liability coverage to 25 Avenue C New Realty, LLC. On June 27, 2005, Alea North America Insurance Company had an insurance policy in effect providing liability coverage to 25 Avenue C. Eamonn Grimes filed a lawsuit against 25 Avenue C to recover for personal injuries sustained on 25 Avenue C’s property on June 27, 2005. 25 Avenue C gave timely notice of the claim to Alea. Alea then undertook the defense of this case and assigned defense counsel. In May 2007, an investigator discovered that the accident actually occurred on June 27, 2003, not June 27, 2005. In August 2007, defense counsel received a bill of particulars from Grimes stating the accident occurred on June 27, 2003. On October 4, 2007, defense counsel took the deposition of a nonparty witness who testified that Grimes’ accident occurred on June 27, 2003. Inexplicably, it was not until May 15, 2008 that Alea’s third-party claims administrator spoke with 25 Avenue C and determined that Merrimack was the actual insurer on June 27, 2003. At that point, defense counsel tendered the defense to Merrimack and notified them that Alea’s policy was not in effect at that time. Thereafter, on July 8, 2008, Merrimack rejected Alea’s tender on the grounds that it was not given timely notice of the claim. Alea then advised 25 Avenue C on August 11, 2008 that it was declining coverage because the actual date of the incident predated coverage. 25 Avenue C then brought this action seeking a declaration that either Alea or Merrimack was obligated to defend and indemnify them in the underlying personal injury action. The Supreme Court granted 25 Avenue C’s motion for summary judgment against Merrimack, finding that Merrimack was obligated to defend and indemnify 25 Avenue C as Merrimack “was notified within a reasonable time under the facts and circumstances and there is no apparent prejudice, as discovery is ongoing.” The court also granted Alea’s motion for summary judgment, allowing Alea to bow out. The Appellate Division upheld the decision as to Alea, but reversed in favor of Merrimack, finding that under these facts, the five-year delay in notifying Merrimack was unreasonable. The Appellate Division found fault in Alea, stating that Alea should have notified 25 Avenue C as early as May 2007, and that Alea’s attorneys were conclusively aware in August and October of 2007 that the correct date of the accident was June 27, 2003, not June 27, 2005. Further, the court was critical of Alea’s third-party claims administrator for waiting until May 15, 2008 to contact 25 Avenue C to determine which insurer covered the premises in June 2003. This decision leaves 25 Avenue C without coverage from either Merrimack or Alea in the underlying personal injury suit. Given the mistakes made and the language in this decision, it will be interesting to see which party 25 Avenue C goes after. Thanks to Michael Nunley for his contribution to this post. http://www.courts.state.ny.us/reporter/3dseries/2012/2012_04672.htm   Previous Next Contact

News The Climb (up the ladder) to Contractual Indemnification (NY) April 3, 2018 < Back Share to: In Wojciech v. Schafer Mews Housing Development, et al., plaintiff, an electrician, was injured when he fell from a makeshift wooden ladder while helping to unload supplies. The ladder was approximately five feet above ground to the first-floor slab of the building under construction. Although plaintiff’s employer provided an A-frame ladder, plaintiff was unable to use it to access the slab because the ground was covered in dirt, debris, and rocks. The First Department determined that plaintiff’s decision to use the makeshift ladder, which other employees were also allegedly using, was not the sole proximate cause of the accident where he was never instructed not to use it. Additionally, were no proper safety device was provided, the fact that plaintiff’s boots may have been untied or that he may have descended the ladder backwards was not the sole proximate cause of his accident. The court further determined that plaintiff’s accident arose from the means and methods of accessing the slab. Since there was no dispute that plaintiff was supervised and solely directed by his employer, Demand Electric, Inc., the owner defendants, Mega Contracting Group LLC and Schafer Mews Housing Development Fund Corporation, were not negligent in the happening of the accident. Based on the forgoing, the First Department affirmed the motion court’s decision granting the owner defendant’s motion to summary judgment on their claim against Demand Electric, Inc. (plaintiff's employer) for contractual indemnification. Plaintiff’s employer was solely responsible for providing plaintiff with the materials and equipment that proved to be inadequate for the task of carrying supplies up to the first floor slab. Where there was no evidence that the owner defendants supervised, directed, or provided equipment to plaintiff, the court found that they were not negligent for the accident and entitled to contractual indemnification from plaintiff’s employer. Thanks to Alicia Massidas for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Biomechanics Opinion Of Low Speed Crash Sufficiently Scientific? (NY) October 25, 2017 < Back Share to: The biomechanics of vehicle occupants involved in low-speed collisions is a potential defense to personal injury claims. However, any proffer of expert biomechanical testimony should be prepared to meet the test for admissibility, i.e. proof that the opinion is based upon generally accepted principles and methodologies. In Dovberg v. Laubach, the plaintiff was involved in a low speed chain reaction motor vehicle accident. After securing summary judgment against the defendants on the issue of liability, the parties proceeded to a damages-only trial. Prior to trial, defendants served an expert disclosure notice advising that they were going to call a biomechanical engineer/board-certified surgeon to opine that the force generated by the accident could not have caused the plaintiff’s knee injuries. The disclosure notice indicated that the proposed testimony was based on deposition testimony and on the plaintiff’s medical records. It also noted that the doctor’s opinion was based on scholarly works that had gained general acceptance in the field. Plaintiff’s counsel filed a motion in limine to preclude the testimony because it made no reference to any empirical data or peer-reviewed journals, studies, treatises, or texts. The lower court denied the motion, the doctor testified at trial, and the jury concluded that the accident was not a substantial factor in causing the alleged injuries. On appeal, the Second Department reversed the lower court’s decision and found that the defendant’s expert failed to pass the Frye test. Specifically, the defendants failed to establish that their expert’s opinion was based on generally accepted principles and methodologies. They noted that the rule does not require the majority of the scientific community to agree with the expert’s conclusion but, rather, the scientific community must accept the principles and methods used in evaluating the clinical data used to come to his conclusions. The court concluded that the defendants failed to describe the methods used by their expert in drawing his conclusions and failed to provide specifics for the publications relied on including the authors, years of publication, and contents of the works. The court also faulted the proffer for failing to provide a description of the methodology used to determine the force of the accident and the biomechanical engineering principles applied in formulating his opinion that her knees could not have contacted the dashboard. Thanks to Georgia Coats for her contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com .     Previous Next Contact

News PA Court Clarifies When Use Of Plaintiff's Behavior Can Be Used In Products Liability Cases September 28, 2010 < Back Share to: In a recent products liability case, the PA Superior Court clarified when a defendant in a products liability case can introduce evidence of the plaintiff’s behavior. In the case of Reott v. Asia Trend et. al., the court explained that there are only three limited circumstances when a defendant is permitted to introduce evidence of a plaintiff’s behavior in a strict liability products liability case. These are voluntary assumption of risk, misuse of the product and highly reckless behavior. This case involves a plaintiff, Duane Reott, who was injured while attempting to use a tree stand manufactured by the defendants. The plaintiff failed to use the device as prescribed by the instruction manual. However, the device also did not work properly. The issue at trial focused mainly on whether the wrongful use of the tree stand by the plaintiff counted as highly reckless behavior. The court was confronted with the issue of whether the defendants had met their burdens of proof. The court confirmed that highly reckless conduct is an affirmative defense that must be proven by the defendant by a preponderance of the evidence. In order to prove reckless conduct, the defendant must show that the plaintiff (1) knew of facts which created a significant risk of physical harm or that plaintiff “deliberately proceed to act, or failed to act, in conscious disregard of that risk,” and (2) that the plaintiff’s conduct was the sole or superseding cause of the injury. In this appeal the court ruled that the defense had not proven that Reott’s injury was the sole or superseding cause of his injury, thus he was entitled to a directed verdict on the issue. Thanks to Remy Lapidus for her contribution to this post. http://www.aopc.org/OpPosting/Superior/out/a25020_10.pdf Previous Next Contact

News Charitable Immunity Prevails Even Where Non-Profit Rents to For-Profit Organization (NJ) August 31, 2017 < Back Share to: The New Jersey Charitable Immunity Act (CIA) bars negligence claims against nonprofit corporations organized exclusively for religious, charitable, or educational purposes. An entity qualifies for charitable immunity when it is formed for non-profit, educational, religious or charitable purpose, and was promoting such objectives and purposes at the time of the injury to a plaintiff who was a beneficiary of the organization’s works. In Losado v. Princeton University, the court examined whether Princeton University, a non-profit educational organization, was entitled to Charitable Immunity when the plaintiff was injured on its campus. The key question was whether the University was engaged in its educational objectives when renting a pool on campus to an outside organization. The plaintiff's daughter participated in a swim meet hosted by the Princeton Tigers Aquatic Club, an organization not affiliated with the university other than pool rental. The plaintiff was injured in a fall as she left the swim meet when she stepped into a depression adjacent to a walkway. Princeton University filed a motion for summary judgment, arguing that they were immune from suit under the CIA. The motion judge found that the plaintiff was a beneficiary of the University at the time of her injury, and therefore dismissed the claim under the CIA. On appeal, the plaintiff argued that the Judge erred since the renting of a facility on the campus was not part of the “educational pursuits” that the University was organized to advance. Specifically, the plaintiff argued that youth sports by an outside organization was not an educational objective that Princeton was organized to advance. They further noted that the PTAC was not a charitable organization. Per statutory requirement, the Appellate Court liberally construed the CIA to afford immunity to a non-profit entity even when renting facilities to members of the general public for social and recreational activities. So long as the non-profit facility is not dominated by rentals of for-profit entities, the use of the facilities serves important social and recreational needs of the community. Importantly, this case affirms once again that an organization is entitled to charitable immunity even when renting a portion of its property to a non-charitable organization. These type of rental agreements are common between organizations, and will not prevent the non-profit entity from asserting and succeeding on a charitable immunity defense. Thanks to Heather Aquino Obregon for her contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com .   Previous Next Contact

News Mischievous Raccoons Can’t Be Malicious (PA) November 7, 2019 < Back Share to: The Western District of Pennsylvania recently decided an unusual case in Capital Flip v. American Modern Select Insurance Co.: whether a raccoon damaging a house was covered under a dwelling insurance policy pursuant to a vandalism or malicious mischief rider. Specifically, this case presents as a dispute between Capital Flip LLC and its insurer, American Modern Select Insurance Co. pursuant to a homeowners’ dwelling policy. At some point it was discovered that raccoons had entered the property and did what racoons normally do (malicious or not) – cause substantial damage. Capital Flip subsequently sought coverage under the policy, pointing to a clause covering losses arising from “vandalism or malicious mischief.” American Modern denied coverage and this lawsuit followed. American Modern filed a motion to dismiss, contending that damage caused by raccoons simply could not be covered under the vandalism or malicious mischief clause, as animals cannot have subjective intention. Capital Flip argued that the policy did not define “vandalism or malicious mischief”, thus rendering it possible those terms encompassed damage by animals. The Court agreed with American Modern, holding that under reasonable definitions of “mischief” and “vandalism”, a subjective intent combined with an intended unfavorable result was required – and raccoons simply did not have that intellectual ability. Put simply, despite creative thinking, these terms require human actions. Despite the popular opinion that racoons are malicious, this is yet another instance where the Courts simply disagree. Thanks to Matthew Care for his contribution to this post. If you have any questions, please email Georgia Coats. Previous Next Contact

News Failure To Advise Insured Of Right To Independant Counsel Could Be A Deceptive Practice June 11, 2008 < Back Share to: In Elacqua v. Physicians’ Reciprocal Insurers the Appellate Division, Third Department held that a carrier’s failure to affirmatively advise an insured that, when the existence of both covered and uncovered claims creates a conflict of interest between the carrier and insured the insured is entitled to obtain independent counsel at the carrier’s expense, is a deceptive practice under General Business Law 349. The same court ruled in 2005 that a carrier has the affirmative duty to advise the insured of its right to independent counsel, a decision in conflict with an earlier First Department case. The key fact supporting the deceptive practice claim was that the carrier’s practice was not to inform an insured of its right to independent counsel, thus making the offending practice consumer-oriented, not just a private dispute with this particular insured. http://decisions.courts.state.ny.us/ad3/decisions/2008/502964.pdf Previous Next Contact

News New Jersey Supreme Court Allows Testimony Of Biomechanical Expert In Low Impact Crash Case. March 11, 2008 < Back Share to: In Hisenaj v. Kuehner, the Supreme Court found that expert testimony based on data from low impact crashes with human test subjects was properly admitted in a fender bender accident that resulted in a low jury verdict. The case was watched closely by both the plaintiff and defense bars and drew amicus curiae appearances from the Association of Trial Lawyers of America-New Jersey (ATLA) and the New Jersey Defense Association. http://www.judiciary.state.nj.us/opinions/supreme/A-86-06%20Hisenaj%20v%20Kuehner.pdf Previous Next Contact

News Appellate Court holds Suicide Triggers Workers' Comp. Benefits (NY) October 22, 2010 < Back Share to: In the Matter of Smith v. Cornell University, the university appealed a decision of the Workers’ Compensation Board which ruled that the suicide of Smith’s husband was causally related to his employment. Mr. Smith was a painter employed by Cornell when he sustained work-related injuries in 2000 and 2001. Smith’s workers’ compensation claims arising out of a 2001 accident were based on a variety of ailments, including consequential depression. In 2007, Mr. Smith committed suicide and his wife filed a claim for workers’ compensation death benefits, which was approved by the Board. The Third Department upheld the award finding that death benefits may be awarded for a suicide that “resulted from insanity, brain derangement or a pattern of mental deterioration caused by work-related injury.” The Court found that Mr. Smith had previously alleged depression as an ailment resulting from the accident and his treating psychiatrist confirmed that Smith’s disability and accompanying chronic pain led to his eventual suicide. Although Cornell asserted that other factors contributed to Smith’s suicide, a compensable act need only be a contributing cause of a resulting mental injury. Thanks to Chris O'Leary for his contribution to this post. If you would like further information about this case, please e-mail mbono@wmclaw.com http://www.nycourts.gov/reporter/3dseries/2010/2010_07102.htm Previous Next Contact

News Too Sexy for Bank = Bank Dress Code? December 15, 2010 < Back Share to: You might have followed the story about the Citibank employee who claimed that she was fired for being "too sexy" -- http://abclocal.go.com/wabc/story?section=news/local&id=7525073 She is now pursuing her legal options. Perhaps in direct response to this problem UBS has just announced a bank dress code -- http://views.washingtonpost.com/leadership/post_leadership/2010/12/ubs-bank-dress-code.html?hpid=topnews. The code is quite specific and details such things as hair coloring (okay for women (so long as the roots don't show), but not okay for men (because it makes them look old) and what types of food are acceptable to eat at lunch (avoid garlic and onions). While the policy no doubt was well-intended, it seems certain that some type of discrimination claim will arise from its publication and/or enforcement. If you would like more information about this post or WCM's employment practice, please contact Paul Clark at pclark@wcmlaw.com or Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Made-Whole Doctrine Does not Apply to Deductibles or Self-Insured Retentions (NJ) July 30, 2020 < Back Share to: The Supreme Court of New Jersey recently determined that the made-whole doctrine does not apply to first-dollar risk allocated to the insured. In City of Asbury Park v. Star Insurance Company, the plaintiff filed a declaratory judgment action against a workers’ compensation insurer seeking determination that it was entitled to full reimbursement before the insurer could assert subrogation rights to settlement proceeds. The underlying incident involved a firefighter for the Asbury Park Fire Department who suffered injuries on the job. The injured party filed a Workers’ Compensation claim against the City of Asbury, which paid him its full self-insured retention limit of $400,000.00. Star Insurance Company (“Star”) supplemented that payment in the amount of $2,607,227.40. These two payments created a Workers’ Compensation lien entitling the City of Asbury and Star to reimbursement on any recovery against a third party. Eventually, the injured party pursued legal action against a third party surrounding the same incident. The parties reached a settlement agreement for $2,700,000.00. Thereafter, the City of Asbury and Star agreed that $935,968.25 of the settlement proceeds would be set aside for the workers’ compensation lien. Subsequent to this agreement, Star demanded the entire $935,968.25 amount claiming that, pursuant to its policy, it was entitled to reimbursement in full before the City of Asbury could recover anything paid on the self-insured retention. Conversely, the City of Asbury argued that it was entitled to reimbursement in full before Star could assert its subrogation right under the made-whole doctrine. In response, Star argued that the made whole doctrine did not apply to self-insured retentions as such application would unjustly enrich the self-insured party. Both parties moved for summary judgment on the issue. The District Court reasoned that an insured’s right to be made whole before the insurer can recover anything from a third-party tortfeasor can be altered by the insurance contract. As such, the Court found that the policy’s subrogation provision altered the City of Asbury’s right to be made whole. Additionally, the Court determined that the made-whole doctrine did not apply to first-dollar coverage such as deductibles or self-insured retentions because to hold otherwise would convert the policy to an insurance policy without a deductible. This, the Court concluded, would result in the City of Asbury gaining “an unbargained-for windfall at the expense of [Star].” The City of Asbury appealed the District Court’s decision and the Third Circuit eventually determined that the issue should be resolved under New Jersey Law. In its opinion, the Supreme Court of New Jersey relied on both the equitable principles of subrogation, such as the made-whole doctrine, as well as the rights agreed upon in the contract. The Court pointed out that it had never addressed the issue of whether the doctrine applies to first-dollar risk, such as deductibles and self-insured retentions, borne by insureds. The Court referenced similar case law in Connecticut, Pennsylvania, and Washington to ultimately determine that the made-whole doctrine does not apply to first-dollar risk allocated to the insured. Specifically, the Court noted that a self-insured retention or deductible is an amount of risk that the insured assumed in exchange for a lower premium cost. As such, where the award from a subrogation action against a third party is insufficient to reimburse both the self-insured and the excess carrier, to place priority to the self-insured would convert the policy into one without a self-insured retention. The Court determined that an interference like that would result in a windfall to the self-insured party and declined to find “that the equity dictates a departure from the terms of the insurance contract into which the parties voluntarily entered under such circumstances.” Overall, the Court opined that if the policy unambiguously provided Star with all of the City of Asbury’s rights to recovery against third-party tortfeasors in the event Star makes a payment under the policy, the made-whole doctrine would not apply to override that agreement. Thanks to Zhanna Dubinsky for this post. Please contact Vincent Terrasi if you have any questions or comments. Previous Next Contact

News Court Resists Urge to Assault English Language, and Enforces Assault Exclusion (NY) May 5, 2017 < Back Share to: Insurers are well aware of the length courts go to in declining to enforce intentional acts exclusions. Even in cases where the intentional nature of alleged misconduct is obvious, courts often refuse to apply intentional acts exclusions. While the reasoning is often artfully worded, the logic often goes something like this - - “well, the defendant may have intended to set that house on fire, but he may not have. Exclusion inapplicable." The Third Department recently resisted this approach in Graytwig v. Dryden. There, the insured was the owner of a bar whose employee allegedly injured a claimant when he forcibly ejected him from a bar. In the underlying action, the claimant alleged that he suffered injuries when the insured’s employee put him in a headlock and pushed him onto an icy sidewalk, where he allegedly hit his head. The insured sought coverage under his policy, which contained an assault exclusion. The exclusion, which stated it was “subject to the terms contained in the General Liability Coverage,” provided that “notwithstanding anything contained herein to the contrary…this policy excludes any and all claims arising out of assault, battery, fight, altercation, or similar misconduct…” The insured argued the exclusion was inapplicable because it was subject to the terms contained in the policy’s general liability coverage. The court rejected this "attempted assault" on the English language, based on the fact the exclusion contained the words “notwithstanding anything contained herein to the contrary.” The insured also argued the assault exclusion was inapplicable because the insured could be held liable under a negligence theory, the implication being that assault is an intentional tort. The court also rejected this argument, based on the reasoning that no cause of action would exist but for the alleged assault. Thus, there was no coverage. Negligence theories can often defeat intentional acts exclusions, but that often isn’t the case when the theory is assault, and the exclusion is specific. An exclusion generally referring to intent is often insufficient, but Graytwig is an excellent reminder that exclusions are more likely to apply when they are specific. Thanks to Michael Gauvin for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact