News "Arising Out Of" and "Caused By": Different Meanings in AI Endorsements? Apparently Not. January 27, 2012 < Back Share to: In W&W Glass Systems v. Admiral Ins. Co., the plaintiff sought a judgment declaring that it was an additional insured under its subcontractor's insurance policy after an employee of the subcontractor was injured during the course of his employment. The policy provided that plaintiff was covered "only with respect to liability caused by [the subcontractor's] ongoing operations performed for that insured [i.e. plaintiff]." The defendant argued that the additional insured provision was not triggered because the injured employee's accident was not "caused by" the subcontractor's operations -- that the language "caused by" means that there must be a finding of negligence. The First Department rejected this argument, finding that the language "caused by" does not materially differ with the language "arising out of," and that language does not require a showing of negligence. Since the injured employee was working for the subcontractor at the time of the accident, the defendant's duty to defend was triggered. http://www.nycourts.gov/reporter/3dseries/2012/2012_00307.htm Thanks to Gabe Darwick for his contribution to this post. Previous Next Contact

News WCM Philadelphia Partner Appointed to Vice-Chair of DRI Subcommittee October 29, 2020 < Back Share to: WCM is pleased to announce Partner Colleen Hayes was recently appointed Vice-Chair for the Women In The Law Committee for the DRI’s Young Lawyers Steering Committee. The selection process draws from a national pool of applicants from all practice areas within the defense bar. Colleen has previously served on the DRI’s Young Lawyers Steering Committee as Chair and Vice-Chair for the Social Media Committee. Colleen is also currently serving as the Secretary of the Philadelphia Association of Defense Counsel, one of the DRI’s State and Local Defense Organizations. Previous Next Contact

News Time is Not On Your Side: US Southern District of New York Dismisses Insurance Class Action Suit Against Insurers On Statute Of Limitations Grounds August 27, 2021 < Back Share to: Plaintiff insureds brought a putative class action suit for violations of New York General Business Law (GBL), fraud, and breach of contract claims. Plaintiffs allege that in 2000 defendant sold accident disability and medical expense insurance products in violation of New York Insurance Law in that they were on not approved, that the insurance provided illusory coverage, and that the marketing included unlawful deceptive acts in violation of New York General Business Law. Defendants moved to dismiss the plaintiff's claims as time-barred because any and all of the alleged misrepresentations and omissions were at the time plaintiff first received coverage in the year 2000, and that suit brought in 2016 was untimely. The policyholders argued the “continuing wrong” doctrine applied which would toll the limitation period up to the date of the commission of the last wrongful act and that the insurer's had a continuing ongoing obligation that continued past the GBL or CPLR statute limitations date. The court rejected the policyholders’ argument that each time they paid continuing premiums, there were separate and distinct wrongs. Rather the Court found that after plaintiffs first purchased the policies in 2000, this was the only alleged false and misleading advertising. The insurers took no action beyond continuing the coverage. The court held because the alleged deceptive false advertising took place when the policies were sold and because plaintiffs have not alleged they suffered injury by virtue of false and misleading advertising thereafter, the “continuing wrong” doctrine did not apply. The court also found the “equitable tolling” argument equally distinguishable because the plaintiff was on notice of the potential wrongdoing and took no steps to investigate further. Here plaintiffs became aware the policies may have violated the law by 2005 and undertook no investigation to elicit the equitable tolling doctrine applicability. Thus, all of the plaintiff's claims were deemed time-barred and the policyholders’ putative class action was dismissed. If you have any questions, please contact Tom Bracken. Previous Next Contact

News Just in Time for Winter, a Pennsylvania Court Applies the Hills and Ridges Doctrine. December 7, 2012 < Back Share to: In Koeppel v. PNC Bank, et al., a Pennsylvania, Monroe County, trial court was confronted with the applicability of the hills and ridges doctrine. In Koeppel, the plaintiff, Karen Koeppel, filed a lawsuit against PNC Bank and Bell Snow Removal LLC. Plaintiff alleged she slipped on ice on PNC Bank's parking lot. The defendants moved for summary judgment on the basis of the hills and ridges doctrine. The court initially stated that the hills and ridges doctrine protects an owner of land from liability for generally slippery conditions as long as the owner has not permitted ice and snow to unreasonably accumulate on the property. Further, the court noted that accumulation must be the result of an entirely natural occurrence for the doctrine to apply. Here, there was no dispute that at the time of the plaintiff's fall there were generalized icy conditions. The plaintiff, however, contended that the doctrine did not apply because the accumulation, that was the cause of her fall, was not natural. She argued the accumulation was actually the result of the defendants' snow removal efforts. The court determined that since the plaintiff failed to put forth any evidence to show that the defendants' snow removal efforts led to the slippery condition that caused her fall, the hills and ridges doctrine would apply. Thus, the defendants' summary judgment motion was granted and the plaintiff's complaint was dismissed.     Previous Next Contact

News Unless Explicitly Stated Otherwise, Reinsurer’s Policy Limit Does Not Cap Defense Cost (PA) August 20, 2018 < Back Share to: In October of 2017, the Superior Court of Pennsylvania upheld a Philadelphia trial judge’s ruling that OneBeacon Insurance, the reinsurer, was on the hook for defense expenses incurred by its reinsured above and beyond the limit established in the “Reinsurance Accepted” section of its facultative certificates. The case was in regards to an asbestos-related claim against Century Indemnity and Pacific Employers Insurance Co(“PEIC”). OneBeacon was the reinsurer and paid $11 million pursuant to the reinsurance policy limit stated in the certificates. OneBeacon argued that it should not be liable for defense expenses beyond that amount, but the trial court disagreed and, after a nonjury trial, awarded Century about $4.8 million plus prejudgment interest, and PEIC $2.4 million plus prejudgment interest. The Court stated that OneBeacon’s policy did not make clear that the “Reinsurance Accepted” amount in the certificates included defense costs. OneBeacon argued on appeal that the terms and conditions of the certificate follow that of the underlying policy “except as otherwise specifically provided herein” and that because the language does not explicitly state otherwise, the “Reinsurance Accepted” cap must include both losses and defense expenses. The company also argued that because the “Reinsurance Accepted” is set at a specific amount, the reinsurance certificate follows the terms and conditions of the underlying policy only up to that amount. But the Court ruled that, “viewing the certificate as a whole, we do not find the language unambiguously limits OneBeacon’s entire liability for losses and expenses to the ‘Reinsurance Accepted’ amount.” “A reasonable interpretation of the certificate’s reference to OneBeacon’s ‘liability … specified in Section IV’ is that it refers only to liability for losses,” Francisco said. “This is particularly true in light of General Condition (3), which requires the reinsurer to pay its proportion of losses, ‘and in addition thereto’ its proportion of expenses. Similarly, the ‘except as otherwise provided herein’ language is also ambiguous because the certificate does not explicitly state that expenses are included in (or ‘subject to’) the ‘Reinsurance Accepted’ limit. Pursuant to this reasoning, if the certificate follows the underlying policy, expenses must be reimbursed in addition to the policy limits.” The Superior Court rejected OneBeacon’s attempt to analogize its case with Bellefonte Reinsurance v. Aetna Casualty & Surety, a 1990 case in which the U.S. Court of Appeals for the Second Circuit rejected Aetna’s argument that the “follow the fortunes” doctrine required reinsurers to pay for all of a reinsured’s expenses and costs even if they exceed the “Reinsurance Accepted” amount listed on the certificate. The Bellefonte court focused on the language in the certificates that stated Bellefonte’s obligation to reinsure Aetna “subject to the terms, conditions and amount of liability set forth herein.” But the Court rules that OneBeacon’s reinsurance certificates stated only that the reinsurance was “subject to the general conditions set forth on the reverse side.” It does not expressly provide that all of the coverage is subject to the ‘Reinsurance Accepted’ limit. The Court also noted that Century/PEIC’s underlying policies provide for the payment of expenses beyond the limits. “Therefore, because the reinsurance certificate ‘follows’ that of the underlying policy, it would cover expenses above the liability limit,” “This is factually different from the situation in Bellefonte, where the defense costs were paid as part of the reinsured’s settlement agreement with the underlying insured—an agreement to which the reinsurer was not a party.” Thanks to Jonathan Avolio for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Insurers Must Defend Alleged FIFA Fraudster (EDNY) May 5, 2016 < Back Share to: In 2015, the U.S. Justice Department charged more than 40 defendants in a wide-ranging corruption case centered on international soccer. Most of these defendants were officials connected with soccer’s international governing body, FIFA. One of those defendants is Eduardo Li, an elected member of FIFA’s executive committee, and president of the Costa Rican Football Federation. The indictment alleges that Li participated in a racketeering conspiracy, violating the federal RICO statute. Other charges against Li include wire conspiracy, wire fraud, and money laundering. The indictment alleges that the various defendants participated in a criminal scheme that involved accepting over $150 million in bribes and kickbacks in exchange for doling out lucrative television deals, clothing sponsorship contracts, and host country selection for the World Cup. FIFA maintained a $50 million directors and officers liability policy with Lloyds and Axis Specialty Europe SE. After the indictment, Li sent a letter to the insurers requesting payment under the policy for his defense in the criminal action. The insurers denied Li’s claim, asserting an exclusion in the policy that there was no coverage with respect to claims alleging RICO violations. The D&O policy also included a criminal defense costs limitation that provided coverage only if criminal “investigative proceedings” are initiated against an insured. After the denial, Li moved by order to show cause in federal court for a preliminary injunction requiring the insurer’s to pay for his defense in the criminal action. The insurers argued that Li did not constitute an “insured person” because the D&O policy only provided coverage for those that acted in a “managerial or supervisory capacity,” and Li never served as a FIFA executive committee member (he was elected to the committee but never served on it). The insurers also asserted that the defense cost limitation applies because the US indictment based on RICO violations does not constitute “investigative proceedings.” Interestingly, the insurers abandoned any argument based on its original denial position citing the RICO exclusion. On April 27, 2016, Judge Raymond J. Dearie in Eastern District Court granted Li’s request for an injunction, and required the insurers to provide him with a defense in the criminal action. Judge Dearie happens to preside over the criminal action against the FIFA defendants. The court found that the policy definition for “investigation” includes any formal hearing, and that this “presumably encompasses an indictment and criminal trial.” The court also rejected the notion that Li was not entitled to coverage as an “insured person” because he never served on FIFA’s executive committee. The court examined the D&O policy and held that nowhere did it limit coverage only to FIFA committee members who acted in a managerial or supervisory capacity. Rather, coverage applied to all FIFA chairmen and executives or “any person acting in a comparable function.” Judging from the court’s decision it would appear that the insurers’ coverage arguments were tenuous at best. However, the main thrust of the insurers’ challenge to Li’s injunction was premised on jurisdictional grounds. The insurers challenged whether Judge Dearie even had jurisdiction over the coverage dispute due to the policy’s forum selection clause requiring a Swiss place of jurisdiction and the application of Swiss law. Again Judge Dearie rejected any jurisdictional arguments. Since Judge Dearie presides over the criminal matter, he asserted that his court had ancillary jurisdiction over the coverage dispute and that he could rule on the merits of the case. Even if the insurers could not make the most cogent coverage arguments, they took the appropriate measures by attempting to limit coverage. There are potentially 40 or more “insured persons” seeking a defense. The court may also have been persuaded by Li’s difficult financial positon. Li was being defended under a policy by Chubb, but the policy was exhausted shortly after Li sought the injunction. The insurers are not at a complete loss through because a willful acts exclusion in the policy may allow them to claw back any money they pay out. And there’s certainly enough evidence to indicate that Li willfully participated in the corrupt scheme at FIFA; he once boasted: "There's no Arab sheikh who can buy tickets to the kind of events us leaders of world football have access to." Thanks to Dan Beatty for his contribution to this post. If you have any questions about this post, please email Brian Gibbons at Brian Gibbons for additional information.   Previous Next Contact

News Pennsylvania Jury Finds A Commercial Property Owner Liable For Construction Accident Over the Hired Construction Company February 3, 2016 < Back Share to: Carbon County, Pennsylvania is home to a piece of Blue Mountain, which is one of the most popular ski and snowboarding destinations in the tristate area. Recently, a Carbon County jury awarded the county’s highest reported verdict of $1.2 million against Blue Mountain Ski Resort’s owner, The Tuthill Corp., in Bortz v. Tuthill. In September 2011, Bortz had been working on a project to widen one of Blue Mountain’s slopes. On the day of the accident, Bortz was operating an articulating hauler truck that was carrying a load of soil. Bortz ascended 25 feet up the mountain, and at some point, decided to back down a steep embankment. Bortz descended 30 feet down, struck a ski lift tower, and was ejected from the truck through a window. The truck then landed on Bortz. Bortz had apparently expressed concerns to his coworkers that the project was dangerous; specifically that the slope of the hill on which they maneuvered the trucks was too steep. Bortz’s estate claimed that before the accident, Bortz had numerous unsuccessful attempts at maneuvering the truck on hill. After his first successful attempt, supervisors left the area. Bortz’s estate pursued a theory of negligence against Blue Mountain, arguing that Blue Mountain prepared the slope for the workers before the work commenced by leveling it off, leaving a slope grade that too steep per industry standards. Bortz’s estate also argued that Blue Mountain suggested Bortz use the method of backing down the hill, thereby forcing Bortz to operate a truck on a slope that was beyond the truck’s capabilities. Blue Mountain countered that Bortz’s employer, Livengood, was an expert in its field and bore ultimate responsibility for the equipment and safety details of the project. Blue Mountain also suggested that Bortz did nothing to mitigate the trucks descent, as there was no evidence of brake activity. Further, Blue Mountain disputed Bortz’s cause of death, citing record evidence indicating that Bortz may have suffered a heart attack during the incident. In the end, Bortz’s estate persuaded the Carbon County jury that Blue Mountain exercised control over Bortz’s work, so much so that Blue Mountain was found 71% liable while Bortz was found only 29% liable for the fatal accident. The jury awarded Bortz’s estate $341,250 on the wrongful-death claim and $879,009 on the survival claim. This verdict reminds businesses to be very cautious in their level of involvement when commencing a construction project. A business may believe that partaking in certain aspects of project amounts only to “being helpful” and that the hired professionals hold the reins. However, as shown in Pennsylvania, a jury may disagree. Bortz v. TuthillThanks to Rachel Freedman for her contribution to this post.   Previous Next Contact

News Plaintiff’s Slip and Fall on Wet Floor Goes to Jury as Summary Judgment is Denied (NY) July 29, 2021 < Back Share to: In Lopez v. 1355 Morris Ave, LLC (1st Dept. 2021), the First Department upheld a trial court’s decision to deny defendants’ motion for summary judgment. In some premises liability cases, a defendant can occasionally avoid liability if it shows that it warned the bystander of a dangerous condition, or that the bystander had knowledge of the dangerous condition prior to the accident. Here, however, plaintiff slipped and fell on a wet floor when defendants were mopping the floor at the time of the accident. Defendants moved for summary judgment arguing plaintiff knew that the floor was being mopped and knew the floor was wet prior thereto. The First Dept. in upholding denial of summary judgment, held defendants failed to establish that it cannot be held liable for the injuries plaintiff sustained because, even if they were relieved of their duty to warn her of a hazardous condition by the open and obvious nature of the wet floor, the defendants were not relieved of their duty to maintain the floor in reasonably safe condition. Moreover, an issue of fact existed because plaintiff testified that she saw the superintendent only cleaning the floor, not mopping it, and that she did not see the wet floor before she fell. Whether or not she should have seen it would remain a triable issue of fact for a jury to determine. The First Dept. was also not convinced by defendant’s arguments that plaintiff was primarily at fault because she was not paying attention or holding the handrail when walking, because plaintiff did not need to show complete absence of her own comparative fault in order to defeat defendant’s motion for summary judgment on liability. This case highlights the rigorous duty property owners are being held to keep premises free from dangerous conditions. Of course, all floors must be mopped on occasion, and a wet floor invites liability in a slip and fall accident. However, courts are making owners go further to floors safe from patron traffic with “reasonable means” perhaps such as blocking off the section of the wet floor. Property owners would be prudent in using any available means possible to keep the public safe on their premises. Thanks to Raymond Gonzalez for his contribution to this post. Should you have any questions, please feel free to contact Tom Bracken. Previous Next Contact

News Prejudice and Late Notice in PA Coverage: Sometimes Common Sense Prevails! February 17, 2012 < Back Share to: In the case of Vanderhoff v. Harleysville Insurance,a coverage dispute that arose out of a phantom car motor vehicle accident, the court was asked to determine when a carrier could disclaim coverage based on a showing of late notice and resulting prejudice. The trial court had invalidated the disclaimer on the grounds that Harleysville “did not show that the result would have been any different with…a timely investigation.” The Appellate Division has now reversed. It wrote: The entire justification for the requirement of a timely report of an unidentified vehicle to an insurer is to allow the insurer to investigate the accident to discover evidence. It is nearly axiomatic that the insurer cannot know what evidence it might discover in such an investigation. In fact, if the insurer could establish with certainty what evidence it would have discovered, it would, by definition, not be prejudiced by the lack of timely notice. As established by the testimony cited above, significant amounts of evidence, both physical and testimonial, are lost with the passage of 8 months’ time. Sometimes common sense prevails, indeed. The question is whether the thrust of the holding will be applied by the courts in other contexts. For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Ignoring School Harassment May Be “Intentional” Conduct With Unintended Consequences March 20, 2018 < Back Share to: The Second Department recently held that there was a question of fact regarding whether a school district’s conduct in ignoring complaints of anti-Semitic harassment was a covered “occurrence” under the insurance policy. In Graphic Arts Mutual Insurance Co. v. Pine Bush Central School District, plaintiffs in an underlying action alleged the Pine Bush Central School District violated their civil rights by being deliberately indifferent to anti-Semitic harassment. The School District tendered their defense in the underlying action to Graphic Arts Mutual Insurance Company. Graphic Arts Mutual initially defended the School District in the underlying action, but later disclaimed any duty to indemnify. The School District ultimately settled for $3 million in compensatory damages and $1.48 million in attorneys’ fees. Graphic Arts Mutual did not contribute to the settlement, and commenced a declaratory judgment action. Graphic Arts claimed it was not obligated to indemnify the School District because the District’s conduct constituted intentional discriminatory conduct, and the claims did not constitute a covered “occurrence” or “loss.” The Second Department found that for the claim to have been an “accident,” it would have to be unexpected, unusual, or unforeseen from the point of view of the insured. The underlying plaintiffs alleged that the repeated nature of harassment gave rise to an inference that the District “intended for the harassment to occur” based on the District’s policies in dealing with reports of discrimination. Ultimately, the court held that whether the incidents giving rise to the underlying complaint were “accidents” were questions of fact that could not be decided on a motion to dismiss. Insurers should be mindful of the court’s discussion of “accidental results flowing from intentional causes.” Specifically, the court held that “an act that is intentionally committed or performed may still be considered an accident within the meaning of an insurance policy, as long as the insured did not expect or intend the harm caused.” Thus, even though the District’s conduct may be intentional, it would nonetheless be covered conduct because the consequences from that conduct were unexpected. The outcome of this case remains unclear, but a decision on the underlying facts may shed light on how New York courts approach “accidental results flowing from intentional causes.” Thanks to Douglas Giombarrese for his contribution to this post.       Previous Next Contact

News Art Scholars Fear Liability for their Opinions on Authenticity July 26, 2012 < Back Share to: According to a recent article in the New York Times, one of the downsides of the booming art market is that many art scholars no longer feel they have the right to be wrong when opining on the authenticity of works. Because there can be so much money at stake, some experts have found themselves the target of lawsuits due to unfavorable opinions. In fact, the Andy Warhol Foundation for the Visual Arts, the Roy Lichtenstein Foundation, as well as other museums and institutes have stopped authenticating works in order to avoid litigation. Although art experts have been sued for years over their opinions, the amount of exposure due to the value of many works has created the current problem. And whether insurance responds to such lawsuits is, in some cases, unclear. Whether this leads to the sale of more fakes, or causes experts to sit idly by when a known forgery is being sold remains to be seen. But we will continue to follow this development. Please write to Mike Bono at mbono@wcmlaw.com if you would like further information. Previous Next Contact

News Exception To Hearsay Rule Used To Defeat Summary Judgment In New York October 1, 2009 < Back Share to: In Jara v Salinas-Ramirez, the Appellate Division, First Department applied the present sense impression exception to the hearsay rule to deny the defendant's motion for summary judgment. The case involves a hit and run automobile accident. After the accident, the plaintiff followed the defendant's vehicle for three blocks and then called the police. When he returned to the scene of the accident, a man and a woman approached the plaintiff and advised him that they wrote down the license plate number of the defendant's vehicle. The man provided the plaintiff with the number on a piece of paper and left the scene. When the police arrived at the scene, the woman gave the license plate number to the police. The license plate number given to the police is the same number the man wrote on a piece of paper. There was no dispute that the license plate number matched the defendant's van. However, the defendant moved for summary judgment because the plaintiff no longer has the piece of paper given to him by the man, he has not been able to locate the female witness and there is no police accident report in the record. However, for purposes of opposing the defendant's motion for summary judgment, plaintiff's testimony regarding the statements allegedly made by the two witnesses identifying the license plate number of the offending vehicle were sufficiently corroborated by his other testimony, accurately describing the offending vehicle as a dark-colored van and asserting that the woman made her statement to the police at the scene of the accident ten minutes after the accident, to invoke the "present sense impression" exception to the hearsay rule and raise a triable issue of fact as to whether defendant's vehicle was involved in the accident. The court noted that this ruling was not to be construed that the hearsay statements were to be admissible at trial. http://www.courts.state.ny.us/reporter/3dseries/2009/2009_06593.htm Thanks to Maju Varghese for his contribution to this post. Previous Next Contact