Wade Clark Mulcahy LLP

News To Remove or Not To Remove? Federal Court Beckons ... (PA) June 8, 2017 < Back Share to: Plaintiffs get to choose litigation venue by filing a complaint in any court that meets jurisdictional rules – State or Federal. While defendants have limited means to select venue, one consideration is whether a matter can be removed to federal court. Particularly where an out of State defendant is involved in an action meeting diversity requirements, federal court may provide a more favorable venue. However, the decision must be made quickly as the rule requires removal in thirty days from service of the complaint. In JUDITH KOERNER v. GEICO, the defendant insurer removed a UIM claim to Pennsylvania Middle District Court only after the plaintiff amended the complaint some eight months into the State court litigation. The insurer contended that the only after the amended complaint did the amount in controversy exceed the jurisdictional requirement of $75,000. The plaintiff sought remand on the grounds that the removal came well after the allotted 30 days. The plaintiff, Judith Koerner (“Korner”) alleged that she was injured in an auto accident, when objects from an unidentified vehicle were thrust into the roadway and forced her into a guardrail. As a result, she sustained injuries for which she sought uninsured motorist benefits from her insurer, Geico, which denied the claim. Koerner filed her original complaint in Pike County Court of Common Pleas, without a quantification of damages, but demanded an unspecified judgment in the amount to cover damages she sustained in the accident. Nearly a year later, Koerner amended her complaint, adding individual counts for breach of contract and bad faith against Geico. Notably, Koerner alleged that Geico was liable for Pennsylvania common law and statutory bad faith damages, including punitive damages (which under Pennsylvania jurisprudence can be up to ten times the compensatory award). Subsequent to Koerner’s amended complaint, Geico filed a notice to remove the case to federal court, based on diversity jurisdiction. In support of its notice, Geico stated that the policy’s UIM limit was $15,000, noting that the demand for punitive damages in Koerner’s amended complaint satisfied the jurisdictional requirement of a $75,000 amount in controversy. Geico argued that the removal was timely because it was not until the filing of the amended complaint that it could ascertain the amount in controversy as meeting the threshold for removal. Koerner counter-argued that Geico’s petition to remove the case was untimely because Geico should have filed for removal within 30 days of filing the original complaint. Koerner relied on 28 U.S.C. § 1446(b)(3), which states: (3) Except as provided in subsection (c), if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable. Although the original complaint did not allege damages in excess of $75,000, Koerner argued that under 28 U.S.C. § 1446(b)(3), Geico could surmise that the amount in controversy exceeded $75,000 prior to her amended complaint, based on “other papers” including medical reports. The Middle District denied plaintiff’s motion reasoning that the use of the word "ascertain" in § 1446(b)(3) means that the thirty-day removal period is triggered only when the documents "make it `unequivocally clear and certain' that federal jurisdiction lies." Because Koerner provided no basis to conclude that medical records supplied in response to a request for production of documents makes the amount in controversy ascertainable—the documents did not "make it unequivocally clear and certain that federal jurisdiction lies." This was particularly so when the operative complaint at the time only alleged with specificity that Koerner was entitled to uninsured motorist benefits from Geico and those benefits under the policy were $60,000 shy of the amount in controversy required for federal jurisdiction. Only when bad faith was alleged did Pennsylvania's Bad Faith statute make punitive damages in issue and, in theory, increase the amount in controversy in excess of $75,000. Therefore, federal court jurisdiction was proper. Thanks to Sathima Jones for her contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com Previous Next Contact

News Tee Off Be-“fore” It’s Safe And Face Liability (NY) May 22, 2019 < Back Share to: As the weather gets warmer, it appears that more people are participating in outdoor activities. This leads to the inevitable injury and the, you guessed it, subsequent lawsuit. In Krych v. Bredenberg, the plaintiff was golfing with friends when he was struck by a golf ball hit by the defendant, who was playing in the following group. The defendant moved for summary judgment, arguing assumption of risk. The lower court denied the motion. In affirming the decision, the Fourth Department held that a plaintiff ‘will not be deemed to have assumed the risks of reckless or intentional conduct or concealed or unreasonably increased risks.’ The appellate court noted that the defendant admitted that he teed off prematurely and that the plaintiff was still in the fairway before he yelled ‘fore.’ The Court admitted that “although the object of the game of golf is to drive the ball as cleanly and directly as possible toward its ultimate intended goal (the hole), the possibility that the ball will fly off in another direction is a risk inherent in the game.” Moreover, the mere fact that a ball does not travel in the intended direction, does not establish a viable negligence claim. Nevertheless, in the instant action, the Appellate Division found that the defendant failed to exercise due care when he teed off too soon and this action created a triable issue of fact as to whether the defendant unreasonably increased the risk of harm to the plaintiff. Simply put, the plaintiff could not have assumed the increased risk created by defendant’s reckless conduct. Thank you to Paul Vitale for his contribution to this post. Previous Next Contact

News WCM to Co-Host October 12 Product Recall Webinar September 16, 2020 < Back Share to: Total Recall: An In-Depth Look At Issues That Arise With Product Recall Policies Bill Johnstone and Matthew Hagan of Johnstone Partners, https://johnstone-partners.com/, and Bob Cosgrove and Colleen Hayes of Wade Clark Mulcahy, LLP, https://www.wcmlaw.com/, are pleased to invite you to a product recall webinar on Monday, October 12, 2020 at 11 a.m. EST. This webinar will take an in-depth look and discuss, from both a legal and expert perspective, a variety of topical and complex issues that tend to arise in connection with product recall policies. Specifically, the webinar will address: Fashion Before Function in Wordings We will first venture into a comparative analysis of the Customer Loss Of Profit Endorsement and the Recall Liability Endorsement. We will delve into a discussion regarding the distinction of these two separate endorsements, as well as a discussion regarding their potential coverage for commonly claimed customer lost profits. Life in the Grey Area Second, we will address the ever-present question of what constitutes “property damage” under a product recall policy, especially if no harmful trigger language is included. We will also discuss the interplay between “property damage” coverage under a product recall policy and a commercial general liability policy -- given that CGL policies typically broadly define “property damage”. Loose Lips Sinks Ships Next, we will address how an insured advertises its product could potentially impact coverage when a claim is made under a product recall policy. Gordon Gekko’s Quality Assurance Programme Finally, no discussion in 2020 would be complete without some discussion on how COVID may potentially impact coverage. In this webinar, we will address the coverage implications if an insured’s quality control processes are impacted by the realities of COVID and no longer comport with underwriting’s understanding of these processes, at the time the policy was placed. If you have interest in attending this webinar, you can register at: https://zoom.us/meeting/register/tJMsfuCoqjsqGdbBEDfjy0LSwen2tSexs26W. You can also contact Bob at rcosgrove@wcmlaw.com for more information. The webinar is approved for CLE credits in NY and CE credits in North Carolina with Texas and California CE credit approval pending. Previous Next Contact

News PA Supreme Court Virtually Eliminates Sidewalk Liability for Municipalities. May 22, 2009 < Back Share to: In the case of Reid v. City of Philadelphia, the plaintiff slipped on snow and ice that had accumulated on a sidewalk adjacent to a Philadelphia police station. The plaintiff proved that the City was negligent in its removal of snow and ice, but in opposition the City argued that it was exempt from claims under 42 Pa.C.S. § 8541, the Political Subdivision and Tort Claims Act. Plaintiff argued that the 8542(b)(3) exemption (which holds that a municipality can be primarily liable for failure to maintain real propery) applied. The trial court and Commonwealth court agreed with plaintiff. The Supreme Court, however, disagreed, It held that the 8542(b)(3) exemption does not apply to sidewalks – only real property. http://www.pacourts.us/OpPosting/Supreme/out/J-95-2007mo.pdf Previous Next Contact

News NY's Second Dept. Finds Asbestos and Pollution Exclusions Ambiguous. November 19, 2010 < Back Share to: In the case of Great American Restoration v. Scottsdale Insurance, NY's Second Department was faced with the question of whether a CGL policy's asbestos and pollution exclusions barred coverage in a situation in which Great American's clean-up of a flood caused asbestos to be dispersed around the building it was hired to clean -- http://www.loislaw.com/advsrny/flwhitview.htp?lwhitid=9986753. The asbestos exclusion provided that coverage did not apply to "bodily injury" or "property damage" arising out of the "inhal[ation]" or "prolonged physical exposure to" asbestos, the "use" of asbestos in construction, the "removal" of asbestos from products or structures, or the "manufacture, sale, transportation, storage, or disposal" of asbestos or products containing asbestos. The pollution exclusion stated that coverage does not apply to "[b]odily injury' or property damage' arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants.'" "Pollutants" were defined as "any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste." In respect of the asbestos exclusion, the Second Department held that the exclusion did not apply because the exclusion did not make clear that coverage would not attach for accidental release or dispersal of asbestos. In respect of the pollution exclusion, the Second Department held that since asbestos was not enumerated as a pollutant, and in light of the specific asbestos exclusion, asbestos was not a pollutant for purposes of the policy. Scottsdale was thus mandated to defend and indemnify Great American. If you would like more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News The New Normal (NY) August 21, 2020 < Back Share to: The New York Supreme Court Commercial Division has enacted a new rule that allows attorneys to request permission to appear remotely before commercial judges based on a showing of a good cause. The new rule is a clear shift from the status quo of courts operating on an ad hoc basis filled with administrative court adjournments and trial delays. However, what separates the Commercial Division's new rules from most other courts is that it provides attorneys with more autonomy to facilitate the progress of their client’s cases on the trial calendar. It is now incumbent on courts to allow a transition to a more digital platform by allowing remote participation and paperless submissions. We can safely assume that we are in the new normal, and the idea of returning back to pre-covid days any time soon is just a pipe dream that only delays bureaucratic operations even more than they were before the pandemic. Attorneys and court staff continue to acclimate themselves to the new changes and adapt to attending hearings and conferences remotely. Thanks to James Papadakis for his contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News Pranking On The Job April 19, 2019 < Back Share to: In Johns v. Wengerter, the New Jersey Superior Court addressed a prank gone wrong. Plaintiff worked as a firefighter for the City of Linden. He was injured by a firework that was placed in a firehouse toilet by his co-worker. Plaintiff was treated at the hospital for a burn and a contusion and was placed off duty. After two weeks, plaintiff returned to work. He never lost wages and he never filed a workers compensation claim. Instead, plaintiff filed a civil suit for damages against his co-worker. The co-worker in turn impleaded the City alleging that it allowed pervasive pranking at the fire department. The trial court dismissed all claims against both defendants, holding that the claims were barred by the exclusivity provision of the Workers Compensation Act. In New Jersey, an injured employee has one exclusive remedy which is to file a workers compensation claim with the employer’s workers compensation insurance carrier. There are, however, exceptions to the rule. For example, an employer engaged in grossly negligent or intentional wrongdoing can be sued despite the exclusivity provision. Johns argued just that. He claimed defendants could be sued because they were grossly negligent or engaged in intentional wrongdoing. The Appellate Division, on appeal, agreed with the trial court’s decision that the accident occurred as the result “horseplay or skylarking,” and that a prank fell within the definition of same. Employers in New Jersey can rest easy knowing that an employee’s prank gone awry likely will not subject them to a civil tort lawsuit. Thanks to Mike Noblett for his contribution to this post. Please email Colleen Hayes with any questions. Previous Next Contact

News Scooter Lessor Off the Hook for Incident at County Fair in NY January 23, 2013 < Back Share to: In Couture v. Miskovitz, the plaintiff complained that she was struck by a motorized scooter operated by defendant Miskovitz. Miskovitz had rented the scooter from defendant Stillwater Ramps and Mobility Center and was operating the scooter at the county fair at the time of the accident. Defendant Dutchess County Agricultural Society owned the premises. The lower court denied Stillwater's and Dutchess County's motions for summary judgment. In reversing the lower court's decision, the Second Department held that Stillwater was entitled to summary judgment because it was not vicariously liable for Miskovitz' actions pursuant to Vehicle and Traffic Law 388. Specifically, the fact that the scooter was not operated on a public highway relieved Stillwater from vicarious liability. Moreover, Stillwater demonstrated that it was not negligent in maintaining the scooter, entrusting the scooter to Miskovitz or in training him how to use it. The Court also held that Dutchess County was entitled to summary judgment because it did not have the ability or opportunity, through the exercise of reasonable measures, to control Miskovitz's actions. Thanks to Georgia Stagias for her contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com . Previous Next Contact

News Do CGL Policies Now Insure Data Breaches? April 29, 2016 < Back Share to: The case that everyone is talking about is Travelers Indemnity v. Portal Health, a just released, unpublished Fourth Circuit opinion. The quick story is that the Fourth Circuit affirmed the trial court opinion and held that Travelers owed coverage (specifically defense) under a CGL policy for a data breach. The real story is a bit more nuanced. In the case, Portal Healthcare, a Virginia based company, was sued in NY in a class action lawsuit. In the lawsuit, patients of Glen Falls Hospital claimed that Portal Healthcare failed to safeguard medical records entrusted to Portal Healthcare by the hospital and instead allowed those records to be posted on the internet – accessible to everyone via a Google search. Portal Healthcare was insured by Travelers under two consecutive commercial general liability insurance policies – a 2012 policy and a 2013 policy. The Policies were not standard policies – rather they contained special endorsements that expanded the scope of personal injury, advertising injury and web site injury. Specifically, the 2012 Policy contained a Web Xtend Liability Endorsement that deleted and replaced the definition of Personal and Advertising Injury liability. The 2013 Policy contained an Amendment of Coverage B – Personal And Advertising Liability Endorsement that deleted and replaced the definition of Personal and Advertising Injury liability. Under both endorsements, the parties (and court) seemed to agree that coverage was triggered if the underlying complaint alleged: (1) injury arising out of the offense of “electronic publication of material that . . . gives unreasonable publicity to a person’s private life” (the language utilized in the insuring agreement of the 2012 Policy) or (2) injury caused by the offense of “electronic publication of material that . . . discloses information about a person’s private life” (the language utilized in the insuring agreement of the 2013 Policy). In respect of the first point, Travelers argued that, although the data was available to the general public, since Portal Healthcare did not intend to publish it, publication did not occur. This argument was rejected by the court which held that it was the fact of publication (and not the intent of publisher) that mattered. In respect of the second point, Travelers argued that there was no “publicity” given to a person’s private life as the leak was not intended to generate publicity. This argument was also rejected by the court which held that since the leaked data was available to the general public, publicity had occurred. All of this seems rather straightforward, so why all the fuss? It seems that a top sheet review might be to blame. When you look at the trial court’s decision and the policies themselves, you see that the Travelers’ decision to broaden the scope of potential claims that would qualify as “personal and advertising injury” is the root cause of the decision. So, it’s true that CGL policies might have more potential exposure to data breaches – but only if you enhance the coverages. For more information about this post please e-mail Bob Cosgrove. Previous Next Contact

News A Tale Of Two Transit Authorities: Relation Back Doctrine Found Not to Apply Where Defendants Were Not United In Interest November 4, 2022 < Back Share to: In New York, a claim asserted against a new defendant will “relate back” to the date of the original claim if plaintiff establishes that (1) both claims arose out of the same conduct, transaction, or occurrence; (2) the new defendant is united in interest with the original defendant, and by reason of that relationship can be charged with notice of the institution of the action such that the new defendant will not be prejudiced in maintaining its defense on the merits by the delayed claim; and (3) the new defendant knew or should have known that, but for a mistake by the plaintiff as to the identity of the proper parties, the action would have been brought against the new defendant as well. See CPLR 203(b). The Appellate Division, Second Department recently addressed the “relation back” doctrine in Chandler v. New York City Transit Authority. In that case, plaintiff was allegedly injured after a city bus driver closed the door on plaintiff’s hand and began to drive away. Plaintiff commenced an action only against the New York City Transit Authority, an improper party. After the statute of limitations expired, plaintiff moved for leave to amend the action to include Metropolitan Transit Authority Bus Company, the proper entity. The Supreme Court denied the motion, finding that the claims against the newer defendant did not relate back to the initial pleading. The Second Department affirmed, holding that while both claims arose out of the same conduct, transaction, or occurrence, plaintiff failed to establish that the Transit Authority defendants were united in interest. To do so, it must be shown that the defendants “stand or fall together and that judgment against one will similarly affect the other.” In a negligence action, to be united in interest further means that “the defenses available to two defendants will be identical, and thus their interests will be united, only where one is vicariously liable for the acts of the other.” Since plaintiff could not make such a showing, the court affirmed the denial of plaintiff’s motion to name the Metropolitan Transit Authority Bus Company as a defendant. The takeaway from Chandler is that New York has specific requirements for claims asserted against newer defendants after the expiration of the statute of limitations to “relate back” to claims made in the initial complaint. Claims not meeting these requirements are subject to challenge and dismissal. Thank you to Rebecca Pasternak for her contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News A.D. Says Installer and Cleaner Not Responsible For Broken Handrail That Caused Accident January 16, 2008 < Back Share to: In Peters v. Trammell Crow Co., 2008 NY Slip Op 00055, AD and New York Co. Index 101297/03, Frank Peters, plaintiff and an employee of the building owner, fell on an interior set of stairs and injured himself when a handrail broke in half. The handrail had been allegedly installed 10 years before the accident by ARI Products, Inc. Trammell Crow Company, the property manager, contracted with Triangle Services, Inc., for janitorial services, pursuant to written contract. Motions for summary judgment by ARI Products, Inc., and Triangle Services, Inc., were denied by the trial court but were granted by the Appellate Division - First Department. The Appellate Court found that Triangle Services' contract to be unambiguous, only requiring it to provide cleaning and janitorial services. Additionally, none of the building engineering and maintenance personnel were under Triangle's supervision or control. As for ARI, notwithstanding the question of whether or not it installed the handrail, the Appellate Division deemed the affidavit from plaintiffs' achitectural expert to be conclusory and unable to raise a question of fact as to whether the handrail was improperly installed. Moreover, the subject handrail had been repaired twice by the building's maintenance staff after its installation and before plaintiff's accident, which the Court deemed an intervening act that allowed legal cause to be decided as a matter of law. http://www.courts.state.ny.us/reporter/3dseries/2008/2008_00055.htm Previous Next Contact

News Email Update: NJ Limits Company's Right to Read Personal Employee Emails March 31, 2010 < Back Share to: In our post of July 9, 2009, we discussed a company's right to search for and use an employee's personal email communications with her attorney exchanged through a company provided laptop computer. Stengart v. Loving Care Agency, Inc. In Stengart, the New Jersey Appellate Division decided in favor of the employee and privacy advocates in a case closely followed by the employment bar. The New Jersey Supreme Court believed that the issue was so important that it granted interlocutory leave to appeal and stayed the underlying action until it reviewed that decision. The facts in Stengart were relatively simple. Marina Stengart was an employee of Loving Care who was provided with a laptop for company related work. The employee handbook of Loving Care alerted employees that emails were considered part of the company's business records and were to used principally for business purposes. Athough employees were cautioned against considering such communications either private or personal, the handbook explicitedly permitted occasional personal emails. Stengart was not a happy employee. While contemplating legal action against her employer, she used her company laptop to access her private, password-protected Yahoo mail account through the internet to communicate with her attorney. When she left the company a short time later, she turned in her laptop and thereafter filed an employed related civil action against Loving Care. In response, the company's lawyers retained a forensic expert who recreated her laptop's harddrive and retrieved several of the emails exchanged between Stengart and her attorney. These emails were eventually identified in the company's discovery responses, which drew a vigorous objection by the plaintiff. The Supreme Court was faced with the specific question of whether these emails were protected by the attorney client privilege and the broader question of under what circumstances an employer may search for and use the contents of email communications between an employee and her attorney when those communications are facilitated by the company's electronic resources. A sticky wicket indeed. Siding with the employee and advocates of privacy in this electronic age, the Supreme Court ruled that Stengart had a reasonable expectation of privacy under the circumstances. Although the company provided and presumably owned the laptop, she used her private, password-protected Yahoo email account --not the company server or email system-- to communicate with her attorneys. In addition, the company employee handbook was ambiguous in its email policy. On the one hand, the handbook cautioned against any privacy expectation when using the internet or exchanging emails while, on the other hand, it permitted occasional personal email use. On the balance, the court found that the employee's right to confidential communications with her attorney trumped the company's absolute right to monitor and access all email communications assisted by company resources. Stengart provides important guidance on the scope of an employee's legitimate privacy expectations in the work place when electronic communications are involved. While an employer should use care in formulating a clear and well defined electronic use policy in its handbook, there are limits to a company's legal right to search for and use an employee's personal email exchanges no matter how what the handbook states. If you have any questions about this post, please contact Paul Clark at pclark@wcmlaw.com http://www.judiciary.state.nj.us/opinions/supreme/A1609StengartvLovingCareAgency.pdf Previous Next Contact