News NJ Considering Legislation to Mandate Insurance Coverage for COVID-19 Pandemic March 26, 2020 < Back Share to: Alarming news in New Jersey regarding the legislature’s apparent intent to force insurers to provide coverage for BI claims with respect to the COVID-19 Pandemic. New Jersey is threatening to rewrite insurance policies to include the COVID-19 pandemic as a covered peril, regardless of the language and exclusions in the policy. This appears to attempt to force insurers which provide BI insurance to indemnify the insured for COVID-19 elated closures and losses. The bill, introduced as bill No. 3844, in its statement of rationale: This bill provides a mechanism by which certain businesses that suffer losses due to interruption as a result of the coronavirus disease 2019 pandemic may recover those losses from their insurer if they had a policy of business interruption insurance in force on March 9, 2020, the date on which the Governor declared a Public Health Emergency and State of Emergency in Executive Order 103. The bill would apply to businesses covered by such a policy with less than 100 eligible employees in the State of New Jersey. "Eligible employee" is defined as a full-time employee who works a normal work week of 25 or more hours The bill provides that every policy of insurance insuring against loss or damage to property, which includes the loss of use and occupancy and business interruption, in force on the date of the Executive Order, shall be construed to include among the covered perils under that policy coverage for business interruption due to global virus transmission or pandemic, as provided in the Governor’s Executive Order. The coverage provided would be subject to the limits under the policy and would indemnify the insured for losses incurred during the State of Emergency. The exact language of the bill is equally alarming: a. Notwithstanding the provisions of any other law, rule or regulation to the contrary, every policy of insurance insuring against loss or damage to property, which includes the loss of use and occupancy and business interruption in force in this State on the effective date of this act, shall be construed to include among the covered perils under that policy, coverage for business interruption due to global virus transmission or pandemic, as provided in the Public Health Emergency and State of Emergency declared by the Governor in Executive Order 103 of 2020 concerning the coronavirus disease 2019 pandemic. The bill later indicates that coverage is subject to policy limits. This bill, in current form, only would require insurers that wrote a policy that included coverage for business interruption or loss of use to indemnify the insured. Specifically, “[t]he coverage required by this section shall indemnify the insured” but only applies to companies with less than 100 employees. This bill has not yet passed, but it is alarming news for insurers who have written insurance policies that generally exclude from coverage losses due to a virus. Thanks to Matthew Care on his contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News Expert Reports in Lieu of Sworn Affidavits Are Sufficient to Establish a Question of Fact. April 1, 2010 < Back Share to: In Mendez v. Mendez, Index No. 111435/04, 2010 NY Slip Op 02717, the First Department upheld the trial court’s denial of defendant’s motion for summary judgment, seeking the dismissal of plaintiff’s claims of permanent consequential limitation of use of body organ/member and significant limitation of use of body function/system resulting from a motor vehicle accident. Simply because the defendant established a prima facie case that plaintiff did not suffer any permanent loss of use through expert reports did not entitle the defendant to summary judgment. Rather, plaintiff’s expert affirmations and MRI reports served to raise issues of fact as to the permanency of the injuries. The fact that the MRI reports were unsworn was of little consequence since plaintiff’s expert’s opinions were also related to their personal observation and findings. Previous Next Contact

News How Plaintiff Couched Testimony Determined Applicability of the Labor Law February 3, 2009 < Back Share to: In Pakenham v. Westmere Realty, LLC, the plaintiff, a service technician, responded to a call of "no heat" at the defendants' office. The plaintiff used a ladder to access the heating unit on top of the building. While descending, the ladder he slipped and fell to the pavement. The plaintiff sued alleging violations of Labor Law § 240(1) and § 241(6) . The defendants moved for summary judgment arguing that the Labor Law did not apply. The court split its decision and held that plaintiff's “repairs” implicated the Labor Law § 240(1) claim, but conversely held that the Labor Law § 241(6) cause of action had to be dismissed as it was “inapplicable outside the construction, demolition or excavation contexts”. Thanks to Cheryl Fuchs for her contribution to the post. http://decisions.courts.state.ny.us/ad3/Decisions/2009/504889.pdf Previous Next Contact

News Zipline Included in the Premises and Covered Under the Policy October 31, 2017 < Back Share to: The tension between the scope of coverage for an additional insured and the terms of an underlying contract reared its head when a youth group sought coverage as an additional insured in a zip-line accident case. In Great American Alliance Ins. Co. v. Windermere Baptist Conference Center, Inc.., the Searcy Baptist Church youth group leased camp grounds from Windmere Baptist Conference Center. The camp grounds included a ropes course, dubbed “the Edge.” The lease agreement memorialized numerous benefits, including lodging and recreational activities. Under typical circumstances, a guest camper would have to pay an additional premium for activities at the Edge. No such additional premium appeared in the lease agreement between the Church and Windmere. While leasing the property, one of the Church’s youth group members was injured while zip-lining at the Edge. The Windmere policy provided coverage to the Church as a lessee under a blanket additional insured endorsement, but only for “liability arising out of the ownership, maintenance or use of that portion of the premises leased to [the Church]” by Windermere. Great American argued the Edge was not listed in the agreement and, therefore, coverage was not triggered. The Church argued the lease included any and all recreational activities on the grounds. The Western District of Missouri ruled in favor of the Church, finding ambiguity first in the insurance policy, and then in the underlying contract. With respect to the policy, the court held the additional insured endorsement’s use of “lease premises” conflicted with a layman’s understanding, and resolved the ambiguity in favor of the insured seeking coverage. As for the contract, the court referred to parole evidence showing the Edge was offered as part of the included services. Great American made the correct call based on the information provided. Having been set off from the standard camp grounds and recreational activities, the Edge arguably was not part of the premises leased. Further investigation into the negotiations, though, may have led to a different interpretation at the outset. Insurers are often at the mercy of the information the insured can think to provide. As a result, in-depth investigation by a third-party can uncover critical facts relevant to a coverage determination, saving time and litigation costs down the road. Thanks to Chris Soverow for his contribution to this post.     Previous Next Contact

News WCM Successfully Opposes Defendant’s Motions to Dismiss and Remand (PA) September 25, 2020 < Back Share to: In Harleysville Worcester Insurance Company v. Pediatric Associates of Westmoreland Ltd, WCM Partners Robert Cosgrove and Colleen Hayes successfully defeated defendant Pediatric Assoc. of Westmoreland, Ltd.’s (“PAW”) Motion to Dismiss or, in the Alternative, Remand to State Court. By way of brief background, plaintiff Harleysville Worcester Ins. Co. filed a declaratory judgment action asserting it does not owe PAW defense or indemnity with respect to an underlying state court action as the pertinent policies do not provide coverage. In evaluating PAW’s Motion, the United States District Court for the Western District of Pennsylvania first considered whether the case should be dismissed as to PAW. In doing so, the Court determined Harleysville Worcester Ins. Co. (“Harleysville”) and PAW fundamentally disagree about Harleysville’s obligations under the relevant insurance policies. The Court held the parties’ fundamental disagreement constituted a controversy under the Declaratory Judgment Act, which warranted denial of PAW’s Motion to Dismiss. Next, the Court analyzed PAW’s Motion to Remand in accordance with the standards established by the Court of Appeals for the Third Circuit’s holding in Reifer v. Westport Ins. Corp., 751 F.3d 129 (3d Cir. 2014). As set forth in Reifer, the Court considered the following factors to assess its jurisdiction over the lawsuit: (1) the likelihood that a federal court declaration will resolve the uncertainty of obligation which gave rise to the controversy; (2) the convenience of the parties; (3) the public interest in settlement of the uncertainty of obligation; (4) the availability and relative convenience of other remedies; (5) a general policy of restraint when the same issues are pending in a state court; (6) avoidance of duplicative litigation; (7) prevention of the use of the declaratory action as a method of procedural fencing or as a means to provide another forum in a race for res judicata; and (8) (in the insurance context), an inherent conflict of interest between an insurer's duty to defend in a state court and its attempt to characterize that suit in federal court as falling within the scope of a policy exclusion. See Harleysville Worcester Ins. Co., 2020 WL at *2. Weighing the foregoing 8 factors – with the understanding that the Court may look to other case law or considerations – the Court concluded that judicial economy is best served by retaining jurisdiction over the action. In support of this conclusion, the Court reasoned, inter alia, no underlying state court action related to the heart of the lawsuit existed, a ruling on the action would resolve the issue of whether Harleysville is required to defend or indemnify PAW and the parties already appeared before the Court. In sum, this ruling serves as a reminder of the emphasis the District Courts in the Third Circuit place on the Reifer factors when determining whether to retain jurisdiction or remand to state court. Congratulations to Bob and Colleen on Harleysville Worcester Insurance Company v. Pediatric Associates of Westmoreland Ltd, No. CV 19-1251, 2020 WL 5544413, at *1 (W.D. Pa. Sept. 16, 2020), and thanks to Lauren J. Berenbaum for her contribution to this post. Please contact Vincent F. Terrasi with any questions. Previous Next Contact

News Caveat Employer—Coverage Triggered for Failure to Supervise July 11, 2018 < Back Share to:   Although intentional acts are typically excluded from coverage under a commercial general or professional liability policy, an employer is still entitled to coverage in a claim for failure to supervise according to the Second Circuit Court of Appeals in Pacific Employers Insurance Co. v. Saint Frances Care Inc. For thirty years, from 1963 until 1993 when he retired in a cloud of suspicion, Dr. George Reardon sexually abused children in his care as an endocrinologist at St. Francis Hospital. The details and scale of his horrific actions came to light when, following his death in 1998, his home was purchased and the new home owners found a secret room housing pornographic materials and logs of his actions. Approximately 160 individuals sued the hospital for, among other things, corporate negligence, breach of fiduciary or confidential relationship, and breach of the special duty of care owed to children. The excess insurer of the hospital argued sexual assault falls outside the purview of coverage, and also raised concurrency and priority issues. The District of Connecticut rejected the excess insurer’s arguments, and the Second Circuit affirmed in a summary order. With respect to coverage for the sexual assault, the Second Circuit stated coverage is triggered under either the commercial general or professional liability at the primary level of coverage for the claims of failure to supervise. In reviewing claims, it can be difficult to separate the character of an action from the specific nature of a claim. In New York, the duty to defend arises when at least one claim fails within the scope of coverage. Here, it is incumbent to assess the nature of the claims against the actual insured, the hospital, to determine coverage. This matter sounds in negligent supervision, and negligence is typically covered. An important exception is when the character of an intentional act cannot be separated from the alleged negligence. We see this in cases where an assailant may not have intended injury, so the victim sues under an intentional tort and negligence (e.g., reckless disregard). As both causes of action pertain to the intentional act of an assault, coverage would be excluded even for the negligence action. By contrast, here, the intentional act is separate and apart from the hospital’s alleged negligence in failing to supervise the doctor. Thus, when analyzing claims arising from an intentional act, it is important to focus on two things: the character of the act itself, and whether the claim itself is removed from the act. Thanks to Christopher Soverow for his contribution to this post. Previous Next Contact

News Serial Class Action Filer Suffers Set Back January 13, 2009 < Back Share to: A serial class action filing attorney had his case for Consumer Fraud thrown out of court in Hoffman v. ASSEENONTV.com, -- N.J.Super. – (App.Div. 2009). After ordering a product on-line to take advantage of a “free bonus” offer, Hoffman was hit with a $7.95 handling charge. He filed a Consumer Fraud class action lawsuit claiming that despite the fact that the order was cancelled prior to any payment and he was never charged for the product ordered, he nonetheless sustained a diminution to his available credit meriting his representation of a class against the internet marketer. The court disagreed finding that he did not sustain an actual loss as required by the Consumer Fraud Act and upheld dismissal of his case. On the other hand, the court likewise rejected the defendant’s claim for abuse of process against the plaintiff. The defendant had argued that the plaintiff, who had filed over 40 nearly identical lawsuits, had used the process to “extort” settlements prior to class certification. The Court found that it was not in the position to assess the bona fides of settlements in these other actions and upheld dismissal of the defendant’s counterclaim. Thanks to Denise Ricci for her contribution Previous Next Contact

News Affidavit Tailored for Summary Judgment Motion Won’t Overcome Prior Testimony December 4, 2013 < Back Share to: In Scafe v. Schindler Elevator Corp., elevator doors quickly slammed shut and trapped plaintiff's hand. Schindler, the exclusive elevator maintenance contractor moved for summary judgment arguing that it did not have notice of a specific defect with doors slamming. However, Schindler’s documents contained numerous references to recurring problems, some of which may have inferred prior problems with the doors. To get around the records, Schindler submitted an employee affidavit in which he claimed he had personal knowledge of inspecting the elevator on the date of the accident, and presumably found no defects. However, given that the affidavit was improperly tailored to overcome prior deposition testimony, it could not establish defendant’s prima facie entitlement to summary judgment. The lesson here is that witnesses must be prepared to testify as to specific inspections performed at/around the time of the plaintiff’s accident. If the appropriate testimony is not elicited during opposing counsel’s deposition, it may be necessary to question your own witness at the conclusion of your opponent’s questioning. For more information about this case contact cfuchs@wcmlaw.com   Previous Next Contact

News Eagles Win! February 12, 2018 < Back Share to: Some of you may have heard that the Philadelphia Eagles just won their first Super Bowl. It's kind of a big deal down here in Philadelphia. So for those who have interest in such things, enjoy the pictures of the Eagles' celebratory parade that our very own Clayton Thomas took from our office windows. Previous Next Contact

News Plaintiff’s Claim Against Movie Theater Flops at Box Office (NJ) March 8, 2019 < Back Share to: Anyone who has gone to the movie theater to catch the latest flick knows to tread carefully when exiting the theater. No matter how many ushers and cleaning crew are available, it’s a challenge to keep the floors completely free of any loose popcorn, snacks, or general debris in between movie showings. In Frankel v. Edgewater Multiplex Cinemas, et. al., plaintiff filed a claim seeking damages for injuries sustained after a slip and fall in defendant’s movie theater. It was a crowded night at the theater, so plaintiff decided to sit in the dreaded first seat of the first row which was adjacent to an emergency exit door. When the movie ended, plaintiff attempted to exit towards the lobby, when he slipped and fell into the metal bar of the emergency exit door suffering a crush avulsion and laceration to his forehead. Plaintiff testified that he had seen “litter” when he first sat down in the theater before the movie began, but “paid it no mind.” However, plaintiff was unable to identify what he had fallen on at the time of the accident. The defendant indicated that not only did the theater have ushers that would clean the theaters between movie showings, a “breach person” is responsible for inspecting auditoriums each hour to check sound levels, lighting levels, cell phones, talking patrons, or any items posing a tripping hazard. The theater showed evidence that the breach person had inspected the theater on an hourly basis, including two inspections which took place approximately half an hour before plaintiff’s accident. The appellate court found that although there is a duty of care of business owners to eliminate dangerous conditions and keep the premises reasonably safe, plaintiff failed to show that defendant had actual or constructive knowledge of the dangerous condition that caused the accident. Plaintiff could not identify what he had slipped on, and therefore could not establish that defendants were aware of the condition that caused plaintiff to fall. As such, the appellate court affirmed the trial court’s decision and affirmed defendant’s dismissal from the lawsuit. Thanks to Steve Kim for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Using Social Media To Prove Your Case: There's An App For That September 12, 2013 < Back Share to: The quest for social media through discovery is still relatively new. While most courts acknowledge a privacy interest in the world of cyberspace and require defendants to establish a factual predicate for disclosure, some courts simply apply the rules applicable in traditional discovery disputes. In Wilson v. Fantastic Trans., the plaintiff alleged personal injuries that prevented from teaching her dance class. The defendant requested access to her Facebook account because the account might contain information relevant to her alleged injuries. Although the court did not cite any publicly available content in the plaintiff’s Facebook profile, it nevertheless ordered the plaintiff to produce all content depicting her dancing or teaching her class. In other words, the defendant was allowed access to potentially relevant information; no more, no less. But the Nassau County Supreme Court’s decision in Wilson appears to be the exception to the rule. A textbook example of the approach taken by most courts is Pereira v. City of New York. There, the plaintiff alleged that he was injured after being knocked to the ground while working as a superintendent on a construction site. During the discovery process, the defendants demanded access to the plaintiff’s Facebook and MySpace profiles. The plaintiff objected, claiming the request was overly broad and unlikely to lead to the discovery of admissible evidence. Fortunately for the defendant, there were publicly available photographs from the plaintiff’s Facebook profile and a hockey blog depicting him playing golf and hockey. Based on these posts, the court granted the defendant’s motion to compel. The court displayed some concern for the plaintiff’s privacy, however, and ordered an in camera review of the plaintiff’s social media profiles. Publicly available social media content that contradicts a plaintiff’s allegations is usually sufficient to open the door to the private areas of an online profile. But sometimes, plaintiffs are willing to lend a helping hand. In Paccione v. Bradica, not only did the plaintiff’s Facebook profile show materials contradicting claims about his physical injuries, they also contradicted his sworn deposition testimony about vacations he had taken and fights he has been involved in. Based on discrepancies in his deposition testimony, the court ordered an in camera review of the plaintiff’s Facebook profile to determine if the private areas of the account contained information relevant to the issue of plaintiff’s injuries. The court recognized that “a plaintiff’s mere possession and utilization of a Facebook account is an insufficient basis to compel a plaintiff to provide access to the account or to have the court conduct an in camera inspection of the account’s usage.” But because the publicly available content on the plaintiff’s Facebook account contradicted sworn testimony, the court ruled that discovery into the private areas of the plaintiff’s account was warranted. Courts may show some concern for a plaintiff’s privacy during discovery, but once the publicly available information opens the door to disclosure, the door may swing wide open. In Jennings v. TD Bank, the court ordered the plaintiff to provide access to the private areas of her Facebook account because the publicly available photographs showing her in front of a cruise ship established the factual predicate necessary for a defendant to obtain access to the private areas of the plaintiff’s social media account. Recognizing plaintiff’s privacy interest, the court ordered an in camera review, but the scope of the disclosure was sweeping. Not only was the plaintiff required to provide access to her private areas of her Facebook account, the court also ordered her to send an authorization to Facebook to retrieve the deleted materials as well. The message of these cases is to avoid blunderbuss discovery requests for social media data. You must first do your homework: Search for publicly available data that calls into question some aspect of plaintiff’s case. With that App in hand, you have a much better chance of getting information from the “private” space. *As a reminder, last month, we announced that Dennis Wade is presenting at the New York State Bar Association’s “Law School for Insurance Professionals” session on October 10, 2013. In his written submission, A Carnival for the Skeptic: Using Social Media in Claim and Defense Litigation, Dennis discussed the online carnival that is social media and the tools available to defense attorneys seeking to use what plaintiffs post online to as evidence against them at trial. Special thanks to Michael Gauvin for his contribution to this post. For more information, please contact Dennis Wade at dwade@wcmlaw.com . Previous Next Contact

News Replacement Cost Policy Must Actually Provide Replacement Cost Coverage (PA) July 21, 2017 < Back Share to: In Kurach v. Truck Insurance Exchange, a Pennsylvania Court awarded summary judgment to a homeowners' policy holder who alleged that the replacement cost coverage policy was actually not replacement cost, as the terms of the policy allowed the insurance company to reduce the reimbursement by utilizing depreciation costs. Pennsylvania law defines replacement cost as the actual value of the property at the time of the loss, without deduction for depreciation or deterioration. But here, as the insured learned when he sought coverage for a water damage claim, the policy coverage did deduct for depreciation. The policy further excluded general contractor “overhead” in clear and unambiguous language and plaintiff also challenged the legality of this provision in a policy labeled and marketed as a“Replacement Cost Coverage” policy. The court held that a replacement cost coverage policy may not exclude general contractor overhead or profit, as that would run contrary to the definition under Pennsylvania law. Even though this exclusion was clearly written into the policy, the court stated that a policyholder paying a premium for replacement cost coverage cannot be reimbursed for less. The same rationale applied to the depreciation claim – because this policy was labeled as a replacement cost coverage plan the court took issue with the policy diminishing full reimbursement, regardless of the reason. Specifically, the court took issue with Truck Insurance purporting to provide a policy that provided replacement cost coverage but defined replacement cost coverage in a manner that provided far less coverage. Thanks to Matt Care for his contribution to this post and please write to Mike Bono for more information. Previous Next Contact