News New York Court Approves Service Of TRO Via Non-Fungible Token June 17, 2022 < Back Share to: With approval from the New York Supreme Court, Miami attorneys with Holland & Knight’s asset recovery team recently served a defendant with a temporary restraining order in the form of a non-fungible token (“NFT”). The underlying lawsuit is based on the unauthorized access to, and theft of, approximately $8 million worth of virtual assets on the Ethereum blockchain. The idea to serve the defendants via NFT emerged when the anonymous defendants allegedly attempted to tamper with their fraudulent transaction history that is visible on the blockchain. By serving the defendants via NFT 24 hours before filing the complaint, plaintiff’s counsel was able to preserve the transaction history reflecting millions of dollars of cryptocurrency. Plaintiff filed an Order to Show Cause seeking a temporary restraining order against defendants, and the Court permitted plaintiff’s attorneys to serve a copy of the Order to Show Cause and supporting papers upon the person controlling the Address via a special-purpose Ethereum-based token airdropped into the Address. The Service Token contained a hyperlink to a website created by plaintiff’s counsel wherein they would publish the Order to Show Cause. The hyperlink also included a mechanism to track when a person clicks on it. The court found that such service “shall constitute good and sufficient service for the purposes of jurisdiction under NY law on the person or persons controlling the Address….” This decision is significant in that it sanctions a unique and novel approach to service of process in litigation involving the cutting-edge subjects of NFT/Cryptocurrency. Thank you to Alexandra Deplas for her contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News Assignor Contract May Create Additional Insured Status November 10, 2023 < Back Share to: In Catlin Insurance Company v. Colony Insurance Company , the Supreme Court of New York County considered whether plaintiffs, Sandy Clarkson LLC (“Sandy Clarkson”) and McAlpine Contracting Company (“McAlpine”), were entitled to coverage from Colony Insurance Company (“Colony”), as Additional Insureds. 80 Misc. 3d 1227(A) (N.Y. Sup. Ct. 2023). The dispute arose out of a series of contracts and insurance agreements entered into by the parties. First, Sandy Clarkson and McAlpine entered a construction contract. Id . at 1. Next, McAlpine and Kingspan entered into a subcontract, which required Kingspan to procure liability insurance. Id. Thereafter, Kingspan assigned the subcontract to Kingstone, which purchased a commercial general liability policy from Colony (the “Policy”). Id. at 2. In 2017, a personal injury action was commenced against Sandy Clarkson and McAlpine by an employee of a McAlpine subcontractor for injuries sustained at the construction site. Id . at *3. Kingstone and its assignor were thereafter joined to the case through a third-party action. Id. Sandy Clarkson and McAlpine argued that the underlying personal injury action entitled them to a defense from Colony as Additional Insureds pursuant to the Policy. Id. at *5. Colony disagreed because its insured, Kingstone, never entered a written contract with either party. Id. The Court held that McAlpine qualified as an Additional Insured pursuant to the Policy because it entered into a written contract with Kingstone’s assignor regarding coverage. Id. at 6. The Court noted that the Policy defined Additional Insureds as “[a]ll persons or organizations as required by written contract with the Named Insured.” Id. Thus, the Court reasoned, the provision implicitly extended coverage to any party with whom Kingstone contracted—including McAlpine through Kingstone’s assignor, Kingspan. Id. Conversely, Sandy Clarkson was not entitled to coverage as an Additional Insured because neither Kingstone nor Kingspan entered into a contract with it. Id. The Court next considered whether McAlpine was entitled to indemnification or defense in the lawsuit. Ultimately, the Court found that McAlpine was entitled to defense because the allegations in the lawsuit “suggested a reasonable possibility of coverage,” but could not obtain indemnification due to limiting language in the Policies. Id. at *6-7. One key takeaway from the Catlin decision is that New York insurers should be wary of policy provisions and definitions implicating contracts made by an insured’s assignor or predecessor in interest. As Catlin reflects, these prior contractual agreements may ultimately trigger Additional Insured coverage and additional duties of the insured to defend or indemnify. Catlin Insurance Company v. Colony Insurance Company .pdf Download PDF • 232KB Previous Next Jessica Whelan Jessica Whelan Associate +1 267 665 0877 jwhelan@wcmlaw.com Contact

News Insurer's Duties Defined by Its Policy Not by Its Insured's Contracts Says NJ Appellate Division June 30, 2010 < Back Share to: In construction venues, contracts requiring subcontractors to name owners and general contractors as additional insureds on liability policies are common. But what happens when the terms of the contract do not match the express language of the subcontractor’s general liability policy additional insured endorsement? The answer boils down to whether the terms of the insurance policy are clear and unambiguous. If so, the insurer’s duty to the additional insured is defined by its policy language rather than the contract language between its insured and the party with whom it contracted. Only when there is an ambiguity in the insurance policy language will the court turn to extrinsic evidence such as the insured’s contract to clear up the gray areas of coverage. In Jeffrey M. Brown Associates, Inc. v. Interstate Fire & Casualty Company, -- N.J.Super. – (App. Div. 2010), New Jersey Appellate Division clarified this position in a coverage dispute between insurers of a general contractor and a subcontractor. The subcontractor’s insurance policy included a blanket endorsement naming as an additional insured “any entity the Named Insured is required in a written contract to name as an additional insured” for liability arising out of work performed by the named insured. However, the policy clearly stated that the insurance provided was “excess over any other insurance.” In contrast, the general contractor’s policy other insurance provision specified that it was primary except when other primary insurance was available. The court concluded that regardless of contractual language between the general contractor and subcontractor requiring the subcontractor’s policy to be primary, the plain and unambiguous language of the policies would govern the respective duties of the insurers. Thus, the subcontractor’s policy was excess to that of the general contractor’s primary coverage, and the settlement of $750,000 in the underlying action was covered entirely by the GC’s $1million policy. If you have any questions or comments about this post, please contact Denise Ricci at dricci@wcmlaw.com . Jeffrey M. Brown Associates, Inc. v. Interstate Fire & Casualty Company, -- N.J.Super. – (App. Div. 2010), http://www.judiciary.state.nj.us/opinions/a2325-08.pdf Previous Next Contact

News No Harm in Failing to Notify Employees as to Rejection of UIM Coverage (PA) March 15, 2019 < Back Share to: The Eastern District of Pennsylvania recently granted a Motion for Summary Judgment in favor of an employer and its insurer in an underinsured motorist coverage (“UIM”) case. In Morales v. Travelers Property Casualty Company, the Court determined that there were no genuine issues of material fact at hand when all parties agreed that an employer previously signed off on two UIM coverage rejection forms. The two issues involved in the matter were (1) whether the employer’s completion of the rejection forms complied with 75 Pa.S.C. § 1731 and (2) whether the plaintiff employee required notice of such. The lawsuit arose when the plaintiff, David Morales (“Morales”), was injured in a motor vehicle accident while acting in the scope of his employment with Tribus Services, Inc. (“Tribus”). Morales filed a claim against the tortfeasor and settled at the policy limit of $15,000.00. He later filed a claim for UIM benefits from Tribus’ policy with Travelers Property Casualty Company of America (“Travelers”). Morales was denied, however, as Tribus previously opted out of those benefits. In fact, the Executive Vice President and Corporate Secretary of Tribus signed two UIM rejection forms prior to the date of the accident. At the close of discovery, all parties filed motions for summary judgment. After reviewing the motions, the Court determined that there were no issues of material fact in dispute. The legal issues were (1) whether Travelers’ UIM rejection form and Tribus’ completion if it complied with 75 Pa.S.C. § 1731; and (2) whether Tribus was obligated to provide notice to Morales that it rejected UIM coverage such that Morales would have the opportunity to obtain his own independent coverage. In reaching its conclusion, the Court first reviewed the two UIM coverage rejection forms in the record and determined that both complied with the statutory language from 75 Pa.S.C. § 1731(c). Morales argued that neither form identified the policy to which it applied. In response, the defendants argued that 75 Pa.S.C. § 1731 does not require that a policy number be found on the UIM coverage rejection form. See Travelers Indem. Co. v. DiBartolo, 171 F.3d 168 (3d Cir. 1999); see also Universal Underwriters Grp. v. Tusay, Jr., 2004 WL 902372, at *3 (E.D. Pa. Apr. 2004). The Court agreed with the defendants’ position. Additionally, Morales argued that the second UIM coverage rejection form post-dated the effective policy by almost two months. However, the insurance administrator for Tribus and its corporate designee testified in her deposition that she understood the rejection form to apply to “all future renewals unless we can cancel in writing.” Thus, the corporate designees of each defendant stated that they intended the rejection to apply to the policy at issue during Morales’ accident. In granting the defendants’ motion for summary judgment, the Court did highlight one public policy issue which was favorable to Morales. The Court referenced Bielec v. Am. Int’l Grp., Inc., in which Judge Ramy Djerassi granted summary judgment in favor of a plaintiff under similar facts. 2017 WL 6594067, at *7 (Pa. Super. Ct. Dec. 2017). In the opinion, Judge Djerassi stated that even if the employer’s UIM rejection was valid on a statutory text analysis, “we believe an employer who fails to notify its employee driver that UIM coverage has been rejected is acting against public policy.” Id. at *7. The Eastern District of Pennsylvania rejected this argument by stating that Judge Djerassi’s discussion surrounding public policy was merely dicta and not the actual basis for the Superior Court later affirming that decision. Additionally, the Court stated that the Third Circuit and Pennsylvania Supreme Court precedent did not support such a theory. Thanks to Zhanna Dubinsky for her contribution to this post. Please email Vito A. Pinto with any questions. Previous Next Contact

News A.D. Defines Foreseeability Of Crime Necessary For Negligent Security Claims June 25, 2008 < Back Share to: In Maria T. v. New York Holding Company Associates et al, the plaintiff was sexually assaulted at gunpoint in her apartment. In her lawsuit, she claimed that the defendants failed to provide adequate security for the building where she lived. She asserted that the defendants failed to maintain a working lock on the sole entrance into the building. Defendants moved for summary judgment on the grounds that the assault was not foreseeable in that they were unaware of any criminal activity in the building other than the crime at issue and that the prior crimes relied upon by plaintiff were not similar to the assault and therefore did not demonstrate that the assault was foreseeable. In opposition, plaintiff relied upon police reports that reflected criminal activities that occurred in or near the building to establish that this crime was foreseeable. Plaintiff also retained an expert in the field of premises security who opined that the subject apartment building was in a police precinct with high rates of crime and the drug activity in the neighborhood attracted criminal elements to the neighborhood, thereby making the assault on plaintiff foreseeable. The Trial Court denied defendants' motion, citing a question of fact as to the issue of foreseeability. In reversing this decision, the Appellate Division, First Department held that building owners and managing agents have a common-law duty to take minimal security precautions to protect tenants from foreseeable criminal acts of third parties. In order to establish foreseeability, the criminal conduct at issue must be shown to be reasonably predictable based upon prior occurrences of the same or similar criminal activity at a location sufficiently proximate to the subject location. While plaintiff cited seven prior instances of criminal activity in and around the apartment building, ambient neighborhood crime alone is insufficient to establish foreseeability. In conjunction with the fact that none of them were similar to the sexual assault committed against the plaintiff, the crime perpetrated upon plaintiff was not foreseeable ie., reasonably predictable. http://www.courts.state.ny.us/reporter/3dseries/2008/2008_05558.htm Previous Next Contact

News Covid-19 Business Interruption Litigation Comes to NY April 22, 2020 < Back Share to: The nationwide wave of insurance coverage litigation in the wake of the Covid-19 pandemic has made its way to New York. On April 17, on behalf of a similarly situated class, Gio Pizzeria & Bar Hospitality and Gio Pizzeria Boca filed suit in the Southern District of New York against Certain Underwriters at Lloyd’s London. The class action was brought on behalf of all insureds who were issued similar policies with similar coverage grants by Underwriters. While neither named plaintiff operates in New York, their policies specify that service can be effectuated against Lloyds’ on their agent in New York. The insureds seek to recover lost business profits resulting from the closure of their properties in the wake of civil authority orders issued by Florida Governor Ron DeSantis. The policies at issue contain a Special Liability Coverage form, which includes Business Income, Civil Authority, Extra Expense, and Sue and Labor coverages. Unlike many policies providing business interruption coverage, the policies do not contain specific virus exclusions. Therefore, the primary issue is for business interruption purposes is whether the virus constitutes “damage to property,” a prerequisite for such coverage. Seeking to get out ahead of this argument, the Complaint includes a quote from a statement issued by the Insurance Services Office (“ISO”), which provides: Disease-causing agents may render a product impure (change its quality or substance), or enable the spread of disease by their presence on interior building surfaces or the surfaces of personal property. When disease- causing viral or bacterial contamination occurs, potential claims involve the cost of replacement of property (for example, the milk), cost of decontamination (for example, interior building surfaces), and business interruption (time element) losses. Although building and personal property could arguably become contaminated (often temporarily) by such viruses and bacteria, the nature of the property itself would have a bearing on whether there is actual property damage. An allegation of property damage may be a point of disagreement in a particular case. The key issue in this case, and indeed in every case involving similar policies, is whether the “damage” caused by the pandemic constitutes property damage. Given that these arguments are now being made for the first time throughout the country, it remains to be seen how receptive courts will be. That said, insofar as the policies at issue in here do not contain specific “virus” exclusions as many policies do, this case presents the best opportunity for insureds to succeed. We will continue to monitor all Covid-19 litigation. Thanks to Doug Giombarrese for his contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News First Department Takes Expansive View on both “Altering” Work and “Elevation-Related Risks” as Defined by N.Y. Labor Law November 17, 2023 < Back Share to: Recently, in Keilitz v. Light Tower Fiber New York, Inc. , 2023 N.Y. Slip Op. 05661 (1st Dep’t 2023), the First Department ruled on a plaintiff construction worker’s appeal, after the lower court granted summary judgment to defendants on plaintiff’s claims arising from Labor Law § 240(1). Plaintiff, an electrician, was installing fiber optic cables underground in a manhole, when a vacuum being used at street level fell and struck the plaintiff on the head. At issue was whether the plaintiff was engaged in a protected activity enumerated in Labor Law § 240(1), and whether the vacuum at street level posed an elevation-related risk contemplated by Labor Law § 240(1). First, the Appellate Division held that plaintiff’s work constituted “altering” work, contrary to the trial court’s findings that his work merely entailed “feeding cable through a preexisting hole.” Instead, the First Department found that plaintiff’s installation of fiber optic cables was part of a larger project that would ultimately require drilling holes into communications rooms, and thus constituted altering work as protected within Labor Law § 240(1). Second, the court disagreed with the trial court’s conclusion that the vacuum’s position at ground level removed plaintiff’s case from the Labor Law § 240(1) protections for elevation-related risks. Rather, the court held that since the plaintiff was working underground, with a significant elevation differential between him and the vacuum at ground level, his work posed an elevation-related risk protected by New York Labor Law. Accordingly, the First Department granted summary judgment in favor of plaintiff for his Labor Law § 240(1) claim. This case serves as a reminder of N.Y. Labor Law’s liberal construction of protected work, particularly in the First Department, and that protections against elevation risks under Labor Law § 240(1) can still be implicated even if the “risk” is located at ground level. Keilitz v. Light Tower Fiber New York Inc. .pdf Download PDF • 157KB Previous Next Contact

News Must There Be Negligence? Res Ipsa Loquitor Double Take (NY) May 11, 2016 < Back Share to: Res ipsa loquitor is a rebuttable presumption or, an inference of negligence that relieves plaintiffs, to a certain extent of their burden of proof by direct evidence that a defendant caused her harm. When res ipsa loquitor applies, a plaintiff need only demonstrate the injury suffered and the circumstances under which the accident occurred. Res ipsa loquitor is warranted only when the following conditions are satisfied: (1) an incident of this nature would ordinarily not occur in the absence of negligence; (2) the instrumentality that caused the injury was within the defendant's exclusive control; and (3) the incident was not due to any voluntary action or contribution by the plaintiff. The second and third limitations on res ipsa loquitor can generally be determined convincingly – the defendant must have exclusive control and the plaintiff must clearly be an innocent victim. However the whether the circumstances under which the accident occurred, unexplained, justify a presumption or inference of negligence depends upon the specific set of facts of each case or upon the nature of each accident. If the accident would not have occurred in the ordinary course of events, and the second and third prongs are established, then res ipsa loquitor will apply and a jury can infer the defendant’s negligence. The application of res ipsa loquitor, is often attempted in cases where a plaintiff’s proof is weak and, therefore, is an important issue to try to resolve by summary judgment motion before trial. There is no standardized case or bright line rule regarding what accident or which circumstances justify the application of this powerful presumption. The Appellate Divisions of the First and Second Department recently decided appeals based upon the doctrine of res ipsa loquitor and provided different interpretations of the doctrine’s applicability. The Second Department, in the case of Little v. Kone reversed a lower court’s denial of defendant’s motion for summary judgment. The plaintiff alleged that she was injured while attempting to enter a freight elevator. She sued the company retained to service and maintain the elevator after she was allegedly struck on the head by the elevator gate, after its alarm bell and strobe light failed to activate and warn her that the gate was about to close. The Second Department, in analyzing the case, found that plaintiff failed to satisfy the first element of res ipsa loquitor, namely that the accident was “of a kind that ordinarily does not occur in the absence of someone’s negligence.” The court determined that plaintiff failed to raise a triable issue of fact in response to the elevator company’s proof that it lacked notice of an ongoing condition that would have caused the elevator gate to close without warning. In other words, the incident could have occurred even if no one was negligent. Because the plaintiff failed to satisfy the first element, she could not rely on the doctrine of res ipsa loquitor and in fact, could not maintain the cause of action against the elevator maintenance company. The First Department, in Sterbinsky v. 780 Riverside Dr., LLC, affirmed a lower court’s application of res ipsa loquitor and grant of partial summary judgment to a plaintiff who fell through an air shaft while walking over a metal grate that collapsed. Plaintiff, a cable television technician fell as a result of the collapse of a grate due to the corroded condition of the metal frame supporting it. The court found that the doctrine applied and defendant failed to rebut the presumption due to the fact that eyewitness testimony confirmed the existence of rust on the edges of the grate. In other words the court found that the grate would not ordinarily collapse in the absence of someone’s negligence. The court even added that defendant’s claim of no notice was unavailing because notice is inferred when res ipsa loquitor applies. Sometimes seen as a throw in claim, a plaintiff’s claim of res ipsa loquitorcan have powerful implications. When a plaintiff can sustain the inference, a court can deem a party negligent that might not otherwise be. If the defendant can defeat the application of the doctrine, it may lead to complete dismissal. The cases above demonstrate that application of this doctrine has a strong influence on the ultimate outcome of the case. When a plaintiff makes claims of res ipsa loquitor, the defense must pursue the facts that defeat the doctrine’s application early on and move to dismiss the res ipsa loquitorclaim when the facts support such a dismissal. Thanks to Vincent Terassi for his contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com . Previous Next Contact

News To Repair or Replace: Damages for Replacement Costs Upheld (PA) October 12, 2017 < Back Share to: The Pennsylvania Superior Court recently affirmed a damages award that came under appeal after defendants argued that it was not supported by competent evidence. In 700 EBA v. Weaver's Glass & Building, No. 1868 MDA 2016, defendants Weaver’s Glass & Building Specialties, Inc. appealed the amount of the damages awarded by the trial court in the underlying non-jury trial, which involved a dispute between Weaver and plaintiffs 700 EBA, LLC, after 700 EBA hired Weaver to furnish and install several windows in one of 700 EBA’s buildings. After installation, 700 EBA discovered that a majority of windows contained “major window failure” and permitted water to penetrate into the building during periods of heavy rain. Subsequently, 700 EBA sued Weaver for breach of contract for improperly installing the windows. Following a bench trial, the trial court ruled in favor of 700 EBA and awarded $67,420.25 in damages, which included the cost of replacing the windows. Weaver appealed the damages award on the grounds that replacement of the windows was not necessary, and that the problem could be resolved by simply repairing the existing windows, which would cost less than replacing the existing windows with brand new ones. As evidence in support of their appeal, Weaver cited 700 EBA’s expert testimony that replacement of the windows was not necessary. On appeal, the court articulated the standard of review applied to challenges of a non-jury verdict – whether the findings of fact of the trial court are supported by competent evidence and whether the trial court committed error in application of the law. The trial judge’s findings of fact must be given the same weight as if they were found by a jury, however the appellate court has plenary review power to address questions of law. As to the specific issue of damages, the appellate court stated that the evidence must be considered in the light most favorable to the trial verdict winner, and that appellate courts should defer to the trial court on decisions regarding damages. In reviewing the award, the appellate court cited an expert report from the window manufacturer that stated that the existing window frames should be removed, as well as expert testimony from a building remediation company and a building consultant who testified that the windows should be replaced. Additionally, the court cited expert testimony that opined that the plan to replace rather than repair the windows was reasonable, as was the quoted cost estimate. Thus, the Superior Court ultimately ruled that the trial court did not err in its damages award based on the replacement costs of the windows, and affirmed the award. This case offers aclear articulation of the standard of review applied by an appellate court when reviewing a damages award, and illustrates the heightened burden that an appellant must carry. THanks to Greg Herrold for his contribution to this post. Please email Brian Gibbons with any questions.   Previous Next Contact

News NJ Supreme Court Rejects Employee's Direct Action Against WC Carrier For Pain and Suffering August 2, 2012 < Back Share to: No one seems happy with the workers compensation system. Employers and their insurers complain that the system is biased in favor of employees, awarding compensation even in the face of fraud, malingering or worse. On the other hand, employees kvetch that workers compensation insurers are slow to process and pay claims, leading to delays in treatment, needless anxiety and unhappy medical providers. With this background in mind, may an injured employee seek damages directly from his employer’s workers compensation insurer for pain and suffering allegedly due to the insurer’s delay in making required payments? The New Jersey Supreme Court tackled this issued in Stancil v. ACE USA, ruling in favor of the workers compensation insurer. In Stancil, the employee alleged that the insurer routinely delayed medical payments and ignored a directive from the workers compensation court to rectify this situation by a date certain. In response, the employee filed suit against the insurer in the local Superior Court seeking damages for pain, suffering and physical injury allegedly caused by the insurer’s delay. The Superior Court and Appellate Division dismissed plaintiff’s complaint on the pleadings but, ever the persistent fellow, plaintiff was granted permission to appeal to the New Jersey Supreme Court. A good omen indeed. Displaying unusual deference to the worker compensation system, the Supreme Court ruled that the employee’s complaint could not stand for three reasons. First, the legislature constructed the workers compensation system that eliminated the worker’s right to file suit in the Superior Court. The employee’s suit was inconsistent with that scheme. Second, the legislature had already enacted remedies to deter the occasional recalcitrant insurer. Neither the courts nor an injured employee should interfere with or expand those remedial measures. Finally, the Supreme Court found that the present system worked fairly well for several decades and the legislature had moved quickly and decisively when problems became apparent. In other word, no need to tinker with a system that, albeit not perfect, was working fairly well. Stancil settles the question of whether an employee can seek damages for pain and suffering from a workers compensation insurer for alleged delays in making required payments. The Supreme Court firmly declined to recognize a remedy beyond that authorized by the Workers Compensation Act. If you have any questions or comments, please email Paul at pclark@wcmlaw.com Previous Next Contact

News Settlor, Beware (NJ) May 16, 2019 < Back Share to: In Estate of Atanasoski v Arcuri Agency Inc. , the New Jersey Appellate Division recently found that a third-party’s broker malpractice claim was completely vitiated based on her settlement with the insured. The background facts are as follows: Arcuri and Archer procured insurance for their client, Schripps – a bread delivery company – that included a $1 million commercial auto policy, and a $5 million excess policy that specifically excluded commercial auto liability. In July 2017, a Schripps commercial auto was involved in an accident, resulting in the death of a pedestrian. His widow, the Plaintiff, initiated a wrongful death suit, and quickly realized insurance coverage was limited to the $1 million auto policy. Thus, Plaintiff included claims of broker malpractice against Arcuri and Archer in the lawsuit, alleging it was professional negligence not to advise Schripps of the need for excess insurance on its business autos, particularly given that this was a delivery business, with commercial vehicles in constant use. Plaintiff ultimately settled with Schripps for $940,000, an amount within the commercial auto policy limits, and paid out under that policy. In the settlement agreement, Schripps expressly did not admit any liability for the fatal accident. The Appellate Division found that this settlement, clearly mooted the claims against the broker, because any potential excess coverage would not have been exposed based upon the set point of damages the parties agreed to therein. One must assume that Plaintiff was not aware of the risk she undertook by settling out with Schripps, the insured, within the policy limits of the primary policy. Accordingly, this case is a stark reminder that, in legal actions, one must fully evaluate all contingencies and the ripple effects of any settlement with one defendant. Thank you to Vivian Turetsky for her contribution to this post. Please email Colleen E. Hayes with any questions. Previous Next Contact

News Real Estate Exception to Pennsylvania’s Local Agency Immunity Applies Only When Alleged Conduct or Negligent Act Relates Directly to Condition of Real Propert April 20, 2018 < Back Share to: Under 42 Pa. C.S. § 8541, a school district is entitled to immunity from certain suits. In M.M. v. E. Stroudsburg Sch. Dist. & Jane Doe, the plaintiff tried to assert a real estate exception to the rule, but failed to allege the necessary facts to support the exception. In M.M., students at J.T. Lambert were participating in a fire evacuation drill from the rear of a school bus. When M.M. attempted to exit through the back door, she fell to the surface of the parking lot and injured her ankle. M.M. sued the bus driver School District for negligence. The District filed preliminary objections claiming local agency immunity. M.M. responded claiming the “real estate exception” permitted her claim. The real estate exception, created by 42 Pa. C.S. § 8542(b)(3), states that liability may be imposed on political subdivisions or local agencies, such as a public school district, when the alleged harm was caused by “the care, custody or control of real property in the possession of the local agency.” The exception imposes a standard of liability akin to private landowners on political subdivisions. They are required to maintain real property within their care, custody, or control for the activities it is ordinarily used or for activities that the property is reasonably anticipated to be used. However, the alleged conduct or negligence must be directly related to a condition of the property. In this case, M.M. failed to set forth any factual averments or allegations relating to a defective surface of the J.T. Lambert parking lot. She did not allege any defect, or that it was not suitable for its ordinary purpose. Therefore, the real estate exception did not apply, and the District and its bus driver were entitled to local agency immunity. Thanks to Robert Turchick for his contribution to this post.       Previous Next Contact