News Supreme Court Rejects Narrowing Of Employer Immunity From Tort Liability, Under the Workers’ Compensation Act (PA) June 2, 2023 < Back Share to: In the recent case of Franczyk v. Home Depot Inc., the Supreme Court of Pennsylvania found that when relief in the form of workers’ compensation is available for a workplace injury, the exclusivity provision of Pennsylvania’s Workers’ Compensation Act (“WCA”), bars employees from also seeking tort relief against their employer. Plaintiff-Franczyk suffered a dog bite, from a customer’s dog, while working at Home Depot. Franczyk was instructed by her employer not to have any further interaction with the offending customer on the day of the incident. She was ultimately diagnosed with injuries requiring surgery and claimed and received workers’ compensation under the WCA. Franczyk filed suit against Home Depot, alleging that by preventing her from investigating and receiving necessary contact information from the customer, the store “denied her the opportunity to file a third-party suit against the dog owner.” Home Depot moved for Summary Judgment on the grounds that they were immune from liability under the exclusivity provision of the WCA. This provision states: 481. Exclusiveness of remedy; actions by and against third party; contract indemnifying third party (a) The liability of an employer under this act shall be exclusive and in place of any and all other liability to such employes [sic] ... entitled to damages in any action at law or otherwise on account of any injury or death as defined in section 301(c)(1) and (2) or occupational disease as defined in section 108. (b) In the event injury or death to an employe is caused by a third party, then such employe ... may bring [her] action at law against such third party, but the employer, his insurance carrier, their servants and agents, employes, representatives acting on their behalf or at their request shall not be liable to a third party for damages, contribution, or indemnity in any action at law, or otherwise, unless liability for such damages, contributions or indemnity shall be expressly provided for in a written contract entered into by the party alleged to be liable prior to the date of the occurrence which gave rise to the action. The trial court denied summary judgment. It reasoned that an employer cannot utilize the statutory protections of § 481, when its alleged negligence prevented an employee from learning identifying information about the theoretical third-party whom the statute envisions employees will sue instead of their employers. Significantly, the trial court made no reference to any specific duty owed by employers, that could give rise to the type of negligence claim asserted against Home Depot in the present matter. The Superior Court affirmed the Trial court’s decision. The Supreme Court rejected the lower courts’ finding. It reasoned that § 481 is the product of public policy compromise wherein “the employer assumes liability without fault for a work-related injury but is relieved of the possibility of a larger damages verdict in a common[-]law action. The employee benefits from the expeditious payment of compensation but forgoes recovery of some elements of damages.” In light of this public-policy context, the court determined that even intentional acts by an employer, are insufficient to pierce the employer-liability protections of § 481. While the Court acknowledged the existence of a select few carve-outs to the Act, it ultimately determined that “the WCA has anticipated and foreclosed virtually any sort of negligence claim against an employer ‘on account of” a physical injury that occurs in the workplace.” The Court reversed and remanded the lower court’s decision and granted Summary Judgment to Home Depot. Franczyk is a win for defendant-employers and their insurers as it limits the risk of duplicative liability for employers by correctly accounting for the public policy compromise set forth in § 481 of the WCA. Thanks to Stephen Kerstein for his contribution to this article. Should you have any questions, contact Tom Bracken. Previous Next Contact

News Plaintiff’s Complaint Partially Dismissed Due To Off-Target Claims (PA) November 20, 2020 < Back Share to: In a recent negligence case, Beatrice Hena v. Target Corporation, heard in the Eastern District of Pennsylvania, Plaintiff alleged she slipped and fell on a slippery and dangerous wet floor while shopping at a Target store in Philadelphia, that Target knew or should have known about the allegedly dangerous condition and did not exercise reasonable care in remedying the condition or warning her of it. The complaint included causes of action for negligent hiring, selection and retention, and vicarious liability against Target. Target moved to dismiss these claims and the Court ultimately ruled in its favor, leaving only a premises liability cause of action. Pennsylvania courts have recognized that negligent supervision claims have gone beyond respondeat superior and established it does not matter whether an employee was acting within or outside of the scope of employment when the alleged incident occurred. Under Restatement § 213, a basic negligence claim must be established. An employer may be held liable for negligence if the employer knew or should have known that the employee behaved in a dangerous manner and the behavior posed a risk to others. The harm caused by the employee must be foreseeable to the employer. In applying this doctrine, the Court found Hena failed to establish that Target should have been aware of dangerous or incompetent behaviors by its employees. Hena did not identify any specific employees in her complaint nor assert factual allegations that Target knew or should have known about employees’ dangerous or incompetent acts. Hena’s allegation rather resembled the res ipsa loquitur theory that Target is presumed to have acted negligently in hiring merely by presence of the dangerous conditions. The Court found Hena’s claim “misses the target,” and thus, failed to state a valid claim for negligent hiring, selection, retention or supervision. Hena’s claim for vicarious liability (whereby employers are held liable when an employee injures a third party while acting in furtherance of the employer’s business) was likewise dismissed because she again failed to identify any specific Target employee or any specific actions by a Target employee that indicated negligent, careless, or incompetent behavior that could be attributed to Target. The Court ultimately held Hena tried to overinflate a basic premises liability case to a matter about negligent hiring and employer responsibility. Since Hena could not meet her burden of proof for these expansive claims, the Court granted Target’s motion to dismiss these two counts, leaving her only with the premises liability claim. Special thanks to Gabrielle Outlaw for her contribution to this article. If you have any questions, kindly contact Thomas Bracken. Previous Next Contact

News Reasonable Expectation of Insured Trumps Employee Exclusion in a Pennsylvania Court January 27, 2012 < Back Share to: In United States Steel Corp. v. Nat’l Fire Ins. of Hartford, several employees performing maintenance work on behalf of an independent contractor were injured during explosions at a plant owned by United States Steel Corp. The employees filed suit against United States Steel Corp. Defendant insurance companies issued policies to the independent contractors, naming United States Steel Corp. as an additional insured. When the insurers disclaimed, United States Steel Corp. commenced a declaratory judgment action against them. The defendants moved for judgment on the pleadings, arguing that an employer's liability exclusion excluded coverage for the bodily injury claims raised by the employees. The court disagreed, and concluded the insured had the reasonable expectation that each would be covered if sued for injuries to an employee of the other insured. The court reasoned it would be of little benefit to United States Steel Corp. to be an additional insured if it was also required to obtain its own insurance for suits by employees of any other named insured against the plaintiff. http://www.law.com/jsp/pa/PubArticlePA.jsp?id=1202539318248&slreturn=1 Thanks to Colleen Hayes for her contribution to this post. Previous Next Contact

News Father Knows Best: Church Assets May Be Valued In a Pastor's Divorce Proceeding November 15, 2007 < Back Share to: The wife of a pastor sued for divorce in New York. Her attorney argued that the pastor --the wife's estranged husband-- used the church's assets as his "personal piggy bank." Not suprisingly, the pastor protested that he was merely a humble "W-2" employee of a duly registered not for profit religious corporation. Ruling that the church and its finances may be considered the pastor's "alter ego" if he had unfettered control of its assets for his personal use, the court permitted the wife to pursue the valuation of the church's assets for equitable distribution purposes. We are reminded of the biblical admonition: You reap what you sow. (Galatians 6-7) Or the more practical lesson to be careful how much you tell your spouse if your marriage is on shaky ground. http://www.nylawyer.com/adgifs/decisions/111507diamond.pdf Previous Next Contact

News Pennsylvania Court Applies Regular Use Exclusion (PA) February 7, 2020 < Back Share to: It's remarkable how often even the clearest of insurance policy language is placed before the court. But it's also satisfying when a court applies a policy exclusion as worded and as intended. In one recent decision, Eckert v. Unitrin Auto Home Ins. Co. the Pennsylvania Superior Court did just that. In Eckert, the plaintiff, acting in the scope of her employment, was driving a school bus and was involved in an accident with an uninsured driver. After the accident, she sought UIM coverage by filing a claim with her automobile insurance carrier. However, the insurer denied coverage based on the policy's regular use exclusion, which barred coverage for "bodily injury...sustained...by you while occupying...any motor vehicle you own or any motor vehicle which is furnished or available for your regular use." In her declaratory judgment action, the plaintiff argued that the exclusion did not apply to her situation because she drove several buses in the employer's fleet, her employer precluded her personal use of school buses, and that she only drove a bus for 5-6 hours per day. But the court disagreed, and held that the exclusion applied. In doing so, the court, relying on precedent, reasoned that at the time of the accident, she was driving a school bus about 80 percent of the time and that she regular access to all school buses in her employer's fleet. Courts are unpredictable, even when interpreting policy language that is clear on its face. But Eckert should provide comfort to insurers because it is another example of a court honoring the intent of a policy exclusion. Thanks to Garrett Gittler for his contribution to this post. Please email Mike Gauvin with any questions. Previous Next Contact

News How Not to Handle a Product Recall: J&J Shows the Way. June 11, 2010 < Back Share to: J&J's handling of the Tylenol recall in the 1980s is lauded as "the" model of how a company should handle a recall; indeed, even the US Department of Defense studies it -- http://www.ou.edu/deptcomm/dodjcc/groups/02C2/Johnson%20&%20Johnson.htm! (Coincidentally, it was also the genesis of the effective commercialization of product recall insurance). However, it appears that J&J has forgotten its prior success and instead is seeking to write a new model of how not to handle a recall. As we reported, earlier this year, J&J subsidiary McNeil Consumer Healthcare ran into a problem with some of its Tylenol products -- http://www.wcmlaw.com/blog/Default.aspx?g=posts&t=486. In May, that same subsidiary was forced to institute a recall of 40 over-the-counter pain, fever, and allergy medications for infants and children, including certain forms of Tylenol, Motrin, Benadryl, and Zyrtec. As you can imagine, the FDA and Congress has been actively (and publicly) investigating these recalls. Rather, than cooperate with the investigations, it appears that J&J is stalling and refusing to provide requested information -- http://www.nytimes.com/2010/06/11/health/11drug.html?ref=business. The relevant investigative agencies are now considering a more aggressive approach and a criminal inquiry has been opened. J&J seems unaware of the old axiom that the cover-up is always worse than the crime, except, of course, when it's not. If you would like to know more about this post, or WCM's product recall practice, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Can’t Establish Labor Law §200 and §240(1) Claims That Easily April 19, 2024 < Back Share to: When a construction site has an accident and a worker becomes injured, the knee-jerk reaction for plaintiff’s attorneys can be to try to find a way to apply Labor Law §200 and §240(1). Owners, general contractors, and subcontractors should keep in mind that, even when they are placed on the opposite side of a lawsuit against a sympathetic, injured plaintiff, if they don’t meet the specific criteria related to each alleged Labor Law violation, then their chances of failure in potential summary judgment motions rapidly decrease. For example, in Giraldo v Highmark Ind., LLC , 2024 NY Slip Op 02042 (2d Dep’t April 17, 2024), the plaintiff was injured after he was allegedly hit by a construction machine that was being crane-lifted and moved to a different location. Plaintiff alleged, among other claims, common-law negligence and violations of Labor Law §200 and §240(1) against the owner, general contractor, and crane-owner subcontractor. Plaintiff moved for summary judgment. The Second Department affirmed the trial court’s denial of plaintiff’s summary judgement motion. Although §240(1) claims are commonly thought of as injuries occurred due to any height or gravity-related differences, the trial court clarified that, “[c]onsequently, the protections of Labor Law §240(1) 'do not encompass any and all perils that may be connected in some tangential way with the effects of gravity'…'Rather, liability [remains] contingent upon the existence of a hazard contemplated in §240(1) and the failure to use, or the inadequacy of, a safety device of the kind enumerated therein.'" Although the machine was technically off the ground when it made impact with the plaintiff, the accident was due to their collision, not the height of the machine as it was lifted off the ground . Regarding plaintiff’s Labor Law §200 claim, the court found that liability can only attach to entities that either controlled plaintiff’s work or parties that should have established a safe place to work (the owner or GC). Since plaintiff was unable to establish that the defendants supervised or controlled the means and methods of Plaintiff’s work on the site, summary judgment was denied. The court also found material issues of fact precluded summary judgment because it was uncertain which allegedly dangerous condition or combination of dangerous conditions proximately caused plaintiff’s accident. This decision shows the importance of developing and highlighting factual nuances during litigation to successfully defend against Labor Law claims. Giraldo v. Highmark Ind., LLC .pdf Download PDF • 2.19MB Previous Next Alexander Rabhan Alexander Rabhan Senior Associate +1 212 267 1900 arabhan@wcmlaw.com Contact

News Dental Floss: Cavity Fighter or The Perfect Murder Weapon October 4, 2018 < Back Share to: Eleven inmates at a Westchester County jail seek $500 million and the right to use dental floss in a lawsuit brought against Westchester County and dental care providers. The inmates allege that, despite constant brushing, they are unable to fend off cavities because they are denied dental floss. With no floss to keep tartar away, the inmates took self-help measures rid themselves of unsightly tartar; such as shoving “weird objects” between their teeth. According to the complaint, the problem is compound. The lack of floss causes cavities. But the county facility refuses to provide permanent fillings or crowns. that is so because the county lock up is a holding facility for pre-trial detainees or for sentenced inmates awaiting transfer to a New York State penitentiary. Inmates claim that the denial of floss constitutes a violation of the Eighth Amendment’s prohibition against cruel and unusual punishment. To prove such claim: (1) plaintiff must show that he had a serious medical condition; and (2) that it was met with deliberate indifference. In response to the suit, Deputy Correction Commissioner Justin Pruyne defended the ban, saying "it (dental floss) potentially can be used as a weapon." According to prison officials, apart from being a deadly weapon, floss can used to cut through prison bars or fashioned into rope. In fact, in 1994, a prisoner did just that, using an 18-foot floss rope to clamber down the walls of a West Virginia prison. Considering that prison officials are given a large degree of deference, the odds against success are quite long. In era of budget cutbacks and crowded dockets, it is difficult to move insurance cases to trial, but at least we know that our jurists are grappling with weighty issues, such as whether denying inmates dental floss constitutes cruel and unusual punishment. Thanks to Gabriel Darwick for his contribution to this post. If you have any questions, please email Dennis at dwade@wcmlaw.com . Previous Next Contact

News Water Water Everywhere – Court Holds Off-Premises Flood Is Still A Flood, and Policy’s Flood Exclusion Controls (NY) April 6, 2016 < Back Share to: In Northern Spy Food Co., LLC v. Tower National Insurance, Justice Carol Edmead of New York County Supreme Court recently granted an insurer summary judgment, dismissing a Manhattan restaurant’s cause of action arising from the carrier’s coverage denial for damages resulting from a flood-related power failure. After Hurricane Sandy, Northern Spy Food Co., LLC submitted a claim to Tower National Insurance for “power outage/food spoilage” that resulted when a restaurant owned by Northern (“Premises”) lost power for several days. Tower’s investigation of Northern’s claim revealed that the “loss of business income and food spoilage claims resulted from an off premises power failure . . . due to flood.” Like many other properties in Manhattan, the Premises lost power from October 29, 2012 to November 2, 2012 when ConEd’s East 13th Street Substation was shut down due to severe flooding. Because the loss was caused by flooding, which was expressly excluded from coverage under the Policy’s flood damage exclusion, Tower denied the claim. Northern went to New York Supreme Court to contest Tower’s denial. Northern argued that the cause of loss was not a flood, but an “off premises power failure” that resulted in two types of covered losses: 1) loss of business income and 2) property damage (in the form of food spoilage). First, Northern contended that the Policy’s flood damage exclusion was inapplicable to their claim, as there was never any flood on the Premises; the only flooding occurred at the ConEd Substation, a location that Northern did not own, operate, occupy, possess, or control. Secondly, the Policy expressly identified “Covered Property” as “Stock,” which included the food that sustained damaged because of the power failure. According to Northern, this kind of property damage was not excluded by the Policy. Lastly, Northern felt that to the extent there were any ambiguities in the Policy, those ambiguities should be construed against Tower. Tower moved for summary judgment, arguing that Northern’s loss resulted from a flood, which was not a “Covered Cause of Loss” within the clear language of the Policy. Therefore, both aspects of Northern’s claim should fail. First, in opposition to Northern’s claim for loss of business income, Tower explained that the Policy did not provide business income coverage because there was no direct physical loss or damage to Premises. To support this assertion, Tower noted that a ConEd engineer attested that the power loss at the Premises was due to the failure at the 13th Street Substation, which in turn was due to flooding. Secondly, Tower claimed that Northern’s claim for food spoilage was not covered under the Policy because the Policy’s Commercial Property Deluxe Restaurant Enhancement Endorsement provided coverage only where the spoliation resulted from a covered cause, which did not include flooding. In essence, Tower argued the undisputed facts demonstrated that Northern’s loss was caused entirely by a flood, and that Northern was trying to create ambiguity where none existed. Justice Edmead agreed with Tower, noting that she was guided by the principals of contract interpretation. As with any other case of contract interpretation, unambiguous language in an insurance agreement must be given its plain and ordinary meaning. Here, the Policy stated that Tower would pay for lost business income due to the necessary suspension of operations that resulted from a “direct physical loss or damage to property” at the Premises. However, with regards to Northern’s claim for lost business income, the Policy’s flood damage exclusion expressly said that Tower “will not pay for loss or damage caused directly or indirectly by . . . . Flood, surface water, waves, tides, tidal waves, overflow of any body of water, other their spray, all whether driven by wind or not.” A second subsection, concerning food spoilage, similarly stated that Tower “will not pay for loss or damage directly or indirectly caused by . . .the failure of power supplied to the described premises, however caused, if the failure occurs away from the described premises.” It was uncontested that Northern’s claims for loss of business income and food spoilage resulted from a power outage, and that power outage was due to flooding of the ConEd Substation. Although Northern’s loss of business income was caused by the direct physical loss or damage to property at the Premises (in the form of food spoilage), the food spoilage itself was not caused by a “covered cause of loss” within the Policy. Because both of Northern’s claims were caused, albeit indirectly, by flooding, which was not a covered cause of loss, the Court granted Tower’s motion for summary judgment dismissing the complaint. Thanks to Evan King for his contribution. Please email Brian Gibbons with any questions. Previous Next Contact

News An Acord Certificate Worth The Paper It's Printed On? November 22, 2010 < Back Share to: It's long been a truism that an Acord certificate is not worth the paper it's printed on. Texas may be about to change all of that -- http://www.insurancejournal.com/news/southcentral/2010/11/17/114977.htm. In the case of Brown v. Omni, the Houston Court of Appeals -- http://www.1stcoa.courts.state.tx.us/opinions/HTMLopinion.asp?OpinionID=87640 -- has held that "we reject...[the argument] that as a matter of law, issuance of an insurance certificate does not create a duty; presence of disclaimers precludes the creation of false impression; no duty to disclose should arise because there is not duty to explain policy exclusions to an insured; and the use of 'All Risk' cannot convey a false impression." The case is now on appeal to the Texas Supreme Court and if the decision stands, under certain circumstances, an Acord certificate might actually be worth the paper it's printed on. If you have any questions about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Surfing The Web: Authenticating Out-of-State Legal Documents March 4, 2013 < Back Share to: Many practitioners puzzle over how to admit in to evidence legal documents from other states. But, in the digital age, there appears to be a ready answer to this dilemma. Judicial notice can be defined as the authority of the court to accept as fact certain matters that are of common knowledge from sources that guarantee accuracy or are official records -- without the need for evidence establishing the facts. But do digital records pulled off an official website qualify for judicial notice? Camilla Lowther Management v. Majestic Mills, 653137/11 (Feb. 11), appears to answer that question. There the special referee took judicial notice of print-outs from a website, purporting to be complaints filed in a California court, which plaintiff was attempting to introduce into evidence. The plaintiff provided the documents, along with an affirmation detailing the process he used to access and print the documents. Plaintiff further affirmed that the documents were true and accurate representations of the records appearing on the official California court website. The special referee accepted the documents over objection, noting that the documents were a hearsay exception as a public record. Furthermore, the special referee ruled that the safeguards regarding authenticity under CPLR § 4518(a) and New York Technology Law § 306 were met permitting the pleadings filed in the California court to be taken into evidence by judicial notice despite not being certified. Special thanks to Johan Obregon for his contribution to this post. For more information, please contact Dennis Wade at dwade@wcmlaw.com . Previous Next Contact

News Early Motion to Dismiss May Fail When Not Supported by Client Affidavit April 23, 2012 < Back Share to: Often the wrong corporate entities are sued in personal injury lawsuits. Those parties often immediately move to dismiss the complaint. However, when attempting an early exit, an affidavit explaining the relationship or lack thereof between the correct and incorrect entity is crucial to success. In Heintz v. Irgang, the plaintiff slipped and fell in a puddle of water in an apartment located at "Roddy's Place," a conditional shelter operated pursuant to a contract with the City's Department of Homeless services. 148 Realty owned the building and leased it to Bronx Addiction Services Integrated Concept Systems, Inc. a/k/a "Basics, Inc." BASICS Housing Inc. had a contract with the City Department of Homeless Services to operate a transitional residence program for homeless families. BASICS Housing Inc. moved to dismiss arguing that it owed no duty to the plaintiff because it was not the owner of the premises, nor did it lease the premises from the owner (rather BASICS Inc. leased the premises). In opposition, the plaintiff and co-defendants argued that BASICS Inc. and BASICS Housing had the same corporate address. In addition, the plaintiff's 14 Days Housing Contract with Roddy's Place, listed both BASICS Inc. and BASIC Housing Inc. on top. Accordingly, without an affidavit from the corporate officers, there were questions of fact as to the relationship between BASICS Inc., BASICS Housing Inc. and their varying roles at the premises. The court denied BASICS Housing Inc.'s motion as premature. http://statecasefiles.justia.com/documents/new-york/other-courts/2012-ny-slip-op-30966-u.pdf?ts=1334675933   Previous Next Contact