Wade Clark Mulcahy LLP

News Jury's Web Research Leads to Mistrial (NY) May 2, 2013 < Back Share to: Speaking with the jury after a trial is always fraught with peril. That issue recently came to light in Olshantesky v. NYCTA, where it was discovered after the trial that the jury consulted an on-line dictionary to help them define the term “substantial.” The trial court found, and the appellate court agreed, that such research constituted juror misconduct, warranting a mistrial. Interestingly, the appellate court allowed the damages award to stand, finding no evidence that the misconduct affected the jury’s determination on damages. However, the parties will be required to retry the liability case. If you would like more information, please write to Mike Bono. Previous Next Contact

News NY App Div: Insurers Window to Disclaim Coverage May Be Shrinking January 5, 2010 < Back Share to: If an insurance company wishes to disclaim coverage to an insured based on untimely notice of the claim, they must act expeditiously or risk being estopped from disclaiming coverage on those grounds. In Scott McLaughlin Truck & Equipment Sales, Inc. v. Selective Ins. Co. of Am., the court found untimely a disclaimer issued by an insurance company less than two months after the insurer was on notice of a potential claim, even though the plaintiff had failed to report the claim to the insurer for nearly four years. The court noted that the timeliness of a disclaimer is measured from the moment when the insurer first learns of the grounds for the disclaimer. Here, the court concluded that Selective knew or should have known of the grounds for disclaimer on the same day they were first notified of the claim. Selective asserted that difficulties with its investigation resulted in the delay in disclaiming and generally the courts have allowed an insurer a reasonable amount of time to conduct investigation and thereafter issue an effective disclaimer. However, the case at hand suggests that New York Courts are affording insurers increasingly less time to issue timely disclaimers of coverage. Thanks to Chris O'Leary for his contribution to this post. http://www.nycourts.gov/reporter/3dseries/2009/2009_10030.htm Previous Next Contact

News Court Splits on Electrical Upgrade Issue (NY) October 20, 2017 < Back Share to: In Daly v 9 E. 36th LLC, a New York court wrestled with the issue of whether an apartment building has a duty to update its electrical system to meet the modern electrical needs of tenants, and the question of who is responsible when electrical overuse by a tenant results in a fire. The plaintiff in this case was a tenant in the defendant’s building, who was injured by a fire in his rent-stabilized studio apartment. The fire was described in the fire incident report as originating "in an area of electrical wiring"; the report also noted the presence of "multiple extension cords plugged in to one outlet with a power strip." The apartment building was built in the 1930s and the plaintiff's apartment had three electrical outlets in the main living space, with additional ones in the hall, the bathroom, and the kitchen. No interior electrical upgrade had ever been done to the apartment, although the plaintiff made several requests to the building to install more outlets. In addition, the plaintiff had shown the superintendent that the existing receptacles were in disrepair. Plaintiff told the superintendent that he "didn't feel comfortable with using the extension cords," and did not use them for long periods of time because they would get hot. From all accounts the fire was caused by the overuse of the electrical outlets in the apartment. Plaintiff argued that the building’s decision not to upgrade the electricity in his apartment, despite the apartment's history and his requests over the years, was a breach of the duty to keep the building safe and functional for all tenants. The building filed a motion for summary judgment in New York County Supreme Court, and the court denied the motion. On appeal, the majority of the court agreed that a jury should decide whether plaintiff's lifestyle and electrical consumption are above and beyond the reasonable needs of any modern tenant, and whether the building had a duty that it breached to keep the apartment building, and plaintiff's apartment, reasonably safe. The dissenting opinion, however, was that “rather than moderating his use of power to conform to the building's electrical capacity (or at least using different outlets for different appliances), plaintiff was entitled to have defendant upgrade the building's wiring to accommodate his demand.” The dissent concluded that summary judgment should have been granted on the ground that plaintiff's negligent use of extension cords to operate numerous appliances simultaneously, as opposed to any alleged defect in the apartment's electrical wiring, was the sole cause of the fire. In its conclusion, the dissent found plaintiff's "lifestyle and electrical consumption" must still be in accord with the building's electrical capacity. Based on the 3-2 decision, it will be interesting to see if this decision winds up with the Court of Appeals. Thanks to George Parpas for his contribution to this post and please write to Mike Bono with any questions. Previous Next Contact

News A Wall Is Really A Window: "Routine Maintenance" Re-Visited September 3, 2009 < Back Share to: Labor Law § 240(1), also known as the Scaffold Law, places absolute liability on owners and general contractors to provide a safe work environment to prevent accidents that flow from the risk of performing work from elevated heights. Section 240(1) specifically enumerates activities under its protection, which includes commercial window washing, but not routine cleaning. But the courts have long struggled with the concept of what constitutes “routine maintenance.” In Declercq v. WWP Off., LLC, plaintiff was washing the walls and window ledges inside a subway station. The job entailed using a ladder to apply a cleanser, letting it soak, then again using a ladder to hose down the area. The plaintiff was hosing down the area when the ladder kicked out from underneath him, causing him to fall 20 feet and sustain injuries. The plaintiff argued that because cleaning is specifically enumerated as a protected activity under Labor Law § 240(1), and he was not provided any safety device to prevent him from falling, the defendant building owner is liable under § 240(1). The defendant argued that they are not liable under § 240(1) because the plaintiff was involved in routine cleaning. The cleaning was routine because the plaintiff was cleaning the walls and window ledges, and not the windows. The court disagreed and held that the plaintiff was not performing routine cleaning because he was not cleaning residential or household buildings. And, cleaning under § 240(1) is not limited to cleaning windows. Section 240(1) protects workers while cleaning when it involves an elevated height without the proper safety equipment, which the court found is exactly what happened in this case. Declercq makes plain that where the worker requires a ladder (or works from a height), the marked judicial trend is to find 240(1) applicable even if the task is as mundane as washing walls. Thanks to Anne Mulcahy for her contribution to this post. For more information, please email Dennis Wade at dwade@wcmlaw.com . Previous Next Contact

News Step Class Not Inherently Dangerous June 25, 2009 < Back Share to: In Devorah Meisels v. Lucille Roberts Health Clubs, Inc., the plaintiff was injured when she slipped on an excercise step while participating in a step class. The plaintiff claimed that she slipped because the fuzz from a newly-installed carpet had become caught in the grooves of the step. The defendant moved for summary judgment arguing that the plaintiff testified that she first noticed the fuzz 30 minutes prior to the accident, but continued to use the step without complaint. The trial court denied the defendant's motion for summary judgment, but the Appellate Division reversed and granted the defendant's motion for summary judgment reasoning that the condition of the carpet fuzz was open and obvious and not inherently dangerous condition. http://www.nycourts.gov/reporter/3dseries/2009/2009_05303.htm Previous Next Contact

News (Preserve) All The Evidence, Men (NY) June 29, 2018 < Back Share to: Most lawyers and insurance professionals know the importance of preserving evidence when a claim is asserted against an insured. But insureds who are not involved in litigation as a matter of course often express the displeasure of the taking the time necessary to collect and preserve all relevant information. As the recent First Department decision in Davis v. Pathmark makes clear, the consequences for failing to take that time to preserve evidence, in a thorough, if not exhaustive manner, can be disastrous. In Davis, the store being sued provided video surveillance footage of the plaintiff slipping and falling in the store along with 30 seconds of footage before the fall. The problem was that the defendant deleted all other footage from that day. According to the trial court and the First Department, that selective editing may have prevented the plaintiff from making its case about the origin of the liquid on the floor that caused the accident. Thus, the court struck the defendant's answer. It may well be that the defendant in Davis acted in good faith by providing what it thought was relevant evidence. But insureds often make poor judges of what may or may not be relevant or discoverable in litigation. Davis should serve as a reminder to lawyers to instruct their clients to preserve all evidence when a suit is filed and to insurance professionals to request that all information be preserved when a claim is first submitted. Thanks to Mike Gauvin for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Appellate Division Infers Judge's Intent Regarding Personal Jurisdiction August 19, 2011 < Back Share to: In McConnell v. Santana, a wrongful death action, the defendant failed to answer the complaint and the plaintiff was granted a default judgment. When the defendant moved to vacate he also argued that the court lacked personal jurisdiction because he was never properly served. After a Traverse hearing, the court granted his motion stating in sum, the motion "to vacate a default is granted." The court never stated whether or not the complaint was properly served. After trial, judgment was entered in favor of the plaintiff. The defendant then moved to vacate the judgment on the grounds that the court lacked jurisdiction because he was never properly served. The Appellate Division denied the motion. The court did not address the merits of the moving papers, rather the court reasoned that if the trial court had found that the defendant had not been properly served at the Traverse hearing, it would have had no authority to take any action other than to dismiss the complaint. Since the court did not dismiss the complaint, in effect, the Supreme Court found that service was properly effected. Thanks to Bill Kirrane for his contribution to this post. http://www.nycourts.gov/reporter/3dseries/2011/2011_06251.htm Previous Next Contact

News Cyberattack Might Not Be War-Worthy < Back Share to: War risk exclusion has been included especially in commercial property insurance policies for a long period of time. Recently, a New Jersey Appellate court addressed the modern application of the war risk exclusion. Plaintiff Merck & Co., Inc. (“Merck”), a multinational pharmaceutical company based in New Jersey, believed it was entitled to insurance coverage under the “all risks” property insurance policies issued by multiple defendants after a cyberattack damaged thousands of Merck’s computers in its global network. The subject cyberattack was caused by a malware that started from a Ukraine accounting company used by Merck that processes invoices and financial data to the Ukrainian government. Defendants denied coverage under the “Hostile/Warlike Action” exclusion within the policies. Merck & Co. v. Ace Am. Ins. Co ., 475 N.J. Super. 420 (App. Div. 2023). The property coverage clause states: “This policy insures against all risks of physical loss or damage to property, not otherwise excluded in this policy, while at an Insured Location except as hereinafter excluded.” Physical loss is defined as “any destruction, distortion or corruption of any computer data, coding, program or software except as excluded specifically in clause 6.M., Electronic Date Recognition Exclusion, and as hereinafter excluded.” Under New Jersey law, insurance policy exclusions are construed narrowly. The Appellate court ruled that the plain language of the Hostile/Warlike exclusion does not apply to a cyberattack on a non-military company that services non-military consumers, even if the alleged cyberattack was initiated by a private actor or a “government or sovereign power.” Further, the Court dived into the history behind the war risk exclusion. The purpose of the war risk exclusion is to “eliminate the insurer’s liability in circumstances in which it is impossible to evaluate the risk.” Considering the history and intent of the war risk exclusion, the Court pointed out that the cyberattack at hand was not sufficiently linked to a military action in order for the war risk exclusion to apply. Merck and Co. Inc. v. Ace American Insurance Company .pdf Download PDF • 320KB Previous Next Contact

News Default is not a Total Loss (NY) September 24, 2020 < Back Share to: In a personal injury action, plaintiff Castaldini claims personal injury when a propane tank exploded at the home of defendant Walsh. Upon defendant’s failure to answer, plaintiff’s motion to enter default judgment was granted by the trial court, and the case was sent to inquest for a trial on damages. At the inquest trial, plaintiff testified as to his injury and submitted a written sworn statement by one of his treating physicians. Defendant objected to the admission of the sworn statement arguing that he should be allowed to cross-examine the physician testifying as to plaintiff’s injuries. The trial court admitted the sworn statement into evidence and handed down a judgment totaling $275,000 for plaintiff’s past and future suffering. Defendant appealed to the Second Department arguing plaintiff failed to establish the accident caused his injuries and argued he had a right to cross-examine the physician. The Second Department held in Castaldini v. Walsh, that a defaulting defendant admits all allegations in the Complaint as true, but does not admit the plaintiff’s conclusory statements as to its damages. Once defendant defaulted by failing to answer the Complaint, plaintiff did not need to prove the accident caused his injuries. The purpose of an inquest court is to ascertain the amount of damages. (Gonzalez v Wu, 131 AD3d 1205, 1206; see Rokina Opt. Co., Inc. v Camera King, Inc., 63 NY2d at 730; Arluck v Brezinska, 180 AD3d 634; Jihun Kim v S & M Caterers, Inc.,136 AD3d 755, 756). The Second Department agreed with defendant that he had a right to cross-examine the plaintiff’s physician. Since the inquest is to ascertain damages, and defendant is present at the inquest, then plaintiff must make any treating physicians available for cross-examination. See Reynolds Sec. v Underwriters Bank &Trust Co., 44 NY2d 568, 572. Thus, the trial court should not have admitted the physician’s sworn statement into evidence and the case was remitted back to the trial court for a new inquest on the amount of damages. The key takeaway in this case is that even though a defendant failed in timely answering the complaint, and thus cannot argue causation, a defendant can still, and should, object as to plaintiff’s evidence for damages. Moreover, at that inquest trial for damages, a defendant has the right to cross-examine plaintiff’s treating physicians to contest damages even when in default. Thanks to Raymond Gonzalez for his contribution to this post. Please contact Vincent F. Terrasi with and questions. Previous Next Contact

News Dodging the Spoliaton Bullet (NY) November 21, 2013 < Back Share to: In Shields v. First Avenue Builders, LLC, a New York County trial court refused to strike third-party defendant’s pleading after the party accidentally destroyed the evidence that it was ordered to preserve. In Shields, plaintiff alleged that he was injured while cleaning a concrete pump that was manufactured by defendant/third-party plaintiff Worthington’s predecessor in liability. Third-party defendant MC & O was ordered to preserve the pump for a second inspection after plaintiff amended his bill of particulars to include additional allegations regarding the manufacture of the pump. MC &O, however, inexplicably destroyed the pump before the second inspection took place. Several parties moved for a stricken pleading and sanctions against MC&O without explaining about how they would specifically be prejudiced by the pump’s destruction. In addition, prior to this motion’s decision, Worthington was granted summary judgment and dismissed from the case. The court, therefore, held that Worthington’s motion was rendered moot given its dismissal from the case. In addition, it held that the other party did not submit any evidence proving that the pump’s destruction was prejudicial to its case. Therefore, rather than striking the pleading, the court ordered that an adverse inference charge at trial as the appropriate sanction. The lesson learned is that defendants must to take great care in preserving any property involved in an accident when court ordered to do so. A clear channel of communication must be established to ensure that property subject to a court order is preserved. That said, defendants can have some faith the court will not just strike pleadings and order sanctions for any minor violation. Rather, the moving party must show that such spoliation was actually prejudicial. Thanks to Alison Weintraub for the post. If you have any questions, please contact Paul at pclark@wcmlaw.com Previous Next Contact

News Painful Verdict for Pain and Suffering (NY) July 23, 2020 < Back Share to: The Bronx has a reputation for plaintiff-friendly verdicts, and the case of Cabrera v Port Auth. of N.Y. N.J. (2020 NY Slip Op 03993) did not disappoint. Plaintiff, an employee at a Dunkin Donuts franchise at LaGuardia Airport, was involved in an accident with a salt spreading truck in the parking lot during a snowfall. After a jury trial, she was awarded future damages for only a period of three years, yet was awarded $12 million dollars. Fortunately for the defense, the First Department found many instances of reversible error warranting a new trial. First, the court truncated proof on whether the parking lot was public or private, which directly impacted whether the jury should been charged with the recklessness standard set forth in NY VTL §1103 or VTL §1163. This alone was enough for a new trial, but the court had made a trifecta of mistakes. The second error came in precluding defendant’s accident reconstruction expert from testifying. The Appellate Division found the lower court’s in limine inquiry of the expert concerning scientific studies was irrelevant to the subject of his testimony. Additionally, any deficiencies in the expert disclosure could have been remedied by limiting the testimony, not precluding it. Finally, a retrial on damages was necessary because the defense medical expert was improperly barred from testifying on the issue of whether plaintiff’s injuries were traumatically induced and whether the surgeries were necessary and appropriate. Any one of these errors would warrant a new trial, but all three, combined with a future damages award of $12 million dollars for a period of only three years, certainly required a new trial. This case confirms that unsupported and excessive jury verdicts will be scrutinized by the court. Thanks to Mehreen Hayat for her contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News Guidance Provided for Choice of Law Analysis for Coverage Disputes in NJ September 20, 2012 < Back Share to: The outcome of a conflict of laws analysis is often difficult to predict. But a recent Appellate Division decision may provide some guidance as to how allocation of coverage issues are decided in New Jersey where there is a conflict of laws. In the consolidated appeals of In The Matter Of The Liquidation Of Integrity Insurance Company/Sepco Corporation and In The Matter Of The Liquidation Of Integrity Insurance Company/Mine Safety Appliances Company, the Appellate Division was faced with the issue of which state’s laws should apply when apportioning insurance coverage in the mass tort context. Both Sepco Corporation, a California-based company, and Mine Safety Appliances Company, based in Pennsylvania, were insured under excess policies with Integrity, a New Jersey insurance company, in the mid-1980s. After Integrity’s Liquidator filed its liquidation plan, both Sepco and Mine Safety filed proofs of claim with the Liquidator for coverage under the policies. The Liquidator denied the claims based on the utilization of an “all-sums” (joint and several) allocation methodology. Under that methodology, “the insured may recover in full under any triggered policy that it chooses and leave the selected insurer to pursue cross-claims against other triggered carriers whose policies are also available.” While both California and Pennsylvania utilize this approach, New Jersey has rejected the joint and several allocation method for a pro-rata allocation method. The denials were referred to a Special Master, who affirmed the Liquidator’s decisions in both matters, citing New Jersey’s compelling interest in having its own law applied to the claims because Integrity was being liquidated pursuant to New Jersey law, and because the pro-rata approach was more equitable as to other claims filed against Integrity than was the joint and several approach. The Special Master’s determinations were affirmed by the trial court. On review, the Appellate Division affirmed the trial court’s decision to apply New Jersey law. While refusing to state a blanket rule that the law of the insurer’s home state would govern the analysis, the Appellate Division found that the balance of the equities favored applying New Jersey law to the claims against Integrity, who was in its twenty-fifth year in the liquidation process, even though the policy language confusingly seemed at times to favor an “all-sums” approach. The best way to guard against uncertainty is to add a provision as to choice of law; otherwise, an unintended and unexpected interpretation of policy terms may result. Thanks to Christina Emerson for her contribution to this post. If you would like further information please write to mbono@wcmlaw.com .     Previous Next Contact