News NY App. Div. Finds Maintenance Records Key in Establishing Constructive Notice May 27, 2010 < Back Share to: In Zambri v. Madison Sq. Garden, the Second Department upheld the lower court’s denial of defendant’s motion for summary judgment, stating that the defendant failed to establish that it did not have constructive notice of the allegedly hazardous condition that caused plaintiff to fall. In Zambri, plaintiff slipped and fell on beer that had been spilled on the floor at Madison Square Garden. Although plaintiff didn’t see the beer before her fall, after landing on the ground, her pants were wet and smelled like beer. Despite defendant’s event supervisor’s testimony that he inspected the floor over the course of the night and did not recall seeing any beer on the ground, the documentary evidence revealed that the area had been mopped on two separate occasions, well after plaintiff’s fall. Since the defendant did not offer any evidence as to when the area was last cleaned prior to plaintiff’s fall, the Second Department held that the defendant failed to establish that it did not have constructive notice of the condition prior to plaintiff’s fall. Thanks to Lora Gleicher for her contribution to this post. http://www.courts.state.ny.us/reporter/3dseries/2010/2010_04370.htm Previous Next Contact

News Emotional Damages For The Loss of “Man’s Best Friend” Not Compensable (NJ) August 1, 2012 < Back Share to: In 1870, attorney George Graham Vest reportedly argued that “the one absolutely unselfish friend that a man can have in this selfish world, the one that never deserts him and the one that never proves ungrateful or treacherous is his dog.” While that observation may be true, may a pet owner recover for emotional injuries sustained when her dog is violently attacked and killed right before her eyes? Or, is the pet owner's loss no different than a shattered piece of furniture or other item of personal property? In McDougall v. Lamm, the New Jersey Supreme Court ruled that a pet owner may not recovery for emotional distress caused by observing the traumatic death of a pet. The court drew a sharp line in the sand and declined to expand the reach of prior case law designed to compensate individuals for the traumatic loss of a narrowly defined class of individuals such as parents, children or fiancés . In short, the death of a pet may be tragic but the owner cannot recover for any ensuing emotional loss in New Jersey. The loss of a “man's [or woman’s] best friend” may be devastating, but the aggrieved owner may not recover for any emotional loss no matter how severe. If you have any questions or comments about this post, please email Paul at pclark@wcmlaw.com .     Previous Next Contact

News Art Basel. The Florida Sun, The Glamour and, Of Course, an Insurance Dispute. December 10, 2009 < Back Share to: Art Basel, arguably the most important art show in the United States, took place this past weekend in Miami Beach, but not without incident involving the world of fine art insurers. Prior to the opening of the art expo, a dozen U.S. Marshals and police officers arrived on the scene to seize paintings by Fernand Leger, Joan Miro, Edgar Degas and Yves Klein following an insurance dispute between two art dealers. In July, Edelman Arts Inc., a New York gallery, as assignee of XL Specialty Insurance Corp., brought suit in New York Federal Court against Galerie Gmurzynska regarding a damaged Robert Ryman painting. The lawsuit alleges that Edelman consigned a Ryman painting to Gmurzynska for sale at Art Basel Miami Beach 2007, which was insured for $750,000. The plaintiff claims that the work was returned with considerable damage including “gouges” and that the defendant refused to pay the insured value of the work. While the suit resulted in a default judgment for Edelman of $765,000, due to Gmurzynska’s failure to answer the complaint, the seized paintings are estimated at ten times the value of the judgment, the standard amount usually confiscated for auction. An undisclosed settlement was reached between the dealers and the paintings were ultimately returned to the gallery’s exhibition space before the end of the expo. Thanks to Chris O’Leary for his contribution to this post. http://www.bloomberg.com/apps/news?pid=20601088&sid=aX82sXGnDW4Y http://www.miamiherald.com/entertainment/arts/art-basel/story/1364846.html Previous Next Contact

News Remove Now Or Forever Hold Your Peace March 31, 2022 < Back Share to: In Florida, plaintiffs often ask the state court to grant leave to amend to assert an insurance bad faith claim upon successful conclusion of their breach of policy claim against an insurer. More often than not, the case is more than one-year old when the amendment is made. Under federal diversity of jurisdiction rules, a citizen of one state, who is sued by a citizen of another state in state court, may, within one-year of the lawsuit being brought, remove the lawsuit to the US District Court. Until recently, Florida’s US District Courts inconsistently enforced the one-year limitation on removal when dealing bad faith claims. That inconsistency was recently resolved in Vachon v. Travelers Insurance, 2021 U.S. App. LEXIS 36999, 20 F.4th 1343 | 29 Fla. L. Weekly Fed. C 633 (11th Cir. December 14, 2021). In Vachon, plaintiff sued Travelers for breach of insurance policy but did not sue for bad faith. Travelers could have but did not remove the case to the US District Court. Plaintiff prevailed and then asked for, and was granted, permission to amend his lawsuit to add a bad faith claim. Travelers removed the new bad faith claim to the US District Court. Plaintiff, arguing that the lawsuit was more than one-year old, asked the US District Court to remand the case back to state court. Travelers argued that removal was proper because the original claim had been completed and that the new bad faith claim restarted the one-year clock. The US District Court disagreed, remanded the case to state court, and Travelers appealed. On appeal, the Eleventh Circuit Court of Appeals dismissed on the grounds that an order remanding a case to state court is not an appealable order. Chief Judge Pryor, by separate opinion, explained that remand was proper because, even if it could appeal, Travelers could not win because plaintiff’s lawsuit was filed more than one-year before the removal and the addition of a new bad faith claim did not restart the one-year limitation. The end result is, Travelers is now litigating a million-dollar bad faith claim in a Florida state court rather than its preferred venue, the US District Court. Chief Judge Pryor’s opinion drives home the old adage: Speak now or forever hold your peace. Thanks to Charles "Chip" George for this post. Please contact Chip with any questions. Previous Next Contact

News EDPA -- PA Law Governs PA Insurance Contract w/ California Based Claim. February 22, 2008 < Back Share to: In the case of PhotoMedex Inc. v. St. Paul Fire & Marine Ins. Co. , the tort action requiring indemnification originated in California, but the underlying insurance contract was issued in Pennsylvania. The question thus arose -- which state's law governs the Policy's interpretation? The EDPA ruled that the law most connected to the insurance policy, not the underlying tort, was the one to be applied. http://www.law.com/jsp/pa/PubArticleFriendlyPA.jsp?id=1203677127439 Previous Next Contact

News Allegation of "Negligent Misrepresentation" Fails to Trigger Coverage in PA January 12, 2009 < Back Share to: In Erie Insurance Exchange v. Maier, the Pennsylvania Superior Court recently held that a lawsuit did not allege an “occurrence” under the Erie policy, even though the allegations against the insured included a claim of negligent misrepresentation. The underlying lawsuit was filed by First National Bank, and its complaint alleged the purchaser (Erie's insured) and the seller of a house (a debtor to the bank) participated in a fraud upon the bank as a creditor. The bank claimed the parties misrepresented the true purchase price of the house in order for the seller to obtain additional cash from the transaction. The parties set the purchase price of the house at $650,000 and the bank agreed to forego its interest in the house that was higher than that amount. But the insured also paid the seller an additional $200,000 for “personal property” in which, conveniently for the seller-debtor, the bank had no security interest. A single count in the complaint alleged that the insured made a "negligent misrepresentation," and the insured alleged that was sufficient to trigger coverage under the Erie policy. But the court ruled that there was no “occurrence” under the policy because the bank acknowledged the insured knew that the sale price was undervalued. In fact, the Bank would be unable to prevail in the lawsuit without proving the insured was involved in an intentional fraud. Couching the claim in terms of the insured’s negligence did not trigger coverage, and thus, Erie had no duty to defend or indemnify the insured. The important point for insurers and counsel is that the the use of a "magic word" such as negligence in a pleading is not always enough to carry the day in coverage controversies. Thanks to Mendel Simon for his contribution. http://www.aopc.org/OpPosting/Superior/out/a30005_08.pdf Previous Next Contact

News WCM Obtains Judgment for Clients in Monroe County Property Damage Case. February 13, 2017 < Back Share to: Associate Peter Cardwell obtained judgments in favor of our clients in the Magisterial District Court of Monroe County in a property damage lawsuit. The case of Baranowski v. The Home Depot and Big E Transportation arose out of allegations by the plaintiff that his driveway was damaged after our clients made a delivery of retaining wall stone. At a hearing for the case, we argued that the plaintiff presented no evidence supporting his claim that cracks and dents in his driveway were, in fact, caused by our clients. In addition, we pointed to the fact that the plaintiff presented no invoices or quotes proving his alleged damages and needed repairs. We further submitted several photos of the plaintiff’s driveway showing no damage and what appeared to be normal every day wear and tear. We also presented two employees of our clients to testify as to delivery procedures and their investigation into the alleged damage. Ultimately, the court agreed with our position and found in favor of our clients. For more information about this post, please e-mail Bob Cosgrove. Previous Next Contact

News NJ Fee Shifting Applies Even to Out of State Coverage Litigation July 29, 2010 < Back Share to: New Jersey is generally considered a pro-policyholder state. Under New Jersey Court Rule 4:42-9(a)(6), a successful claimant may recover attorneys fees “in an action upon a liability or indemnity policy of insurance.” While the courts have some discretion when considering such fee applications, the trend has been to award attorneys fees to a successful policyholder in most circumstances. See, for example, our post on Baughman v. US Liability Insurance on July 16, 2010. How far does Rule 4:42-9(a)(6) extend? Does it apply where a piece of the declaratory judgment is litigated in another state? According to the New Jersey Supreme Court, the reach of Rule 4:42-9(a)(6) extends beyonds the borders of New Jersey and applies to coverage litigation filed in another state. In Myron Corporation v. Atlantic Mutual, this point was significant because an Illinois court – where two actions for declaratory relief had been filed by the insurer and later dismissed—would have followed the traditional American rule and denied the policyholder’s application for attorneys fees. Getting your coverage position right at the onset is critical when considering an insured’s request for a defense or indemnification under a liability policy. The consequences of a mistaken judgment can be significant if the insured prevails and recovers its attorneys fees in litigating the coverage dispute in addition to those associated with the underlying suit. If you have any questions or comments about this post, please email Paul at pclark@wcmlaw.com http://www.judiciary.state.nj.us/opinions/supreme/A5309MyronCorpvAtlanticMutual.pdf Previous Next Contact

News Street Smarts: Untangling Liability for Defective Conditions < Back Share to: So, you’ve been sued because someone was injured, or possibly damaged their personal property, due to a defect in the road or street next to your property. Are you responsible? While the specific circumstances of any given case will always be the factors that determine the ultimate answer, as a general matter, a property owner does not own the public street or road, and the municipality might be the real party at fault. Pennsylvania’s Political Subdivision Tort Claims Act states that “no local agency shall be liable for any damages on account of any injury to a person or property caused by an act of the local agency or an employee thereof or any other person.” 42 Pa.C.S. § 8541. There are exceptions however. See e.g. 42 Pa.C.S. § 8542(b)(6) (enumerating the street related exception). There is a body of caselaw concerning various iterations of the municipality’s responsibility for a public street. For example, the Pennsylvania Supreme Court stated that [u]nder Pennsylvania law “a municipality is required to construct and maintain its highways in such a manner as to protect travelers from dangers which, by the exercise of normal foresight, careful construction and reasonable inspection, can be anticipated and avoided.” Mitchell v. Rochester Borough , 395 Pa. 373, 378, 150 A.2d 338, 340 (1959). A municipality owes this duty not only to motor vehicles, but to pedestrians who, in the absence of sidewalks, have rights “equal” to those of motor vehicles on roadways. Neidlinger v. Haines , 331 Pa. 529, 532, 200 A. 581, 582 (1938). The type of precautions that are to be taken by a municipality in the construction and the maintenance of a safe highway is ascertained by examining the nature of the traffic which uses a roadway. Rodgers v. Shaler Township , 164 Pa.Super. 558, 560, 67 A.2d 806, 808 (1949). A municipality's duty “is not confined to maintaining the bed of . . . (a) road in a solid and safe condition and clear of obstructions, but extends to the erection of barriers or other devices for guarding unsafe and dangerous places on or along . . . (a) road.” Rodgers , supra. The question of whether a municipality has taken the requisite precautions which it owes to travelers is one for the jury. Mitchell , supra. Drew v. Laber , 477 Pa. 297, 300–01, 383 A.2d 941, 943 (1978). Another example would be Leiphart v. City of Philadelphia , 972 A.2d 1239 (Pa. Cmwlth. 2009) (in which the court found the municipality to be liable for the plaintiff’s injuries under the street exception because the municipality owned the street, oversaw work performed on the street, and inspected the work, thus making the risk of a fall reasonably foreseeable and giving the municipality actual notice of the dangerous condition); see also Redmond v. Dep't of Transportation , 194 A.3d 229, 231 (Pa. Commw. Ct. 2018). In a more recent case, the Pennsylvania Supreme Court handed down a ruling in Degliomini v. ESM Prods., Inc. , 253 A.3d 226, 228 (Pa. 2021). In Degliomini , a bicyclist was injured after he rode his bicycle into an unmarked and un-barricaded sinkhole “which measured sixteen square feet in area and six inches deep” during a charity ride; thereafter bringing an action in negligence against Philadelphia and other parties. Id . at 229. Though the Degliomini Court’s holding was focused on the enforceability of an exculpatory clause found in a release, the court stated the following with regard to the municipality (specifically Philadelphia in this case): [t]he common law cause of action for negligent breach of a municipality's non-delegable duty to repair dangerous street conditions is perhaps older than most of Philadelphia's streets themselves; recognized and enforced for over a century, the duty withstood the evolution of governmental immunity in Pennsylvania throughout the late-nineteenth and twentieth centuries, which otherwise shielded municipalities and their employees from tort liability in most circumstances as a rule with few exceptions. See, e.g. , Drew v. Laber , 477 Pa. 297, 383 A.2d 941, 943 (1978) (“Under Pennsylvania law a municipality is required to construct and maintain its highways in such a manner as to protect travelers from dangers which, by the exercise of normal foresight, careful construction and reasonable inspection, can be anticipated and avoided.”) (internal quotation omitted); Good v. Philadelphia , 335 Pa. 13, 6 A.2d 101, 102 (1939) (“[T]he liability of a municipality for injuries suffered as a result of defects in the highway arises only when it has notice, actual or constructive, of the existence of a dangerous condition.”); Lawrence v. City of Scranton , 284 Pa. 215, 130 A. 428, 430 (1925) (“The primary duty of keeping its streets in travelable condition is on the city. When public safety is concerned, this duty cannot be delegated to others.”) (internal quotation and citation omitted); Harvey v. City of Chester , 211 Pa. 563, 61 A. 118, 118 (1905) (“The primary duty of keeping its streets in travelable condition is on the city, and, while it may turn over their control to an independent contractor for specified purposes and limited time, it cannot by contract relieve itself indefinitely from its duty in that regard.”) Id . at 240–41. Though the common law cause of action referenced above has been replaced by Pennsylvania’s Political Subdivision Tort Claims Act (see above), the exception for street related claims remains and a municipality cannot in every circumstance avoid liability by way of immunity. Further, the Pennsylvania Supreme Court “has interpreted the Tort Claims Act Subsection 8542(b)(6) exception to immunity for dangerous conditions of municipally-owned streets consistently with Subsection 8522(b)(4) of the Sovereign Immunity Act (relating to waiver of immunity for Commonwealth real estate, highways and sidewalks), and held a municipality owes a duty of care to those using its property ‘to make its highways reasonably safe for their intended purpose,’ ‘such as to require that the condition of the property is safe for the activities for which it is regularly used, intended to be used or reasonably foreseen to be used[.]’” Degliomini at, 243 (citing McCalla v. Mura , 649 A.2d 646, 649 (Pa. 1994)). The takeaway from all this then, is that a public street defect alleged by a plaintiff might very well be the responsibility of the municipality and not (circumstances depending) on an adjacent property owner. Likewise, just because the municipality enjoys the benefit of immunity for some lawsuits in negligence, does not mean that it will be immune in every case and close attention to immunity exceptions must be paid and examined. Drew v. Laber .pdf Download PDF • 152KB Degliomini v. ESM Productions Inc .pdf Download PDF • 446KB 8542 Exceptions to governmental immunity .pdf Download PDF • 136KB Previous Next Ryan Hunsicker Ryan Hunsicker Senior Associate +1 267 239 5526 rhunsicker@wcmlaw.com Contact

News Duty To Defend Does Not Extend To Liability From “Lessor’s Risk” Due To Injury To Non-Tenants Off-Premises February 10, 2023 < Back Share to: The United States District Court for the Eastern District of New York recently granted an insurer’s motion for summary judgment and declaratory judgment that it did not have a duty to defend or indemnify the defendant landlord holding that the term “lessor’s risk,” as used in insurance policies, is an unambiguous term that does not cover tort claims from non-tenants injured off the premises. In Colony Insurance Company v. 28-41 Steinway, LLC, the Court addressed this issue on Colony’s motion for summary judgment and declaratory judgment that it did not have a duty to defend or indemnify 28-41 Steinway. This coverage dispute arose out of an underlying personal injury suit in which underlying plaintiff, Figueroa, alleged his foot was run over by an excavator while working on a project involving the sewer system at the premises, 28-41 Steinway Street, Astoria, New York. Colony argued that it was entitled to a declaration that it owed no duty to defend or indemnify 28-41 Steinway for any damages in the underlying action because the relevant policy included a “lessor’s risk only” limitation. According to Colony, the “lessor’s risk only” limitation precludes indemnification for tort claims by non-tenants and for injuries sustained outside of the premises. 28-41 Steinway argued, inter alia, that the policy’s “lessor’s risk only” language was undefined and ambiguous, therefore urging the Court to construe that term in its favor and against Colony. The Court noted that although 28-41 Steinway’s interpretation of “lessor’s risk only” may be correct based on the “purely textual meaning” of that term, the Court was required to look also to context, including “customs, practices, usages, and terminology.” The Court held that “lessor’s risk only,” as used in insurance, “has a specialized meaning that limits insurance coverage to damages sought by property tenants, or at the very least to injuries suffered on the landlord’s property.” Accordingly, based on the facts of the case, the Court granted Colony’s motion for summary judgment, holding that because it was undisputed that Figueroa was not a tenant and did not suffer an injury on the premises, the “lessor’s risk only” limitation applied to preclude coverage. This decision confirms two important matters for insurers. First, it holds “lessor’s risk only” is an unambiguous term with a specialized meaning. This is beneficial to insurers, as ambiguous terms are construed in favor of the non-moving party, and against the movant. Second, it reaffirms that insurance contracts are not to be interpreted solely based on their “purely textual meaning,” but in context, which includes the customs, practices, usages, and terminology as generally understood in the particular trade or business. Thanks to Erin Gallagher for her contribution to this post. Should you have any questions, please contact Tom Bracken. Previous Next Contact

News Trap Down Leads To Store Owner's Victory (NY) April 30, 2021 < Back Share to: In Vaughan v. Triumphant Church of Jesus Christ, 2021 NY Slip Op 02560 (2d Dept. 2021), a plaintiff fell down an open trap door in a deli and sued the owner of deli and the building owner. The building owner moved for summary judgment arguing that it did not control the premises and had no notice of the dangerous condition. "An out-of-possession landlord is not liable for injuries that occur on its premises unless the landlord has retained control over the premises and has a duty imposed by statute or assumed by contract or a course of conduct'" (Fox v. Patriot Saloon, 166 AD3d 950, 951). Further, it cannot be held liable for injuries caused by a defective condition on the property unless it either created the condition or had actual or constructive notice of it" (Rodriguez v. Sheridan One Co., LLC, 177 AD3d 801, 801). The lease agreement between the building owner and the deli-tenant was unclear as to whether the owner was responsible for maintaining the trap door. However, plaintiff’s deposition testimony showed that he walked over the closed trap door on the floor and a few moments later walked backwards, without realizing that the doors had been opened. The plaintiff ‘s testimony established that the building owner could not have had any actual or constructive notice of the dangerous condition because it happened so quickly. Thus, plaintiff could not argue that the building owner failed in their duty to prevent a dangerous condition from existing in the deli. Plaintiff’s arguments that the building owner knew that a trap door existed in the deli and it could possibly constitute a dangerous condition was unconvincing to the court. This case highlights the fact that actual and constructive notice (or the lack thereof) can be established by the testimony of a witness. If the time is so brief that a property owner could not have been made aware of a dangerous condition, then a court will likely find that they are not liable as a matter of law. Thanks to Raymond Gonzalez for his contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News Bi-Coastal Blow to Covid Related Restaurant Business Interruption Claims October 8, 2020 < Back Share to: During the first week of October two separate District Courts, for the Northern District of Georgia and the Central District of California, issued Orders granting the respective motions to dismiss filed by insurer defendants arguing that their policies provide no coverage for a restaurant insureds’ claim for business income coverage alleging losses stemming from Covid-19 closures. In California, Travelers prevailed on its motion seeking dismissal of the action initiated by its insured, Mark’s Engine Company No. 28 Restaurant in Los Angeles, alleging that Travelers owed coverage under its policy Business Income and Extra Expense for business income losses incurred due to the Covid-19 government mandated closures of all non-essential business in Los Angeles, which of course encompassed the closure of restaurants for everything by take-out and delivery. Travelers’ Business Income and Extra Expense term covered all losses due to any suspension of business operations due to a “direct physical loss or direct physical damage” to property. The policy also included a Virus Exclusion barring coverage for any “loss or damage caused by or resulting from a virus.” Mark’s Engine argued that the mandated closure of the restaurant evidenced physical damage to the property because it evidenced a “dire risk of exposure” to Covid-19 within and upon the restaurant property. In finding for Travelers that there was no coverage for the claim, the Court held that Plaintiffs’ theory of coverage relied upon an untenable premise that “deprivation of property” without any physical change to the condition of the property, constituted a direct physical loss or damage. The Court reasoned that while patrons were not permitted within the restaurant, the Insured never lost access to its property. Further, even if a direct physical loss was adequately alleged, the Virus Exclusion would bar all coverage. The reasoning employed by the Northern District of Georgia in finding no coverage on behalf of Allied Insuance was parallel to that of the Central District of California. There, Plaintiff Henry’s, an Atlanta restaurant and private party space, sought coverage under the Allied policy Business Income term which also covered business losses due to suspension of operations caused by direct physical loss or damage. The Allied policy also had a Virus or Bacteria exclusion. The Court likewise held that a government-mandated closure of the businesses did not equate to any “physical change at the Plaintiffs’ property”, and ruled that because Plaintiffs had not identified the presence of Covid-19 on the premises, “no physical change as a result of the virus’ presence can be argued.” Thus, no coverage was due and Allied’s motion to dismiss was granted. Business Interruption claims have been filed by restaurants in every jurisdiction, and there has been some concern regarding the risk of inconsistent rulings. These recent cases perhaps forecast a unity in the federal courts’ disposition of such claims in favor of insurance companies. Thanks to Vivian Turetsky for her contributions to this post. Any questions, please contact Georgia Coats. Previous Next Contact