News No Fault? No Problem (NJ) June 13, 2019 < Back Share to: In Liberty v. Penske, the New Jersey Superior Court was asked to address whether: New Jersey’s No-Fault Act, N.J.S.A. 39:6A-9.1 compels arbitration when there is a disputed question of fact regarding whether a party is a tortfeasor. By way of background, in October 2016, a tractor trailer being operated by a CEVA employee collided with a pickup truck driven by Eugene Jerinsky in New Jersey. Jerinsky was injured as a result of the accident and subsequently obtained no fault benefits through Liberty Mutual, his insurance company. After all was said and done, Liberty Mutual requested that Ceva, who was self-insured at the time of the accident, reimburse the claim because its employee was at fault. Ceva declined and then Liberty Mutual requested an arbitration to arbitrate the reimbursement claim. Ceva again declined. In September 2017, Liberty Mutual filed suit against Ceva. The main issue being whether the reimbursement claim should be heard by an arbitrator or a judge and jury. The lower court ruled in favor of Ceva, stating that a judge or jury had to first determine the employee’s fault before an arbitrator could hear a reimbursement claim. The appeals court disagreed. The court held that arbitrators can determine issues of fact. It stated that whether or not the Ceva employee was at fault involved a factual question of negligence. In the end Liberty Mutual was allowed to arbitrate the claim. Long story short, this is a win for insurance companies in the State of New Jersey looking to arbitrate PIP reimbursement claims. Thank you to Marc Schauer for his contribution to this post. Please email Colleen E. Hayes with any questions. Previous Next Contact

News Will Lloyd's Tell Jackson Concert Promoters to Beat It? August 9, 2009 < Back Share to: At the time of his June death, Michael Jackson was about to embark on a final comeback tour in London. As is typical for such high profile concerts, contingency risk insurance was procured through the London market. The Policy excluded from coverage "any loss directly or indirectly arising out of, contributed to, by or resulting from . . . the illegal possession or illicit taking of drugs and their effects." It appears that the Policy does not define the terms "illegal possession" or "illicit drugs." It has been widely reported that Michael Jackson's death resulted, in whole or in part, from his use of a cocktail of prescription medications. The questions Lloyd's will have to face are: (a) was Jackson lawfully in possession of the medications; and (b) was his use (i.e. taking of them) illicit? Some $18,000,000 in insurance coverage rests in the answers. One thing is for sure -- it's certain to be an insurance "Thriller." http://www.latimes.com/news/local/la-me-jackson-insurance7-2009aug07,0,5290158.story?track=rss Previous Next Contact

News WCM and Airbnb Obtain 3211(a)(7) Dismissal in New York County July 6, 2023 < Back Share to: A few weeks ago, WCM partner Brian Gibbons, in collaboration with Airbnb's legal team, achieved a resounding victory in a NY County premises case. Specifically, Plaintiffs Eric Miller and Nelson Fogarty alleged injuries when a wooden handrail broke while renting a unit through Airbnb in 2019. In addition to asserting claims against other parties, Plaintiffs claimed that Airbnb assisted with the short-term rental of the unit and therefore owed them a duty of care. However, last month the Supreme Court of the State of New York granted a Pre-Answer Motion to Dismiss. The Court decided that pursuant to CPLR 3211(a)(7) that Plaintiffs failed to state a cause of action against Airbnb, holding that Airbnb does not owe a duty to Plaintiffs. This was the crux of Airbnb's argument -- that Airbnb is simply a platform for guests to book with hosts, but that Airbnb has no duty to invitees, much like an application like OpenTable has no duty to restaurant guests. The outcome of this case has significant implications for Airbnb. The court reasoned that Airbnb did not own, control, or operate the premises and did not enter into any contractual relationship with Plaintiffs. This decision clarifies Airbnb's role as a platform that facilitates short-term rentals, but does not owe a duty of care to plaintiffs in situations where injuries occur on the rented properties. The plaintiffs' case continues against other parties, but Airbnb's lack of duty is clear based on the Court's decision. Thanks to Corey Weisfeld for his contribution to this post. Please email Brian Gibbons with any questions about the decision or our premises liability defense practice. Previous Next Contact

News Third Circuit Finds Broad Duty To Defend In Trademark Suit (PA) January 14, 2022 < Back Share to: In Vitamin Energy, LLC v. Evanston Insurance Company, the United States Court of Appeals for The Third Circuit held the defendant insurer had a duty to defend its insured from a trademark suit. It broadly interpreted Pennsylvania law in favor of insureds. The case stemmed from an underlying lawsuit filed by 5-hour Energy against Vitamin Energy for trademark infringement, among other claims. In addition to other wrongs allegedly committed by Vitamin Energy, 5-hour asserted that Vitamin Energy committed false and misleading advertising about the benefits of 5-hour’s products. Vitamin Energy sought defense in the suit from its insurer, Evanston. However, Evanston did not provide a defense, claiming that there was no coverage based on an exclusion. Specifically, Evanston argued that the “incorrect description” exclusion barred coverage for any claim arising out of an incorrect description of a product. The court disagreed with Evanston. The court reasoned that an insured’s burden to establish a duty to defend is light, and that Vitamin Energy had carried it. Read liberally in favor of coverage—as is required under Pennsylvania law—there was at least a possibility that the exclusion did not apply to every element of the case. Therefore, Evanston had a duty to defend. Vitamin Energy argued that the policy exclusion Evanston relied on only pertained to incorrect descriptions of its own products—not competitors’ products. The Court found this sufficient to conclude Evanston had a duty to defend. Thanks to John Lang for his contribution to this post. Should you have any questions, please feel free to contact Thomas Bracken. Previous Next Contact

News State Scuttles Salty Suit January 21, 2011 < Back Share to: A New Jersey Appellate Court affirmed the dismissal of a suit against Denny’s wherein the plaintiff alleged the food served at the restaurant contained excessive levels of sodium. The suit was brought under the Consumer Fraud Act, as plaintiff alleged Denny’s failed to disclose the sodium content of the meals. However, the trial judge determined, and the Appellate Division agreed, that the case was actually a product liability claim because the complaint alleged that excessive levels of sodium are dangerous and cause an increased risk of bodily harm. Under New Jersey law, the NJ Products Liability Act is the exclusive remedy for such claims. A condition of the NJ Product Liability Act is damages. However, plaintiff’s did not allege any specific damages. Therefore, the trial court dismissed the case, and the Appellate Division affirmed that decision. In a footnote the Appellate Court noted that the NJ legislature recently passed a law requiring restaurants to disclose the calorie court of the food sold, but did not require restaurants to disclose the sodium content of the food. The court determined that the statute demonstrates the public policy of New Jersey is that a restaurant is not required to disclose the sodium content of food sold. If you have any questions about this post, please contact David Tavella at dtavella@wcmlaw.com . http://www.judiciary.state.nj.us/opinions/a4135-09.pdf Previous Next Contact

News Emergency Doctrine Rescues Taxi Driver (NY) March 18, 2016 < Back Share to: Under the “emergency doctrine”, if a driver is faced with a sudden and unexpected circumstance which leaves little or no time to consider alternative courses of conduct before making a speedy decision, that driver is not negligent if his or her reactions are reasonable and prudent in the emergency. In Kandel v FN Taxi, Inc., the plaintiff was injured when he was pinned between two vehicles after a multi-vehicle accident. The plaintiff and one of the defendants had been involved in an accident after sliding on ice. Their cars were stopped in the right lane of a three-lane highway when a vehicle belonging to a non-party crashed into the median and came to rest in the left lane. A yellow cab, after rounding a curve, saw the other vehicles stopped in the left and right lanes. The driver stepped on his brakes, but a sheet of black ice on the highway caused the cab to slide and hit the plaintiff’s vehicle pinning the plaintiff between his own car and the other vehicle in the right lane. The cab driver and owner successfully moved for summary judgment, arguing that the emergency doctrine precluded plaintiff from pursuing a negligence claim against them. The decision was affirmed on appeal. The Second Department found that the cab driver was faced with an emergency when he observed three crashed vehicles blocking two lanes of traffic. There was no evidence the driver was speeding, nor did he have reason to believe there would be black ice on the road on an otherwise dry day. The court held that under these particular circumstances, the cab driver acted reasonably when he hit the brakes and tried to steer the taxi clear of the other vehicles. Although the reasonableness of a driver’s actions can raise a triable issue of fact to defeat summary judgment, the court found that plaintiff did present any evidence that the cab driver either contributed to or could have avoided hitting plaintiff’s car. Thanks to Sheree Fitzgerald for her contribution. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com .   Previous Next Contact

News PA Supreme Court: Operational Control Over Contractor Work Is Needed for Property Owner Liability February 18, 2011 < Back Share to: In the case of Beil v. Telesis Construction Inc., et al., Pennsylvania’s Supreme Court has just issued a significant decision clarifying a property owner’s responsibility for personal injury actions arising out of the work of its contractors. In Beil, Lafayette College hired Telesis, a construction company, to work on one of its campus engineering buildings. In turn Telesis, subcontracted with another company, Kusman, to perform roofing work. Beil, the plaintiff, was a Kusman employee and was injured when he fell from the roof on which Kusman was working. He sued Telesis and Lafayette. Justice Debra Todd addressed the scope of Lafayette’s exposure -- http://www.pacourts.us/OpPosting/Supreme/out/J-89-2009mo.pdf Using the Restatement Second of Torts as a guidepost, Justice Todd’s majority opinion held that a landowner can only be liable for a personal injury action arising out of a subcontractor’s work, if the landowner retained control over that work “such that it renders the contractor not entirely free to do the work in his own way.” Merely maintaining some general responsibility for safety issues does not constitute the requisite degree of control. Rather, to be exposed to liability, the landowner must maintain some operational control over the means and methods of the subcontractor’s work. This is good news for property owners and not such good news for plaintiffs attorneys. Special thanks to Remy Cahn for her contributions to this post. For more information, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Insurer Has Heavy Burden Proving Insured’s Noncooperation October 31, 2017 < Back Share to: In a recent New York appellate decision, the court considered whether letters from attorneys representing an insured in an underlying lawsuit and investigation reports regarding statements made by an insured’s president can be considered on a motion for summary judgment following an insurer’s disclaimer on the grounds of noncooperation. In DeLuca v. RLI Insurance Company, plaintiff sued RLI’s insured, ML Specialty Construction, Inc., alleging property damage caused by ML’s construction work on a neighboring property. After ML Construction notified RLI of the plaintiff’s claim, RLI retained counsel to defend ML Construction. RLI then disclaimed coverage after ML Construction allegedly stopped cooperating with counsel after five years of cooperating with the defense. ML Construction then defaulted in the underlying action. After the plaintiff obtained a judgment against ML Construction, she commenced a declaratory judgment action against RLI seeking a declaration that RLI was obligated to pay her damages in connection with the judgment obtained against ML Construction. RLI cross-moved for summary judgment. The Second Department held that an insurer who seeks to disclaim coverage on the basis of a policy’s noncooperation clause faces a heavy burden. The insurer must demonstrate that “(1) it acted diligently in seeking to bring about the insured’s cooperation, (2) its efforts were reasonably calculated to obtain the insured’s cooperation, and (3) the attitude of the insured, after its cooperation was sought, was one of willful and avowed obstruction.” The court held that in this case, RLI failed to meet its burden, namely by failing to submit proof of its efforts and ML Construction’s refusal to cooperate in an admissible form. The proof RLI submitted as evidence of ML Construction’s noncooperation were letters from ML Construction’s counsel and investigation reports and emails from an investigation services company. The letters, emails, and reports purportedly contained statements from ML Construction’s president supporting RLI’s contention of ML Construction’s noncooperation, which the court held were offered for their truth and were therefore were hearsay, and not admissible. Furthermore, an affidavit from the president of the investigation company containing a conclusory assertion that efforts to obtain ML Construction’s cooperation were not successful did not sufficiently meet the insurer’s heavy burden of proving noncooperation. Accordingly, the denial of RLI’s cross-motion for summary judgment was affirmed. This case serves as a reminder that an insurer’s burden of demonstrating an insured’s alleged noncooperation in connection with a disclaimer of coverage remains high. Thanks to Rebecca Rose for her contribution to this post.       Previous Next Contact

News A CMS Donnybrook in Philadelphia? May 25, 2011 < Back Share to: I was in the Philadelphia Court of Common Pleas earlier today on a trial calendar call. For better or worse, I walked into a donnybrook of a CMS argument before Judge Moss, involving amicus insurers from all over the country and the majority of the Philadelphia asbestos bar. The issues before Judge Moss were, among others, whether: (a) an insurer can refuse to allow plaintiff to hold set aside CMS funds (pending a CMS determination) because, in effect, the defendants/insurers don't trust plaintiff's counsel and would therefore prefer to hold the money in their own escrow; (b) in asbestos cases with a pre-1980 exposure whether CMS has rights to the funds; and (c) whether the CMS guidelines contain inherently contradictory rules and regulations, which thereby render them ineffective if a defendant insurer attempts to rely upon them in stating why it can't release funds in a particular case? The orders have yet to be issues and will no doubt be the subject of an appeal, but underscoring all of the arguments was a common problem -- a failure to communicate. Too often the claims examiner/defense attorney fail to make clear to plaintiff's counsel (in writing so that a paper trail exists) that payment of the settlement is conditioned upon: (a) a finding by CMS that plaintiff is not eligible; or (b) if there is a finding of eligibility by CMS then either (i) plaintiff agrees that the settlement proceeds are not payable until after CMS announces/renounces its recovery rights, or (ii) CMS’s name goes on the check. Based upon today's arguments, it appears that Philadelphia's judiciary would find this good evidence of defendant/insurer intentions if a plaintiff filed a motion to force payment with costs and interests. Carriers and their attorneys might want to modify their best practices accordingly. After all, an ounce of prevention is worth two of cure. For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News New Connecticut Law Provides Tort Protections For Cyber-Savvy Businesses (CT) August 13, 2021 < Back Share to: On July 6, 2021, Connecticut Governor Ned Lamont signed into law a bill designed to incentivize Connecticut businesses to implement stronger cybersecurity practices to combat the rise in cyber and ransomware attacks. In doing so, the state becomes only one of three states, the others being Ohio and Utah, to adopt an incentive-based approach for businesses to improve cybersecurity best practices. The new law, which will become effective on October 1, 2021, gives statutory protection from punitive damages claims brought under Connecticut law in Connecticut state court to those companies who enact reasonable cybersecurity controls. This includes the adoption of a formal written cybersecurity program that contains “administrative, technical and physical safeguards for the protection of personal or restricted information.” The program must also conform to certain cybersecurity standards set forth in the statute, including those established by the National Institute of Standards and Technology (NIST) and the Payment Card Industry (PCI) Security Standards Council, as well as any applicable regulations relevant to the business (e.g., HIPAA or FISMA). Connecticut businesses which do not have strong cybersecurity protocols in place should strongly consider complying with the new law to avoid potential punitive damages exposure from future cyber losses. Thanks to Andrew Gibbs for his contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News PA Insurance Fraud -- Beware of Allen Litt, Esq. December 12, 2007 < Back Share to: Allen Litt, Esq., a Philadelphia area personal injury lawyer was charged with 73 criminal counts arising out of hundreds of fraudulent personal injury lawsuits and claims that occurred over the past 25 years. http://www.law.com/jsp/pa/PubArticleFriendlyPA.jsp?id=1197367479119 Previous Next Contact

News Pennsylvania Amendment Snaps Back At Snap Removal January 21, 2022 < Back Share to: On January 18, 2022, the Pennsylvania Supreme Court formally amended the Pennsylvania Rules of Civil Procedure clarifying that original service of process is satisfied per Rule 400(b) by a sheriff or competent adult in cases of state to federal court and permitting pre-service or “snap” removal pursuant to 28 U.S.C. § 1441. This change was initiated when the Pennsylvania legislature heeded the clarion call of the Third Circuit Court of Appeal’s call to action in Judiciary Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147, 154 (3d Cir. 2018), which identified conflicts between §1441, its “forum defendant” exception in Section 1441(b), and the former Rule 400 leading to inconsistencies across the state and a split amongst the circuit courts. Specifically, Section 1441(a) provides that a state action may be removed to a federal court where there is federal subject matter jurisdiction, including where there is complete diversity of citizenship between all plaintiffs and all defendants. Further, Section 1441(b) states the “forum defendant” exception: an action otherwise removable on the basis of diversity jurisdiction “may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which the action is brought.” Section 1441(b) (emphasis added). In conflict, Rule 400(a) provides that the sheriff must serve original process of civil actions within the Commonwealth. While former Rule 400(b) enumerated certain civil actions to allow original service of process by sheriff or competent adult, Rule 400.1 carves out an exception for the service of original process in Philadelphia County. In turn, this tension led to different interpretations per venue, fostered the principle of “snap” removal, and in practice, has led to docket monitoring now available with increases in technology, professional service of process industries, and a race-to-the federal courthouse where prospects may be more favorable. In Encompass, Encompass Insurance Co., the defendant agreed to accept electronic service of process instead of requiring formal service of the complaint, however, when the plaintiff then filed suit against the defendant in the plaintiff’s home state and sent the defendant a copy of the filed complaint and a service acceptance form via email, counsel for defendant refused to accept service and thereafter removed the action to federal court. The Encompass court found that the face of Section 1441(b) does not prevent removal where the in-state defendant has yet to be properly served under the state law at issue, here, Pennsylvania. In noting how the district courts within the state and country were split, the Encompass court decided narrowly and ultimately kicked the issue to the Pennsylvania legislature. See Parker Hannifin Corp. v. Fed. Ins. Co., 23 F.Supp.3d 588, 596 (W.D. Pa. 2014) (concluding that “the forum defendant rule does not apply to this case because plaintiffs failed to properly serve [the in-state defendant] prior to removal of this case to federal court”). In turn, the Pennsylvania Civil Rules Committee proposed an amendment to Rule 400 enumerating circumstances of “snap” removal under Rule 400(b) which has formally been adopted per Order No. 727. In its report, the Committee notes that amended rule is intended to ameliorate “snap” removal and the holding of Encompass, as such polarized outcomes defeat the purpose of the Pennsylvania Rules of Civil Procedure in obtaining speedy determinations to actions. See Pa. R.C.P. 126. This amendment takes effect April 1, 2022. Practically, this change will make it difficult, but not impossible, for in-state defendants to remove a case from state court to federal court under diversity jurisdiction and signals the Pennsylvania court’s broadening interpretation of what it means to avail oneself to the forum state. Thanks to Kendall Hutchings for her contribution to this article. If you have any questions, please contact Matthew Care. Previous Next Contact