News Business Person or Just Good Friend ... Her Insurer Would Like to Know (NJ) May 17, 2013 < Back Share to: Homeowner's policies contain a business exclusion. So when an insurer believes that a claim arises out of a homeowner's business activity, it is likely to decline coverage. This scenario presented itself recently in Bay State Insurance Company v. Jennings. The claim arose when a child was injured while under the care of the homeowner. While shopping, the caretaker fell causing a shopping cart to topple with the toddler inside. The toddler was injured and a claim presented. During the course of discovery, the insurer learned that the homeowner was caring for the child while her parents worked. The insured testified that she was not engaged in a child care business but rather was simply helping her best friend. The child's mother testified that she only gave her friend $35 per day to cover costs associated with food, diapers, etc. After a hearing, the judge found that the homeowner was in fact not motivated for financial gain but rather by her love for her friend and the child. She held that the business exclusion was inapplicable. The appellate division affirmed and noted that receiving money for childcare does not establish a profit motive and that the insurer bore the burden to prove this motivation. For more information contact Denise Fontana Ricci at dricci@wcmlaw.com . Previous Next Contact

News Corrosion Is Not An ‘Ensuing Loss’ From Sandy Floods October 7, 2016 < Back Share to: In the aftermath of Superstorm Sandy, Amtrak (a.k.a., National Railroad Passenger Corp.) sought coverage for widespread property damage sustained within its tunnels as a result of the incursion of seawater. Amtrak submitted claims under various policies, which covered the losses but only up to the combined $125 million flood sublimits for its policies. Amtrak argued that the sublimits should not apply because the definitions of “flood” in the policies were ambiguous, and the corrosion of the train tracks constituted a separate “ensuing loss” that was not subject to the sublimit. With respect to corrosion, Amtrak reasoned it was caused by a “chloride attack” that occurred only after the seawater evaporated, leaving salt residue to interact with oxygen on the rails. On September 7, 2016, in national-railroad-passenger-corp-v-aspen-specialty-insurance-co, the Second Circuit affirmed the district court’s ruling and held that the Amtrak was only entitled to coverage up to the flood sublimits of the insurance policies for Superstorm Sandy related losses. According to the Second Circuit, although three separate definitions of “flood” were at issue, each was unambiguous and the mere existence of different definitions did not render them ambiguous. As to the ensuing loss argument, the Court ruled that Amtrak’s broad interpretation would swallow the express and unambiguous purpose of the sublimit policy. Further, “chloride attack” was not an “ensuing loss” because “[t]he corrosion of Amtrak’s metal equipment cannot meaningfully be separated from water damage that is plainly subject to the flood sublimit, nor can it be attributed to a distinct ‘covered peril.’” Not only will this case be useful when interpreting what constitutes flood damage, but it has broad applicability in evaluating whether consequential damages or ensuing losses are covered as a separate event. At times, it is difficult from a metaphysical perspective to determine when one loss ends, and another begins. The analogy of evaporating sea water and resulting rust can certainly help in such circumstances. Thanks to Chris Soverow for his contribution to this post. Previous Next Contact

News PA Supreme Court Confirms Third-Party Contractor Has Duty to Warn of Obvious Dangers August 4, 2023 < Back Share to: In a May 2023 opinion, the Supreme Court of Pennsylvania potentially expanded contractor liability to third parties injured by construction defects. See Brown v. City of Oil City, 294 A.3d 413 (Pa. 2023). In 2011, due to weathering and aging, the condition of Oil City Library’s concreate entrance stairs significantly declined since their construction in 1904. Id at 419. As a result, Oil City (“City”) contracted with Harlod Best and Struxures, LLC (collectively “contractors”) to develop plans to reconstruct the stairs and oversee the implementation of those plans. Id. The actual reconstruction work of removing and replacing the stairs was performed by subcontractor Fred Burns Inc., pursuant to a contract with the City and Contractors. Id. Shortly after the stairs were installed, the City began receiving reports about imperfections in the concrete surface, which also began to degrade; these imperfections prompted the City to inform Struxures that it considered the stairs to be “dangerous and defective.” Id. Over the years, the condition of the stairs continued to worsen, neither the City nor Contractors made repairs. Id. In November 2015, David and Kathryn Brown was exiting the library; Kathryn tripped and fell on one of the deteriorated sections, and struck her head, resulting in a fatal head injury. David brought a lawsuit against the City, Contractors, and Fred Burn’s Inc. Id. With respect to the Contractors and Fred Burns, Brown argued that their work on the steps created a dangerous condition and an unreasonable risk of harm. Id. At the trial level, the Contractors filed a successful motion for summary judgement based on the argument that § 385 of the Restatement (second) of Torts provides no duty to out of possession contractors to third parties harmed by conditions of their work done on behalf of another. Id. at 420. However, on appeal, the Supreme Court of Pennsylvania found that nothing in the Restatement that would exempt an out-of-possession contractor from liability when it makes a repair to a chattel that it reasonably should foresee would render it dangerous to a third party who uses it, even when its dangerous condition is obvious. Id at 430. Further, the Court found that a contractor has a duty to inform a third-party user of a dangerous condition when the contractor “has no reason to believe the third party will realize the dangerous condition which the contractor created.” Id. The Court found that a contractor who has created a dangerous condition through work performed for a possessor of land may be liable to all persons injured by the dangerous condition, even if that condition is obvious or apparent in nature. Id at 435. The Court reversed the order for Summary Judgment and remanded the case to the trial court. Id. While this case does not provide a holding that these contractors should be held liable, the Court did hold that these contractors, and those in similar positions could be held liable in these kinds of situations. It is early to tell if this ruling will spark changes in plaintiff’s decisions on what parties to name in a lawsuit. Thanks to Hannah Garber for her contribution to this article. Should you have any question, contact Matthew Care. Previous Next Contact

News Liability Won’t Always Fall on the Property Owner in Slip-and-Fall Action (PA) October 25, 2019 < Back Share to: In Mary Minch and Joseph Minch v. KDG Rental Inc. et al., the Pennsylvania Superior Court found that the property owners of a rental property were not liable to the tenant couple after the wife slipped and fell on a substance on the floor. Plaintiffs Mary and Joseph Minch (“the Minches”) were leasing defendants’, Daniel and Donna Zola’s (“the Zolas”) property on a short-term basis. Defendants owned and leased the house under their corporation, KDG Rentals (“KDG”), and hired a cleaning company (“the Cleaners”) to prepare the home for the Minches visit. The Zolas had only used the Cleaners’ services once before due to a friend’s recommendation. When the Minches arrived at the home, the Cleaners were still there and told the couple that they could enter. Shortly after arriving, Minch slipped and fell on Orange Glo, a cleaning product, while exiting the bathroom and sustained injuries. She subsequently sued the defendants for negligence by vicarious liability, sued KDG Rentals and the cleaners for negligence and sued for loss of consortium for Joseph Minch. The trial court ultimately found against the Cleaners. However, the court granted the Zolas' motion for compulsory nonsuit. The Minches filed an appeal stating the Zolas were vicariously liable for the actions of the Cleaners, the Cleaners were an ostensible agent of the Zolas, and the Zolas negligently hired the cleaners. Ultimately, the Superior Court was not convinced by the Minches' arguments. The Court found the Zolas to be “landlords out of possession”, which meant that they could not be liable for the injuries of third parties on the property because they did not owe them a duty. There are several exceptions to this rule, such as maintaining control over a dangerous condition, failing to disclose a known danger at the time of possession, negligent repairs, etc. However, these exceptions did not apply in this case. Additionally, the Zolas were not vicariously liable for the Cleaners because the Cleaners were independent contractors. There was no evidence that the Cleaners were employees of the Zolas, as there was no contract, the Zolas did not control how the cleaning was performed, the Zolas received an invoice for the service, the Zolas only used the cleaning services twice, and the Zolas could choose to never use them again. Tthe Minches also argued that the Cleaners were ostensible agents of KDG and thus KDG could be held liable, even if the Cleaners were independent contractors. The Court dismissed this argument by stating that the Zolas did not present the Cleaners as employees and the fact that the Cleaners allowed the Minches into the home was not indicative of an agency relationship. Lastly, regarding their negligence arguments, the Court remained unconvinced. The Minches common law negligence claim was not timely presented prior to nonsuit, so the claim was deemed waived. Their negligent hiring argument did not hold up because as previously stated, the Cleaners were independent contractors who were outside of the control of KDG or the Zolas. Therefore, while Mary Minch certainly suffered an injury, the property owners could not be held liable for negligence simply because the Minches were on their property. Thanks to Gabrielle Outlaw for her contribution to this post. Please email Vito A. Pinto with any questions. 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 Nosy Neighbor Raises Question Of Fact In NY May 26, 2023 < Back Share to: In September 2017, plaintiff in Abramson v. Janowski’s Hamburgers Inc tripped and fell over a crack in a sidewalk in residential Rockville Center, NY. Across the street from where she was injured is the loading dock and driveway of defendants, a wholesale and retail hamburger products business. Plaintiff alleged that defendants affirmatively caused and created the defective sidewalk condition on the public property. In opposing defendants’ motion for summary judgment, plaintiff produced the testimony and evidence provided by defendants’ neighbor who had lived on the block for over 50 years. That neighbor regularly saw 18-wheel trucks coming and going from his street and testified that he observed defendant employees guiding the trucks onto the sidewalk while assisting them up to the loading dock. The neighbor had even taken photographs of tire marks near the alleged defect upon which plaintiff later fell and who saw the employees directing the trucks. At oral argument, the Court opined that although there was no video surveillance there was a very “nosy neighbor,” for whom plaintiff’s counsel was grateful. The Second Department, Appellate Division, decided that the evidence provided by that neighbor raised a triable issue of fact as to whether defendants caused or created the sidewalk defect by directing the trucks onto the sidewalk, and reversed summary judgment. This case highlights the importance of conducting a thorough investigation in bringing or defending against such premises liability claims, including knocking on doors hoping for a nosy neighbor. Thanks to Abed Bhuyan for his contribution to this post. Please contact Abed with any questions. Previous Next Contact

News New Jersey Ruling Makes Construction Subrogation Cases More Difficult for Insurers April 19, 2019 < Back Share to: In Wichot v. Allstate, the New Jersey appellate court recently held that ACE American Insurance was unable to subrogate its claim against a subcontractor plumber for over $1 million in damages. In interpreting a standard construction contract, the court held that ACE’s insured waived its right to assert a claim, even though the contracted work had been completed prior to the loss. ACE insured Equinox Development under a policy covering, in part, “property while in the course of construction.” ACE’s policy with Equinox was effective from September 2012 until September 2013. It also contained a standard subrogation clause. Equinox Development contracted with general contractor Grace Construction to build the “core and shell” of a new Equinox gym. Grace then subcontracted the plumbing work to American Medical Plumbing. In April 2013, after the contracted work had been completed, a water main broke, flooding the club and causing about $8,000 in damage to the “core and shell” and approximately $1.2 million overall. ACE then paid Equinox $1.2 million for the total damages and filed suit against AM Plumbing, alleging that they were at fault for the water break. AM Plumbing filed a motion for summary judgment arguing that ACE’s claims were barred by the terms in the A-201 construction contract to which Equinox and AM Plumbing where parties. The contract required Equinox to obtain builder’s risk insurance and provided for a waiver of subrogation clause which stated that the parties waived their rights with respect to damages “to the extent covered by property insurance applicable to the Work.” Although the damages were almost all unrelated to the “core and shell’ work, the court ultimately held that waiver prevented ACE from suing AM Plumbing because all of the damages were “covered” by “property insurance applicable to the Work.” The court stated that this was the “majority view” in other jurisdictions. Further, the court held that additional terms in the contract meant that the waiver applied whether or not AM Plumbing had an insurable interest in the property. Thus, ACE was unable to recover from AM Plumbing, notwithstanding the fact that the damages occurred after the contracted work had been completed. This decision creates an additional hurdle for insurers in pursuing subrogation claims against New Jersey contractors. However, subrogating insurers would be wise to check to see whether, as is frequently the case, the parties modify the standard contract in some way. Further, the New Jersey Supreme Court has not yet interpreted these provisions, meaning insurers may still be able to distinguish this case on the facts presented. Thanks to Doug Giombarrese for his contribution to this post. Please email Colleen Hayes with any questions. Previous Next Contact

News U.S. Supreme Court Re-Writes the Rules of Personal Jurisdiction in Mallory v. Norfolk Southern Railway Co. July 14, 2023 < Back Share to: Perhaps overshadowed by landmark opinions in other areas, the U.S. Supreme Court’s recent 5-4 decision concerning personal jurisdiction in Mallory v. Norfolk may dramatically impact the nature of civil litigation against out-of-state defendants across the nation. Personal jurisdiction refers to a court’s power to hear a claim against a certain entity. Generally, plaintiffs in civil claims can establish personal jurisdiction over a defendant if: (1) the defendant is “at home” in the forum state meaning they are incorporated or headquartered there (referred to as “general” jurisdiction); or (2) the defendant has “minimum contacts” with the state such that defending would not threaten “traditional notions of fair play and justice,” referred to as “specific” jurisdiction. However, Mallory upheld a Pennsylvania law that requires any entity registering to do business in the state to consent to the general jurisdiction of the state’s courts, potentially subjecting businesses to general jurisdiction in any state where it registers to do business. In Mallory, the plaintiff worked as a freight mechanic with Norfolk Southern Railway Co. (“Norfolk”) in Ohio and Virginia for twenty years, and then briefly moved to Pennsylvania until his diagnosis with cancer. After moving back to Virginia, Mallory sued Norfolk for alleged workplace injuries in Pennsylvania court. In response, Norfolk argued the court lacked personal jurisdiction because Norfolk was not headquartered or incorporated in Pennsylvania and did not have sufficient contacts with the state. Norfolk also argued that the consent statute violated the Due Process Clause and that the U.S. Supreme Court’s decision in Pennsylvania Fire Insurance Co. v. Gold Issue Mining and Milling Company, 243 U.S. 93 (1917), which found that a similar statute did not violate due process, had been overruled by subsequent cases addressing personal jurisdiction. The Supreme Court of Pennsylvania agreed with Norfolk and held that the statute was unconstitutional. The U.S. Supreme Court majority disagreed, finding that the Due Process Clause does not prohibit states from requiring an out-of-state corporation to consent to being sued as a condition of doing business in the state. The Court found that it was irrelevant that Mr. Mallory no longer lived in Pennsylvania and was likely injured in Virginia and Ohio; instead, the Court acknowledged that entities like Norfolk can statutorily consent to jurisdiction by registering to do business in a state. The Court also found that the Pennsylvania Fire case had not been overruled and was controlling precedent. While some fear that the Mallory decision will allow plaintiffs to engage in “litigation tourism” and “forum shopping,” others predict that it may be subject to challenge. Three members of the Court joined Justice Barrett in dissent, opining that Pennsylvania’s registration law violates the Due Process Clause while Justice Alito noted in his concurrence that the law also raises Dormant Commerce Clause concerns. That issue was not addressed in the decision and may form the basis for a subsequent challenge. Nonetheless, the decision will likely result in other states passing similar laws and expand the ability of states to obtain general jurisdiction over foreign and domestic companies doing business in multiple states. Thank you to Nicholas Ozorowski for his contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News PA Superior Court Analyzes The "Regular Use" Exclusion November 5, 2012 < Back Share to: In Rother v. Erie Insurance, Patrick Rother was injured in a car accident. At the time of the accident Rother was living with his mother but was driving his father’s car. Two weeks before the accident, Rother’s father had given him permission the use the car to commute to work for the indefinite future. After Rother recovered liability benefits from the other driver’s policy, he and his mother initiated an action seeking a declaration that Erie Insurance was obligated to provide underinsured motorist coverage under his mother’s policy. Erie contended that coverage was excluded under the “regular use” exclusion in the policy. The trial court granted summary judgment in favor of Rother. Erie appealed. On appeal, the Superior Court first noted that, generally, policy exclusions should be narrowly construed. Next the Court held that the duration of Rother’s use of the car was irrelevant in determining if the test for “regular use” had been met. Further, the fact that Rother’s father had placed restrictions on the use of the car would not preclude there being a finding of “regular use.” The Court held that the determining factor was there was no indication that Rother’s use of the car was on a temporary basis. As such, the test for “regular use” had been met and there was no coverage under Erie’s policy. Thanks to Colleen Hayes for her contribution to this post. http://www.law.com/jsp/pa/PubArticlePA.jsp?id=1202576475740 Previous Next Contact

News Booming Chinese Art Market. September 7, 2011 < Back Share to: This will come as no surprise to fine arts professionals, but the Chinese art market remains hot. This interesting NYT's article explores that phenomenon. For more information about this post or WCM's fine art practice, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Movie Theater Employee’s Outside the Box Assault is Outside Scope of Employment (NY) February 11, 2020 < Back Share to: Due to the principle of respondeat superior, more employees mean more exposure to the employer for their employees’ actions. That said, the First Department recently emphasized the potential strength of an employer distinguishing the employee’s actions from their actual job duties as a defense. In Gregory v. National Amusements, Inc., the plaintiff Gregory claimed she viewed a film at the defendants’ movie theater. While walking out of the movie, Gregory alleged she tapped the defendant’s employee on the shoulder to say she liked the movie and then employee turned and without warning slashed Gregory’s face with a box cutter. Encouragingly for defendants, even though the employee in question was a security guard and was working at the time of the incident, the First Department found that an alleged unprovoked assault was outside the scope of his employment as a matter of law. Specifically, the appellate court framed the alleged actions as “not in furtherance of [the employer’s] business interests,” even if plaintiff may have argued a security guard’s duties theoretically include physical altercations with customers. As a result, the First Department modified in part and affirmed in part an order from the trial court such that all claims against National Amusements were dismissed. This decision is helpful for defendants who seek to aggressively pursue motion practice by advancing this theory in similar scenarios. Thanks to Nicholas Schaefer for his contribution. If you have any questions or comments please contact Vincent Terrasi. Previous Next Contact

News NJ Sup Ct Finds Public Entities Attempt To Limit Right To Sue Against Public Policy October 26, 2010 < Back Share to: In Marcinczyk v. State Of New Jersey Police Training Commission, the Supreme Court considered whether an exculpatory agreement that a police recruit executed as a condition of participating in the Somerset County's Police Academy program barred his claims for injuries. On August 5, 2010 in Stelluti v. Casapenn Enterprises, the Supreme Court held that a gym patron of a private health club could not sue for injuries sustained on faulty exercise equipment because she had signed a lawsuit waiver as a condition of her membership. While the Supreme Court enforced the waiver of liability in the private health club setting, it found that a government run institution violated public policy by doing the same thing. The Court found that the agreement signed by Marcinczyk was invalid because it contravened public policy as expressed in the New Jersey Tort Claims Act. The Court found that a public entity cannot condition the provision of a public service on the recipient's execution of a waiver of liability. Please contact Robert Ball with any questions regarding either of these opinons. http://www.judiciary.state.nj.us/opinions/supreme/A-19-09.pdf Previous Next Contact