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News Stuck With the Bill – Even if You’re an Excess Carrier in New York. October 7, 2010 < Back Share to: In the case of RLI Insurance Company v. Leslie Smiedala, et al., RLI, an excess insurance carrier, commenced a declaratory judgment action in New York which it sought a declaration that, in the event that the primary insurer’s policy limits were exhausted (an event that had not yet come to pass), it would not be obligated to defend or indemnify various parties. This endeavor proved unsuccessful. As a result, the defendants sought to recover the fees they had accrued in the declaratory judgment action against the “losing” carrier. The trial court agreed and granted fees. An appeal to the 4th Department resulted. In the appeal, RLI argued that, since it had not yet paid any defense or indemnity monies in the underlying action, it could not be said to have “lost” the declaratory judgment action and thus was not obligated to reimburse the defendants. The 4th Department disagreed – http://www.loislaw.com/advsrny/flwhitview.htp?lwhitid=9886142. It held that “although plaintiff's duty to defend Regional may not have been triggered in the underlying action because the primary coverage has not been exhausted, Regional may nevertheless recover its attorneys' fees from plaintiff incurred in the declaratory judgment action inasmuch as Regional was "cast in a defensive posture by the legal steps [plaintiff took] in an effort to free itself from its policy obligations.” If you would like more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News The Importance Of Being An Expert (PA) July 11, 2019 < Back Share to: Experts reports and opinions are paramount in proving a party’s theory of the case. In State Auto v. Kim Eagan Woods, the Middle District Court of Pennsylvania addressed a situation where a Defendant-Insured moved for summary judgment against a Plaintiff-Insurer over an apartment fire. Defendant's apartment was insured by the plaintiff and was damaged by fire. Plaintiff, relying on its expert's report, asserted the fire was started by defendant's negligently lit cigarette and commenced a declaratory judgment action. Defendant argued the fire was caused by a lamp, and further that there was no evidence to support the plaintiff’s claim. However, defendant did not retain an expert to support her contention. Plaintiff’s expert reviewed the evidence supplied in the case and conducted an examination of the scene of the fire. The expert determined that the fire was caused by a negligently lit cigarette, noting a lighter and ten empty cigarette packs in the apartment. He determined that, although the wire of the lamp showed fire damage, it was not the cause of the fire. Subsequently, the defendant moved for summary judgment. In analyzing the motion, the Court found that the plaintiff’s expert report, and other supporting evidence, set forth a prima facie case of negligence sufficient to survive summary judgment. Importantly, the Court noted that the defendant did not move to exclude the expert report or preclude the expert's testimony in her motion. The Court further noted that even if the defendant had moved to exclude the expert’s testimony, the judge would not have granted it because of the wealth of support for the expert’s opinion. In most cases, all parties to a case will retain an expert who will conduct a review of the evidence/location of interest and author a report that supports the respective party’s theory of the case. Here, the defendant moved for summary judgment based on a lack of evidence to support the plaintiff’s case. Crucially, the defendant failed to retain an expert to support her theory of the case. The Court was, thus, faced with a situation where a layman’s theory of the case was pitted against that of an expert. As such, this case exemplifies the importance of retaining an expert when a case involves technical issues, especially if the opposing party has already obtained an expert. Thank you to Malik Pickett for his contribution to this post. Please email Colleen E. Hayes with any questions. Previous Next Contact

News Virus Coverage Doesn’t Always Mean Coronavirus Coverage (PA) January 22, 2021 < Back Share to: As the ever-changing landscape of COVID-19 insurance litigation gets more and more crowded, courts are becoming even more attentive to the language of the insurance policies at issue. In Ultimate Hearing Solutions II, LLC v. Twin City Fire Insurance Co., the Eastern District of Pennsylvania Court dissected an insurance provision titled “Virus Coverage” and found for the insurer based on a strict reading of the policy. Plaintiffs are LLC’s that operate hearing aid stores throughout Pennsylvania and other states. Plaintiffs sought coverage under their Business Owner’s Insurance Policy issued by Defendant-Insurer for alleged losses they sustained because of COVID-19 and the recent Closure Orders, as they were characterized as “non-essential” businesses. Defendant-Insurer denied coverage, and Plaintiffs then sued for breach of contract and bad faith. The parties later filed cross-motions for summary judgment. Among other arguments, Plaintiffs focused on the Virus Coverage provision in their Policy, which stated that Defendant-Insurer “will pay for loss or damage by…virus.” In interpreting this coverage provision, the court first referenced a later provision in the policy, which defined such loss as direct physical loss or damage caused by the virus. Next, in response to the Plaintiffs’ argument that denying coverage for their claims would result in the policy only providing illusory coverage, the court, looking to the language of the policy, denied this argument and held that since the Virus Coverage also applied to fungi, rot, and bacteria, which could all easily create physical damage of the type described, the provision was not illusory. This case demonstrates that even as we continue to wade into the unknown waters of COVID-19 litigation, courts are relying on the plain language of the policy in analyzing whether a policy would provide coverage for damages related to COVID-19. Thanks to Abby Wilson for her contribution to this post. If you have any questions or comments, please contact Colleen Hayes. Previous Next Contact

News When is a House your Home? This Answer Will Cost Insurers in Pennsylvania October 23, 2020 < Back Share to: In Erie Ins. Exch. v. Montesano, the Montgomery County Court of Common Pleas heard an issue of first impression in deciding who was covered under “physically living” with another “on a regular basis” language in an auto insurance policy. Christiana Montesano was a 19-year-old girl who lived in her father’s Boyertown, Pennsylvania home. Her father and mother divorced when she was young and Christiana would typically spend approximately five weeks out of the year with her mother in Florida. After an incident between her and father/stepmother, Christiana boarded a flight to Florida and moved in with her mother for about one month. During that time, she changed her voter registration to Florida. Christiana the again packed up and settled in with her grandparents in Alabama for two months. Again, Christiana changed her driver’s license and voter registration to Alabama while also starting a seasonal job. The family then all agreed Christiana was to come back to Boyertown, her father’s residence. However, before Christiana could return to Boyertown, she was involved in a motor vehicle accident as a passenger with her sister driving. Christiana was injured and Christiana’s mother was killed. The Montesanos sought coverage under the auto insurance policy issued to Christiana’s father, Anthony and stepmother, Donna. The case of first impression required the Court to determine what “physically living” with another “on a regular basis” meant. Judge Thomas Rogers issued a declaratory judgement that the Erie Policy issued to Christiana’s father covered her, specifically holding “Christiana had physically lived in the Boyertown home for 19 years before hastily departing with a carryon bag and a few clothes, shoes, and toiletries and leaving behind all her worldly possessions.” Judge Rogers’ concluded that Christiana was a guest in the home of both her mother and grandparents and that her stays were sporadic and temporary. To add additional weight to this outcome, the Court considered the fact that, “Christiana was making her way from her grandmother’s home to her home in Boyertown at the time of the accident.” The impact of this case, of course, is that while an individual may not currently be “physically living” within the policyholder’s home at the time of loss, a court may look to numerous factors to determine what “on a regular basis” means, including a look at the totality of the facts. This decision certainly increases risk to auto insurance companies by increasing the amount of people that may be covered under the policy. More questions of fact will be litigated on coverage issues and it will also increase litigation costs. Who lives where is a question that appears to be changing daily. This decision will certainly involve judicial reviews over other factual scenarios such as the teen runaway, the college student, and even more prescient issues such as COVID-19 impact? This ruling’s application under the present climate opens the door for complicated factual analyses as to who “physically resides” where and what a “regular basis” is under the policy. Thanks to Ryan Geib for his contribution to this post. If you have any questions or comments, please contact Thomas Bracken. Previous Next Contact

News WCM Victorious in Second Department Appeal Arising Out of a Personal Injury Burn Case February 1, 2013 < Back Share to: New York, NY Counsel Cheryl Fuchs and Associate Gabriel Darwick successfully convinced the Second Department to reverse a Brooklyn trial court decision that denied our client’s motion for summary judgment in a case involving burns allegedly sustained in a bathtub. In Mauskopf v. 1528 Owners Corp., the decedent was found in his bathtub with burns to the left side of his body. The then 95-year old died a month and a half later. There were no witnesses to the accident, but the decedent’s son claimed his father told him he was burned in the bathtub. We represented G. Bauer, Inc., a boiler service company that, upon request, performed repair and maintenance work on the burner of the building and otherwise performed annual Department of Building inspections of the boiler. We moved for summary judgment on the basis that plaintiff could not identify the cause of the decedent ’s injuries without resorting to hearsay or speculation. We also argued, that even if the decedent was burned in the bathtub, G. Bauer did not have a contract with the building to perform routine or systematic maintenance of the boiler, and never performed work on, or inspected the mixing valve that controlled the hot water temperature. The trial court judge denied our motion on the basis that there were “issues of fact”. The alleged "issues of fact" were not identified in the court's order. On appeal, the Second Department reversed the trial court and granted our motion on the basis that G. Bauer owed no duty to the plaintiff, as there was no evidence that G. Bauer’s work involved inspection or maintenance of the mixing valve. Previous Next Contact

News Janitor Keeps Logs, Building Prevails (NY) September 12, 2019 < Back Share to: In Thomas v. Sere Hous Dev Fund Corp.,the Appellate Division, First Department addressed the duty of care owed by a building to a plaintiff who gets injured on their property. The accident involved an individual who alleged injuries when he slipped and fell on a wet substance on the interior stairs of the defendant’s building. The defendant testified as to its janitorial schedule during a customary day. The Supreme Court, Bronx County denied the defendant’s motion for summary judgment, which was unanimously reversed by the Appellate Division. The Appellate Court stated that the defendant was able to establish a reasonable cleaning routine, which precluded liability. As such, the Court held that since the plaintiff failed to raise a factual issue that such routine was manifestly unreasonable, that summary judgment should have been granted in favor of the defendant. This case is a great example of the importance for building owners to implement a reasonable and regular cleaning routine as it can preclude them from liability. As exhibited in this matter, a reasonable cleaning routine can allow a case to be dismissed, without having to go through a strenuous and costly trial. Thank you to Corey Morgenstern for his contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News US Supreme Court Issues Important Product Liability Decision. February 26, 2010 < Back Share to: When litigating a claim, if the parties reside in different states, the claim may be brought in federal court, as opposed to state court, under diversity of citizenship grounds. If an action is brought in state court, and diversity of citizenship exists, the parties may request that the case be removed from the state court to the federal court. The issue of diversity is important since, most plaintiffs prefer to sue in state court, where the "home town" advantages are much more real, and thus defendants often try to remove the case to federal court. In a unanimous ruling on Tuesday, February 23, 2010, the United States Supreme Court has determined that for the purposes of diversity of citizenship, a corporation will be deemed a resident of the state only where the company’s executives maintain their offices. The Court held that the “principal place of business” is located at the “corporate headquarters” or “nerve center” where the corporation’s officers “direct, control, and coordinate the corporation’s activities.” This is an important ruling because although a corporation could sell their products in all fifty states, that corporation cannot be considered a resident of any state its products are sold, except the state in which its corporate headquarters is located. If someone claims they bought a defective product in their home state, they can no longer “hometown” the corporation in a product liability suit by bringing their action in their home state court. If the litigant attempts to gain the hometown advantage by commencing the action in state court, the corporation will be able to swiftly remove the case to federal court on the basis of diversity of citizenship. Effectively, this ruling provides corporations with another strategic avenue to increase the likelihood of fair litigation, without the claimant obtaining the hometown advantage. This ruling may also change the structure of class action suits, where one representative member is chosen from the class for the purposes of determining diversity. If the class wants to litigate in state court, the only state court option will be that state where the corporation is headquartered, and the representative of the class will have reside in the same state as the corporation. Corporations selling products in many states should be prepared to ask for removal to federal court any time they are sued in state court, and should expect to see an increase in federal litigation as a result of this decision. If you would like more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Special thanks to Alison Weintraub for her contributions to this post. http://www.supremecourtus.gov/opinions/09pdf/08-1107.pdf Previous Next Contact

For 25 years, foreign and domestic insurers have looked to WCM to represent their interests in controversies involving fine art and specie. Our claims and defense work in this niche market is international in scope and has taken WCM lawyers to many parts of the globe–London, Paris, Antwerp, Rome, Dubai and Hong Kong. Our work embraces claim investigation and litigation relating to fraud, theft, physical damage, authenticity and recovery of stolen property. Our reputation for excellence and deep understanding of the issues that confront the Underwriters who insure the world’s valuables give our clients a distinct advantage in this highly competitive arena, and we are often called upon to conduct seminars on emerging trends and to give advice on policy wordings. WCM lawyers know this world and we achieve consistently superior outcomes for our clients. Fine Art and Specie For 25 years, foreign and domestic insurers have looked to WCM to represent their interests in controversies involving fine art and specie. Our claims and defense work in this niche market is international in scope and has taken WCM lawyers to many parts of the globe–London, Paris, Antwerp, Rome, Dubai and Hong Kong. Our work embraces claim investigation and litigation relating to fraud, theft, physical damage, authenticity and recovery of stolen property. Our reputation for excellence and deep understanding of the issues that confront the Underwriters who insure the world’s valuables give our clients a distinct advantage in this highly competitive arena, and we are often called upon to conduct seminars on emerging trends and to give advice on policy wordings. WCM lawyers know this world and we achieve consistently superior outcomes for our clients. Practice Lead Dennis M. Wade Partner +1 212 267 1900 dwade@wcmlaw.com Download Download

News Legal Malpractice Claims Barred Business Enterprise/Pursuits Exclusions January 17, 2013 < Back Share to: Professional liability policies are designed to cover errors and omissions committed by professional while providing or failing to provide services on behalf of their firms. Sounds simple enough. Problems arise when attorneys -or other professionals – act in different capacities, sometimes providing legal advice while at others offering business judgments or acting as “deal makers” for fledgling businesses. In Abrams, Fensterman, et al. v. Underwriters At Lloyd’s, London, a partner and his law firm found themselves in a real pickle over some business transactions that went bad. The underlying complaint alleged that the partner committed legal malpractice and engaged in fraudulent conduct when he induced the underlying plaintiffs to invest in a business formed to underwrite and sell insurance products. According to the disgruntled investors, when their seed money went missing, the law firm defendants falsely claimed that it was stolen by members of a royal family in the United Arab Emirates. Given the allegations of legal malpractice, the law firm defendants sought a defense and indemnification from their malpractice insurer. After some initial fact gathering, the insurer denied coverage citing two key policy exclusions commonly called the “business pursuits” and “business enterprise” exclusions. Closely aligned, these exclusions bar coverage for any claims arising out of or in connection with (1) a business “controlled, operated or managed by any insured” or (2) an insured’s activities as “a trustee, partner, officer, director or employee of a business " other than his law firm. Given the attorneys' alleged involvement in the formation, capitalization and management of the business venture, the court upheld the insurer's denial of coverage. Abrams, Fensterman reinforces that most professional liability policies seek to avoid assuming additional risk where an attorney “so intermingles his business relationships with his law practice” that the line between the two is blurred. When timely invoked, the courts will uphold those exclusions. If you have any questions or comments about this post, please email Paul at pclark@wcmlaw.com Disclaimer: This post is not intended to express any opinion on the merits of the allegations in the underlying lawsuit, which may or may not have any merit.   Previous Next Contact

News A Stairway May Constitute a Safety Device Under NY's Labor Law September 23, 2010 < Back Share to: In Ramirez v. Shoats, 2010 N.Y. Slip Op 06550, plaintiff was injured when a piece of corrugated metal covering an unfinished landing of a newly constructed stairway slipped under his feet, causing him to fall from the second floor to the basement level of a building under construction. Plaintiff sought relief under Labor Law § 240(1), which provides that the owner of the premises can be held liable for failure to provide adequate safety devices for workers. The issue at hand was whether a permanent, yet unfinished stairway can constitute a safety device under the statute. In a 3-2 split decision, the Court held that the stairway was the plaintiff’s sole means of access to and from his work area and thus was a safety device within the meaning of the statute. The dissenting opinion noted that temporary ladders were on site which provided alternative means of descent and, in any event, prior case law in New York has determined that “under no construction of the statute could a permanently installed stairway, used by the plaintiff as a place of passage, be deemed to be a scaffold, hoist, stay, ladder, sling, hanger, block, pulley, brace, iron or rope.” Ryan v. Moerse Diesel, Inc., 98 A.D. 615 (1983). Unfortunately it seems that New York courts, yet again, have extended the grasp of the Labor Law. http://www.nycourts.gov/reporter/3dseries/2010/2010_06550.htm Thanks to Chris O'Leary for his contribution to this post. If you would like more information about this case or WCM's Labor Law practice, please contact mbono@wcmlaw.com Previous Next Contact

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