News Sidewalk Liability for Snow and Ice Continues to Evolve in NJ. May 29, 2012 < Back Share to: In the case of Gray v. Caldwell Wood Products, et al., New Jersey’s Appellate Division was faced with the question of whether a commercial owner of a vacant property has an obligation to remove snow and ice from the sidewalk. The trial court, relying on precedent, had ruled in the negative and dismissed the claim. The Appellate Division has now reinstated the claims. In reaching its decision, the Court focused on the fact that the property was not vacant land (with nothing on it), but rather a commercial property that simply lacked tenants (because it was for sale) when the accident occurred. Based on this fact, the Court was blunt – the property “had the capacity to generate income and, had, in fact, generated income in the recent past”. Thus, the Court reasoned it was proper to make the lot’s owners responsible for sidewalk accidents. In other words, if you make, can make, or have made money from your land in the past, you are responsible for the sidewalk. Harsh words for commercial property owners in New Jersey. For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News N.J. Court Requires Higher Standard of Care for Fire Safety System Inspections. July 6, 2012 < Back Share to: In Wayne and Irene Davis v. Brickman Landscaping, Ltd., et. al., the N.J. Appellate Division discussed the standard of care applicable to fire-safety system inspection professionals. Here, plaintiffs (mother, daughter and son) were staying at a hotel in a second-floor suite from which their only means of ingress and egress was a staircase with a storage closet underneath it. The storage closet did not have any fire sprinklers installed. A lit cigarette was thrown onto landscaping mulch located next to the building. Thereafter, a fire ignited, spread to the storage closet and up the staircase to the second floor where both children died. The plaintiffs filed suit against the companies that inspected the sprinkler and fire alarm system. The Trial Court noted that New Jersey adopted the National Fire Protection Association’ (“NFPA”) regulations in determining the responsibilities of fire-safety inspection professionals. While the original version of the NFPA required installation of sprinklers throughout a residential building, subsequent versions only required inspectors to conduct visual examinations for normal wear and tear with no obligation to find installation flaws. Testimony revealed that the defendants (3 separate inspection companies) had periodically inspected the fire safety systems, but all failed to note that the storage closet was void of sprinklers. Plaintiffs’ expert opined that the NFPA was the minimum standard of care for sprinkler system inspections, and that inspectors have a higher standard (reasonable care). Defendants argued that there was no evidence that they violated the NFPA and plaintiffs’ expert’s testimony that a “reasonable care standard” applied was simply an unsupported “net opinion”. The Trial Court entered summary judgment in favor of the defendants finding that they complied with the NFPA which was dispositive on the issue of negligence. Plaintiffs appealed the Trial Court’s decision arguing that simple compliance with NFPA is in fact not dispositive on the issue of negligence. The Appellate Division agreed with the plaintiffs finding that the N.J. Supreme Court has announced many times that compliance with a safety regulation is not always dispositive on the issue of negligence. The risk posed by a certain trade or industry by dangerous hazards requires use of the “reasonable care” standard. The Court noted that the appropriate standard is what a reasonable member of that particular industry or community would have done. Compliance with a regulation does not prevent a finding of negligence if a reasonable person would have taken additional precautions. The Appellate Division therefore reversed the trial court and remanded the case finding a genuine issue of material fact as to whether defendants exercised reasonable care despite their compliance with the NFPA. Special thanks to Andrew Marra for his contributions to this post. For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Plaintiff’s Now Occasionally Entitled To Recording IMEs In NJ May 13, 2022 < Back Share to: Recently, the Appellate Division dealt with three separate cases consolidated into one appeal on the issue of when a plaintiff’s attorney may have a third-party attend a plaintiff’s medical exam with a defense doctor, as well as whether it is permissible for a plaintiff’s attorney to audio and/or video record his client’s exam with a defense doctor. Difiore et. al. v. Pezic, et al. dealt with three plaintiffs against their respective defendants. The defendants scheduled neuropsychological and orthopedic evaluations of the three plaintiffs. Counsel for those plaintiffs insisted upon the presence of a third-party practitioner at the medical exam, as well as insisting that the exams be audio and/or video recorded. The law on this subject dating back roughly 20 years is that the plaintiff may be entitled to “unobstructive” audio recording of a psychiatric exam if the plaintiff is claiming emotional distress. In addition, case law allows a minor child to be accompanied by parents or other relatives during the child’s medical exam. Normally, trial judges in this state generally prohibit any recordings or the presence of third-parties at routine orthopedic exams. In a departure from this precedent, the Appellate Division vaguely held, in a published decision, that any disagreement over whether to permit third-party observation of any defense medical exam (including orthopedic exams of fully grown adults), are to be evaluated by trial judges on a case-by-case basis. Moreover, it is the plaintiff’s burden to show the court that third-party presence or recording, or both, is appropriate in a particular case. Video recordings are also now allowed, and any video taken will be allowed to be shown at trial. Third-party observers, however, are not allowed to interact with the plaintiff or otherwise interfere with the exam. However, the Court emphasized that the presence of a third party or recording the exam required “special conditions”. Perhaps the most egregious part of this decision is that it only applies to defense medical exams. Plaintiff attorneys have been and remain allowed to schedule medical exams of their clients without any notice to the defense, thus providing the defense no chance to audio record, video record or have a third-party attend the plaintiff’s exam scheduled by his attorneys. Moreover, the court expressly held that if the plaintiff’s expert is his treating physician, then there is a blanket prohibition on any of the above. Rules for me, but not for thee. We expect many contentious motions and appeals on this issue in the future. Thanks to Mike Noblett for his contribution to this article. Should you have any questions, please contact Matthew Care. Previous Next Contact

News Insurer Mailing Error Discloses Thousands of Social Security Numbers, Prompting Settlement with AG (NY) March 8, 2018 < Back Share to: The New York Attorney General recently announced a $575,000 settlement with EmblemHealth, one of the largest health plans in the United States, after a “mailing error” resulted in the accidental disclosure of more than 80,000 social security numbers. In October of 2016, EmblemHealth mailed over 80,000 policyholders, including approximately 55,000 New York residents, paper copies of their Medicare Prescription Drug Plan Evidence of Coverage. The mailing label affixed to each envelope included the policyholder’s Health Insurance Claim Number, which incorporated their social security number. According to the Attorney General’s Office, EmblemHealth’s actions violated many standards and procedures required by HIPAA. It also violated New York’s General Business Law § 399-ddd(2)(e), which prohibits printing an individual’s social security number “on a postcard or other mailer not requiring an envelope, or visible on the envelope or without the envelope having been opened.” As part of the negotiated settlement with the Attorney General’s office, EmblemHealth agreed to implement a Corrective Action Plan that included a thorough risk analysis of security risks associated with the mailing of policy documents, and submit a report of its findings to the Attorney General’s office within 180 days of the settlement. It also agreed to review and revise its policies and procedures based on the results of the assessment, and notify the Attorney General’s office of any action it takes. In addition, EmblemHealth pledged to make reasonable efforts to ensure that all relevant employees are adequately trained to avoid similar disclosures in future mailings, to report any known violations of EmblemHealth policies and procedures relating to the HIPAA Minimum Necessary Standard, and remediate all violations as soon as practicable. Lastly, for the next three years, EmblemHealth must report the loss or compromise of New York residents’ information to the Attorney General’s office, even in situations that would not otherwise trigger New York State reporting requirements. So, while this breach only costs EmblemHealth $575,000 to the AG's office, it will cost significantly more in terms of future compliance time and expense. EmblemHealth’s decision to settle, the amount of the settlement, and its agreement to be scrutinized by the Attorney General all speak volumes about the publicity risks associated with these kinds of privacy violations. First, the same subsection of the General Business Law discussed above limits judicial fines for violations arising from a single occurrence to $100,000 for the first offense. Fines for the second offense are also limited to $250,000. Second, the General Business Law provides would-be violators with an out: the provisions will not be “deemed . . . violated” if the entity demonstrates, by a preponderance of the evidence, that the violation was unintentional “and resulted from a bona fide error made notwithstanding . . . procedures reasonably adopted to avoid such error.” It is unclear whether any of the individual policyholders will be able to maintain direct actions against EmblemHealth, provided they can correlate damages to the breach. Thanks to Evan King for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Insurers Battle in DJ Action Stemming from Assault at NFL Game (CA) December 15, 2016 < Back Share to: We don't often report on California cases, but First Mercury Insurance Company v Great Divide Insurance Company presents an interesting insurance coverage dispute over defense costs and indemnity pertaining to a serious assault at a 49ers game. Specifically, the insurers are battling over the cost of defending the San Francisco 49ers against a suit brought by two men who were assaulted at a game, with First Mercury contending that Great Divide has flouted the California court’s previous duty to defend finding. In October 2014, San Francisco 49ers season-ticket holders Amish and Kiran Patel were at Levi’s Stadium for a game. The brothers went to the restroom, where one of them “nudged” the shoulder of the gentleman ahead of him to alert him to an available urinal, which resulted in the Patels being on the receiving end of a savage beating from the man and his friends. The Patels sued the team, the stadium, and the stadium security company, Elite, for negligently failing to screen people entering the stadium and failing to kick out people who were problematically drunk. The 49ers soon requested defense and indemnity from First Mercury, Elite's insurer, citing its status as an additional insured pursuant to the Elite service agreement. First Mercury accepted the request; however, it now seeks to share the costs with Great Divide, which insures the 49ers and Levi’s Stadium. First Mercury commenced a declaratory judgment action, and Great Divide filed a motion to dismiss. The U.S. District Court for the Northern District of California, San Jose Division denied Great Divide’s motion to dismiss, ruling that the underlying case over the assault might shift at least some liability away from First Mercury’s client, Elite Services, which handles security at the stadium, to the stadium and team, suggesting Great Divide should have to assist in the defense. This week, both insurers moved for summary judgment. First Mercury contends that Great Divide has continued to shirk its obligation to share in the cost of defending the brothers’ lawsuit, despite the District Court’s finding that the team and stadium might be held partially responsible for the incident, and that such a refusal to defend is bad faith. On the other hand, in its own motion for summary judgment, Great Divide pointed out that the District Court’s order denying dismissal was an interlocutory order, not a final judgment, thus First Mercury’s claim that it’s acting in bad faith must fail. At a glance, we presume the 49ers' primary argument against Elite's insurer is: "If Elite's responsibility as stadium security doesn't cover this type of assault, then what does it cover?" Alas, it appears that the 49ers uncertain "defense strategy" extends both on the field and off. (They are 1-12 on the season, fresh off a loss to the much maligned Jets.) Thanks to Hillary Ladov for her contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News NJ Courts Brace for Surge of Sandy Insurance Coverage Suits January 21, 2013 < Back Share to: Hurricane Sandy left a wake of destruction with uprooted homes and disrupted businesses. As home and business owners attempt to rebuild, many are learning that their insurance may not cover their losses. In turn, they are looking to lawyers to sort out their claims and potential suits for coverage against their insurers or malpractice against their insurance brokers. The Newark Star Ledger reported that these claims may hit the courts in waves with the first arriving three to six months post storm, or about now. Additional claims are expected as statutes of limitations run. Coverage litigation will parse out damages based upon exclusions in policies, e.g. claims for wind are often covered versus tidal surge damages which generally are not. Complicating matters, anti-concurrent clauses exclude coverage for damages caused by a combination of factors, some of which are excluded. Where insurance coverage does not exist, brokers will be the target. At issue will be whether they properly advised their clients regarding available insurance and whether they obtained the insurance requested. In either event, courts will be busy as the storm continues. For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com .   Previous Next Contact

News Insurance Limits Must be Exhausted by Payment (NY) August 23, 2013 < Back Share to: Anyone who grew up in the 1980's is familiar with the "Commodore 64" home computer. The company filed for bankruptcy in 1994, but its directors were recently involved in an interesting case involving excess insurance coverage issues. In Ali v. Federal Insurance Company, the directors sought coverage under their multi-tier insurance policy. The directors were insured by a “tower” system – namely, each excess policy would be triggered when the limits of the policy below it had reached. The policies contained an “exhaustion” clause which provided that the excess insurance would not apply until all of the underlying limits had been exhausted, “solely as a result of payment of losses thereunder.” Two of the excess carriers in the tower had become insolvent, including one which had issued an excess policy that contained limits of between $10 million and $15 million. Because the $10 million excess carrier had gone under, the insureds sought coverage under the Federal excess policy that provided coverage in excess of $15 million. The insureds argued that because they were not able to obtain coverage for the amount of liability of $10-15 million, the Federal policy dropped down to cover that amount of liability. The Second Circuit disagreed and relied on the specific policy language that provided coverage where the underlying policies were exhausted as a result of “payment” of the loss, not merely liability above that amount. In reaching this decision, the Second Circuit also made two interesting points. First, this is limited to the context of third party liability policies, and did not apply to the first party context. For example, an insured seeking coverage for its own property does not have to force a primary carrier to pay him before reaching an agreement with the excess carrier. Second, the Court noted that if it allowed the upper limits to be exhausted by liability alone, the insured could artificially inflate the structure of any settlement in order to tap into these higher limits, and that the requirement of actual payment afforded the insures some protection against the threat. Thanks to Mendel Simon for his contribution to this post. If you would like more information, please write to Mike Bono. Previous Next Contact

News California Insureds File Suit Seeking Coverage For Covid-19 Claims April 17, 2020 < Back Share to: A prominent California law firm, along with two commercial property owners and a restaurant have sued their insurer in Los Angeles County Superior Court seeking coverage for losses related to the coronavirus pandemic. The four suits, filed on April 9 and April 10, 2020, seek declarations that Travelers Indemnity Co. of Connecticut is obligated to provide coverage under the policyholders’ “all-risk” policies. According to the plaintiffs, Travelers has accepted their premium payments with no intention of covering loss and shutdown from a virus pandemic under the civil-authority coverage section of the Travelers policies. Los Angeles Mayor Eric Garcetti ordered all nonessential businesses in the city to close on March 15. The order followed a similar statewide order from California Governor Gavin Newsome issued on the same day. The plaintiffs also name the Los Angeles Mayor as a defendant in the suits. According to the plaintiffs’ complaints, Mayor Garcetti’s order specifically referenced “dire risks of exposure with the contraction of Covid-19 and evidence of physical damage to property.” All four plaintiffs have used this language to couch their argument for coverage under the business income and extra expense coverage parts for closures by order of civil authority. In addition, the civil authority coverage parts of the policies here include “direct physical loss” and indirect damage. Notably, it appears, the plaintiffs will argue that the global scientific community’s consensus is that the coronavirus is a cause of “real physical loss and damage.” According to the complaints, Covid-19 has physically affected the plaintiffs’ property since the virus can remain on surfaces or objects for up to 28 days. Each lawsuit seeks a declaratory judgment that Mayor Garcetti’s order triggers coverage under the policies. Though in their early stages, these suits offer a glimpse into what insureds will likely argue in order to trigger coverage under their policies. The particularly noteworthy argument is making use of both the shutdown civil authority order, as well as the scientific consensus on the ability of the virus to remain on surfaces and objects for a substantial period of time. We’ll continue to keep you posted on this emerging area of law. Thanks to Joseph Anzalone for his contribution to this post. If you have any questions or comments, please contact Colleen Hayes. Previous Next Contact

News NJ Court Affirms PIP Insurer's Right To Settle Even If Policy Limits Are Exhausted For Other Claims December 21, 2009 < Back Share to: Marilus Rodriquez suffered personal injuries in a motor vehicle accident with medical bills for treatment totaling $623,677. The Allstate policy providing PIP benefits to her had $250,000 per accident limits. After Allstate paid $250,000, another unpaid provider, Endo Surgical sought additional benefits over the Allstate policy limits. It argued that while its demand for arbitration was pending, Allstate had a duty to notify it that the insured's PIP benefits were going to be exhausted. The appellate division rejected this argument and affirmed , finding that, absent bad faith, an insurer may settle with one claimant, notwithstanding that the settlement may exhaust the policy limits available for other claimants. http://www.judiciary.state.nj.us/opinions/a2146-08.pdf Previous Next Contact

News Guilty Plea Not Necessarily Proof of Liability For Civil Suit (NY) August 9, 2012 < Back Share to: In Maiello v. Kirchner, the Second Department was asked to determine whether a defendant was collaterally estopped from contesting liability in a civil matter where he entered a conditional plea of guilty to an assault charge, but that plea was later vacated. On the day of the incident, the defendant went to the plaintiff’s house to speak with his estranged wife, who happened to be dating the plaintiff at the time. A confrontation ensued when the defendant tried to get in the door, so the plaintiff picked the defendant up and placed him on the front of the porch, where the defendant lost his balance. The defendant then reached out and grabbed the plaintiff, pulling him off the porch and causing substantial injuries. The defendant subsequently pled guilty to assault in the third degree on the condition that upon completion of probation, the plea would be vacated and the charge would be amended to harassment in the second degree. The defendant completed the probation, the assault charge was vacated, and the charge was amended. In his civil action against the defendant, the plaintiff moved for summary judgment arguing that based on his guilty plea to assault, the defendant was collaterally estopped from contesting liability. A party may invoke the doctrine of collateral estoppel to prevent a party from contesting liability where the criminal conviction is based upon facts identical to those in issue in a civil action. The party seeking benefit of collateral estoppel bears the burden of proving that the identical issue was necessarily decided in the prior action, and is decisive in the present action. The party against whom preclusion is sought bears the burden of demonstrating the absence of a full and fair opportunity to contest the prior determination. The Supreme Court found that the defendant’s plea estopped him from contesting liability, but the Second Department disagreed. It found that although the defendant’s plea involved the identical issue in the civil proceeding, liability was not decided because a conditional plea was not a final judgment. Rather, when a defendant enters a conditional plea, sentencing is adjourned. The court further found that the defendant’s plea to harassment did not estop him from contesting liability because he did not have a full and fair opportunity to contest liability. It reasoned that the defendant did not have the same incentive to contest the charge against him because harassment was a nonviolent violation. Thanks to Gabriel Darwick for his contribution. For more information, contact Denise Ricci at dricci@wcmlaw.com   Previous Next Contact

News This New Year, Perhaps Tell Your Personal Trainer to "Butt Out" January 4, 2013 < Back Share to: Many of us have already begun the annual pilgrimage back into crowded gyms with the intent to follow through on New Year's resolutions. But if you're looking for a personal trainer to help guide you on your path to personal fulfillment, it may be a good idea to make sure he or she does not instead set you on a path to pain. In a split decision, the Appellate Division, Third Department, has ruled that where a gym patron suffered a back injury while performing a squat exercise pursuant to a personal trainer's written instructions, a jury should generally decide whether the patron assumed the risk of injury. Under the well-settled doctrine of assumption risk, a person who voluntarily participates in a recreational activity is deemed to have assumed the inherent risks of that activity. Plaintiff Dianne A. Layden took part in a personal training session at a fitness center with a personal trainer, defendant Angela Plante. Prior to her training session, plaintiff advised Ms. Plante that she had a history of back problems. Ms. Plante supervised plaintiff's training session, and provided her with written instructions on how to repeat the exercises independently. Plaintiff returned to the gym days later, and attempted to perform a weight-lift move known as a "Smith squat," as described in the written instructions. While performing the maneuver, plaintiff experienced back pain, which thereafter required surgery to correct two herniated discs. Plaintiff commenced a lawsuit against the trainer, and the owner of the fitness center. The defendants each moved for summary judgment based on the doctrine of assumption of risk. The Third Department reversed the trial court's decision granting the defendants summary judgment, and ruled that a jury should decide whether plaintiff assumed the risk of injury when attempting to perform the squat exercise. The court noted that the application of the assumption of risk doctrine is typically a question of fact best resolved by a jury. Specifically, the majority found that the plaintiff raised a question of fact as to whether the trainer's potentially misleading directions "unreasonably heightened the risks to which [plaintiff] was exposed." Plaintiff's experts testified that the trainer improperly instructed plaintiff to "stick her butt out" while performing the squats. Instead, plaintiff's experts averred that a person should maintain a straight back when performing Smith squats. So this New Year, instead of assuming that your personal trainer will prevent you from getting injured, you may wish to simply tell him or her to "butt out" of your workout. Layden v. Plante, 2012 WL 6698873, 2 (3d Dept. 2012). http://www.nycourts.gov/reporter/3dseries/2012/2012_09126.htm Many thanks to Steve Kaye, Jr. who assisted with this post.   Previous Next Contact

News Whether Belief In Non-Liability Is Reasonable Question For Jury June 11, 2009 < Back Share to: In Preferred Mutual Insurance Co. v. New York Fire-Shield, the Third Department analyzed the timeliness of notice provided by an insured. First, the court recognized that timely notice was still required under general liability and excess policies, and that notice made two years after the insured was aware of a possible claim would ordinarily be late. However, the court held that a reasonable belief in non-liability would excuse untimely notice, and it was for a jury to determine whether the insured’s belief was reasonable. http://decisions.courts.state.ny.us/ad3/Decisions/2009/505847.pdf Previous Next Contact