News Pyrotechnic Promotion of Rum Burns Bacardi (NY) December 15, 2011 < Back Share to: Everyone knows that playing with fire is generally not a good idea. But recently, Bacardi found itself on the wrong side of a summary judgment decision, in part, because the Court found that it encouraged such behavior. In Scalfani v Brother Jimmy’s BBQ, Inc., plaintiff was injured during a “pyrotechnic” display when the bartender poured Bacardi “151” onto the bar and ignited it. Bacardi 151 has an alcohol content that exceeds 75%, and as such is often used because it is capable of being ignited. In fact, plaintiff alleged Bacardi promoted bartender flame tricks at a Las Vegas bartending convention. Unfortunately, during this incident at Brother Jimmy’s, the flame spread from the bar the bottle, and the remaining rum ignited and shot out, severely burning plaintiff. Plaintiff brought claims under theories of strict liability and negligence against Bacardi, alleging the bottle was defectively designed. In New York, a defectively designed product is one which, “at the time it leaves the seller's hands, is in a condition not reasonably contemplated by the ultimate consumer and is unreasonably dangerous for its intended use." If the "utility" of a product "does not outweigh the danger inherent in its introduction into the stream of commerce," then the product is defectively designed. In its defense, Bacardi claimed that the bottle included a flame arrester, and also warning labels. It also argued that the intended use of the product is to be consumed, not to ignite flames. But the Court held such arguments were not sufficient to award Bacardi summary judgment, particularly where it was alleged that Bacardi had actively promoted the very type of pyrotechnic displays that caused plaintiff’s injury. Thus, plaintiff’s claims survived for a jury to determine liability. Thanks to Joe Fusco for his contribution to this post. If you would like more information, please write to mbono@wcmlaw.com Previous Next Contact

News Employee Classification Revisited (NJ) March 27, 2019 < Back Share to: The New Jersey Workers’ Compensation Act requires employers to insure workers by providing employees with medical treatment, and temporary/permanent disability payments for job-related injuries or illnesses. In exchange for these non-fault related benefits, employees are subject to a workers' compensation bar, which precludes them from suing their employer in court for economic loss and “pain and suffering” damages caused by work related injuries. The workers' compensation bar extends to “special employees” of an employer. In the recent case of Carabello v. Jackson Dawson, the Appellate court clarified and confirmed the factors that must be considered when determining whether a plaintiff qualifies as a “special employee” under the Act. Specifically, the court must consider whether 1) the employee has made a contract of hire, express or implied, with the special employer; (2) the work being done by the employee is essentially that of the special employer; (3) the special employer has the right to control the details of the work; (4) the special employer pays the employee's wages; and (5) whether the special employer had the power to hire, discharge or recall the special employee. No single factor is dispositive, and not all factors must be met in order to establish a special employment relationship. In Carabello, the court found that a special employment relationship did not exist pursuant to the above-factors, since the record was unclear as to whether the defendant controlled and supervised the plaintiff; whether the plaintiff was paid by the defendants; and the defendant did not have the ability to fire or hire the plaintiff. Thanks to Heather Aquino for her contribution to this post. Previous Next Contact

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

News No Summary Judgment in PA Fire Loss Case Where Insured Lived In Apartment But Had Regular Contact With Insured Residence June 17, 2022 < Back Share to: In Isenberg v. State Farm Fire & Cas. Co., the plaintiff insured filed a claim under her homeowner’s insurance policy after a house that she had purchased was destroyed by a fire. Plaintiff had been performing renovations at the house and, at the time of the fire, was living in an apartment with her children. Believing that plaintiff was not using the home as a residence under those circumstances, the insurer rescinded the policy and disputed coverage. Plaintiff filed suit to enforce coverage and the insurer moved for summary judgment, arguing that the homeowner’s insurance policy required the property to be Plaintiff’s residence premises in order for coverage to apply and that a person could only have one “residence” under the policy. The plaintiff countered that while she was temporarily living in the apartment during the renovations, the home was her residence since she had almost daily contact with the house, used it for eating and sleeping, and stored her personal possessions there. The Western District of Pennsylvania denied the insurer’s motion, holding that the facts supported a finding that plaintiff resided in the home. The court explained that plaintiff exhibited a “measure of permanency” and “habitual repetition” by her almost-daily presence at the house to work on renovations, including being present at the house on the day of the fire. The court also noted that an individual’s “residence” is not dependent on the insured’s intentions when visiting the property, but instead is a question of fact showing whether or not the insured is actually present at the property regularly. The court also distinguished the cases relied upon by the insurer which involved insureds who were leaving or had left their properties and had no subsequent regular or “habitual” contact with the properties. The court also agreed that, under Pennsylvania law, an individual is not limited to one residence for the purposes of coverage. The Isenberg case shows that Pennsylvania courts will focus on the contacts with an insured residence, rather than the address where the insured physically lives, to determine whether there is homeowner’s insurance for a loss. Thank you to Mason Bailey for his contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News Merriam-Webster Comes To The Aid of Insurer in Coverage Dispute (NY) February 7, 2017 < Back Share to: Despite overwhelming case law to the opposite, policyholders consistently argue that undefined terms create ambiguities within insurance contracts because such terms are open to multiple reasonable interpretations. Courts that apply this line of reasoning often do so because they mistakenly believe that if the parties can demonstrate two reasonable interpretations for the same term, then there must be an ambiguity in the policy. This appears to have been the case in Hansard v Federal Ins. Co, where the lower court (Supreme, Kings County) concluded that an insurer could not refuse to defend or indemnify because the undefined term “employment-related” was open to multiple reasonable interpretations of the parties. The insureds' coverage spat with Federal Insurance Company arose out of an underlying complaint against Vannguard Urban Improvement Association, Inc. and Hansard—as chairman of Vannguard’s board of directors—by former employees alleging the non-profit corporation violated the Fair Labor Standards Act. These violations include misclassifying employees to avoid overtime pay, and by failing to pay employees according to their hours or on time. Hansard sought coverage from Federal under a Directors and Officers Liability Policy. The D&O policy issued to Vannguard covered Hansard as an insured against allegations of “wrongful acts” committed by Hansard as a director and/or officer of Vannguard. However, Federal disclaimed a duty to defend Hansard because the D&O policy excluded coverage for any “employment-related Wrongful Act,” and the underlying allegations fell within this exclusion. After commencing a DJ action, Hansard moved for declaratory relief, arguing that Federal was required to defend him, and that the policy exclusion for employment-related wrongful acts was ambiguous. Specifically, Hansard argued that “employment-related” was not defined in the policy, and the exclusion produces two reasonable interpretations as to whether it applies to the allegations of violations of the Fair Labor Standards Act. The trial court agreed with Hansard, and declared that Federal was required to defend its insured under the D&O policy against the FLSA suit. Federal then appealed to the Appellate Division, Second Department. In reversing the lower court, the Second Department reiterated that “an ambiguity does not arise from an undefined term in a policy merely because the parties dispute the meaning of that term.” The Appellate Division applied the plain and ordinary meaning of the policy language to first determine if there is any ambiguity. For the Court, the first logical place to look when analyzing the plain meaning of words is Merriam-Webster’s dictionary. After looking up the definitions for “employment” and “related,” the Court asked whether any facts or allegations in the complaint are “connected by reason of an established or discoverable relation to the act of employing or the state of being employed.” After reading the allegations, the Court concluded that “no reasonable average insured” would conclude the underlying FLSA allegations regarding payment of wages were not “employment-related.” Based on the facts, it seemed clear the policy’s exclusion applied to the underlying action. The fact the allegations were based on the Fair Labor Standards Act should have been a red-flag that Federal did not intend to insure against such risks under the D&O policy. Unfortunately, it took three years for the insurer to obtain this outcome. Thanks to Dan Beatty for his contribution to this post. If you have any questions about this post, please call or email Brian Gibbons at Brian Gibbons for additional information.   Previous Next Contact

News Failure to File the Note of Issue in Time Gets Case Dismissed in Nassau January 19, 2011 < Back Share to: In Fenner v. County of Nassau, the Supreme Court in Nassau County issued a certification order, directing the plaintiff to file his Note of Issue within 90 days. On the day of the deadline, the plaintiff had neither filed his Note of Issue nor moved to extend the time to file the Note of Issue. Accordingly, the Court dismissed the complaint but later, pursuant to the plaintiff's motion, restored the complaint to the pre-note calendar. The Second Department reversed that decision, finding that the plaintiff had failed to demonstrate a reasonable excuse for the dealy. The Court found that "law office failure" did not rise to the level of a reasonable excuse. Further, the Court found that the plaintiff had failed to establish the existence of a meritorious cause of action. Thanks to Georgia Stagias for her contribution to this post. http://www.nycourts.gov/reporter/3dseries/2011/2011_00178.htm Previous Next Contact

News Proof Items Destroyed Were "Key Evidence" Required For Spoliation Sanctions March 4, 2009 < Back Share to: The First Department’s recent decision in Kugel v. City of New York, et al., highlights the strict spoliation standard that must be met before the court will strike a party’s pleading. Namely, a pleading may be stricken due to the intentional destruction of key evidence. In Kugel, the named defendant, A. Jetta Towing, discarded documentary evidence, including tow truck invoices, because its president believed the corporation had been dissolved. A. Jetta, represented by this office, argued that the documentary evidence was not key evidence, as it was not the actual product, part, or component involved in the accident. Rather, it was argued that the key evidence was the motor vehicle that was allegedly involved in the accident. The First Department agreed and held that the documents were not key evidence warranting such a harsh sanction, thus reinstating the defendant’s answer. Thanks to Lora Gleicher for her contribution to this post. http://www.courts.state.ny.us/reporter/3dseries/2009/2009_01521.htm Previous Next Contact

News Latency Protects You From Negligence Until it is No Longer Latent July 12, 2024 < Back Share to: It is not surprising that a property owner is not responsible for a latent defect on their property that they would not discovery upon reasonable inspection. However, once they become aware of that defect and fail to fix it, THEN they risk liability. Damages caused by this latent defect which occurred before the landowner was made aware of it will not lead to liability against them, but hose after they become aware of it may. This was the primary issue in Huang v. Fort Greene Partnership Homes Condominium . Trista Huang was a property owner next to Fort Greene Partnership Homes Condominium, a collection of condominium units. On September 27, 20143, water began flowing into Huang's basement through the wall adjacent to Fort Greene's property. It was not until October 9, 2014, that the New York City Department of Environmental Protection (DEP) discovered that the cause of the water was a broken water service line in the Fort Greene's property. Although the DEP served Fort Greene with a three-day notice to repair the line, water continued flowing onto Plaintiff's property for another week, only ending on October 17, 2013, when the line was fully repaired. Defendants eventually moved for summary judgment to dismiss the complaint in its entirety. While this was initially denied by the trial court, the Appellate Division Second Department reversed most of this decision. The Appellate Division dismissed the negligence claim for damage prior to October 7, 2014, when Huang first emailed the Fort Greene about the water, because it found the broken water line was a latent problem, but they affirmed the denial as to negligence for after that day because Fort Greene now had notice of the problem, and the Court evidence they may have delayed repairing the damage. The main lesson to be learned from this case: Once a latent defect rears its ugly head, fix it. You are only shielded from liability due to latency until it's not latent anymore. Huang v. Fort Greene .pdf Download PDF • 905KB Previous Next Patrick J. Argento Patrick J. Argento Counsel +1 516 873 0011 pargento@wcmlaw.com Contact

News In Memory of Jeff Weston February 27, 2022 < Back Share to: We at WCM mourn the untimely passing of our long-time friend and London Market representative Jeff Weston on February 19, 2022. Jeff was felled by a heart attack during a skiing holiday in Finland with his dear wife Irina and their two lovely young girls, Sienna and Lucia. In the midst of pain and deep sorrow for a life tragically cut short, we give thanks for knowing Jeff and enjoying the great pleasure of his company. While our grief is hard felt, our aim here is to celebrate the life of a man who gave his all to his family and friends. We also pay tribute to a consummate insurance professional who, with a big grin, a welcoming handshake, a wooden leg and a deep knowledge of the insurance industry, made all around him feel better about themselves—and the undertaking of the moment. While we suffer the loss of our friend, we shall continued to be sustained by Jeff’s spirit—and his always sunny outlook on life’s journey even during our golfing misadventures. Our thoughts and prayers are with Jeff's wife and daughters. We will provide any further public details as they become available.   Previous Next Contact

News NJ Appellate Division Approves Auto Policy's Family Member Exclusion July 7, 2009 < Back Share to: In Cassini v. Soussou, the Appellate Division ruled that an injured driver could not recover from an excess policy purchased by the son of the defendant, due to an exclusion denying coverage when use of a family member owned vehicle other than the named insured's " covered auto" was involved. The Court found the exclusion to be unambiguous, and that excluding coverage for a separately insured family member's use of a noncovered auto was not uncommon, was legally sound and was supported by the policy. http://www.judiciary.state.nj.us/opinions/a5205-07.pdf Previous Next Contact

News Conditional Indemnification: Some Get it, Some Don't. November 12, 2010 < Back Share to: In Vovchik v. Metropolitan Development Partners, II, LLC, the plaintiff, an employee of High-Rise was injured when he fell into a 10-12 foot ditch while wheeling along an 80-pound concrete core-drilling machine at a construction site. Metropolitan was the owner, Gotham was the general contractor, and High-Rise was its subcontractor. In its contract with Gotham, High-Rise agreed to indemnify Metropolitan and Gotham. Accordingly, the court stated that Metropolitan and Gothem could be indemnified if they were not negligent. With respect to the Metropolitan, its only involvement was weekly progress updates. Accordingly, the court found that Metropolitan could not have been negligent, and granted it an award of conditional indemnification. Gotham, however, created a ramp at the site that plaintiff had to avoid while wheeling the machine. As such, a jury could find it liable for plaintiff's accident to some extent. Accordingly, the court denied its motion for conditional indemnification against High-Rise. http://www.law.com/jsp/nylj/CaseDecisionNY.jsp?id=1202474622127 Previous Next Contact

News NJ Court Dismisses Complaint against LoJack and Enforces Arbitration Clause February 8, 2017 < Back Share to: Plaintiff Tracey Perez disregarded a clear arbitration provision in a contract with defendant Leonard Automotive Enterprises, to his own eventual detriment. In Perez v. Leonard Automotive Enterprises, plaintiff purchased a vehicle with a LoJack Stolen Vehicle System from Toyota. As part of the purchase, plaintiff signed a Retail Installment Sales Contract which contained a privision, to wit, disputes between the parties would be resolved through arbitration. Sometime after the purchase, the vehicle was stolen and totaled after being involved in a fire. Plaintiff filed a complaint against defendant alleging that it failed to install and activate the LoJack Stolen Vehicle System. Defendant filed a motion to dismiss the complaint seeking to enforce the binding arbitration provision within the contract. Plaintiff opposed the motion with allegations that the arbitration provision was invalid. The Court determined that the arbitration provision was enforceable and will “pass muster when phrased in plain language that is understandable to the reasonable consumer.” The court pointed out that the arbitration provision was immediately above the signature block on the first page of the contract and would be impossible to miss. Additionally, the court found that the arbitration provision was prefaced with a large warning in bold, capital letters that stated: PLEASE REVIEW – IMPORTANT – AFFECTS YOUR LEGAL RIGHTS. The arbitration provision was not buried within an obscure document, but clearly and conspicuously set apart from the rest of the contract on its own page with specific directions right above the signature page. The court found that the consumer should have read the full provision carefully before signing the document. As such, the court dismissed plaintiff’s complaint with prejudice and granted defendant’s motion to compel arbitration. Thanks to Steve Kim for his contribution to this post. Please email Brian Gibbons with any questions.   Previous Next Contact