Wade Clark Mulcahy LLP

News Estate of Family Who Fled Nazi Germany Sues Met For Return of Picasso Allegedly Sold Under Duress November 18, 2016 < Back Share to: The estate of a family who fled Nazi Germany recently sued the Met Museum in the U.S. District Court, Southern District of New York, claiming that it was the rightful owner of a work by Pablo Picasso titled “The Actor.” According to the complaint in Zuckerman v. The Metropolitan Museum of Art, Paul Friedrich Leffmann, a successful and wealthy businessman from Cologne, Germany, purchased the work in 1912. After Germany’s Nazi regime implemented the Nuremberg Laws, the Leffmanns were forced to emigrate to Italy in 1937. There, according to the complaint, they faced the same kind of persecution they suffered in Germany. The plaintiffs further alleged that, due to the discriminatory and confiscatory laws in Italy, and the regulatory barriers associated with fleeing to countries such as Switzerland and Brazil, Lefmann, sold the Work under duress at a deep discount in 1938. After the Work changed hands at least two more times, the Work was donated to the Met in 1952. According to the complaint, the Met either knew and failed to disclose; or should have known that the Work had been owned by a Jewish refugee who only disposed the Work under duress because of Nazi and Fascist persecution. In support of this allegation, the plaintiff cited, among other things, State Department efforts to warn museums, libraries, art dealers, and others to use vigilance in identifying “cultural objects with provenances tainted by World War II.” The plaintiff also alleges that the Met published an inaccurate provenance for the Work, which indicated that Leffmann sold the Work much earlier than 1938. According to news reports on the case, the Met is expected to argue that Leffmann actually sold the Work at market value in 1938 and was therefore, not a sale under duress. The Met is also expected to argue that inaccuracies in the Work’s provenance were based on a former buyer’s inaccurate recollection rather than anything nefarious. It will be interesting to see how Zuckerman unfolds. There is no denying that the Nazi regime looted art and that many sales were made under duress. One question is whether a valuation analysis can shed light on the issue of whether this Work was sold at the then value or under duress. Watch this space. Thanks to Mike Gauvin for his contribution to this post. For more information, please email Dennis Wade at dwade@wcmlaw.com . Previous Next Contact

News Emergency Is Valid Defense to Collision May 16, 2011 < Back Share to: In Zapata v. Sutton, 2011 NY Slip Op 03962, defendant was sued after his car collided with another car that had crossed over double yellow lines and into his lane from the opposite direction. Defendant moved for summary judgment and the court found that defendant could not be held responsible for any part of the accident as he was “presented with an emergency situation not of his own making” and had almost no time to react. As such, summary judgment was granted. The appellate court affirmed, finding that plaintiff’s expert report was nothing more than pure speculation and unsubstantiated by any facts and thus failed to raise a triable issue of fact. http://www.courts.state.ny.us/reporter/3dseries/2011/2011_03962.htm Thanks to Alison Weintraub for her contribution to this post. Previous Next Contact

News March 22, 2020 Order Halts All Non-Essential NY Filings March 23, 2020 < Back Share to: Since the COVID-19 outbreak, Court directives have been changing by the day, and sometimes, by the hour. As of Friday, March 20, 2020, all Statutes of Limitations in New York were stayed, and parties were directed to stipulate out any deadlines impacted by COVID-19 -- including summary judgment deadlines. We posted about this on Friday. The message was clear -- with the current crises we're all dealing with, which is affecting our personal and professional lives, now is not the time to exploit missed deadlines, especially since different attorneys have different remote-working capabilities. Fortunately, WCM's remote capabilities have allowed for a fairly seamless transition. (Except that there are yelling children in the backgrounds of conference calls with greater frequency these days...). The newest update, just issued on Sunday, March 22, 2020, essentially places ALL filings on hold for the time being. Specifically, the Court is directing that no filings -- including E-filings -- will be accepted by County Clerks until further notice. The full order is attached here. Non-essential matters, which includes the bulk of civil litigation, is on hold, absent emergency circumstances. In speaking with friends, colleagues and adversaries in New York, and also, throughout the U.S. and also in London, the same word keeps coming up -- "surreal." The COVID-19 pandemic has completely changed our lives in the short-term. In the interim, we're still working remotely, abiding by Shelter in Place recommendations, and doing our best to maintain a sense of normalcy. In the words of NY Police Commissioner Dermot Shea, “It’s not going to be fun, it’s not going to be easy, but it’s also not going to be forever.” Stay safe, stay home, and we'll continue to circulate Court updates as we receive them. Previous Next Contact

News If It Looks Like A Disclaimer And Sounds Like A Disclaimer, It’s A Disclaimer September 1, 2011 < Back Share to: In the previous post, we addressed the case of QBE Insurance Co. v. Jinx-Proof, where the New York Supreme Court held that as assault and battery exclusion was applicable to deny coverage even when the underlying plaintiff alleged negligent acts of the insured, if the alleged action was rooted in intentional tortuous behavior. Another issue in that case was whether QBE properly disclaimed coverage to the insured. The insured argued that QBE never properly disclaimed coverage. QBE sent the insured two “reservation of rights” letters regarding the underlying suit. The court noted that, while reservation of rights letters may not be effective notices of disclaimer, there is no magic formula that separates a reservation of rights letter from a denial of coverage. The QBE letters clearly denied coverage for assault and battery claims, indicating that QBE “will not be defending or indemnifying you under the General Liability portion of the policy for the assault and battery allegations.” The was sufficient because QBE notified the insured “with a high degree of specificity the ground or grounds on which the disclaimer is based.” This decision supports the argument that it is the content of any communication that is important, not the title of the communication. While a specific denial of coverage letter is still preferred, as long as the carrier informs the insured “with a high degree of specificity the ground or grounds on which the disclaimer is based” the communication should be sufficient. If you would like more information regarding this post, please contact David Tavella at dtavella@wcmlaw.com . http://pdf.wcmlaw.com/pdf/jinx-proof.pdf Previous Next Contact

News Municipal Policy Denying Coverage for an Officer’s Criminal Acts Stands (PA) November 21, 2019 < Back Share to: The Superior Court of Pennsylvania recently affirmed a trial court’s decision surrounding a municipal insurance policy denying coverage to a police officer involved in a high-speed car chase. In Pennsylvania Integrated Risk Management Association v. Borough of Nesquehoning, et al, the insurance company moved for judgment on the pleadings claiming that its policy excludes coverage for criminal acts. The underlying incident involved a deadly car accident in which a police officer was acting within the scope of his employment for the Borough of Nesquehoning. At the time of the accident, the officer was traveling in excess of one hundred miles per hour in pursuit of another vehicle he observed committing a summary traffic offense. The officer’s vehicle eventually collided with the vehicle of a Plaintiff Husband and Wife passenger. The accident resulted in the unfortunate death of the Wife as well as multiple injuries to the Plaintiff Husband. As a result, the officer was charged criminally and pleaded guilty to homicide by vehicle, recklessly endangering another person, and other lesser traffic offenses. The Plaintiff Husband, both individually and as administrator of the estate of the Wife, sued the officer as well as the Borough of Nesquehoning. Prior to the accident, the Borough of Nesquehoning executed a “Legal Defense and Claim Payment Agreement” with Pennsylvania Integrated Risk Management Association (PIRMA). The agreement required PIRMA to defend and indemnity the Borough of Nesquehoning’s employees, who are acting within the scope of their employment, against lawsuits seeking damages unless an act is not covered by the agreement. Specifically, the agreement explicitly excludes criminal acts, which include any injury arising out of any criminal act or violation of a penal statute. The exclusion is not effective until it is judicially determined that an employee committed such a criminal act. PIRMA filed a declaratory judgment action against the Plaintiff Husband asserting that the underlying action is not covered under the agreement between PIRMA and the Borough of Nesquehoning. Therefore, PIRMA had no obligation to defend or indemnify the officer in the action. The trial court granted PIRMA’s Motion for Judgment on the Pleadings and the Plaintiff Husband proceeded to appeal the decision. In relying on the trial court’s opinion, the Superior Court of Pennsylvania affirmed the order of the trial court. Specifically, the appeal surrounding three issues included: (1) whether the subject insurance policy violates public policy set forth in the Pennsylvania Motor Vehicle Financial Responsibility Law; (2) whether the subject insurance policy’s blanket “criminal acts” exclusion is overly broad; and (3) whether the subject insurance policy is internally inconsistent since it provides coverage for conduct which constitutes criminal acts and later excludes coverage for criminal acts upon conviction. Addressing the first issue, the trial court determined that it would be against Pennsylvania public policy to require PIRMA to defend the officer for what has already been deemed criminal conduct by virtue of the officer’s guilty plea. The trial court relied on state precedent that had previously refused to require an insurer to defend an insured for his own intentional torts and/or criminal acts. Surrounding the second issue, the trial court was not persuaded by the officer’s argument that the term “criminal acts" was not defined in the policy and, thus, makes it unclear whether the exclusion includes guilty pleas or just guilty verdicts. The Court stated that the criminal acts exclusion is not overly broad because it limits the exclusion to only those instances where the criminal act results in the injury for which the actor has been sued. Additionally, the Court relied on the plain meaning of the language “until it has been judicially determined that the member did commit such criminal act or violation” such that the actor must have been convicted of the criminal act, which further limits the scope of the exclusion. As such, a plea of guilty and a verdict of guilty are both judicial determinations that a person has committed a crime. Ultimately, the Court determined the insurance policy is consistent, unambiguous, and neither illusory nor overly broad. Finally, the Court concluded that the policy was not internally inconsistent. Specifically, the Court determined that the criminal acts exclusion only applied when an insured has been convicted of a crime and that crime resulted in the injury for which a third party is seeking damages. Furthermore, there is policy coverage only if an allegation of a crime is listed under the injury definition, if an insured has been found not guilty, or if the crime was unrelated to the injury. Thanks to Zhanna Dubinsky for her contribution to this post. Please e-mail Vincent Terrasi with any inquiries or feedback. Previous Next Contact

News Insurer Has Heavy Burden on Proving Timeliness of Disclaimer in NY November 26, 2007 < Back Share to: New York is notoriously strict in requiring insurers to promptly disclaim coverage. In Lloyd's v. Gray, the insurer delayed 56 days in disclaiming on an apparently air tight exclusion based on bodily injury to any employee of an independent contractor engaged by the insured. The insurer received notice of the suit, engaged an investigator to interview the insured, and disclaimed coverage in a 56 day period. The Appellate Division, First Department held that whether the insurer disclaimed "as soon as is reasonable possible" was a fact question that precluded summary judgment in favor of the insurer. A life's lesson for insurers underwriting risks in New York: disclaim promptly and cite all potential grounds that preclude coverage. http://www.nycourts.gov/reporter/3dseries/2007/2007_08885.htm Previous Next Contact

News No Coverage For Vehicle Driven By Employee But Not Possessed By Employee (PA) March 26, 2021 < Back Share to: The Eastern District of Pennsylvania recently determined that an insurance company had no duty to contribute to a settlement over a car accident involving its insured’s employee while the employee was driving a noncompany vehicle. In Continental Casualty Company v. Pennsylvania National Mutual Casualty Insurance Company, the court determined that there was no coverage as the employee did not “borrow” the vehicle involved in the accident. The incident involved a vehicle collision between a motorcycle driver and a GMC Yukon driven by an employee of Shady Maple Smorgasboard, Inc. The GMC Yukon was owned by Sight & Sound Ministries Inc. Occasionally, including at the time of the accident, the Shady Maple employee drove to marketing events in the same vehicle as an employee from Sight & Sound, which often partnered with Shady Maple in various marketing efforts. At the time of the accident, the Shady Maple employee, with permission, was driving the GMC Yukon owned by Sight & Sound. In the aftermath of the accident, a lawsuit was commenced against the Shady Maple employee, Sight & Sound, and other entities in the Philadelphia County Court of Common Pleas. Later, the action was settled in private mediation for $10 million. Sight & Sound’s insurer, Continental Casualty Co., contributed $8.7 million to the settlement. Thereafter, Continental sought reimbursement from Pennsylvania National Mutual Casualty Insurance Co. which insured Shady Maple through a declaratory judgment action in the Eastern District of Pennsylvania. Ultimately, the court found that Penn National had no duty to reimburse Continental for the settlement because the Shady Maple employee never acquired “control, dominion or possession” over the GMC Yukon. As such, the court determined that Shady Maple could not have “borrowed” the GMC Yukon for business purposes. In reaching its decision, the court considered a number of factors including the fact that the GMC Yukon was already set to be used to attend a trade show and that the Sight & Sound employee could have told the Shady Maple employee to stop driving the vehicle at any point in time. Additionally, the court determined that the Shady Maple employee’s offer to drive was not based on any effort to exercise control of the vehicle for Shady Maple’s purposes. Furthermore, the court stated that the Shady Maple employee did not have express authority from Shady Maple, itself, to borrow the GMC Yukon. As such, the court concluded that, although a Shady Maple employee was behind the wheel, Sight & Sound remained in possession and control of the GMC Yukon at the time of the accident. As such, Continental’s declaratory judgment action was denied. Thanks to Zhanna Dubinsky for her contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News Defense Jury Overruled (NY) November 21, 2013 < Back Share to: In DiDonna v. Houck, the Second Department granted plaintiff’s motion to set aside a verdict that was contrary to the weight of the evidence. The plaintiff was struck while crossing the street in a crosswalk by a vehicle driven by the defendant. After trial, the jury found that the plaintiff was 60% at fault while the defendants were 40% at fault for the accident. The court found that the plaintiff began crossing the street on a “walk” signal and at all times stayed within the crosswalk. There was no evidence presented indicating otherwise. Pursuant to Vehicle and Traffic Law §1112, a pedestrian crossing a roadway during a steady walk signal must be given the right of way. If a pedestrian partially completes his or her crossing on the walk signal, that pedestrian may proceed on a flashing or steady “don’t walk” signal. Applying the law, the court could not find a fair interpretation of the evidence that was consistent with the jury’s findings. As such, the court held that the verdict was contrary to the weight of the evidence, quite a high standard to meet. The court set aside the verdict and granted a new trial on liability, unless the parties stipulated to a finding that the plaintiff was 5% at fault and the defendants were 95% at fault for the accident. The verdict is not all that surprising for a case tried in Westchester County, a defendant-friendly venue. However, the court’s decision is not as predictable. The court essentially made its own finding on liability, conditioning it with the threat of a new trial. As seen in this case, a favorable jury verdict, or a favorable venue, will not automatically help a party when the evidence presented does not discharge a party’s liability under the law. However, the defendant will get the benefit of that same jury deciding the damages issues in a bifurcated trial. Thanks to Anne Mulcahy for her contribution to this post. If you have any questions, please email Paul at pclark@wcmlaw.com Previous Next Contact

News Clear Policy Language Precludes Comcast from Additional Insured status (NJ) July 25, 2019 < Back Share to: The Appellate Division in New Jersey recently ruled that after a review of the facts, Comcast cannot be considered an additional insured under the policy it was seeking coverage, in Comcast v. Hanover-Insurance No. A-3245-17T4 (N.J. App. Ct. July 10, 2019). A lawsuit was filed by an individual claiming injuries resulting from tripping over a temporary above-ground cable that JNET Communications, LLC had installed while performing work as Comcast’s contractor. Plaintiff claimed negligence against both Comcast and JNET. Comcast tendered the defense and indemnification to Hanover Insurance Company under an insurance policy Hanover had issued to JNET. Deposition testimony suggested that a Comcast technician had placed or replaced the temporary cable after the JNET employee had first placed the cable on the property where plaintiff tripped and fell. Therefore, Hanover denied tender stating the policy provided that Comcast was an additional insured “only with respect to JNET’s work.” Comcast sued Hanover, seeking declaratory judgment that Hanover was obligated to defend and indemnify Comcast because Comcast was an additional insured under the policy. The appellate Court found that the Hanover policy was not ambiguous and that its plain language allowed additional insured coverage only with respect to JNET’s work and Comcast was not entitled to coverage as an additional insured for its own negligent act under the policy. Thanks to Jon Avolio for his contribution to this post. Please email Brian Gibbons with any questions.   Previous Next Contact

News Slip Slidin’ Away – Student’s Fracture Occurred too Quickly for School to React (NY) July 28, 2016 < Back Share to: In Elbadwi v Saugerties Cent. Sch. Dist, the Third Department recently discussed the standard of care that schools must exercise to prevent children from being injured by snow and ice. Plaintiff, a 10-year-old student attending Cahill Elementary, she slipped and fell on any icy surface in December 2012 on the school’s playground during recess. On the day of plaintiff’s injury, the school’s lunch monitor expressly told all students, including plaintiff, that they had to remain in a specific area of the blacktop during recess. According to the lunch monitor, the students were told that they could not walk onto the actual playground, as its rubber surface was icy and all the equipment was covered with snow. Less than a minute after recess began, the plaintiff claimed that, in order to avoid colliding with another classmate, she jumped onto a slide on the playground, slipped, and fractured her upper left arm. The infant plaintiff and her mother brought suit against the Cahill Elementary school district for 1) failing to maintain its property in a reasonably safe condition and 2), negligently supervising the infant plaintiff. After completing discovery, the defendant moved for summary judgment dismissing plaintiff’s complaint. The Supreme Court granted defendant’s motion as to the negligent supervision claim, but denied the portion of defendant’s motion seeking to dismiss the premises liability claim. According to the Supreme Court, there were questions of fact that precluded summary judgment regarding whether the defendant maintained the playground in a reasonably safe condition. The parties cross-appealed. The Appellate Division, Third Department, held that the complaint should have been dismissed in its entirety. In terms of plaintiff’s negligent supervision claim, the Court noted that while schools have a duty to adequately supervise children in their care, they are not “insurers of their students’ safety.” Instead, schools are charged with the same degree of care that would be exercised by a reasonably prudent parent in similar circumstances, and when a child’s accident occurs in such a short period of time that “even the most intense supervision could not have prevented it, lack of supervision is not the proximate [cause] of the injury,” and summary judgment is warranted. In the case at bar, the defendant’s expert, an experienced school administrator, argued that the ratio of students-to-monitors was sufficient to provide proper supervision and that the lunch monitor provided reasonable supervision to the plaintiff on the day in question. Even more important to the Court was the infant plaintiff’s own testimony. According to the infant plaintiff, as soon as the doors opened for recess, she and two friends ran toward the playground. When her friends turned to play kickball on the blacktop, she kept running toward the playground. Her friends called out her name, she turned, and when she “wasn’t paying attention” nearly collided with another classmate. To avoid the classmate, she swerved toward the playground equipment only to realize that she was about to trip over the slide. On instinct, she jumped up to avoid tripping, landed on the icy slide, slipped, and broke her arm. Because the plaintiff confirmed that “no amount of supervision” could have prevented her injury in such a short period, the Third Department affirmed the Supreme Court’s dismissal of plaintiff’s negligent supervision claim. With regards to plaintiff’s premises liability claim, the Third Department reversed the Supreme Court. According to the defendants’ expert, because the plaintiff was expressly instructed not to use the playground or playground equipment, the school had no duty to clear that area of snow. Further, it would have been “nearly impossible” to remove all the snow the rubberized playground surface. In response, the plaintiff failed to provide their own expert or submit any evidence sufficient to raise a question of fact as to the defendant’s obligations to remove snow from the playground. Instead, the plaintiff only provided a bare assertion that the school was required to remove snow and ice from the playground. The Court concluded that, even if plaintiff submitted sufficient evidence to raise a question of fact, the plaintiff’s injury were likely the result of her own inattentiveness, not the condition of the slide. Please note the importance of the appropriate experts in the defendants prevailing on both causes of action. Without them, this case would have found itself before a potentially sympathetic jury. Thanks to Evan King for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Multiple Additional Insured Endorsements Create Multiple Avenues to AI Status. February 23, 2018 < Back Share to: In Vargas v City of New York, the First Department was called to reconsider the Supreme Court’s decision that Liberty Insurance Underwriters had a duty to defend and indemnify the City of New York, NY Transit Authority and the MTA as additional insureds to a CGL policy issued to its insured, L&L, a subcontractor on a construction project. The underlying action involved personal injury claims arising out of a construction accident. The City Defendants hired E.E. Cruz as a general contractor. E.E Cruz subcontracted some of the work to L&L, Liberty’s named insured. The contract between L&L and E. E. Cruz required L&L to procure additional insured coverage for the City Defendants. The Liberty Policy included four separate Additional Insured Endorsements, providing some conflicting requirements. Endorsements 1-3 each defined an additional insured as a party “required by written contract signed by both parties prior to any occurrence in which coverage is sought.” While Endorsement 4 provided that any party “with whom you [L&L] have agreed to add as an additional insured by written contract” qualified for AI status. Liberty disclaimed coverage to the NYC Defendants in reliance upon the Endorsement 4’s requirement of an executed, written contract. But the Court affirmed the lower court’s ruling that this endorsement did not serve to vitiate the laxer requirements in Endorsements 1-3. The First Department also found that Liberty had waived its right to assert any reliance upon the Lead Exclusion because its disclaimer was untimely, noting that the insurer would not have even needed to undertake an investigation to assert the lead exclusion where the complaint made clear on its face that the injured party alleged he was exposed to harmful lead dust. The Vargas decision is a reminder and a warning that a later, more stringent endorsement will be entirely without teeth – and ultimately useless - if related endorsements remain a part of the Policy. Thanks to Vivian Turetsky for her contribution to this post.   Previous Next Contact

News NY's Plans for a Direct Competitor to Lloyd's Are Gaining Momentum. January 6, 2010 < Back Share to: We have previously commented on NY's plans to reopen a New York Insurance Exchange. It appears that the reopening of the exchange will be a priority of NYS Governor Patterson heading into an election year. In his State of the State Address earlier today http://www.ny.gov/governor/press/press_01061001.html, Governor Patterson announced that, assuming industry interest, his administration plans to create a New York Insurance Exchange and have it operational "as soon as possible." http://www.insurancejournal.com/news/national/2010/01/06/106431.htm Previous Next Contact