News Crocs, children and escalators -- a marriage made in liability heaven. October 1, 2007 < Back Share to: Apparently, children who wear soft-soled sandals (like Crocs) on escalators run the risk of significant toe injuries. http://www.insurancejournal.com/news/national/2007/09/24/83639.htm Previous Next Contact

News Landlord's Duty Arises From Ability And Opportunity To Control Conduct April 28, 2012 < Back Share to: In Banner vs. New York City Housing Authority, the infant plaintiff was injured when, while sitting on his bicycle in the courtyard at the rear of the defendant's building, he was hit in the eye by a bottle that was allegedly thrown from the roof of the building. The plaintiffs allege that NYCHA was negligent in failing to secure the roof and in allowing persons to use it in a dangerous and defective manner. The court noted that "a landowner has a duty to exercise reasonable care in maintaining his own property in a reasonably safe condition under the circumstances." This duty includes an obligation "to take minimal precautions to protect tenants from foreseeable harm, including foreseeable criminal conduct by a third person. However, this duty only arises when there is an ability and opportunity to control such conduct, and an awareness of the need to do so." The defendant submitted affidavits from its supervisor of caretakers and a professional engineer establishing that the defendant was required to keep the door to the roof unlocked for fire safety purposes. The testimony of the infant plaintiff established that neither he nor his friends actually saw a person on the roof throw a bottle, and that the alleged perpetrator was unknown, making it possible that the perpetrator was a resident of the building who would have had access to the roof despite any amount of security provided. The plaintiffs failed to raise a triable issue of fact that the defendants had the ability and opportunity to control the conduct through the exercise of reasonable measures, and that the failure to have done so was a proximate cause of the injuries alleged. As such, summary judgment was granted to the defendant. Thanks to Sandy Debbas for her contribution to this post. http://www.courts.state.ny.us/reporter/3dseries/2012/2012_03269.htm Previous Next Contact

News And Now Mold... November 10, 2012 < Back Share to: Things have been pretty bad of late in New York, with Sandy and then snow. While the problems continue, a new threat emerges -- mold -- http://m.nypost.com/p/news/local/manhattan/merchants_battling_growing_mold_C9YfFCRUBZ6CTXHqFOSRHO New Yorkers are going to find out in a hurry that most insurance policies don't provide mold coverage. For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News One Method of Defense to Claims of Bad Faith: 12(b)(6) Motions (PA) December 21, 2018 < Back Share to: On September 11, 2016, Anita Das, a newly enrolled student at the University of Pennsylvania who had only recently moved into a new temporary apartment for the school year, was riding her bicycle in Philadelphia when she was struck by another motorist on the road. Unfortunately, she suffered catastrophic injuries. Although Ms. Das settled with the driver, the settlement was insufficient to cover the total loss she suffered in the accident. Accordingly, Ms. Das turned to her parents’ automobile insurance policy, which contained underinsured motorist coverage and benefits for “resident relatives.” After disclaiming UIM coverage to Ms. Das, Amica Mutual Insurance Company (“Amica”) commenced a Declaratory Judgment Action against Ms. Das and her parents (“Das”) in the United States District Court for the Eastern District of Pennsylvania. Subsequently, Das filed an answer, which included counterclaims against Amica for three causes of action: (1) Ms. Das is entitled to UIM benefits as an insured “resident relative” under the Amica insurance policy; (2) breach of contract; and (3) Amica withheld benefits under the Amica insurance policy in bad faith. Das also sough relief for punitive damages pursuant to Pennsylvania’s bad faith statute, 42 Pa. C.S. § 8371. In response, Amica filed a motion to dismiss the bad faith claim for failure to allege sufficient factual allegations and the damages claim for failure to state a claim upon which relief can be granted. Ultimately, for reasons addressed below, the Court granted Amica’s motion to dismiss for failure to state a claim and ordered Das to file a second amended counterclaim for bad faith and punitive damages (and held that if Das elected not to proceed, such claims would be dismissed with prejudice). To support its decision, the Court in Amita Mut. Ins. Co.v. Anita Das, et al., applied long-standing principles of federal civil procedure in conjunction with the elements under Pennsylvania’s bad faith statute, which entitles insureds to recover punitive damages, interest, attorney’s fees, and court costs if the insurer is found to act in bad faith when investigating a claim. In doing so, the Court determined that Das failed to allege any specific facts meeting the threshold to overcome a motion to dismiss. First, the Court noted that Das simply recited the elements of a bad faith claim, instead of asserting “fact specific” allegations regarding Amica’s conduct in handling and evaluating Ms. Das’ claims for UIM benefits. In this regard, Das’ failure to assert any factual averments relating to howAmica lacked a reasonable basis in its interpretation, administration, investigation, or delay of UIM benefits to Ms. Das or describing “who, what, where, when and how the alleged bad faith conduct occurred” was detrimental to Das defeating Amica’s motion. Second, the Court emphasized that, since an insurer’s delay in settling a claim is a relevant factor in determining whether bad faith occurred, Das failure to detail any dates was also harmful. This decision exposes a significant barrier for bringing bad faith claims in federal court under Pennsylvania substantive law. It also illuminates a mechanism for insurers to combat such claims early in litigation. Yet (and possibly most significant) it reminds us of the detail required when asserting claims, crossclaims, and counterclaims in federal court. Thanks to Lauren Berenbaum for her contribution to this post. Please email Vito A. Pinto with any questions. Previous Next Contact

News Unintentional Destruction of Security Footage is No Excuse (NY) November 21, 2017 < Back Share to: In personal injury cases the existence of security footage of the incident itself is rare, often due to the length of time between an accident and the commencement of a lawsuit. In many instances, especially where a defendant may not even know an accident occurred, the footage is erased within days or hours of the accident and irretrievable at a later date. Normally, that would not result in a finding of spoliation. However, where a party did maintain the evidence initially, and it was later destroyed, the outcome may not be so favorable. In Eksarko v. Associated, 2017 Slip Op 07975 (2d Dept. 2017), plaintiff alleged that she slipped and fell on a grape that had fallen onto the floor of the defendant supermarket. The supermarket, having been notified by plaintiff at the time of the accident that she was injured, pulled and saved the footage of the accident caught on the store’s security video system. Shortly after commencement of the lawsuit, the store was undergoing renovations when the computer that was storing the footage was destroyed and could not be retrieved. This was conveyed to plaintiff through counsel and through testimony of the Store Manager. When the defendant moved for summary judgment plaintiff cross-moved seeking sanctions for the defendants alleged spoliation of evidence due to the destruction of the video footage. The Appellate Division overturned the lower Court’s decision and denied the defendants' motion for summary judgment and granted plaintiff’s cross-motion for sanctions against the defendant. The Court found that even where evidence was destroyed negligently, versus intentionally, if a party can show that the evidence was relevant to their claim or defense the Court can impose sanctions against the party that failed to preserve the evidence. The Appellate Division found that plaintiff established that the footage was relevant to her claims and to defeating the defendant’s motion on notice and as such sanctions against the defendant were warranted. Due to the fact that plaintiff had other evidence to establish her claim and that the spoliation was not intentional, but negligent, the Court determined that it would not strike the defendants Answer, but rather would direct an adverse inference charge at trial related to the destroyed footage. The message is clear -- if you have notice of a claim and of the existence of footage, save that footage! And as attorneys and claim professionals, we need to remind insured clients of their duties to preserve such footage. Thanks to Dana Purcaro for her contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Limited Business Interruption Coverage in Superstorm Sandy Litigation May 19, 2017 < Back Share to: In a recent New Jersey decision regarding business interruption coverage, the Appellate Division held that plaintiff’s insurance policy only covered damage that occurred on the plaintiff’s premises, and that coverage was limited by a coverage extension endorsement. In Schultz Furriers. Inc. v. Travelers Casualty Ins. Co. of America, plaintiff operated a business selling luxury outerwear and fur, and provided garment cleaning, repair, and storage services. Schultz procured a commercial liability policy from Travelers with an October 31, 2011 to October 31, 2012 policy period. In October 2012, during Superstorm Sandy, electrical transformers were knocked down, disrupting the power supply and forcing Schultz to close its business from October 29, 2012 through November 5, 2012. Schultz filed a business interruption insurance claim and Travelers offered $2,500 while relying on the policy’s “Power Pac Endorsement,” and disclaimed coverage as to any additional loss. Schultz, seeking coverage for more than $2,500, filed a lawsuit against Travelers. The Court held that Travelers would have been required to cover actual loss of business income caused by the direct physical loss of or damage to the property at Schultz’s premises pursuant to the Business Income and Extra Expense section of the Travelers policy. However, Schultz alleged that the business loss was a result of the damaged electrical transformers offsite, as opposed to direct damage to Schultz’s premises. Furthermore, the Travelers policy contained an exclusion barring coverage for loss caused directly or indirectly by the “failure or fluctuation of power or other utility service … if the cause of the failure or fluctuation occurs away from the described premises.” The policy’s Equipment Breakdown Coverage Extension did not provide coverage for the loss, as the equipment breakdown occurred away from the premises and the extension excluded coverage for damage resulting from a windstorm. Additionally, the Court held that Travelers was correct in capping coverage for the loss at $2,500 pursuant to the policy’s Power Pac Endorsement, which provided a coverage extension for the loss of business income caused by the interruption of service to Schultz’s premises. This endorsement provided that the interruption must have resulted from direct physical loss or damage to, among other things, power supply services “not on the described premises.” The coverage extension under the Power Pac Endorsement was capped at $2,500 per occurrence. The Court found that the Power Pac Endorsement allowed Schultz’s claim while capping the amount of coverage, and that Travelers had satisfied its obligation to Schultz by paying that amount for the business interruption due to power outage. While Superstorm Sandy occurred over four and a half years ago, this case serves as a reminder that the resulting insurance litigation remains ongoing and provides useful instruction for carriers looking to fully satisfy their obligations towards their insureds while minimizing exposure by including similar endorsements and limitations in their policies with respect to business interruption coverage. Thanks to Rebecca Rose for her contribution to this post.       Previous Next Contact

News Eastern District of Pennsylvania Finds But-For Causation to be Key in Determining Additional Insured Coverage (PA) February 20, 2020 < Back Share to: In Republic Franklin Square Insurance Company v. Bethren Mutual Insurance Company, Republic Franklin brought a declaratory judgment and equitable subrogation action against Brethren Mutual seeking reimbursement of $175,000 it paid on behalf of its insured. By way of brief background, Paul Lamb owned a shopping center made up of various business entities. Lamb was insured under a Republic Franklin policy. Lambed leased out part of his property to Shree Ram Enterprises LLC (“SRE”), which operated a gas station at the property. SRE was insured under a Brethren Mutual policy. The underlying plaintiff brought suit against Lamb and SRE after she slipped and fell in the parking lot after leaving SRE’s gas station. The underlying action ended up settling, whereby Republic Franklin payed $175,000 on behalf of its insured and Brethren Mutual paid $35,000 on behalf of its insured. Thereafter, Republic Franklin filed a declaratory judgment action arguing that it was entitled to additional insured coverage from Brethren Mutual. Both parties filed cross-motions for summary judgment. Both parties agreed that the Brethren Mutual policy provided coverage for “bodily injury” arising out of the “ownership, maintenance or use” of the leased land and that it was primary coverage for the underlying claim. However, the issue before the Court was whether the underlying plaintiff’s fall arose out of “maintenance or use” of the leased property. Brethren Mutual argued that there was no additional insured coverage as the underlying plaintiff fell in the parking lot, which was outside the scope of the lease agreement. Republic Franklin argued that there was additional insured coverage as the underlying plaintiff was injured as a result of patronizing SRE’s gas station. In determining whether the Brethren Mutual policy afforded additional insured coverage, the Court focused its analysis on “but-for” causation. The Court concluded that but for SRE’s “maintenance or use”, the underlying plaintiff would not have fallen and sustained injuries, given that she was injured as a result of patronizing SRE’s gas station. As such, the Court granted Republic Franklin’s Motion for summary judgment. This case demonstrates how establishing but-for causation is essential in bringing a subrogation action for additional insured coverage where the policy affords coverage for ownership, maintenance or use of a property. Thanks to Rachel Thompson for her contribution to this post. Please email Colleen E. Hayes with any questions. Previous Next Contact

News If You Win, Leave the Building May 14, 2008 < Back Share to: Penca v. Jeffrey Management recently went to trial in New York County. The jury found that the defendant was liable for the plaintiff's injuries but then awarded zero damages, even though the injuries were thoroughly documented. After the verdict, the plaintiff's lawyer wanted to go into the jury room to talk to the jury and the defendant's lawyer agreed to accompany him. Three jurors left without speaking to the lawyers but three others agreed to talk. They said that they awarded no money because they thought the plaintiff's employer (who was not a party to the lawsuit) was the party really at fault and that the defendants in the case should not be made to pay damages. When the judge got wind of these comments, he called the three jurors into the courtroom, polled them on the record, confirmed the inapproriate reasoning behind their verdict, and ordered a new trial. Lesson for Counsel: When you win, pack your things and leave the building. While it is possible the same thing would have happened here, the jurors might not have been so open with just one of the lawyers in the room. Nothing good can come from talking to the jury after they give you everything they have to give. Previous Next Contact

News Out of Possession Landlord Liable for Trip and Fall Based on Language in Management Agreement (NY) December 24, 2009 < Back Share to: In Stevens v. Lincoln Center, the plaintiff tripped and fell in a restaurant located in the owner's premises. Although the restaurant was not open for business at the time of the accident, it was located in the lobby of the building and had openings on each side, allowing visitors to walk through the restaurant to get from one point in the lobby to another. The plaintiff got her foot caught on the leg of chair. The plaintiff claimed that that furniture was randomly spread out in the room and chairs were piled up in the allegedly "darkish" room. The owner entered into an agreement with the co-defendant to manage the restaurant and provide food and beverage service. While the agreement obligated the management company to maintain the premises in a safe and orderly condition, the owner retained the right to inspect the premises to ensure that it was properly maintained and to clean the premises if the owner was unsatisfied with the level of cleanliness. Moreover, the management company was obligated to remove all table and chairs from the restaurant in order for the owner to perform heavy duty cleaning and scrubbing of the restaurant. The owner's employees cleaned the floor of the restaurant every night. Further, both the owner and the management company had control over the lighting in the restaurant. Citing the agreement and deposition testimony, the court denied the owner's motion for summary judgment because, even if the owner could be deemed an out-of-possession landlord, it was still liable for negligence based on the contractual obligation requiring the owner to make repairs and maintain the premises. The owner still retained a certain degree of control over the premises and could be held liable for the plaintiff's accident. http://www.courts.state.ny.us/reporter/pdfs/2009/2009_32903.pdf Thanks to Maju Varghese for his contribution to this post. Previous Next Contact

News Insurance Coverage: Two Impacts, One Accident June 25, 2021 < Back Share to: In Belt v. USAA, Ms. Belt was sideswiped by a hit & run driver, spun out of control and, while doing so, was then struck a second time. The second driver stopped to render aid and, true to the adage “no good deed goes unpunished,” was sued by Belt. Belt’s auto policy provided uninsured motorist benefits and defined an uninsured vehicle as one with inadequate insurance, including hit & run vehicles. The policy also restricted the per accident recovery to one limit, regardless of the number of vehicles involved. Since the driver was uninsured, and believing that two impacts equaled two accidents, Belt demanded payment of two limits. Belt also said since the policy provided insurance for both hit & run and uninsured vehicles, and because she had been hit by an uninsured driver and a hit & run driver, she was entitled to two limits. USAA paid one limit to settle all damages arising out of the hit & run “accident.” Belt then sought a determination that she was entitled to collect a second limit. The trial judge instructed the jury that they were to decide if there was one or two accidents, and if there was but one continuous, ongoing sequence of events, there was one accident. The judge instructed that in reaching their decision, the jury should consider factors such as the time & distance between the impacts and whether Belt regained control of her car before the second impact. The jury found that there was one accident and Belt appealed, arguing that the jury instruction was wrong because it gave the jury too much information. Belt also argued that since “accident” was not defined, and since the definition of uninsured included both the hit & run and uninsured drivers, the policy was ambiguous, and she was entitled to collect two limits. The appellate court rejected Belt’s ambiguity argument, explaining that the definition of uninsured vehicle did not alter the policy’s limitation on the available coverage. The appellate court also found that while no other Florida court had considered the issue, the jury instruction was proper because whether there was one accident or two hinged on whether the impacts were separated by time & distance and that Belt’s control over her car was important to that decision. In doing so, the court established under Florida law that in multi-impact, auto collision cases, two impacts that are part of one continuous, ongoing sequence of events will be considered one accident, and that in determining whether there was one accident or two, the courts will consider factors such as the time & distance between the impacts and whether control of the vehicle was regained between the impacts. Thanks to Chip George for his contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News Notice May Trump Assumption of Risk Argument in Gym Injury Case November 1, 2016 < Back Share to: The defense in many cases involving gym injuries is “assumption of risk.” However, notice of a defective condition may supersede the defense. In Barbuto v. Club Ventures Investments, a machine's falling weights injured an experienced weightlifter. The gym moved for summary judgment arguing that the weightlifter assumed the risk injury by using a machine in openly “suboptimal” conditions such as bad equipment configuration. In opposition plaintiff raised an issue of fact as to actual notice by submitting an affidavit of a gym member who previously complained about the machine in question. The court found there was an issue of fact as to actual notice that could superseded the "assumption of risk" argument. This decision highlights the difficulties in succeeding on an “assumption of risk” argument. Plaintiff's can simply submit an affidavit from one (of many) members that can create an issue of fact to defeat summary judgment. Thanks to Lauren Branchini for her contribution to this post.           Previous Next Contact

News What Happens When Trial Court Permits Plaintiff’s Doctor to Testify that the Defense’s Independent Medical Doctor is paid by an insurance company? A mistrial, according to New York’s First Department November 19, 2021 < Back Share to: Evidence that a defendant carries liability insurance is generally inadmissible at trial, so when a trial witness spills the beans as to the existence of insurance, a mistrial may be warranted. While a mere reference to insurance will not always result in reversal, New York’s First Department recently held that notifying a jury that an insurance company is generally responsible for hiring doctors to perform independent medical examinations (“IME”) is enough to remand a case for a new trial. In Campbell v. St. Barnabas Hospital, 195 A.D.3d 405 (1st Dep’t 2021), plaintiff was injured tripping over a step stool that was placed in the walkway of defendant’s physical therapy clinic. During trial, plaintiff’s doctor was called to the stand and asked if he was aware that plaintiff was examined by another doctor under the guise of an IME. In response, plaintiff’s doctor answered in the affirmative, opined as to the lack of a doctor/patient relationship between plaintiff and the IME doctor, and further stated that IME doctors are “generally hired by an insurance company.” Defendant’s counsel objected to the response concerning insurance and requested a curative jury instruction. However, the Supreme Court did not give a curative instruction, but rather allowed plaintiff’s doctor to further testify that IME doctors are “generally hired by an outside agency” and that IME doctors are “hired solely for an opinion based on [a] bunch [of] records and an examination . . . that is how they’re hired.” Subsequently, defendant’s counsel requested a mistrial, but the Supreme Court denied the motion. On appeal, the First Department reversed the Supreme Court’s ruling and held that the testimony by plaintiff’s doctor warrants remanding the case for a new trial. The First Department explained that evidence of defendant carrying liability insurance is generally inadmissible, as it is both collateral and prejudicial. Thus, if testimony goes beyond the mere mention of insurance, a mistrial may be warranted. As such, the First Department held that the testimony of plaintiff’s doctor constituted reversible error and that a new trial was warranted. Accordingly, the First Department reversed the Supreme Court’s Ruling. Thanks to Drew Fryhoff for his contribution to this article. Should you have any questions, please contact Thomas Bracken. Previous Next Contact