News Federal Courts Strengthen Spoliation Sanctions under New Federal Rules (PA) March 10, 2016 < Back Share to: Although the Third Circuit has long been considered a polestar of spoliation jurisprudence amongst the federal circuits, a recent decision from the Eastern District of Pennsylvania signals an even greater focus on sanctions under the recently strengthened Federal Rules of Civil Procedure. In DVComm, LLC v. Hotwire Communications, DVComm sued Hotwire Communications for breach of contract arising out of the use of a telecommunications business plan improperly shared, pursuant to a non-disclosure agreement. As DVComm planned expansion into the Georgia telecommunications market, Hotwire Communications allegedly implemented the former’s business plan to create a fiber optics network in the Atlanta area without compensation. According to DVComm, the use of the business plan violated a mutual non-disclosure agreement between the parties, though Hotwire ultimately contended that the business plan was part of the public domain and thus outside the limitations of confidentiality. Hotwire tailored its discovery plan to identify the drafting process of the business plan in order to demonstrate that it was, in fact, part of the public domain when implemented in the Atlanta area. In particular, Hotwire pursued all prior versions of the business plan, as well as communications related to its conception, from DVComm and third-party telecommunications providers. In response, DVComm produced only two prior versions of the business plan and certain limited correspondences regarding its development, professing in various attestations and certifications that it did not possess any additional documentation. Notwithstanding these affirmations, additional investigation by Hotwire revealed that DVComm had not only drafted several prior, undisclosed versions of the business plan, but also “double deleted” all evidence of the same during the course of litigation. Not good. After Hotwire ultimately prevailed in defending the breach of contract claims, it petitioned the Court for spoliation sanctions stemming from costs incurred in chasing relevant discovery that was purposefully destroyed by DVComm. In considering the petition, the Court specifically referred to certain amendments of the Federal Rules of Civil Procedure designed to encourage the speedy, efficient and cost-effective disposition of claims, noting that spoliation of evidence directly undermines these aims. The Court found that because DVComm’s conduct in respect of destroying evidence was intentional, it could not demonstrate a “substantial justification” for its actions that would outweigh the defendant’s right to timely and forthcoming discovery disclosures. Consequently, the Court imposed upon DVComm roughly $110,000 in sanctions, explaining that only a monetary penalty could restore the balance in litigation compelled by recent amendments to the Federal Rules of Civil Procedure as relate to discovery. The ruling emphasizes the Court's potential role in respect of discovery disputes under the new Federal Rules of Civil Procedure. Specifically, whereas litigation had previously been marred by the doldrums of discovery violations, DVComm cautions that federal courts have recently been empowered to deal with the same swiftly, and where appropriate, definitively against plaintiffs and defendants alike in order to promote case resolution as quickly as possible. Thanks to Adam Gomez for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Additional Insured Entitled to Defense and Indemnification July 15, 2009 < Back Share to: In Regal Construction Corporation v. National Union Fire Insurance Company of Pittsburgh, the City of New York engaged defendant URS Corporation to be the construction manager for a renovation project at Riker's Island. By written agreement, URS hired plaintiff Regal Construction Corporation to serve as the prime contractor for general construction, as well as for demolition and renovation. In March 2001, Regal was supervising demolition of a bath and shower area of the prison and the replacement of flooring. Ronald LeClair, Regal's project manager, then performed a walk through of the area. LeClair stepped onto a joist in order to point to a wall, but was unaware that the joist had been freshly painted. LeClair then slipped and sustained personal injury. Prior to the commencement of Regal's work, INSCORP issued a commercial general liability policy to Regal that provided additional insured coverage. The policy provided for additional insured coverage "only with respect to liability arising out of [Regal's] ongoing operations performed for that [additional] insured." Regal and INSCORP commenced an action for a declaratory judgment against URS and its insurer, National Union, in an effort to avoid any obligation to provide coverage to URS. The Supreme Court held that INSCORP was obligated to defend and indemnify URS in relation to LeClair's personal injury action. Regal and INSCORP appealed. The Appellate Division, Second Department, upheld the Supreme Court's decision. Specifically, the court reasoned that Regal had responsibilities that encompassed all of the demolition and construciton work to be done during the course of the project. As such, Regal's responsibilities under its contract with URS could not be separated from the cause of and occurrence of LeClair's incident. The Appellate Division indicated that the general nature of the operation in the course of which the injury was sustained should be the focus of a court's analysis of additional insured language as opposed to the precise cause of the accident. Thanks to Brad Thelander for his contribution to this post. http://www.courts.state.ny.us/reporter/3dseries/2009/2009_05831.htm Previous Next Contact

News Turkish Repatriation Efforts to Shake Art World? October 2, 2012 < Back Share to: What's old is new again. Turkey (and all its prior iterations) has been at the forefront of Western history since Byzantium was founded in the 4th century. Its treasures have been seized from other lands and its treasures have been seized from it. Now, as this his NYT article makes clear, the Turks are in seizure mode. They have commenced legal efforts to "take back" treasures of antiquity from their current Western occupiers, e.g. the Met, the Louvre and the Boston Museum of Fine Arts. Can insurance claims be far behind? For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News NJ Court Finds That Endorsement Limiting Scope of “Coverage Territory” Governs February 18, 2021 < Back Share to: The interplay between various endorsements in a policy is not always clear. This is especially the case where multiple endorsements state they are “replacing” the same provisions. A New Jersey federal judge rejected an attempt by an insured to expand coverage beyond the scope of the policy’s plain terms. In so doing, the court reaffirmed that a policy endorsement’s restriction of coverage to a specified location cannot be overridden by another endorsement which does not alter, or otherwise refer to, that aspect of coverage. In FYT Supplies, the insured FYT was a tattoo parlor, which operated out of a location in Brooklyn. Its insurance policy contained a Limitation of Coverage Endorsement provision which stated that the Policy applied only to bodily injury that “[o]ccurs on the premises shown in the Schedule,” which in turn only listed the insured’s location in Brooklyn. In 2018, while at a trade show in the Meadowlands in New Jersey, one of the FYT’s employees was injured while moving certain equipment. The employee sued FYT and FYT sought coverage, which was denied by its insurer. In the ensuing declaratory judgment action, the insurer argued that there was no coverage based on the Limitation of Coverage Endorsement. In other words, because the injury did not occur on the Brooklyn premises listed in the Schedule, but in New Jersey, there was no coverage for FYT in the underlying action. FYT sought to avoid this straightforward application of policy language by pointing to the Policy’s New York Changes Endorsement. That endorsement modified the coverage grant of the Policy and states that coverage exists for bodily injury that takes place in the “coverage territory,” defined to mean anywhere in the United States. FYT thus argued that this language superseded the Limitation of Coverage Endorsement. The court rejected FYT’s arguments, holding that the Limitation of Coverage Endorsement governed, and thus the insurer’s liability was confined to injuries that took place at the insured’s location in Brooklyn. The court noted that the New York Changes Endorsement does not impact the scope of coverage in any way. Thus, the court held that “the language of the New York Changes Endorsement is inserted into a policy which also lists and explicitly incorporates the Limitation of Liability Endorsement.” The court also noted that, perhaps unsurprisingly given its potential impact, no court had yet addressed FYT’s arguments. However, the court held that “[r]eading the … Policy and the endorsements as a whole, it becomes clear that there is only one modification to the precise section at issue, and that modification is contained in the Limitation of Coverage Endorsement. [FYT’s] interpretation would render it meaningless.” While the outcome of the FYT decision seems obvious, it nonetheless affirms the notion that a court will not render certain policy provisions meaningless and frustrate the purpose of the language to which the parties agreed. Thanks to Doug Giombarrese for his contribution to this post. If you have any questions or comments, please contact Colleen Hayes. Previous Next Contact

News Plaintiff's 241(6) Claim For Asbestos Exposure Unsupported By Industrial Code Part 12 Regulations February 25, 2009 < Back Share to: To mount a 241(6) claim, it must be properly supported by a violation of a concrete provision of Industrial Code, part 23. In Nostrom v. A.W. Chesteron Co., plaintiff commenced a wrongful death action due to plaintiff's decedent's exposure to asbestos in the workplace. While plaintiff's complaint was pursuant New York State Labor Law 241(6), she solely relied upon two Industrial Code, part 12 regulations, 12 NYCRR 12-1.4(b)(3),(4) and 12-1.6(a). The landowner and general contractor defendants successfully moved for summary judgment in the trial court. On appeal, the Appellate Division, First Department, affirmed the lower court's decision, ruling that it is the provisions of part 23 of the Indutrial Code that serve as the predicate for Labor Law 241(6) claims. The Court found that the Industrial Code part 12 regulations that plaintiff relied on do not support an action for owner/contractor vicarious liability under Labor Law 241(6) since part 12 ("Control of Air Contaminants") gives no indication either that it was enacted pursuant to Labor Law 241(6) or that it contemplates owner/contractor vicarious liability. Moreover, the Court held that part 12 regulations cited by plaintiff were not sufficiently specific to support a Labor Law 241(6) claim for asbestos-related injury. Thanks to Robin Green for her contribution to this post. http://www.nycourts.gov/reporter/3dseries/2009/2009_00581.htm Previous Next Contact

News Lack Of Contract Allows GC To Escape Labor Law Claim (NY) February 2, 2017 < Back Share to: General contractors are virtually always caught in the web of Labor Law construction claims in New York. But recently, the Appellate Division, First Department dealt with an interesting issue: what happens when plaintiff is injured performing work outside of the relevant contract between the GC and the owner? In Ortiz v. IGBY Huntlaw LLC,plaintiff Wilson Ortiz was injured when he fell off a ladder while painting an apartment in Manhattan. He sued the property owner, IGBY Huntlaw LLC, and the general contractor, A.E. Grayson & Co., Inc., under claims negligence, and violations of Labor Law 200, 240(1) and 241(6). Plaintiff was employed as a painter by Uriu, LLC, an entity that was retained directly by the property owner - and there was no contract between Uriu and Grayson. Grayson moved for summary judgment at the end of discovery, relying on the fact that the contract between Grayson and the owner specifically excluded painting from the services to be provided. They also argued that there was no contract between Grayson and plaintiff’s employer and Grayson did not have actual or contractual authority to control the plaintiff’s work. In opposition, the plaintiff submitted a post-deposition affidavit stating that a Grayson supervisor directed plaintiff and his co-workers as to where and how they should perform their work. This affidavit contradicted the testimony of the Grayson witness and the witness from Uriu, both of whom testified that only the Uriu foreman could or would direct the plaintiff’s work. The trial court held that the plaintiff’s affidavit was sufficient to establish a question of fact as to whether Grayson directed, supervised or controlled plaintiff’s activities on the project. The Appellate Division, First Department reversed, and granted Grayson’s motion for summary judgment dismissing all of the plaintiff’s claims. The Court held that because plaintiff’s work was outside the scope of Grayson’s contract with the owner, Grayson had no right to control the work and could not be held liable under Labor Law §§ 240(1) or 241(6). The Court also dismissed the common law negligence and Labor Law 200 claim, because Grayson had no authority to control the work that caused the plaintiff’s injury. Noticeably absent from the Appellate Division’s holding was any consideration for the allegations that Grayson was actually directed the plaintiff’s work. Because Grayson did not have the authority to direct and control the plaintiff, the Court found that it could not be held liable for the plaintiff’s injuries under the Labor Law. Perhaps if plaintiff’s claims that Grayson directed his work had been corroborated by another witness, the court might have reached a different result. But the mere allegation by plaintiff that another party directed his work at the time of his accident - which was contrary to the contractual language - was found insufficient to create a question of fact in the First Department. Thanks to John Collins for his contribution to this post and please write to Mike Bono if you are interested in more information. Previous Next Contact

News Handling Heavy Buckets Not an Elevation Related Risk (NY) October 20, 2017 < Back Share to: In Ciechorski v. City of New York, the Appellate Division recently distinguished between “usual and ordinary” dangers of a construction site versus “the extraordinary elevation risks envisioned by the Labor Law Section 240(1).” The Court also addressed the distinction between defendants who actually determine the means and methods of the work versus those who merely exercise general oversight over the performance of the work. Plaintiff claimed he suffered pain allegedly caused by repeatedly being handed heavy buckets filled with epoxy from workers at a higher level and then transporting the buckets by hand on his own level. Plaintiff claimed he was required to catch buckets in mid-air, after they were dropped by workers standing on a barge about five or six feet above the float stage where he was standing, and this took place over the course of several weeks. In granting summary judgment in favor of the City of New York, dismissing plaintiff’s complaint, the Appellate Division determined that plaintiff’s claims were unsupported by the record, even when viewed in the light most favorable to plaintiff. The Court noted that plaintiff testified that the barge workers leaned, bent down, or kneeled, as necessary, to hand the buckets to plaintiff, allowing him to grasp each bucket before it was released. As such, the Court determined that the type of activity plaintiff described and complained about was more in line with the usual and ordinary dangers of a construction site as opposed to the extraordinary elevation risks encompassed by the Labor Law. Furthermore, the Appellate Division affirmed the lower court’s dismissal of plaintiff’s Labor Law Section 200 claim and his common law negligence claims as against defendant Hudson Meridian Construction Group, LLC because that defendant did not determine the means and methods of the work, but rather, exercised only general oversight over the performance of the work and site safety conditions, which is insufficient to trigger liability. In contrast, the means and methods of the work were determined solely by plaintiff’s employer, a non-party to the case. Thanks to Sara Matschke for her contribution to this post and please write to Mike Bono with any questions. Previous Next Contact

News Graduation: Slipping Into The Future (NY) November 7, 2019 < Back Share to: In Van Duser v. Mount Saint Mary College, plaintiff sought damages for injuries sustained when she fell on a temporary flooring walkway inside a tent that had been erected at the school for graduation ceremonies. Defendant moved for summary judgment arguing that the flooring did not present a dangerous or defective condition nor did defendant have actual or constructive notice of the alleged dangerous condition. Defendant was granted summary judgment by the lower court. Plaintiff appealed and the Appellate Division, Third Department upheld the lower court’s ruling. Plaintiff attempted to argue that defendant failed to properly inspect the premises, or that its use of rubber mats on some portions of the flooring demonstrates that it failed to maintain its premises in a reasonably safe condition and defendant chose to use two tent walls and to leave the other sides open, but she did not demonstrate that any water allegedly present on the walkway originated from those open sides, rather than having been tracked in. The Appellate Division rejected that argument. The Appellate Division cited the testimony of the plaintiff and defendant’s witness. Plaintiff testified that it had been “drizzling” before and at the time of her arrival for the graduation, but that she did not notice anything unusual about the walkway when entering the tent. Plaintiff stated that, when she later got up from her seat to use the restroom, she was not looking at the walkway, and she fell to the ground. The security director testified that he did not observe that the flooring was wet at the time of his walk-through before the ceremony, and he received no complaints prior to or during the ceremony about the flooring being wet or slippery. The Appellate Court concluded held that property owners are not “required to cover all of [their] floors with mats, nor to continuously mop up all moisture resulting from tracked-in rain” ’ and ruled that the lower court properly granted summary judgment to the defendant. Thanks to Paul Vitale for his contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News Third Circuit Upholds Assault Or Battery Exclusion In Sex Trafficking Case (PA) November 4, 2022 < Back Share to: In Nautilus Insurance Co. v. Motel Management Services, Inc., et al., the Court of Appeals for the Third Circuit analyzed whether the District Court’s judgment declaring that underlying sex trafficking actions fell within the scope of an insurance policy’s assault-or-battery exclusion. On de novo review, the Court of Appeals affirmed the lower court’s ruling. Nautilus Insurance Company (“Nautilus”) issued a commercial general liability insurance policy to Neshaminy Inn and others (collectively “Inn”), in which Nautilus agreed to defend and indemnify the Inn for any liability incurred. However, the policy specifically excluded claims “any action or proceeding alleging damages arising out of any assault or battery.” The exclusion also included “[a]ny act or omission in connection with the prevention or suppression of such acts, including the alleged failure to provide adequate security.” The Inn sought coverage for state court lawsuits alleging three women were trafficked for sex at the Inn and Nautilus agreed to defend the Inn pursuant to a strict reservation of rights letter. Based on certain evidence developed in discovery, Nautilus commenced a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania seeking a declaration of no coverage based on the assault or battery exclusion. Nautilus moved for judgment on the pleadings in all three lawsuits arguing there was no coverage based on the exclusion and the District Court agreed. The Third Circuit affirmed, holding that the plain language of the policy excluded all claims “arising out of any assault or battery.” The policy did not define the terms “assault” or “battery” so the court looked to Pennsylvania law for guidance. The cases defined an “assault” as “intentionally placing another person in imminent apprehension of a harmful or offensive bodily contact” and “battery” as a “harmful or offensive contact with the person of another absent the other’s consent.” Although the court recognized that policy exclusions are construed against the insurer, the court found that the exclusion applied because the victims alleged that their traffickers treated them in an aggressive or violent manner, which made them feel fear and anxiety while being trafficked. The court also noted that selling the victims for sex qualified as an assault because it placed them in imminent apprehension of a harmful or offensive bodily contact and that the force and drugs used to compel the victims’ participation subjected them to harmful or offensive bodily contact without their consent. The Third Circuit rejected the Inn’s argument that the sex trafficking claims do not necessarily involve violence in light of the victim’s alleged consent to the conditions, holding that allegations of “modern-day slavery – facilitated by forced drug use, violent criminal aggression, physical injuries, and a climate of fear and anxiety” eliminated any basis for such an argument. Accordingly, the court held that the exclusion applied, and that Nautilus had no duty to defend or indemnify the Inn for the underlying lawsuits. Please contact Lauren Berenbaum with any questions. Previous Next Contact

News You’re No Expert! $6.3 Million Verdict Tossed Because Expert Testimony on Pain and Suffering had No Sufficient Basis (PA) February 12, 2021 < Back Share to: In Cowher et al. v. Kodali et al., the Pennsylvania Superior Court granted a retrial because of erroneously admitted expert testimony. Cowher, brought a wrongful death and survival medical malpractice claim against the doctor that failed to recognize her husband’s heart condition, which ultimately led to his fatal heart attack. Mr. Cowher went to see defendant Dr. Sobhan Kodali after he experienced persistent chest pain. Dr. Kodali conducted minimal testing and attributed Mr. Cowher’s pain to anxiety and panic attacks. Shortly thereafter, Mr. Kodali suffered a fatal heart attack. At trial, the jury determined that Dr. Kodali was negligent. The trial judge, however, allowed plaintiff’s expert to testify that Mr. Cowher had experienced “conscious pain and suffering” during his fatal heart attack. The plaintiff’s expert’s only basis for that Mr. Cowher experienced “conscious pain and suffering” was a witness to the heart attack who testified that Mr. Cowher appeared to be in pain. The Superior Court determined that the plaintiff’s expert’s testimony on the conscious pain and suffering—for the purpose of calculating damages—was improper expert testimony. The court reasoned that the testimony was not based on the expert’s skill or expertise; but rather, it was only based on a lay person’s observations. The expert’s testimony did not meet the requirement for expert testimony. As such, the court ordered a retrial on the issue of the portion of damages related to Mr. Cowher’s alleged pain and suffering. The court’s decision reinforces the stringent standards expert opinion is held to, and the potential for disaster if permitted to reach the jury. Thanks to John Lang for his contribution to this article. Should you have any questions, please contact Thomas Bracken. Previous Next Contact

News Clarification of Established Law Stacks Results in Favor of Policyholders (PA) May 9, 2019 < Back Share to: This blog post is a follow-up to the February 5, 2019 post on the Gallagher decision. What happens when an insured plaintiff wants to be able to retroactively apply a clarification that has come out of a recent decision? That is the question under discussion in the Eastern District of Pennsylvania case, Butta v. GEICO Casualty Co. This case is an extension of the recent decision, Gallagher v. Geicho Indemnity Co., where the Pennsylvania Supreme Court decided that the “household exclusion” clause in vehicle insurance policies within the same household was a violation of the state’s Motor Vehicle Financial Responsibility Law (MVFRL), which was enacted in 1990. In this case, the court discusses how the Gallagher decision has changed how stacking of vehicle insurance policies can be applied across different members of one household. Under § 1738 of the MVFRL, after paying a higher premium, members of the same household who have the same insured can stack their uninsured/underinsured insurance policies, so that if one member is in an accident, the coverage of other household members can be counted toward his or her claim. Insured parties can choose to waive this stacking feature. However, as opposed to stacking, some insurance companies have a provision in their policy where members of the same household cannot stack their insurance policies for their individual vehicles unless every vehicle is listed on every policy across the household. Gallagher challenged the “household exclusion” rule as imposing a de facto waiver and the court ultimately ruled that it was a violation of the MVFRL. In Butta, the plaintiff was injured in a motorcycle accident on a motorcycle that had underinsured coverage protection with Geico. The plaintiff lived with his parents who also had underinsured coverage through Geico for their own vehicles but had a “household exclusion” provision in their policies. The issue in this case is whether Gallagher could be applied retroactively since the plaintiff’s insurance claim occurred prior to the Gallagher decision in January 2019. In order to make that decision, the court went through two analyses. First, it revisited previous court decisions that applied the household exclusion policy and prevented stacking coverage in vehicle accidents. Second, since it was making a decision based on a case that was decided in the Pennsylvania Supreme Court, the court had to address the issue of retroactive application from the perspective of the Pennsylvania Supreme Court. The defendant argued that the Gallagher decision could not be applied retroactively because the decision established a new rule of law. However, the court rejected this argument by stating that Gallagher does not change case precedent, but reflects what the MVFRL intended when it was introduced in 1990. The case does not deliver a new rule, but provides an explanation of what already existed under the statute. Additionally, the court states that the defendant based its arguments on non-precedential opinions, so there is no evidence that Gallagher was not meant to be applied retroactively. As a result, the plaintiff was able to apply Gallagher to his motorcycle accident. This case is a lesson that sometimes in the law, it takes more discussion and court decisions before the rules are fully understood and before we get to the ultimate point that the legislature intended. Therefore, for certain parties, while it may seem that a rule of law is stacked against you, you may find over time that it actually falls in your favor. Thanks to Gabrielle Outlaw for her contribution to this post. Please email Vito A. Pinto with any questions. Previous Next Contact

News PA- Policyholder Not Entitled to Uninsured or Underinsured Motorist Coverage When Injured in Work Vehicle. October 12, 2018 < Back Share to: In Erie Insurance Grp. v. Catania, in August 2009, Jack Catania was driving a delivery truck for work when he swerved to avoid another vehicle. In doing so, he lost control of his truck and suffered injuries. The other vehicle fled the scene. Catania had a personal policy with Erie at the time. Because the other driver fled, the other vehicle was considered an uninsured motor vehicle, and Catania made a claim for uninsured motorist coverage with Erie. Erie filed a declaratory judgment action to determine it was not obligated to provide uninsured or underinsured motorist coverage for an employee who was injured while driving a work vehicle and subsequently made a claim under his personal insurance policy. The court held Erie did not have to provide coverage because the work vehicle fit the “regularly used non-owned vehicle” exclusion contained in that policy. While Catania regularly used the truck, he did not own it. As a result, it was excluded under Catania’s personal policy with Erie. Thanks to Robert Turchick for his contribution to this post.   Previous Next Contact