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News The Court May View, But Not Weigh, the Evidence on Summary Judgment September 16, 2022 < Back Share to: In Garcia v. Security First Ins. Co., 5D21-1456, 2022 Fla. App. LEXIS 6197, 2022 WL 4111171 (Fla. 5th DCA September 9, 2022) the insured homeowner made a claim for water damage after a roof leak claim. At deposition, the insured admitted to a prior roof leak and later produced pictures and a damage report. The insurer moved for summary judgment arguing that the insured’s concealment of the prior damage and false statement regarding the pre-loss condition of the home forfeited coverage. The trial court, finding that it was entitled to weigh the credibility and the evidence under Florida’s new summary judgment rule (which mirrors the federal rule), granted summary judgment. On appeal, Florida’s Fifth District Court of Appeal reversed, holding that: “Credibility determinations and weighing the evidence ‘are jury functions, not those of a judge,’ when ruling on a motion for summary judgment.” While this sounds basic, there has been much debate over the reach of Florida’s new summary judgment rule – some argue that the court may weigh the evidence, others argue that it may not. Garcia is the first appellate case decision dealing with the issue and every trial court in Florida must follow Garcia until the appellate court sitting in their District rules differently. Claims professionals should keep Garcia in mind when seeking summary judgment in Florida. Thanks to Charles "Chip" George for his contribution to this post. Please contact Chip with any questions. Previous Next Contact

News Footing the Bill Does Not Necessarily Entitle Insurers to Privileged Documents (PA) February 15, 2013 < Back Share to: A recent decision in the Eastern District of Pennsylvania suggests increased hostility to the adoption of an absolute rule that insurers are co-clients with their insureds for the purposes of discovery in declaratory judgment actions. In the case of CAMICO Mutual v. Heffler, Radetich, & Saitta, LLP, CAMICO insured the defendant accounting firm’s administration of class action settlement funds and agreed to defend same under a reservation of rights when sued for misappropriation of proceeds. However, in the midst of funding the firm’s defense, CAMICO elected to pursue a separate action for declaratory judgment stating that its coverage obligations under the policy were limited to $100,000. Litigation proceeded apace in both cases until CAMICO propounded discovery demands upon the firm seeking the production of documents created in the defense of the misappropriation action. Unsurprisingly, the firm took exception, prompting CAMICO to file the subject motion to compel. While the firm argued that the responsive documents were insulated from disclosure by the attorney-client privilege, CAMICO countered by asserting that its common interest in the underlying defense gave rise to an exception. Applying the substantive law of Pennsylvania, Judge Jan E. DuBois of the Eastern District noted that both state and federal courts have consistently split on the issue. Specifically, Judge DuBois explained that while some courts in both jurisdictions recognize an absolute co-client relationship between insurer and insured, Pennsylvania’s appellate courts have recently endorsed a case-by-case approach that focuses on how the parties interact with the joint attorneys and each other. Adopting the second standard, Judge DuBois ultimately held that a co-client relationship did not exist because the firm independently retained defense counsel before CAMICO involved itself in the claim. As a result, CAMICO’s shared interest in the defense, without more, was insufficient to constitute a waiver of the attorney-client privilege and the motion was denied. Although CAMICO’s consideration of the attorney-client privilege in coverage disputes is limited to those circumstances where defense counsel is independently retained, the decision illustrates a growing trend against an absolute rule in Pennsylvania. To be sure, however, the court itself recognized that its decision does not preclude the possibility of a co-client relationship in all cases. Special thanks to law clerk Adam Gomez for his contribution to this post. For further information, please contact Paul Clark at pclark@wcmlaw.com Previous Next Contact

News Dental Floss: Cavity Fighter or The Perfect Murder Weapon October 4, 2018 < Back Share to: Eleven inmates at a Westchester County jail seek $500 million and the right to use dental floss in a lawsuit brought against Westchester County and dental care providers. The inmates allege that, despite constant brushing, they are unable to fend off cavities because they are denied dental floss. With no floss to keep tartar away, the inmates took self-help measures rid themselves of unsightly tartar; such as shoving “weird objects” between their teeth. According to the complaint, the problem is compound. The lack of floss causes cavities. But the county facility refuses to provide permanent fillings or crowns. that is so because the county lock up is a holding facility for pre-trial detainees or for sentenced inmates awaiting transfer to a New York State penitentiary. Inmates claim that the denial of floss constitutes a violation of the Eighth Amendment’s prohibition against cruel and unusual punishment. To prove such claim: (1) plaintiff must show that he had a serious medical condition; and (2) that it was met with deliberate indifference. In response to the suit, Deputy Correction Commissioner Justin Pruyne defended the ban, saying "it (dental floss) potentially can be used as a weapon." According to prison officials, apart from being a deadly weapon, floss can used to cut through prison bars or fashioned into rope. In fact, in 1994, a prisoner did just that, using an 18-foot floss rope to clamber down the walls of a West Virginia prison. Considering that prison officials are given a large degree of deference, the odds against success are quite long. In era of budget cutbacks and crowded dockets, it is difficult to move insurance cases to trial, but at least we know that our jurists are grappling with weighty issues, such as whether denying inmates dental floss constitutes cruel and unusual punishment. Thanks to Gabriel Darwick for his contribution to this post. If you have any questions, please email Dennis at dwade@wcmlaw.com . Previous Next Contact

News Plaintiff Skates Past Assumption of Risk Defense (NY) August 21, 2013 < Back Share to: Most people understand that when you participate in sports, you might get hurt. So in New York, the general law is that “a voluntarily participant in a recreational sporting event has no legal recourse for injuries caused by an occurrence or condition that was a known, apparent, or reasonably foreseeable consequence of such participation.” But the U.S. District Court for the Northern District recently issued a questionable decision in connection with a roller skating accident. In Diaz v. High Rollers Recreational Center, Inc., the plaintiff, while skating, noticed a young man with long hair “skating aggressively and at a higher rate of speed than the other skaters.” The man skated fast while cutting in and out of the path of other skaters, but his conduct was not reported to High Rollers’ staff. Eventually, this unidentified skater struck plaintiff from behind, causing her to fall and injure her ankle. Plaintiff sued High Rollers, claiming that High Rollers failed to properly supervise the skaters and allowed reckless skating. High Rollers argued that plaintiff assumed the risk of skating, and that in any event it provided adequate supervision and was not the proximate cause of plaintiff’s injuries. The judge found that the skater’s conduct was obvious to all at the skating rink, including High Rollers employees, and that a sudden collision is the type of risk typically assumed by skating participants. But the court found that a skater does not assume the risk of another skater’s reckless conduct and that the collision was not sudden but a foreseeable occurrence that could have been avoided with better supervision. Whether the defendant’s supervision was negligent was found to be an issue of fact to be determined by the jury. This type of incident strikes us as a risk typically assumed by skating participants and it seems that the court placed too great an emphasis on the “sudden” nature of the incident. We will continue to monitor this case to see if there is an appeal and if the outcome is any different. Thanks to Steve Kaye for his contribution to this post. If you would like more information, please write to Mike Bono. Previous Next Contact

News School Dodges Wrestling Hold Claim (NY) March 30, 2018 < Back Share to: In Hale v. Holley Central School District, Plaintiff was injured when an 11th-grade classmate unexpectedly walked up behind him before gym class and put him in a chokehold, causing him to lose consciousness and fall face-first against the floor. Defendant Holley Central School District moved for summary judgment under the theory that there was insufficient notice that the student who placed plaintiff in a sleeper hold was dangerous or would have caused such injury. The lower Court disagreed and denied defendant’s motion. Defendant appealed to the Appellate Division, Fourth Department. A school has a duty to adequately supervise the students in their charge, and will be held liable for foreseeable injuries proximately related to the absence of adequate supervision. Schools are not insurers of safety, however, as they cannot reasonably be expected to continuously supervise and control all movements and activities of students; therefore, schools are not to be held liable ‘for every thoughtless or careless act by which one pupil may injure another.’ As such, the Fourth Department ruled the lower court erred in denying summary judgment as there was no actual or constructive notice of the student’s behavior such that the student’s act could be reasonably anticipated. According to school records, the student never engaged in any disorderly or violent conduct in any previous gym class. Although the student had a disciplinary problem, the Fourth Department ruled that the student’s prior endangering conduct was too remote to provide defendant with sufficiently specific knowledge or notice. Furthermore, the Fourth Department was not persuaded by plaintiff’s argument based upon the mixed grade levels in the gym class and, relatedly, the size differences between plaintiff and the other student. The evidence established that it was common for students to wait in the gym until all students exited the locker room before class began. The gym teacher usually would be in his office during this time period because his office had doors leading directly to both the gym and the locker room, which allowed him to monitor both areas simultaneously. Unlike cases in which there was a history of dangerous conduct, the Fourth Department concluded that there was nothing in the record that provided defendant or its gym teacher with specific knowledge or notice of previous dangerous circumstances or conduct. Thanks to Paul Vitale for his contribution to this post and please write to Mike Bono with any questions. Previous Next Contact

News Form Over Substance? Not in NY. December 9, 2010 < Back Share to: In Ruffin v. Lion Corp., New York’s Court of Appeals held that a defect in the service of a summons and complaint related to the residence of the process server is a mere technicality that does not render service ineffective and does not raise any jurisdiction questions -- http://www.courts.state.ny.us/reporter/3dseries/2010/2010_08767.htm Plaintiff was injured in a December 2000 bus accident, and brought a suit in New York against the bus driver and bus company, headquartered in Pennsylvania. Plaintiff effectuated service through a process server who resided in Pennsylvania. The defendant bus company failed to respond to the summons and complaint, and plaintiff obtained a default judgment, and the trial court awarded $450,000 at an inquest. Two years later, the bus company moved to vacate the default on the grounds that the process server was not a New York resident, so plaintiff never obtained proper jurisdiction over the bus company. Plaintiff pointed out that CPLR 2001 allows courts to disregard technical defects in the filing process, but the defendant bus company argued that the process server’s residency was a jurisdiction issue that could not be overlooked pursuant to CPLR 2001. The trial court denied the motion, the Appellate Division reversed and granted the motion, and the Court of Appeals reversed again, denying the motion. The court held that the process server’s residence was a technical defect that did not raise jurisdiction questions because the server’s residency had no effect on the likelihood that the defendant bus company would have received actual notice of the lawsuit. It further held that although CPLR 2001 explicitly excused mistakes in the “filing” process, there was nothing to suggest that the legislature intended to treat mistakes in “service” any differently, and the broad language of the statute allowed for such a result. Special thanks to Alex Niederman for his contributions to this post. If you would like more information, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News NJ Insurance Rescinded For Misrepresented "Spouses" January 13, 2010 < Back Share to: New Jersey Manufacturers Insurance Company was granted dismissal of an uninsured motorist claim when its rescission of a policy was enforced. The insured driver had misrepresented in her insurance application that she was married when, in fact, she was living with her fiancé. The insurer presented evidence that it would not have issued the policy had it known that the two were not wed. Instead, she would have been referred to a subsidiary company and quoted a significantly higher premium. Thus, the misrepresentation was material to the decision to write the policy. The insured persuaded the trial judge that her misstatement was not a willful concealment to induce the insurer to issue the policy. However, in an unreported decision, the Appellate Division made clear that a misrepresentation of an objective truth that is material to the underwriting process will support rescission if the insurer relied upon it regardless of the insured’s motive for the misrepresentation. See Henriques v. New Jersey Manufacturers Insurance Co., 2009 WL 5125021 found at http://www.judiciary.state.nj.us/opinions/a2755-08.pdf If you would like more information regarding this post, please email Denise Ricci at dricci@wcmlaw.com . Previous Next Contact

News UIM Coverage Does not Apply to Rented Vehicles, According to Eastern District (PA) November 8, 2018 < Back Share to: In Achenbach v. Atlantic Specialty, the plaintiff was a passenger in a rental car being driven by her co-worker, when the vehicle she was traveling in was rear-ended by a truck driver. The rental car was rented through the plaintiff’s employer, while the plaintiff and her co-worker were on a work trip in Wisconsin. Plaintiff suffered injuries as a result of the accident, and the truck driver was uninsured. As a result, the plaintiff sought uninsured motorist benefits through the car rental agreement, which offered coverage of up to $25,000.00. Plaintiff settled with the rental car insurer for the policy limit. As the plaintiff’s claimed damages exceeded that amount, she also sought secondary coverage through her employer’s insurance policy with Atlantic Specialty. In attempts to recover from Atlantic Specialty, plaintiff’s counsel and Atlantic Specialty exchanged email communications about her eligibility from July 2013 to October 2015. Plaintiff then demanded payment of the full amount of Atlantic Specialty’s policy as settlement for her outstanding claim, which was denied. Atlantic Specialty claimed she was not eligible for uninsured motorist insurance under the policy. Plaintiff then brought suit for breach of contract, bad faith and promissory estoppel. Atlantic Specialty removed the matter to federal court and filed a motion to dismiss. The Court, finding that Wisconsin law applied, dismissed plaintiff’s bad faith claim, as Wisconsin law did not support a viable claim for bad faith based on failing to investigate her claim and making misrepresentations during the claim adjustment process. Plaintiff argued that defendant breached its contract with her employer by denying the claim. Defendant responded that the policy did not provide coverage for uninsured motorist benefits to rented vehicles. The Court found that the plain language of the policy limited uninsured motorist coverage to owned vehicles and excluded rental vehicles. Plaintiff’s reliance on the alleged assurances from the defendant that the policy covered rental vehicles did not change the plain and unambiguous language of the policy. This claim was dismissed as well. Finally, plaintiff brought a promissory estoppel claim based on the representations made by the defendant’s employees as to the availability of uninsured motorist coverage during the claim adjustment process, and that she relied on those representations to her detriment. The Court agreed that plaintiff plead sufficient facts to support this claim, as the emails between the parties supported the assertion that the defendant made an “express promise” that the uninsured motorist coverage was available to plaintiff, which was reasonable. Therefore, this claim was allowed to proceed. This is a cautionary tale to avoid making any promises or representations to claimants during the adjustment process before making coverage decisions. Thanks to Alexandra Perry for her contribution to this post. Previous Next Contact

News NJ Appellate Court Revisits Offer of Judgment Rule. November 16, 2007 < Back Share to: In the case of Jastram v. Kruse, a NJ appellate court reduced a $500,000 automobile personal injury verdict to $50,000 on the grounds that the plaintiff had made a $12,500 R. 4:58-1 offer that the Court held accurately reflected "her assessment of a reasonable settlement." http://www.law.com/jsp/pa/PubArticleFriendlyPA.jsp?id=1195121063077 Previous Next Contact

News Insurers Cannot Mandate IME's on First-Party Claims Without Court Order (PA) December 11, 2019 < Back Share to: In a case we have been monitoring since we posted about it in February, the Supreme Court of Pennsylvania recently held that an automobile insurance policy provision regarding independent medical examination requirements was void and against public policy because it conflicted with 75 Pa.C.S. §1796(a) of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”). The Court answered a certified question from the United States Court of Appeals for the Third Circuit asking: “Does an automobile insurance policy provision, which requires an insured seeking first-party medical benefits under the policy to submit to an independent medical exam whenever the insurer requires and with a doctor selected by the insurer, conflict with 75 Pa.C.S. §1796(a) of the PA MVFRL, such that the requirement is void as against public policy?” Sayles v. Allstate Ins. Co., No. 58 MAP 2018, 2019 WL 6138409 (Pa. Nov. 20, 2019). The underlying action, Sayles v. Allstate Insurance Company began in 2015 when Sayles was injured in an automobile accident and required medical treatment. She sought reimbursement from her insurance company, Allstate. Allstate sent Sayles a letter stating that Sayles was required to submit to an IME, which would be completed by a physician of Allstate’s choosing. Sayles refused to submit to the IME, and Allstate declined to pay her claim for medical benefits. Sayles then sued Allstate in the Court of Common Pleas of Pike County and alleged that Allstate’s IME requirements violated 75 Pa.C.S. §1796(a), which reads, in pertinent part: General rule.--Whenever the mental or physical condition of a person is material to any claim for medical, income loss or catastrophic loss benefits, a court of competent jurisdiction or the administrator of the Catastrophic Loss Trust Fund for catastrophic loss claims may order the person to submit to a mental or physical examination by a physician. The order may only be made upon motion for good cause shown. The order shall give the person to be examined adequate notice of the time and date of the examination and shall state the manner, conditions and scope of the examination and the physician by whom it is to be performed. If a person fails to comply with an order to be examined, the court or the administrator may order that the person be denied benefits until compliance. Among other things, Sayles argued that §1796 allows the judge to order an IME and delineate the matter, conditions and scope of the IME; as opposed to Allstate’s IME clause at issue, which she argued allows the insurer to have unilateral authority and control of all aspects of the IME. The Court rejected Allstate’s contention that §1796 does not apply when an insurance company has its own IME clause, and subsequently found that the legislature’s deliberate statutory design cannot be bypassed by clauses of automobile insurance contracts. Further, the Court rejected the argument that Allstate’s IME clause language followed the Pennsylvania Insurance Department’s (“Insurance Department”) form policy language, and stated “[o]ur Court has made clear that the Insurance Department cannot, by regulation, legally approve an insurer's use of policy language which conflicts with the express requirements of the MVFRL as enacted by the General Assembly.” See Ins. Fed'n of Pa. v. Pa. Dep't of Ins., 585 Pa. 630, 889 A.2d 550 (2005) (holding that the Insurance Department did not have legal authority to enact a regulation which mandated that all insurance coverage disputes involving uninsured or underinsured motorist coverage be subject to binding arbitration, inasmuch as neither the MVFRL nor the Uninsured Motorist Act allowed imposition of such a requirement). The Court held that §1796 governs, because the statute was “intended to set the irreducible requirements all insurers issuing policies of automobile insurance in this Commonwealth must meet in order to compel their insured to submit to an IME when the insured does not voluntarily comply with the insurer's request to do so.” See 75 Pa.C.S. §1796(a) (section applies “[w]henever the mental or physical condition of a person is material to any claim for medical ... benefits”) (emphasis added). The Court found that §1796 is meant to prevent harassment and upward intrusion of an unwarranted examination and ultimately held that Allstate’s IME policy provisions conflict with, and are repugnant to, the statutory protections under §1796. Accordingly, insurers cannot enforce IME policy provisions that allow the insurer to unilaterally select the physicians, as it impacts the insureds’ significant privacy interests. Going forward, a Court Order will be required, which means significantly more litigation (and associated fees) will be forthcoming in first-party MVA claims in Pennsylvania. Thanks to Emily Finnegan for her contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Holiday Greetings December 22, 2020 < Back Share to: With everyone working from home and in need of a “little Christmas” (whatever your persuasion), in lieu of physical holiday cards you will never see, here at Wade Clark Mulcahy, LLP – https://wcmlaw.com , we decided to try something a little different. In addition to what, on behalf of all of us and all of you, has become our annual donation to https://www.charitywater.org , which funds clean water projects in developing countries around the world, we hope you enjoy our celebration of the spirit of the holidays and the hope of a brighter new year in Twas the Night Before Trial. With continued thanks for your support and loyalty, Bob, Mike, Dennis, Nicole, Brian, Georgia, Tom, Paul, Tony, Tom, Bruce, Heather, Vivian, Debra, Colleen, Matt, Jim and Jen [su_youtube url="https://youtu.be/bFbl65RbdfA" title="Twas the Night Before Trial"] Previous Next Contact

News District of NJ Denies Insurer’s Attempt to Dismiss Claims for Sexual Abuse Coverage February 4, 2021 < Back Share to: In School Excess Liability Joint Ins. Fund v. Illinois Union Ins. Co., the United States District Court for the District of New Jersey recently considered whether the plaintiffs, School Excess Liability Joint Insurance Fund (“SEL”), Diploma Joint Insurance Fund (“Diploma”), and School Alliance Insurance Fund’s (“SAIF”) sufficiently pled that they have incurred losses that eroded their retained risk and triggered coverage under the excess insurance policies issued by the defendant, Illinois Union Insurance Company (“Illinois”). The plaintiffs sought defense expenses and liability costs for defending sexual abuse claims. By way of brief background, the plaintiffs are joint insurance funds, i.e., public entities composed of “members” who pool resources to self-insure against losses for claims up to a specific amount, and purchase excess insurance from insurance companies to cover losses that exceed that amount. Defendant Illinois issued multiple excess insurance policies to the plaintiffs. Specifically, the excess policies provided Illinois will pay the “Ultimate Net Loss in excess of the Underlying Coverage that the Insured becomes legally obligated to pay as damages because of the injury or damage to which this insurance applies.” In their complaint, the plaintiffs averred that the policies provide coverage for general liability, which encompasses sexual abuse claims, as the policies specifically identify limits of insurance for “sexual abuse” in the Schedule of Underlying Coverage. Therefore, plaintiffs claimed that Illinois breached its contractual duty and duty of good faith and fair dealing by failing to indemnify the plaintiffs for defense expenses and amounts paid for liability and defense expenses for sexual abuse claims. Upon analyzing whether the plaintiffs asserted a valid breach of contract claim, the court the held that, since the plaintiffs are “self-insured”, i.e., without insurance, pursuant to N.J.S.A. 18A:18B-1 et seq., the plaintiffs have no Underlying Coverage as defined by the insurance policies. Therefore, the court reasoned that, by self-insuring, the plaintiffs bore the burden of paying defense expenses. With respect to whether the sexual abuse claims were covered under the policies, the court compared the averments of the complaint with the policies and, treating the factual averments as true and construing the complaint in the light most favorable to the plaintiffs, held the plaintiffs sufficiently pled the sexual abuse claims were covered by the policies and the plaintiffs payments towards those claims eroded their retained risk and triggered Illinois’ indemnification obligation. In denying Illinois’ motion with respect to the breach of contract claim, the Court focused on the policies’ definition of sexual abuse, which the plaintiffs pleaded fell within the ambit of “General Liability”, and identification of aggregate limits for sexual abuse claims. It is important to note that, upon rendering its decision, the court did not take a position as to whether the plaintiffs would ultimately succeed on the merits of their claims, as this determination could only take place after the completion of discovery. Thanks to Lauren Berenbaum for her contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact