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News NY’s “Pothole Law,” Prior Written Notice Statutes, and the Affirmative Negligence Exception (NY) December 23, 2020 < Back Share to: In Martin v. City of New York, No. 12318, 2020 WL 7347089 (1st Dep’t, Dec. 15, 2020), the Appellate Division, First Department clarified a municipality’s liability exposure, pursuant to a prior written notice statute and the affirmative negligence exception. In Martin, Plaintiff alleged he sustained personal injuries when falling on a roadway in the Bronx. Defendant owned and maintained the accident location. Defendant moved for summary judgment, which was granted, because Plaintiff failed to provide Defendant with prior written notice of the alleged roadway defect, as required under the “Pothole Law.” See Administrative Code of City of NY § 7-201 (c)(2). On appeal, Plaintiff argued notice was not required under the Pothole Law when the alleged tortfeasor created the roadway defect through an affirmative act of negligence, i.e., poorly conducted repair work. The First Department agreed with Plaintiff and reversed the trial court’s summary judgment order, for the reasons articulated below. Generally, a municipality that has enacted a prior written notice statute may not be subject to liability for personal injuries caused by a defective street or sidewalk condition, absent proof of prior written notice or an exception thereto. Martin, at *1. The Court of Appeals has recognized two exceptions to this rule, namely, where the locality created the defect or hazard through an affirmative act of negligence [and] where a “special use” confers a special benefit upon the locality. Katasoudas v. City of New York, 29 A.D.3d 740, 741 (2d Dep’t 2006) (additional citations omitted). In Martin, the “affirmative creation exception” was at issue. This exception is “limited to work by the City that immediately results in the existence of a dangerous condition.” Yarborough v. City of New York, 10 N.Y.3d 726, 728 (2008) (internal quotation marks and additional citations omitted). The exception does not apply in circumstances where a dangerous condition eventually emerges, due to erosion/gradual wear and tear. In Martin, however, the First Department noted the trial court erred by ignoring deposition testimony demonstrating Defendant attempted to repair the subject road approximately one month before the accident occurred. Thus, questions of fact existed as to whether Defendant’s affirmative repair of the road negligently created a defective condition. The takeaway for defense counsel is that they should be aware of the evidentiary burden required to prevail on summary judgment when plaintiffs proffer testimony supporting the affirmative negligence exception of a prior written notice statute. Rebutting such a proffer would require countervailing evidence that plaintiff’s testimony is either entirely unsubstantiated or the dangerous condition developed over time. Thanks to John Amato for his contribution to this post. If you have any questions or comments, please contact Colleen Hayes. Previous Next Contact

News NY High Court Takes Common Sense Approach to Additional Insured Coverage June 15, 2017 < Back Share to: For years parties have disputed just how far “caused in whole or in part” stretches in the context of coverage afforded an additional insured for the acts or omissions of a named insured. New York’s highest court settled the dispute and decreed “caused” refers to proximate, rather than the impermissibly broad “but for,” causation. The Court of Appeals decided Burlington Ins. Co. v. NYC Tr. Auth., on June 6, 2017, and was presented with a familiar fact pattern in the world of coverage: a coverage dispute over the scope of additional insured coverage afforded in the scope of construction project. Burlington insured Breaking Solutions, Inc. (“BSI”), which supplied equipment and personnel for the project. Plaintiff, a Transit Authority employee, fell from scaffolding after BSI equipment came into contact with a live electrical cable that was under concrete. Burlington initially recognized a duty to defend the Transit Authority, subject to a reservation of rights, based on the Transit Authority’s status as an additional insured. Burlington reserved its right to deny coverage based on the limitations of the pertinent additional insured endorsements, which afforded coverage: …only with respect to liability for “bodily injury”, “property damage” or “personal and advertising injury cause, in whole or in part, by: Your acts or omissions; orThe acts or omissions of those acting on your behalf. Subsequent discovery revealed internal Transit Authority memos admitting they were solely at fault, and BSI neither operated the machinery improperly, nor knew of the existence of the cable. Based on these admissions, Burlington disclaimed coverage. The Court of Appeals held the plain language of the endorsement, including the reference to “liability,” calls for proximate causation. Significantly, the Court rejected the argument that “caused by” is equivalent to “arising out of,” the latter of which signals but for causation. In the end, the Transit Authority’s sole negligence was not covered under the Burlington policy’s additional insured endorsement. The Court’s plain language interpretation reflects the common sense recognition that additional insured endorsements are meant to apportion loss to the party with the most control over the risk. In the real world construction context, the endorsement is meant to create a coverage chain in parallel to the contractual chain of indemnification running from the bottom rung subcontractor to the property owner at the top. Sole acts of negligence of entities higher up the chain always break the liability and indemnification chain in New York, and coverage is no different. Thanks to Chris Soverow for his contribution to this post.     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 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 NJ Insurer's Bad Faith Failure to Settle Issue for Fact Finder July 29, 2010 < Back Share to: When a jury returns a verdict well in excess of an insured’s policy limit after an insurer refused an offer to settle within the limit, a bad faith claim is not a matter of strict liability. In fact, the determination of whether the insurer acted in bad faith is a fact sensitive question that generally will require a plenary hearing or trial. In Wood v. New Jersey Manufacturers Ins. Co., the plaintiff postal worker alleged cervical and lumbar injuries were caused when she backed into a fence and a dog jumped up on her. She had cervical and lumbar surgeries and contemplated further surgery as the trial approached. A court appointed arbitrator had awarded the plaintiff $600,000 attributing 90% to the insured for a net award against the insured dog owner for $540,000, $40,000 above the policy limit. The defense rejected the arbitrator’s award, and at trial, the jury awarded a total of $2.4 million with an allocation of 51% to the insured (49% to the co-defendant property owner) for a net verdict of $1.4 million. Notably both the claims adjuster and the defense attorney had recommended settlement within the policy limit, but this had been rejected by the insurer’s Major Claims Committee. In an appeal by the insurer of summary judgment on the bad faith claim, the Appellate Division reversed and ordered further proceedings that would address the insurer’s reasonableness in their evaluation of the claim. The court recognized that an insurer could disagree with its counsel and even its adjuster’s evaluation of the case. A full hearing would give the insurer an opportunity to explain why it did so and allow a fact finder to fully assess the credibility and persuasiveness of the witnesses. Thus, an insurer is not expected to be “gifted with the powers of divination or of accurate prophecy,” and it will not automatically be held in bad faith when a jury awards an amount in excess of the policy limit. On the other hand, the insurer will need to be prepared to persuade a fact finder of the reasonableness of its actions. If you have any questions or comments about this post, please email Denise at dricci@wcmlaw.com . See Wood v. New Jersey Manufacturers Ins. Co. at http://www.judiciary.state.nj.us/opinions/a1768-08.pdf Previous Next Contact

News Functional Capacity Exams Accepted In New York September 29, 2010 < Back Share to: In Cristiano v. York Hunter Services, the Kings County Supreme Court denied a protective order to a plaintiff who was seeking to prevent the admission of a Functional Capacity Examination (FCE). The FCE is used generally to gage a person’s ability to return to work. Plaintiff argued that the FCE is a novel scientific methodology that has not been shown to have been generally accepted by the relevant scientific community. The court rejected this argument by noting that the New York Appellate Division has previously held that FCEs are commonly relied on by physicians when making determinations on a patient’s ability to return to work. Therefore, the FCE was admissible. For more information on this post, please contact David Tavella at dtavella@wcmlaw.com . http://pdf.wcmlaw.com/pdf/Cristiano.pdf Previous Next Contact

News New Jersey Opens Door to Treble Damages in Products Claims (NJ) January 22, 2021 < Back Share to: New Jersey’s Supreme Court troublingly opened the door to avaricious plaintiffs, potentially allowing plaintiffs to simultaneously allege product liability actions and actions under the Consumer Fraud Act. The Consumer Fraud Act allows for the potential of treble damages, attorneys fees, and costs to successful plaintiffs. Until recently, the Product Liability Act, which governs the strict product liability regime in New Jersey, subsumed almost every cause of action into a products claim, if the thrust of the claim was that of a defective product or warning. In Sun Chemical Corp. v. Fike Corp., 243 N.J. 319 (2020), a fire occurred that resulted in property damage and bodily injury. Relevant here, Sun had purchased a fire suppression system, and alleged that the fire suppression system manufacturer materially misrepresented that the “(1) the Suppression System would prevent explosions; (2) the Suppression System would have an audible alarm; (3) the Suppression System complied with industry standards; and (4) the System had never failed.” The Consumer Fraud Act broadly prohibits deceptive or misleading conduct or practices, including in the sale of goods. Typically, the CFA prohibits material misrepresentations or omissions. However, as relevant here, the CFA typically “punishes” express or affirmative misrepresentations more so than omissions or unintended deceptive conduct. Sun alleged affirmative and express material misrepresentations under the CFA. The New Jersey Supreme Court declared that the more serious “sins” of material affirmative and express material misrepresentations under the CFA were not subsumed under the PLA. Therefore, plaintiffs can now allege simultaneous product liability cases and violations of the CFA. Accordingly, we expect plaintiffs to allege CFA claims pursuant to written or verbal warranties, warnings, and representations, in order to obtain leverage with respect to the treble damages and attorneys fees under the CFA going forward. Thanks to Matt Care for his contribution to this post. If you have any questions or comments, please contact Colleen Hayes. Previous Next Contact

News NY Court Analyzes Effectiveness of Untimely Disclaimer Based on Classification Endorsement February 24, 2016 < Back Share to: A New York court recently addressed an insurer’s untimely disclaimer letter, which disclaimed coverage based on the policy’s classification endorsement. In Black Bull Contracting, LLC v. Indian Harbor Insurance Company, Black Bull was hired to perform demolition work at a construction site. A Black Bull employee was injured and sued the property owner. The owner sued Black bull. Indian Harbor Insurance Company was Black Bull’s insurer. The policy contained a classification endorsement providing, “this insurance applies only to those operations that are classified or shown on the Declarations”. The policy’s declarations page listed four classifications: the “Contractors—subcontracted work—in connection with construction, reconstruction, repair or erection of buildings—Not Otherwise Classified.” Once suit was filed, Black Bull tendered its defense, and that of the owner (as an additional insured) to Indian Harbor. More than two months after receiving the tender, Indian Harbor disclaimed coverage on the ground that the demolition work did not fall within the classifications covered by the policy. Black Bull commenced a declaratory judgment action, and Indian Harbor moved to dismiss the complaint. In analyzing whether to grant Indian Harbor’s motion, the court first determined that the timeliness, or lack thereof, of Indian Harbor’s disclaimer, was not a bar to denying coverage. The court concluded the policy’s classifications defined the activities that were within the scope of coverage and did not constitute exclusions. Thus, since the injury causing activity fell outside the scope of the policy’s coverage, the lack of timeliness of Indian Harbor’s disclaimer would not prevent it from denying coverage (as opposed to an untimely disclaimer relying on an exclusion). Next, the court analyzed whether the demolition fell within the policy’s enumerated classifications. Black Bull argued that demolition fell under the policy’s “Contractors—subcontracted work—in connection with construction, reconstruction, repair or erection of buildings—Not Otherwise Classified” classification. The court disagreed. The court concluded that to utilize Black Bull’s interpretation would render the policy meaningless. Since the claim fell outside of the scope of coverage, Indian Harbor was not obligated to defend or indemnify the insured (or any additional insured) in connection with the underlying lawsuit. This case illustrates that an untimely disclaimer may not always act as a bar in denying coverage, so long as the claims fall outside the scope of the policy’s coverage. In addition, a policy’s classification endorsement should always be reviewed, as this sometimes overlooked endorsement, may ultimately act as a complete bar to coverage. Thanks to Colleen Hayes for her contribution to this post. Previous Next Contact

News Specificity and Clarity Required in Big Apple Maps March 24, 2009 < Back Share to: In 1982, plaintiffs' tort lawyers created Big Apple Pothole & Sidewalk Protection Committee to keep track of sidewalk defects in the five boroughs. The company periodically files "Big Apple maps" with the City of New York in an attempt to provide the city with the legally required notice of sidewalk, curb and crosswalk defects necessary to sustain negligence claims. In two recent cases that reached the Court of Appeals, the Court ruled that the symbols on Big Apple maps must be clear in their representation of the defect and the plaintiff's case must show that the fall was caused by that particular defect. In D'Onofrio v. City of New York, the symbol of a raised sidewalk was clear, but the plaintiff claimed that he fell on a grate or broken concrete. Since there was no evidence of an uneven sidewalk on the map, the Court rejected the jury verdict in favor of the plaintiff and dismissed the case as a matter of law. In the companion case of Shaperonovitch v. City of New York, the plaintiff alleged a fall on a raised sidewalk. The Court found the symbol at that location was ambiguous and did not indicate an elevation. The Court rejected the jury verdict in favor of the plaintiff. Thanks to Robin Green for her contribution to this post. http://www.courts.state.ny.us/reporter/3dseries/2008/2008_09860.htm Previous Next Contact

News Lights Out On Lamp, Court Sheds Light On Service Of Process (PA) April 8, 2021 < Back Share to: In recent case, Gussom v. Teagle, the Pennsylvania Supreme Court revisited the issue whether a lawsuit should be dismissed due to Plaintiff’s lack of effort to complete service – regardless of Plaintiff’s intent. On July 25, 2016, Rasheena Gussom and Maurice Teagle were involved in a car accident. Two months before the statute of limitations expired, Gussom filed a civil complaint against Teagle. Gussom attempted to serve Teagle in Philadelphia and then again in Virginia. After the statute of limitations had expired, Gussom filed a praecipe to reinstate the complaint and unsuccessfully attempted to serve Teagle via certified mail. A few months later, Teagle filed preliminary objections to Gussom’s complaint which argued no good faith effort was made to serve him before the statute of limitations expired. The trial court sustained Teagle’s preliminary objections and dismissed Gussom’s complaint with prejudice. The Pennsylvania Superior Court affirmed the dismissal of a civil complaint citing Plaintiff failed to make a good faith effort to timely serve the Defendant. On appeal, the Pennsylvania Supreme Court affirmed the rulings of the Superior Court and trial court, therefore dismissing the Plaintiff’s complaint with prejudice. In its analysis, the Supreme Court revisited the Lamp Rule which originated from Lamp v. Heyman. The Lamp Rule prohibited plaintiffs filing a writ of summons prior to the expiration of the statute of limitation and then making no effort to service the defendant. However, over time the Lamp Rule has been interpreted to dismiss only claims in which plaintiffs have shown intent to stall the judicial process. The new standard set out in Gussom is that a plaintiff must make a good faith effort to serve process upon a defendant. The plaintiff has the burden of proving they diligently attempted timely service on the defendant, regardless of whether the plaintiff’s actions were intentional. The Gussom Court held the trial court now has full discretion to dismiss a complaint when plaintiff fails to offer proof of attempted service in a timely manner and there is no evidence that Defendant had actual notice. The trial court need not take into account the intent of the Plaintiff nor the prejudice on the defendant when deciding to dismiss a complaint. Of major import, this case places a higher burden on Plaintiff to show diligent efforts of service, especially after the statute of limitations has expired. Additionally, this case aids Defendants in filing preliminary objections, as prejudice is not a factor in the Gussom decision. Thanks to Madeline Troutman for her contribution to this article. Should you have any questions, please contact Tom Bracken. Previous Next Contact

News Cost-Effective ADR -- Brought About by a Not-So Cost-Effective Appeal (PA) January 10, 2019 < Back Share to: On January 4, 2019, the Superior Court of Pennsylvania vacated a May 23, 2017 ruling in the Court of Common Pleas of Fayette County that overruled the preliminary objections of Golden Gate National Senior Care, LLC. Those preliminary objections sought to compel arbitration. At the trial court level, Golden Gate sought to enforce a compulsory ADR agreement signed by Mildred Snyder’s husband, Donald Snyder, upon Mrs. Snyder’s admission to the Golden Gate National Senior Care facility in 2006. However, the trial court overruled their preliminary objections arguing there was no meeting of the minds as to the ADR agreement, Mr. Snyder lacked the authority to execute the agreement, and the agreement lacked consideration and was unconscionable. The Superior Court quickly determined that lower court abused its discretion in overruling Golden Gate’s preliminary objections. However, the Court first had to determine if it had authority to hear appeal of the interlocutory order. In Pennsylvania, an appeal may be taken from a court order denying an application to compel arbitration made under 42 Pa.C.S.A. 7304. The Pa. Supreme Court in Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490 (Pa. 2016) heard an appeal regarding the enforceability of an ADR provision similar to the provision in the present case. Therefore, the Court ruled it could move forward with reviewing the interlocutory order. Once the court overcame that procedural hurdle, the court quickly disposed of the arguments that the trial court made in declining to enforce the ADR provision as the lower court failed to provide sufficient justification for its actions. Although Golden Gate prevailed on appeal, their frustration at the added expense of motion and appellate practice would be understandable, in light of the clear binding ADR language in the agreement. Thanks to Garrett Gitler for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Law Practice in a Post-COVID World March 18, 2021 < Back Share to: We won't be seeing a pre-COVID world any time soon. But a post-COVID world? That seems a bit more realistic, as vaccinations become more prevalent and we progress toward herd immunity. What will the practice of law look like, once COVID19 subsides, regular travel comes back, and in-person interaction resumes? Which remote techniques we use will stay, and which will fade away? My article in this month's issue of the Voice, monthly publication of DRI (The Defense Research Institute) discusses this topic. Please email Brian Gibbons with any questions. Previous Next Contact