News Not So Fast On Punitive Damages Award October 15, 2012 < Back Share to: The threat of punitive damages can be a “game changer” in a civil action. Subjective in nature, punitive damages are akin to aiming a bazooka at a fly, with collateral damage inflicted on any defendant in harm’s way. In other words, a claim of punitive damages can transform an otherwise modest claim for compensatory damages into a high stakes, risky litigation. The United States Supreme Court has spoken three times in the last fifteen years on the subject of punitive damages. Each time the Supreme Court has reduced jury awards for punitive damages and articulated general standards to judge their reasonableness. Most recently, the Second Circuit Court of Appeals, the court hearing appeals from federal courts in New York, Connecticut and Vermont, weighed in on whether a punitive damages award that was five times larger than its companion compensatory award was excessive and should be reduced. In Payne v. Jones and City of Utica, a decorated Viet Nam veteran was transported to a local emergency room for treatment of a minor injury. Plaintiff was apparently suffering from Post Traumatic Stress Disorder and arrived “combative and disoriented.” The police responded to the hospital and the defendant officer, Brandon Jones, slapped plaintiff in the head while plaintiff was being examined by the paramedics. Consistent with the local protocol for dealing with mentally ill patients, plaintiff was handcuffed and transported to another hospital for further care. At the second hospital, the defendant police officer noticed plaintiff’s Marine Corps tattoo and quipped, “Marines are pussies.” In response, plaintiff kicked the police officer in the groin area. Not a wise move particularly for a handcuffed prisoner: the police officer responded by punching the plaintiff in the face and neck 7-10 times and kneeing him in the back. The officer’s retaliation only stopped when a nursed intervened. Plaintiff filed suit against both the police officer and his employer, the City of Utica, alleging that the officer used excessive force. At trial, the jury found in favor of plaintiff and awarded $60,000 in compensatory and $300,000 in punitive damages. On appeal, defendants challenged the punitive damages award as excessive. In an opinion that should provide some comfort for defendants, the Second Circuit found the punitive damages award to be excessive and ordered it reduced to $100,000 or the case retried. Stressing that punitive damages are “by nature speculative, arbitrary approximations,” the Second Circuit ruled that the award for punitive damages failed each of the “guideposts” that must be cleared before a punitive damages award may stand. The Payne decision is welcomed news for private companies and municipalities. Prevailing plaintiffs are certainly entitled to fair and reasonable compensation but, in these difficult economic times, punitive damages can strangle both local companies and governmental entities. Payne makes clear that the federal courts should – and do—take their roles as gatekeepers seriously when reviewing whether a punitive damages award may stand. If you have any questions or comments about this post, please email Paul at pclark@wcmlaw.com Previous Next Contact

News Second Department Expands Meaning of “Altering” in Context of Labor Law §240 (NY) November 16, 2016 < Back Share to: In Goodwin v. Dix Hills Jewish Center, the Second Department Appellate Division overturned the Nassau County Supreme Court’s grant of defendant’s motion for summary judgment dismissing the Labor Law Section 240(1) cause of action and granted plaintiff’s motion for summary judgment, in a case that further expanded the Court’s interpretation of “altering” within the meaning of New York’s labor law. Plaintiff allegedly fell from a ladder on the defendant’s premises and sustained injuries. The plaintiff was restoring and installing wood paneling and molding and metal doors at the center. Before beginning his work, plaintiff removed two audio speakers from the wall. A rabbi, employed by the center, asked the plaintiff to rehang the two speakers as the plaintiff and his coworkers were almost done with the work. The plaintiff agreed to rehang the speakers, which required drilling holes and installing brackets in an elevated position in the room. Plaintiff used an eight-foot A-frame ladder to hang the speakers. Plaintiff, on the third or fourth rung of the ladder, was in the process of installing the second speaker, when the ladder suddenly “started swinging,” causing plaintiff to fall and sustain injuries. The Supreme Court granted defendant’s motion for summary judgment dismissing the complaint and denied plaintiff’s motion for summary judgment alleging violations of Labor Law Sections 240(1) and 241(6). The Appellate Division reversed the lower court's rulings, because plaintiff was engaged in the “altering” of a building at the time of his accident, and was entitled to the protections of Labor Law Section 240(1). “Altering” within the meaning of Labor Law 240(1) requires making a significant physical change to the configuration or composition of the building or structure” as opposed to “routine maintenance and decorative modifications.” The installation of wood paneling was an alteration of the building as the dimension, thickness, and composition of the sheetrock walls and steel doors were changed which constituted a significant physical change to the configuration or composition of the building. The Court rebuffed defendant’s contention that rehanging a speaker did not constitute the “altering” of a building or structure.” The Court opined that the intent of Labor Law Section 240(1) was to protect workers employed in the enumerated acts, even while performing duties ancillary to those acts - such as rehanging a speaker. This is a troubling decision for property owners and general contractors -- if drilling two holes to hang a stereo speaker constitutes "altering" under Labor Law §240, it seems anything involving a power tool and a fall from a ladder could lead to strict liability. Thanks to Justin Pomerantz for his contribution. Please email Brian Gibbons with any questions.     Previous Next Contact

News Sandy's Impact on the Art World. November 5, 2012 < Back Share to: Sandy has had a terrible impact on New York and New Jersey and initial damages estimates are in excess of 30 billion. One specific area of damages is in respect of fine arts. As this interesting piece makes clear, many lower Manhattan galleries and dealers were hard hit and while there should be insurance on the works themselves (although we all know what complications therein can exist -- especially in respect of valuation), coverage for the businesses themselves might be lacking. Stay tuned for a flurry of claims! For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News New York's Finest at Their Worst August 4, 2016 < Back Share to: In Culler v. City of New York, the plaintiff was enjoying a swim at a public pool when he was threatened by a group of fellow swimmers. He reported the incident to a police officer who told him the pool was closing and he had to leave. When the plaintiff walked outside, he saw the group waiting for him with sticks and bottles. He again informed the officer who told him to just walk home. When the plaintiff left, he was chased by the group and attacked with the bottles. He fell and broke his ankle. The First Department held that as a general rule a municipality can not be held liable for injuries resulting from the failure to provide adequate police protection. However, under the "special relationship" exception, liability will arise if the officer assumed an affirmative duty and the plaintiff relied on this undertaking. Unfortunately, the court found that, in the present case, the officer's refusal to protect the plaintiff shielded him from liability. Thanks to Georgia G. Stagias for her contribution to this post. Previous Next Contact

News Punitive Damages For Insurer's Delay In Resolving Title Dispute (PA) September 13, 2013 < Back Share to: In Davis v. Fidelity Nat’l Ins. Co., Pennsylvania's Court of Common Pleas addressed whether an insurer’s delay in resolving an insured’s claim constituted bad faith. In October 2004, Davis purchased a piece of property for development. Fidelity National Insurance Company’s authorized agent issued a title insurance policy to Davis for the property. In October 2007, when Davis applied for zoning ordinances, the owner of the adjacent property objected, claiming he was the record owner of the property Davis had purchased. Consequently, Davis filed a claim with Fidelity. In November 2007, Fidelity’s agent inquired into the situation and discovered that the adjacent property owner, in fact, held the deed to the subject property. The agent informed Fidelity and a few weeks later, notified Davis that the claim was being evaluated. In June 2009, Fidelity advised Davis that the claim was valid and they were working on a proposed solution. Almost three years later, Fidelity initiated settlement negotiations with the adjacent property owner. In November 2010, Davis inquired on the status of the claim and one month later, without a case assessment report, Fidelity offered the adjacent property owner $25,000 to settle the title issues. Subsequently, Davis filed a complaint against Fidelity alleging bad faith and breach of contract. Ultimately, the court held that Fidelity committed multiple violations of the Unfair Insurance Practices Act and acted in bad faith by unreasonably delaying the resolution of Davis’ claim. Specifically, the court noted that Davis had produced clear and convincing evidence that Fidelity knew or recklessly disregarded the fact that it had no reasonable basis to delay making a decision regarding the claim. Consequently, the court exercised its discretion and awarded Davis punitive damages in excess of $1.5 million, four times the amount of Davis’ compensatory damages. In reaching this conclusion the court stated that a five-year delay was extreme and unnecessary and constituted bad faith on behalf of Fidelity. The court further noted that Fidelity consistently failed to reach a prompt and equitable settlement and failed to timely acknowledge Davis’ continual correspondences and inquiries into the claim. Special thanks to Colleen Hayes for her contributions to this post. For more information, please contact Nicole Y. Brown at nbrown@wcmlaw.com . Previous Next Contact

News Automobile Regular Use Exclusion Hits the Red Light of the Motor Vehicle Financial Responsibility Law (PA) November 24, 2021 < Back Share to: On October 22, 2021, in Rush v. Erie Insurance Exchange, 2021 Pa.Super 215 (2021), the Pennsylvania Superior Court held that an Erie Insurance Exchange (“Erie”) regular use exclusion was unenforceable because it modified the clear and unambiguous requirements of Pennsylvania’s Motor Vehicle Financial Responsibility Law, 75 Pa.C.S. §§ 1701-99.7 (“MVFRL”), by functionally precluding insureds from accessing uninsured motorist benefits (“UIM”) to which they would otherwise be entitled. This precedential decision arises from a motor vehicle accident where City of Easton Police Officer Matthew Rush (“Plaintiff”) suffered serious injuries after the police vehicle he was operating was struck by uninsured motorists. The City of Easton maintained UIM coverage through Erie which included a “regular use” exclusion. This exclusion precludes coverage if an insured is injured while using a motor vehicle that the insured regularly uses but does not own. Thus, Erie denied coverage under their “regular use” exclusion because the City of Easton owned the car, not Plaintiff. Plaintiff brought the underlying declaratory judgment action claiming that such exclusions were unenforceable under the the broad scope of the MVFRL which requires UIM coverage in those situations where an insured is injured arising out of “use of a motor vehicle.” 75 Pa.C.S. 1731(c). On appeal, the Pennsylvania Superior Court affirmed the Northampton County Court of Common Pleas who granted Plaintiff summary judgment. The Superior Court found that this exclusion was unenforceable because it limited the scope of coverage required under the MVFRL. As such, Plaintiff was entitled to summary judgement because it was undisputed that absent the otherwise unenforceable “regular use” exclusion, Plaintiff would have been entitled to coverage. The Superior Court importantly did not address whether this exclusion expressly violates the MVFRL because Erie had waived the issue on appeal. Rather, as applied, the Rush court held the “regular use” exclusion unenforceable to the extent it conflicts with the MVFRL’s public policy initiatives which mandate UIM coverage for injuries associated with the use of all motor vehicles - not just those an insured owns as required by the “regular use” exclusion. However, the court indicates their position had Erie raised the novel issue of express violation by pointing to the Pennsylvania Supreme Court’s reasoning in Gallagher v. GEICO Indemn. Co., 201 A.3d 131, 138 n.6 (Pa. 2019) rejecting the same public policy argument proposed by Erie in Rush. The Rush court reiterated: “[W]e recognize that this decision may disrupt the insurance industry's current practices; however, we are confident that the industry can and will employ its considerable resources to minimize the impact of our holding.” Rush, 2021 Pa.Super at 223 n. 5 (2021) citing to Gallagher, 201 A.3d at 138 n.6. In this issue of first impression, the Rush court has essentially opened the door on a novel question of Pennsylvania law concerning whether a regular use exclusion classifies as an express violation of the MVFRL. However, the court’s discussion of Gallagher does not leave a promising for prospect for the success of the insurers. Insurers would be wise to account for this decision with respect to underwriting practices and premium collection for risks the insurer may be forced to cover. Thanks to Kendal Hutchings for her contribution. Should you have any questions, please contact Matthew Care. Previous Next Contact

News Dismantling The Designated Ongoing Operations Exclusion October 29, 2018 < Back Share to: In Tuscarora Wayne Ins. Co. v. Hebron, Inc., the Pennsylvania Superior Court analyzed when a policy’s Designated Ongoing Operations Exclusion may be triggered. In brief, a fire occurred at the insured’s property, when a driver was pumping gas into a vehicle at the insured’s location. The fire caused damage to the insured’s property, and the surrounding neighbors’ property as well. The insured’s policy excluded coverage under its Designated Ongoing Operations Endorsement for ongoing operations including “vehicle dismantling”. On the basis of this exclusion, the insurer commenced a declaratory judgment action seeking a declaration that the policy did not provide coverage for the claimed damages. On summary judgment, the trial court ruled in favor of the insurer. On appeal, the insured argued the trial court erred in finding that refueling a vehicle fell within the policy’s language of “vehicle dismantling”. The Superior Court agreed with the insured. As the phrase “vehicle dismantling” was not defined by the policy, the court looked to the ordinary meaning of the phrase, which generally involved stripping vehicles of their parts. Thus, since the only connection the claimed damages had with “vehicle dismantling” was the fact that the fuel, which started the fire, was being pumped into vehicles that had been dismantled, the Superior Court believed this connection was insufficient to trigger the policy endorsement. Accordingly, this case reveals, Pennsylvania courts will look to the actual operations being performed to determine whether there is a close enough link, as to trigger a policy’s Designated Ongoing Operations Exclusion. Thanks to Colleen Hayes for her contribution to this post. Previous Next Contact

News If an Insured Landlord’s Alleged Faulty Workmanship Causes Damage to a Tenant’s Property, Is It Covered? (PA) August 2, 2019 < Back Share to: Recently, in Pennsylvania-Manufacturers-Indemnity-Company-v.-Pottstown-Industrial-Complex-LP, the Superior Court of Pennsylvania analyzed whether insurer, Pennsylvania Manufacturers Indemnity Company (“PMA”), was permitted as a matter of law to disclaim coverage to its insured, Pottstown Industrial Complex LP (“PIC”), for claims filed against PIC by PIC’s tenant, The Pride Group (“Pride”) (“Underlying Lawsuit”). According to the complaint in the Underlying Lawsuit, on four separate occasions, property, Pride leased from PIC, flooded causing over $700,000 in damages to Pride’s inventory. Pride claimed the water damage occurred because PIC failed to uphold its obligations under the lease to keep the roof in good repair. In the complaint, Pride only alleged a claim for breach of contract – yet, Pride did plead PIC was negligent for failing to properly maintain and repair the Property’s roof. After PMA received notice of the Underlying Lawsuit, PMA agreed to defend PIC subject to a reservation of rights. However, PMA then commenced the instant declaratory judgement action. After the close of pleadings, PMA filed a motion for judgment on the pleadings. Upon review, the trial court agreed with PMA holding PMA was not obligated to defend or indemnify PIC for the Underlying Lawsuit because Pride’s allegations of inadequate roof repairs equated to claims of faulty workmanship; therefore, the trial court held the alleged water damage did not constitute an “occurrence” as defined by the commercial general liability policy. Subsequently, PIC appealed, forcing the Superior Court to analyze whether the policy provided coverage for property damage to Pride’s property caused by faulty workmanship. The Superior Court held a claim of faulty workmanship, on its own, does not constitute an “occurrence”, especially where the only property damaged is, inter alia, “property that the insured supplied or on which it worked”. With this legal foundation in mind, and based on the case’s unique factual pattern, the Superior Court determined that since Pride sought to recover damage to its own property, which was stored at PIC’s property, Pride’s claim constituted an “occurrence.” In doing so, the Superior Court reasoned the property damage sustained by Pride was an accident – i.e., an “unexpected and undesirable event”. Although the Superior Curt noted the Underlying Lawsuit only asserted a breach of contract claim, the Superior Court stressed the factual allegations in the Underlying Lawsuit “determine whether the claims are within the coverage of an insurance policy, not the label of the cause of action selected by the underlying plaintiff.” In sum, the Superior Court’s holding is a reminder that, in the context of determining coverage, it is important to look beyond the labels of the claims and truly evaluate all factual allegations. Thanks to Lauren Berenbaum for her contribution to this post. Please email Vito A. Pinto with any questions. Previous Next Contact

News Plaintiff Rides Again: Dude Ranch’s Motion for Summary Judgment Denied (NY) March 27, 2019 < Back Share to: In SARA W by HENNY W v Rocking Horse Ranch Corporation, plaintiffs commenced an action seeking to recover damages for injuries sustained by plaintiff, who was 16-years-old, when she fell from a horse while at defendant's dude ranch. Defendant moved for summary judgment on the theory of assumption of the risk, but was denied by the lower court. Defendant appealed. Under the doctrine of primary assumption of the risk, although “participants in the sporting activity of horseback riding assume commonly appreciated risks inherent in the activity, such as being kicked ..., ‘[p]articipants will not be deemed to have assumed unreasonably increased risks’ ” In support of its motion, defendant submitted the deposition testimonies of the infant and Robert Gilbert, a certified horse wrangler employed by defendant who assisted the infant, to show that it exercised care in ensuring that the horse riding conditions were as safe as they appeared to be. Gilbert's testimony established that the infant was provided with an appropriate horse for a beginner's trail, helmets were required of infants participating in the ride, the infant was provided with instructions prior to the ride and a horse wrangler accompanied the riders during the trail ride and also assisted the riders when dismounting. Importantly, the infant herself testified that she was aware that there were risks involved in the activity, as she had been on horseback riding trails prior to the incident. Plaintiff contended that defendant was negligent in helping her dismount the horse. The infant's description of the incident differs from Gilbert's description. Specifically, the infant testified that Gilbert moved away from her and towards the horse's head to tame it and that it was this movement by Gilbert that caused the horse to move, leading to the infant's fall. The Appellate Division, Third Department agreed with lower court and upheld their decision finding a question of fact. The Appellate Division held that although defendant attempted to provide adequate assistance on dismount, there still remains a question of fact as to whether defendant’s response to the situation, in light of evidence that the infant was a novice and that the horse was jittery and jumpy, heightened the risk of her fall, thereby unreasonably increasing the risks of horseback riding. As we highlighted some years ago reporting on Corcia v. Rocking Horse Ranch, there will be a question of fact whenever a plaintiff presents evidence that the defendant increased the risk at hand. Thanks to Paul Vitale for his contribution to this post. Previous Next Contact

News NY 1st Dept: Undisclosed Notice Witness Can't Defeat Summary Judgment Motion November 9, 2009 < Back Share to: In Garcia v. Good Home Realty, the plaintiff claimed that she slipped and fell on wet stairs in the defendant's building. She initially testified that she did not know the source of the water, but later submitted an affidavit that the steps appeared recently mopped. In support of its summary judgment motion based on lack of notice, the property owner submitted an affidavit from its porter who stated that he had not mopped the stairs that morning. In opposition, the plaintiff submitted an affidavit from her brother-in-law who stated that he noticed the soapy condition of the stairs shortly before the accident. The Appellate Division held that the affidavit was insufficient to defeat the motion because the brother-in-law had not been previously disclosed as a witness and that submitting an affidavit from an undisclosed notice witness was improper. Thanks to Bill Kirrane for his contribution to this post. http://www.nycourts.gov/reporter/3dseries/2009/2009_07938.htm Previous Next Contact

News Plaintiff Missed the Mark in Her Claim Against Target (NJ) October 16, 2019 < Back Share to: In Elzogby v. Target Corp., 2019 WL 3886940 (Aug. 19, 2019), the United States District Court for the District of New Jersey granted summary judgment in defendant Target’s favor because it found that Target did not have notice of an alleged slippery condition, and the mode-of-operation rule did not apply. The decision’s impact is twofold. First, it demonstrates that the court will not be persuaded by a plaintiff’s argument that a defendant has constructive notice only because of its “ample resources.” Second, it demonstrates the narrow reach of the mode-of-operation rule. Elzogby brought a claim against Target seeking to recover money damages after she slipped and fell on an allegedly wet floor in a Target store. The facts indicated, however, that after her fall Elzogby continued shopping and eventually purchased items. While she shopped, her brother filed an incident report. When asked what the cause of the accident was, Elzogby’s brother reported “water,” but he was “unsure.” Target filed a motion for summary judgment, which the court granted. The court first reasoned that Elzogby’s conclusory allegation that Target had constructive notice because of its "ample resources," cameras, and ability to monitor patrons, was not supported by the facts. Elzogby failed to allege specific facts that Target had constructive notice of the water. She did not show how long the water was on floor, or that anyone other than Elzogby saw the water. Next, the court disagreed with Elzogby’s contention that the mode-of-operation rule applied. Under the mode-of-operation rule, the plaintiff is relieved of proving that the defendant had notice of a dangerous condition where, as a matter of probability, a dangerous condition is likely to occur because of the nature of the business. The mode-of-operation rule generally applies to slip and fall cases that occur in self-service restaurants. In such cases, courts have determined that the nature of the business—usually pouring a drink—creates a high probability of a slippery condition. In Elzogby, however, the mode-of-operation rule did not apply because Elzogby failed to show a causal nexus between the water she allegedly slipped on and a self-service component of Target. Her fall did not occur while she was using a self-service drink station. She did not show that the alleged liquid was from Target and further, she did not fall near any self-service drink station. Although not binding precedent, Elzogby demonstrates the New Jersey District Court’s reluctance to find negligence based on vague conclusory claims. The court did not agree that a store had constructive notice simply because of its “ample resources.” The court also refused to expand the mode-of-operation rule beyond the circumstances of a self-service restaurant. Thanks to John Lang for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Illusory CGL Policy Not Against Public Policy in NY November 12, 2009 < Back Share to: In 720-730 Fort Wash. Ave. Owners Corp. v. Utica First Insu. Co., Utica denied coverage for an underlying tort action wherein a subcontractor’s employee was injured when a concrete block fell on him while working on 702-730 Fort Washington’s construction site. The policy had exclusions for bodily injury to any employee or any liability arising out of any roofing operations. The property owner argued that the exclusions rendered the insurance policy illusory and against public policy since it did not provide any of the insureds with the usual construction site coverage required under its agreement with the general contractor and subcontractors. The Court ruled that Utica’s policy was misleading and did not provide the coverage necessary to protect Fort Washington from the construction site risks and the vicarious liability imposed by the Labor Law. However, the exclusions were judicially upheld and the inadequate insurance policy was found to not have violated any regulation or statutorily declared public policy. The Court suggested that the passing of a statute or regulation mandating the issuance of a “uniform construction site insurance policy” would reinforce the public policy goals sought under New York Labor Law; however, the Legislature has yet to act as such. In the meantime, the Court reminds insureds of the need to perform a due diligence review of the policy, citing the maxim caveat emptor – let the buyer beware. Thanks to Chris O'Leary for his contribution to this post. http://www.nycourts.gov/reporter/3dseries/2009/2009_29443.htm Previous Next Contact