News Independent Contractor: How Much Control is too Much? (PA) September 12, 2019 < Back Share to: The Superior Court of Pennsylvania recently affirmed a grant of summary judgement in favor of The Columbia Gas Company of Pennsylvania in Main v. The Columbia Gas Company of Pennsylvania. The Court reaffirmed that employers must do more than just give suggestions or advice to independent contractors to be held liable for their negligence. Columbia Gas owns natural gas lines that services residential communities. When these lines become clogged, Columbia contracts with The Fishel Company to clear them. While conducting the clearing process, Robert Main, an employee of Fishel, was injured by his coworker. Main alleged that Columbia was negligent by not training Fishel employees on proper safety procedures. Columbia asserted that it neither supervised nor directed Fishel’s work on the gas lines. Columbia filed a motion for summary judgement. The trial court granted the motion in favor of Columbia because an employer of an independent contractor is generally not liable for harm caused by an independent contractor’s negligence. Main filed a petition for reconsideration arguing that Columbia falls within the retained control exception. Main argued that Columbia should be vicariously liable because Columbia retained control over how Fishel employees conducted the clearing process. The court, citing the Pennsylvania Supreme Court, stated that the retained control exception does not apply here because the contract only conferred Columbia with limited control over how Fishel performed the clearing. The court also stated that Columbia merely exercised its right to inspect progress and to make suggestions rather than control the manner or method of work. This case emphasizes the fine line between an employee and an independent contractor. A court might hold the employer accountable for the independent contractor’s negligence depending on how much control the employer asserts on the independent contractor. This opinion also stresses the importance of a clear contract between the employer and the independent contractor to clear up ambiguity. Thanks to Nicholas Wright for his contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News Limits of Underinsured Auto Coverage Eroded by Settlement Payment (NY) April 1, 2016 < Back Share to: In Nafash v Allstate Ins. Co., the plaintiff sued his own automobile insurer to try to recover supplementary uninsured/underinsured motorist (SUM) coverage for injuries he sustained in a motor vehicle accident. In the decision, the Court summarized the purpose of SUM coverage: “when a policyholder purchases SUM coverage in New York, he or she is insuring against the risk that a tortfeasor "(1) may have no insurance whatsoever; or (2) even if insured, is only insured for third-party bodily injury at relatively low liability limits, in comparison to the policyholder's own liability limits for bodily injury sustained by third-parties." In this case, plaintiff settled against the adverse driver for the entire policy limits of $100,000. He then sought to recover $100,000 under his SUM coverage with Allstate. Allstate argued that key language in the policy’s SUM endorsement precluded plaintiff from recovering. The policy language at issue provided, in pertinent part, that "[t]he maximum amount payable under SUM coverage shall be the policy's SUM limits, reduced and thus offset by motor vehicle bodily injury liability insurance policy or bond payments received from, or on behalf of, any negligent party involved in the accident." The Court agreed, finding that the $100,000 SUM coverage was reduced by the underlying settlement; and in this case the SUM coverage was reduced to zero as plaintiff received $100,000 from the other driver’s policy. Thanks to George Parpas for his contribution to this post and please write to Mike Bono for more information.   Previous Next Contact

News Ready to Disclaim? Not so fast ... First Department Issues Important Coverage Decision (NY) January 11, 2012 < Back Share to: The Appellate Division, First Department, recently dealt with an issue involving a lawyers’ professional liability policy that could have a wide ranging impact on all insurance coverage disputes. In K2 Investment Group, LLC, et al. v. American Guarantee & Liability Insurance Company, the court, in essence, ruled that the insurer did not have a right to litigate facts in a declaratory judgment action that pertained to its duty to indemnify when the insurer denied coverage at the outset of the litigation of the underlying action and a default judgment was entered against the insured. Plaintiffs, a group of lending companies, claimed that the insured, Jeffrey Daniels, failed to record mortgages securing a loan that plaintiffs made to Daniels’ company. The insurer denied coverage under its professional liability policy based on a policy exclusion that barred coverage for losses arising out of Daniels’ acts for a business enterprise in which he had a controlling interest. The insurer contended that Daniels’ liability arose out of his actions to obtain a loan for his own company. The policy also excluded claims arising out of Daniels’ status as a shareholder of a business enterprise. Generally, the position of the insurer was that Daniels was not acting as plaintiffs’ attorney, but rather in furtherance of his own company -- acts that were excluded from the malpractice policy. When the insurer failed to pick up Daniels' defense, the insured defaulted and assigned his rights under the policy to the plaintiffs, who then commenced a declaratory judgment action against the insurer seeking the judgment amount. Plaintiffs then moved for summary judgment, which the trial Court granted. On appeal, the Appellate Division majority found that the exclusions did not apply because, according to the allegations in the complaint, the insured’s liability did not arise out of his ownership interest in his company but instead in his role as attorney to the plaintiffs/lenders. The insurer argued that there was an issue of fact in respect of this issue. But the Court held that the insurance company did not have a right to litigate this factual issue in the declaratory judgment action because a default judgment had already been entered in the underlying suit due to the insurer’s failure to defend Daniels in the underlying action. The two dissenting judges argued that the insurer’s duty to indemnify is based on a determination of all applicable facts and because the issue was not litigated in the underlying action, the insurer was entitled to litigate the issue in the DJ action. If this decision stands and is given precedent on this issue, it could impact the way insurers handle disclaimers on the issue of indemnity. Without sufficient factual proof to withstand a motion for summary judgment at the outset, insurers may need to reserve their rights and wait until underlying lawsuits develop before being able to issue effective indemnity disclaimers. Otherwise, they risk a default being entered in the underlying action and may lose their only opportunity to establish factual support for their coverage positions. Thanks to Mendel Simon for his contribution to this post. If you would like further information, please write to Mike Bono at mbono@wcmlaw.com .     Previous Next Contact

News The Perils of Untimely Disclaimer December 19, 2007 < Back Share to: This Appellate Division - Second Department decision and order reversed the Supreme Court, Richmond County decision and order that found the Continental Casualty Insurance Company was not obligated to defend or indemnify its insured in two actions. This decision outlines what an insurance carrier must demonstrate in order to properly deny coverage based upon lack of cooperation. More notably, this decision pits an insured's failure to cooperate against a carrier's obligation to timely disclaim "as soon as is reasonably possible" pursuant to CPLR 3420. In this case, it was found the carrier failed to timely disclaim, causing it to be obligated to defend and indemnify. http://www.nycourts.gov/reporter/3dseries/2007/2007_09718.htm Previous Next Contact

News Summertime at the Shore: NJ Limits Realtor's Duty for Rentals April 13, 2010 < Back Share to: Bad enough the real estate market has been in tatters for the last few years. Realtors have also faced expanding liability to entirely new classes of plaintiffs during this time period. Does their duty of care extend to a family that rents a summer shore house for a mere 2 weeks? A half-hearted "no," according to the New Jersey Supreme Court. In an unusual procedural twist, the justices split 3 to 3 (with one justice obstaining), a result that led to the affirmance of the appellate division decision dismssing the case. The Supreme Court noted that the renters had been in the rental home for 9 days before the accident occurred, more than enough time to observe the alleged defectively designed deck stairs. Focusing on the tenant's opportunity to inspect the premises, the majority stressed that it did not seek to absolve tenants from "personal responsibility for awareness of their surroundings and the dangers inherent in those surroundings." If you have any questions about this post, please email Paul Clark at pclark@wcmlaw.com http://www.judiciary.state.nj.us/opinions/supreme/A9008ReyesvEgner.pdf Previous Next Contact

News FDCPA Doesn’t Apply to Subrogation Claim April 29, 2022 < Back Share to: In Felicia Chavanne v. Second Look, Inc., Barry Lefever, and Erie Insurance., Plaintiff Felicia Chavanne brought a lawsuit against two insurance companies for alleged violations of several conumser protection statutes, including the Fair Debt Collection Practices Act, the Fair Credit Extension Uniformity Act, and the Pennsylvania Unfair Trade Practices and Consumer Protection Law. Chavanne’s claims arose out of alleged violations associated with letters sent to her by defendant Erie Insurance and Second Look which sought to collect on a subrogation claim. The claim was related to a fire that occurred at the property where Chavanne resided. The letters sent by Erie Insurance and Second Look advised Chavanne that Erie had settled a claim for property damages to its insured’s property (insured was co-defendant Lefever); that Erie had a right to recovery under the policy; and requested Chavanne provide her insurance information. Erie Insurance and Second Look filed a Motion for Judgment on the Pleadings, and succeeded. The United States District Court for the Eastern District of Pennsylvania ruled that the FDCPA did not apply to Erie’s attempt to collect on a subrogation claim because such a claim “is not the result of a consumer purchase, but rather flows from the liability of Plaintiff arising out her alleged negligence in causing the fire.” The Court stated that “a subrogation claim such as the one at issue in this case is not a transaction under the FDCPA which constitutes a debt.” The Court ruled that the FCEUA, the Pennsylvania version of the federal FDCPA, and the UTPCPL similarly do not apply for the same reasons. The takeaway from this case is that insureds cannot utilize the protections of consumer debt protection acts because there is typically no debt or consumer purchase involved in a subrogation claim. Thanks to Brian Zappala for his contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News Family Not So Fun Day (NJ) June 25, 2021 < Back Share to: In New Jersey, a plaintiff sought to recover worker’s compensation benefits after she fell in a pothole at a recreational event that was organized by the non-profit organization she worked for. Employees of the non-profit were asked to volunteer to work the event, but were not penalized if they opted out. The plaintiff in Goulding v. NJ Friendship House, Inc., worked as a chef/cook for NJ Friendship House, and was preparing lunch for the event when she stepped in a pothole and fell, injuring her ankle. Goulding filed a claim for worker’s compensation and benefits. Friendship House maintained she was not entitled to relief because she was not working for the organization when the injury occurred. Under New Jersey’s Worker’s Compensation Act, if an employee is injured during a social event, they generally cannot recover compensation for those injuries unless they meet a two-part exception. The two-prong test to the Act provides: expressly permits compensation “when such recreational or social activities [(1)] are a regular incident of employment and [(2)] produce a benefit to the employer beyond improvement in employee health and morale.” See N.J.S.A 34:15-7. The worker’s compensation court, and subsequently the Appellate Division, both ruled that the Family Fun Day was a social/recreational event and not within the scope of plaintiff’s employment with the organization. After granting certification, the New Jersey Supreme Court ruled that plaintiff did in fact meet the exception of the two-prong test, because she worked in the same capacity for the organization as she did at the event, and but for the fact that she was asked to be a volunteer because she was an employee of the organization, she would not have been injured. The court also determined that because the Family Fun Day was designed as a “community outreach event”, the employer’s clients were benefitted, and therefore it could not be deemed a recreational event. The court subsequently reversed and remanded the case to the worker’s compensation court. This matter serves as a cautionary tale for employers to ensure that if your organization plans a social or recreational event, it may end up costing you. Thanks to Haley Matthes for her contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News Abandoned Complaint Dismissed Despite Attorney's Death (NY) May 26, 2017 < Back Share to: In Kim v Wilson, the Second Department Appellate Division addressed the requirements needed to have an "abandoned complaint" dismissed. The lawsuit stemmed from a car accident in August 2007. The defendant was personally served with the summons and complaint in December 2010, but failed to answer - and the plaintiff never moved for a default judgment. More than four years later, in July 2015, the defendant moved to dismiss the complaint as abandoned pursuant to CPLR 3215 (c). But the Queens County Supreme Court denied the defendant’s motion because the plaintiff’s attorney had died in May 2015, which stayed the case. On appeal, the Appellate Division quoted CPLR 3215(c) which provides that "[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned . . . unless sufficient cause is shown why the complaint should not be dismissed" (emphasis added). The Court ruled that the “shall dismiss” language of CPLR 3215(c) is not discretionary, but mandatory when default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned. The Court considered the possible showing of “sufficient cause” to support an excuse for failing to move for default judgment within one year, but noted this required the plaintiff to "demonstrate that it had a reasonable excuse for the delay in taking proceedings for entry of a default judgment and that it has a potentially meritorious action." The Appellate Division ruled that there was no reasonable excuse offered, and that the death of the plaintiff's former attorney and the automatic stay of the proceeding did not constitute a reasonable excuse because the plaintiff's former attorney died in May 2015, almost three and a half years after the one-year statutory time period had expired. The Court thus reversed the decision to deny the defendant’s motion to dismiss the complaint as abandoned and strictly adhered to the statutory language of CPLR 3215. Thanks to George Parpas for his contribution to this post and please write to Mike Bono for more information. Previous Next Contact

News Plaintiff Escapes Snare of Pennsylvania’s Choice of Ways Doctrine at Summary Judgment February 4, 2021 < Back Share to: In Snair v. Speedway LLC, the United States District Court for the Western District of Pennsylvania addressed whether the defendant was entitled to summary judgment on the issue of liability after the plaintiff slipped on a patch of snow and ice while refueling a delivery truck. Under the facts of the case, the plaintiff was refueling a delivery truck when he went to retrieve some paperwork from the truck’s cabin. Instead of walking over the fueling line, the plaintiff decided to walk around the truck, which required that he pass through a four-foot gap between the pump and the column supporting the canopy covering the area. While passing through the gap, the plaintiff slipped and fell on a patch of snow and ice resulting in injuries. In its motion, Speedway argued Pennsylvania’s “choice of ways doctrine” barred recovery, as the plaintiff chose a path covered in snow and ice, rather than a presumably clearer path. Under Pennsylvania’s choice of ways doctrine, recovery may be barred where there was (1) a safe course; (2) a dangerous course; and (3) facts which would put a reasonable person on notice of the danger or actual knowledge of the danger. However, the danger must have been indisputably obvious to the plaintiff. In response, the plaintiff argued that the alternative paths were not clearly safer and the plaintiff was looking at other hazards, including vehicles moving in the area. The Court agreed with the plaintiff. The Court, citing both federal and state precedent applying the doctrine, noted that this was not a situation where there was a known and obvious hazard, as the snow and ice was not clearly visible, and the other available routes posed their own attendant risks, such as vehicle traffic and the possibility of tripping on the fuel line. As a result, the Court found there was a genuine issue of fact as to whether the plaintiff failed to heed an open and obvious hazard and denied Speedway’s motion. This decision serves as a reminder that the “choice of ways” doctrine remains of limited value as a defense to slip and fall injuries in Pennsylvania. Thanks to Benjamin Ferrell for his contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News Long Island Insurance Fraudster pleads Guilty March 22, 2013 < Back Share to: Insurance claim professionals have all experienced situations where litigation costs and the risks of trial have necessitated settlements with plaintiffs and claimants who were, lets say, less than 100% credible. Every now and again, its nice to see a fraudulent claimant get his comeuppance. Richard Roth, a Nassau County resident, tried to collect on a $500,000 life insurance policy by faking his own death. His son reported him missing this past summer, and a massive search began. As is often said in the world of law enforcement, a detective's best friend is a dumb criminal, and Roth certainly qualifies. His entire scheme was documented in email correspondence with his son, resulting in recent capture, extradition to New York, and yesterday's plea in Nassau County Court. He faces 15 years in jail, but will likely receive a lesser jail term, along with probation and restitution to the county. Interestingly, when asked outside court whether he planned to apologize, Roth replied, "Apologize to who?" First, Mr. Roth, it's "to whom." Second, how about apologizing to your neighbors, friends, family as well as strangers - in other words, everyone - whose insurance premiums are all higher than they would otherwise be, because of the costs of investigating fraud perpetrators just like you. Roth may have convinced himself that this was a victimless crime, but insurance fraud affects everyone. Special thanks to Brian Gibbons for this contribution. For more information contact Denise Fontana Ricci at dricci@wcmlaw.com . Previous Next Contact

News California Dreamin': Professional Athletes Flock to CA To File WC Claims April 6, 2010 < Back Share to: As the old saying goes, "it could only happen in California." California's workers compensation system apparently is the venue of choice for many professional athletes who sustain "work related" injuries during professional athletic activities. The typical injuries are orthopedic in nature and involve painful --and expensive-- joint replacements many years after the athletes have stopped playing their sport. The basis for California jurisdiction is easy to satisfy. The claimant need not have played for a California based team or be resident of the state; playing an isolated game in California will do the trick. The first few claims seeking workers compensation benefits for the permanent effects of concussion and closed head trauma are working their way through California's system. Although it has been decades since many of the claimants have played in a professional game, they seek life time benefits for the costs related to the care and treatment of what they contend is work related head trauma including dementia and brain damage. The battle lines have been drawn about which states can adjudicate these workers compensation claims and whether the claimants can medically establish that their injuries were caused by head trauma sustained decades ago. Right now the NFL is the primary target of these claims but other professional sporting organizations will surely follow close behind. Stay tuned in this high stakes and high profile litigation. If you have any questions about this post, please email Paul Clark at pclark@wcmlaw.com http://www.nytimes.com/2010/04/06/sports/football/06worker.html?ref=football Previous Next Contact

News Intrafamily Exclusion In Auto Policy Ruled Unenforceable (NJ) May 13, 2022 < Back Share to: On May 6, 2022, a New Jersey appellate panel upheld a policyholder's win in a coverage dispute with Travelers Insurance Company, holding an intrafamily step-down exclusion acted as a "hidden trap" in a family's auto policy where not reflected in the policy declarations page. Specifically, in Cristina Dela Vega v. The Travelers Insurance Company, et al., (No.: A-2272-19), the Court ruled that Travelers must pay its policy's full $100,000 limit in bodily injury coverage as this “clearly worded exclusion” still functioned as a “hidden trap” making the provision thereby unenforceable as it would lead a reasonable policyholder to expect different coverage. In the underlying accident, plaintiff Cristina Dela Vega (“Dela Vega”), was severely injured while riding in a car driven by her husband who collided with another vehicle pulling out a New Jersey parking lot. A Travelers claims adjuster initially offered Dela Vega her policy's normal bodily injury limit of $100,000, but later revised that to $15,000, saying there had been an "unfortunate mistake" adding that she had never before dealt with an intrafamily exclusion despite her experience as an auto policy adjuster. Dela Vega then sued in New Jersey Superior Court, seeking coverage up to the policy's $100,000 declared limit and asserting claims for bad faith, violation of the Consumer Fraud Act and punitive damages. The trial court ordered Travelers to pay Dela Vega $100,000, finding the step-down exclusion to be ambiguous, "patently unfair" and contrary to public policy. On anticipated appeal, the New Jersey Appellate Court mostly agreed. Even though the exclusion was technically sound, it went against the average policyholder's "reasonable expectations" of coverage, the panel held, since the declarations page provided for $100,000 in coverage and didn't say anything about an exclusion. Furthermore, the claims adjuster's offer of the $100,000 limits four months after the accident was established as proof plaintiff's expectation of that coverage was objectively reasonable. However, in a partial win, Dela Vega’s bad faith, punitive damages, and commercial claims were discarded as Traveler’s didn't display any "unconscionable commercial practice" or malice in issuing the policy or trying to enforce the step-down exclusion. The New Jersey Appellate Court did not go as far to hold that the step-down exclusion itself was contrary to public policy upon finding a violation of the policyholder’s reasonable expectations. However, the court included a footnote that finding the provision to be “troubling” and “concerning” which indicates that such step-down exclusion will likely face ongoing scrutiny from the New Jersey courts. Thanks to Kendal Hutchings for her contribution to this article. Should you have any questions, please contact Matthew Care. Previous Next Contact