In Skulskie v. Ceponis, et al, A-2397-07T1, the Court held that the waiver of subrogation provision in a homeowners insurance policy purchased by a condominium unit owner bars a subrogation recovery against another unit owner, even if uninsured. The carrier argued that enforcing the waiver of subrogation provision against an uninsured party was contrary to the purpose of the provision and created an unintended inequity. The Appellate Division affirmed summary judgment to the uninsured unit owner finding that the carrier that issued the policy with the waiver of subrogation clause had no expectation that it would be able to recover from another negligent unit owner, insured or not.
Monthly Archives: January 2009
NJ Deemer Statute Requires Application of Verbal/Tort Threshold
Like many states, New Jersey enacted a legislative scheme aimed at reducing automobile insurance by limiting an injured party’s ability to sue for injuries sustained in an automobile accident. Unlike New York, a policyholder elects whether to be subject to the “verbal” threshold, which was designed to weed out soft tissue injuries from the legal system in return for a reduced premium. A policyholder pays an increased premium if he selects the unlimited tort option. In contrast, New York’s scheme is mandatory and requires a plaintifff to establish “serious injury” as a condition to maintaining a lawsuit for injuries sustained in an auto accident.
What happens if an out of state resident has an auto accident in New Jersey and subsequently files suit in the Garden State? Is the plaintiff subject to the verbal threshold even if the other state has no analogous scheme? The simple answer is “yes” to both questions if the plaintiff is insured by an admitted New Jersey insurer. Pursuant to its deemer statute, New Jersey “deems” any policy issued by an insurer authorized to underwrite insurance in its state to contain the verbal threshold or limited tort option. As a result, a Pennyslvania resident who is injured in New Jersey in an automobile accident must vault the verbal threshold as a condition to recovery where his insurer is admitted to underwrite insurance in New Jersey.
http://lawlibrary.rutgers.edu/courts/appellate/a3850-07.opn.html
NY Federal Court Deems Misrepresentation Regarding Multiple Policies Material
In John Hancock Life v. Perchikov, a judge in the EDNY recently agreed with the insurer that the insured’s misrepresentation in its application for coverage regarding the existence of other policies covering the risk was material and permitted recision, because the insurer would not have issued the policy without verifying the existence of additional income.
Although this involved a life insurance policy, it can likely be applied in other areas where the type or amount of coverage issued is related to the value of the underlying risk.
Failure to Disclose Discovery leads to RICO action in NJ
Typically, a failure to provide discovery disclosure may result in an admonition from the Court; preclusion of evidence; or in certain extreme situations, the striking of pleadings. But in a never-ending New Jersey litigation, discovery non-disclosures have lead to a RICO lawsuit and recently, an order to unseal previously protected materials.
Plaintiff Michael Green originally filed suit against General Motors in New Jersey for catastrophic injuries caused by a defective product design, and ultimately received a $14 million award. Subsequently, plaintiff’s counsel learned that GM made disclosures in a Tennessee case regarding alternative roof designs considered by GM, but had not provided this information to plaintiff in the New Jersey lawsuit.
Now, in Newman v. General Motors Corp., 02-135, U.S. District Court in New Jersey, plaintiff’s estate is pressing its case against GM for concealment and a violation of the New Jersey Racketeering Influenced and Corrupt Organizations Act.
In the current litigation, the Court has given the plaintiff broad access to discovery of privileged communications between GM and its counsel in the product defect case, and also ordered depositions of GM’s house and outside counsel. Recently, in keeping with the federal courts concern for open access to public records, the Court ordered unsealing of records previously deemed confidential or privileged.
We have linked a recent order regarding discovery, and he will continue to follow this interesting litigation.
Thanks to Denise Ricci for her contribution.
Newman v. GM
Serial Class Action Filer Suffers Set Back
A serial class action filing attorney had his case for Consumer Fraud thrown out of court in Hoffman v. ASSEENONTV.com, — N.J.Super. – (App.Div. 2009). After ordering a product on-line to take advantage of a “free bonus” offer, Hoffman was hit with a $7.95 handling charge. He filed a Consumer Fraud class action lawsuit claiming that despite the fact that the order was cancelled prior to any payment and he was never charged for the product ordered, he nonetheless sustained a diminution to his available credit meriting his representation of a class against the internet marketer. The court disagreed finding that he did not sustain an actual loss as required by the Consumer Fraud Act and upheld dismissal of his case. On the other hand, the court likewise rejected the defendant’s claim for abuse of process against the plaintiff. The defendant had argued that the plaintiff, who had filed over 40 nearly identical lawsuits, had used the process to “extort” settlements prior to class certification. The Court found that it was not in the position to assess the bona fides of settlements in these other actions and upheld dismissal of the defendant’s counterclaim.
Thanks to Denise Ricci for her contribution
Allegation of “Negligent Misrepresentation” Fails to Trigger Coverage in PA
In Erie Insurance Exchange v. Maier, the Pennsylvania Superior Court recently held that a lawsuit did not allege an “occurrence” under the Erie policy, even though the allegations against the insured included a claim of negligent misrepresentation.
The underlying lawsuit was filed by First National Bank, and its complaint alleged the purchaser (Erie’s insured) and the seller of a house (a debtor to the bank) participated in a fraud upon the bank as a creditor. The bank claimed the parties misrepresented the true purchase price of the house in order for the seller to obtain additional cash from the transaction. The parties set the purchase price of the house at $650,000 and the bank agreed to forego its interest in the house that was higher than that amount. But the insured also paid the seller an additional $200,000 for “personal property” in which, conveniently for the seller-debtor, the bank had no security interest.
A single count in the complaint alleged that the insured made a “negligent misrepresentation,” and the insured alleged that was sufficient to trigger coverage under the Erie policy. But the court ruled that there was no “occurrence” under the policy because the bank acknowledged the insured knew that the sale price was undervalued. In fact, the Bank would be unable to prevail in the lawsuit without proving the insured was involved in an intentional fraud. Couching the claim in terms of the insured’s negligence did not trigger coverage, and thus, Erie had no duty to defend or indemnify the insured.
The important point for insurers and counsel is that the the use of a “magic word” such as negligence in a pleading is not always enough to carry the day in coverage controversies.
Thanks to Mendel Simon for his contribution.
Landowner Not Liable For Hidden Defect In Fallen Tree
In Down v. Town of Oyster Bay, the Supreme Court of Nassau County recently held that a tree’s internal staining and discoloration are not outwardly visible signs of a defect and, in doing so, granted the property owner summary judgment against the plaintiff’s claim that she was injured by the defendant’s falling tree. The court declined to impose a duty on a landowner to constantly check all trees for non-visible decay. Instead, the court held that a landowner is only required to take action if there are signs of decay or disease readily observable.
Health Club Need Not Worry If Spin Class Is “All the Rage”
In Sugarman v. Equinox Holdings, Inc., a New York County court dismissed an action brought by a health club member against Equinox gym. Sugarman alleged that Equinox was liable for the actions of a fellow gym-goer who in a fit of “spin rage,” threw Sugarman, who was still perched on his spin bike, into a plaster wall. Sugarman further argued that Equinox employees should have anticipated the tortious conduct and diffused the underlying verbal argument. In granting the motion to dismiss, the court held that the fellow rider’s actions were not foreseeable as Equinox had no notice of his propensity to do harm because he had not exhibited any known pattern of criminal behavior. The court further held that the verbal attack on Sugarman, absent any concurrent physical actions, was not sufficient to put Equinox on notice of any possible physical assault.
http://www.plol.org/Pages/Login.aspx?d=WLPNXQ%2b8ifVM%2fO7CFbNF8A%3d%3d&l=Cases
No Kidney-ing Around
In 2001 a Long Island surgeon donated one of his kidneys to his wife. The couple is now embroiled in a nasty divorce. The case has degenerated into a real pissing match, with the husband now demanding the return of his kidney. In the alternative, he will accept $1.5 million. The wife’s attorney, admirably keeping his focus on the precise legal issue at hand, responded that kidneys are not marital property.
No Coverage In Toxic Torts Case Where Policy Issued After Injury Manifested
The Appellate Division recently decided in Polarome International, Inc. v. Greenwich Insurance Company, that a CGL policy does not cover claims asserted against a manufacturer when the subject policy was issued after the claimant’s initial manifestation of injuries. Generally, under the New Jersey “continuous trigger theory,” injury occurs during each phase of environmental contamination, i.e. during exposure, progression of injury after exposure ends and manifestation of disease. In Polarome, the policies in question were issued after exposure ended and after the claimants first manifested their injuries. Thus, the court reasoned that the policies did not provide coverage because the “occurrence” ended before the policy periods commenced. In essence, the court concluded that when exposure has already ended, the “occurrence” itself ends after the claimants’ initial manifestation of disease. Also of interest, the court determined that the insurers could examine extrinsic evidence not included in the complaint in order to determine when the claimants’ injuries initially manifested, but only in instances where the claimants’ underlying complaint was ambiguous as to the exact date of first manifestation.