Allocation of Insurance Coverage in Long Term Contamination Cases Clarified

In the recent case of Franklin Mutual Insurance Company v. Metropolitan Property and Casualty Company, the New Jersey Appellate Division addressed how the “continuous trigger” theory originally adopted by the New Jersey Supreme Court in the case of Owens-Illinois, Inc. v. United Insurance, should be applied in allocating insurance coverage in long-term environmental contamination cases when the contaminated property at issue changes ownership while the contamination takes place.

The Court concluded that the Owens-Illinois formula is applied separately to each individual insured. They held further that the pro rata allocation principles established in Owens-Illinois apply to the carriers for each individual insured, not collectively to all of the triggered policies for all of the insureds who owned the property during the period of contamination.

Thanks to Sheila Osei for her contribution to this post.

3rd Circuit Imposes Major Change in PA Product Liability Law.

In product liabity cases, PA has followed the Restatement 2nd of Torts. Under the Restatement 2nd, only “intended users” and not bystanders can maintain a product liabilty claim. The 3rd Circuit has now just overturned that understanding. In the case of Berrier v. Simplicty, et al., the 3rd Circuit has just ruled that it believes that the Pennsylvania Supreme Court is likely to soon adopt the Restatement 3rd of Torts. Under the Restatement 3rd, a bystander can maintain a product liability claim. This represents a major change in PA law.

Electrician’s Fall Not Covered By New York’s Labor Law

In Romeo v. Property Owner (USA) LLC, et al., plaintiff, an electrician, was injured when, while walking on a raised computer floor, he stepped on a floor tile that suddenly dislodged, causing his right foot to fall through the opening and strike the concrete sub-floor 18 inches below. Plaintiff sued the property owner and general contractor, alleging violations of Labor Law 200, 240(1), and 241(6). The Supreme Court, New York County granted the defendants’ motion to dismiss.

The Appellate Division, First Department found that plaintiff’s injury did not involve an elevation-related hazard, as defined by 240(1). Plaintiff’s 200 claim (common law negligence) was unsupported by evidence that the owner and general contractor either had notice of the tile condition or that they directly controlled and supervised the electrical work. Plaintiff testified that his work instructions came only from a supervisor who was also employed by the electrical subcontractor.

As to the 241(6) claim, the First Department found that the Industrial Code 23-1.7(b)(1) (hazardous openings) provision relied upon by plaintiff was inapplicable. The opening in question was not of significant depth and size to warrant the protection of the provision. Plaintiff’s reliance upon Industrial Code 23-1.7(e)(2) (work area debris and tripping hazards) was also held to be inapplicable because he was not injured as a result of tripping over debris, dirt, tools or materials. Ultimately, the First Department unanimously affirmed the lower court’s ruling in favor of the defendant.

Thanks to Robin Green for her contribution to this post.

Doctor’s Affidavit Sufficient to Defeat Summary Judgment

In Hudkins v 81st St. Parking, LLC, plaintiff sought to recover for personal injuries suffered in a car accident. Under Insurance Law §5102(d), in order for a plaintiff to recover under §5102(d), the plaintiff must demonstrate that he sustained “serious injury”, as defined by §5102(d), as a result of the accident.

In Hudkins, the Second Department of the Appellate Division held that the plaintiff’s submission of his treating orthopedist’s affidavit, based on the orthopedist’s contemporaneous and recent range of motion testing, raised a triable issue of fact as to whether the plaintiff sustained serious injury as a result of the subject accident under the permanent consequential limitation or the significant limitation of use categories of Insurance Law § 5102(d).

Thanks to Alison Weintraub for her contribution to this post.

Notice To Wrong Town Official Of Defect Is Not Proper Notice To Town

In Gorman v. Town of Huntington, the plaintiff s commenced a personal injury action against the town due to an alleged uneven sidewalk in front of a local church. Four months prior to the plaintiff’s accident, the pastor of the church sent a written complaint to the town’s Department of Engineering Services, which is responsible for sidewalks, complaining of the condition and requesting a repair of the sidewalk.

The Court of Appeals reversed the Appellate Division ruling and held that the Town of Huntington was entitled to summary judgment because the town did not receive prior written notice pursuant to the specific language of a local statute pertaining to notice

The local statute designated the Town Clerk or the Town Superintendent of Highways as proper receipts of written notice of sidewalks defects. By statute, notice to a department that was not enumerated in the statute would invalidate the notice. Since the Department of Engineering Services was not a statutory designess, notice to the department was deemed insignificant.

Thanks to Maju Varghese for his contribution to this submission

Misuse of Ladder Not Sole Proximate Cause of Accident

In Rico-Castro v. Do & Co. New York Catering, Inc. ( the plaintiff was working on an A-frame ladder that he left in the closed position and leaned up against a wall. The ladder slipped, and the plaintiff fell to the floor and was injured. A New York appellate court granted summary judgment to the plaintiff on Labor Law section 240 even though he misused the ladder (i.e., leaving it closed), ruling that the misuse was not the “sole proximate cause” of the accident and injury.

Justin Rowe contributed this post.

First Party Disclaimer “Collapses” in New York

A New York federal appellate court recently addressed the interpretation of the meaning of “collapse” as found in an all-risk policy in Dalton v. Harleysville Wor. Mut. Ins. Co. Plaintiffs owned a three-story townhouse in Brooklyn, and discovered damage to an interior wall. The damage was so extensive, that the NYC Department of Buildings ordered that the building be vacated.

Harleysville disclaimed coverage under its all-risk policy, citing exclusions for decay, and settling. Although the policy had an additional coverage section that provided coverage for damages resulting from “risks of direct physical loss involving collapse of a building or any part of a building caused … by … hidden delay,” the policy did not provide coverage for a collapse that included “settling, cracking, shrinkage, bulging or expansion.” Harleysville also argued that to constitute a collapse, the buiding needed to sustain “total or near total destruction,” and that a “sudden destructive force” was necessary.

The Second Circuit Court of Appeals found that under New York law, the meaning of the term “collapse” is unsettled, and it is not necessary that the building sustain total or near destruction, and that “substantial impairment of structural integrity” would suffice. The Court held the Harleysville policy was ambiguous, did not require “suddenness” as a condition, and notably cited to policy forms used by other insurers that “spoke more directly to the dispute involved here.” Thus, even though one would not typically consider what happened here to be a collapse, the Court held it was a covered loss.

NY’s First Department Allows Insurer to Rescind

The First Department recently reiterated its position in respect of policy recision in Kiss Construction NY Inc. v. Rutgers Cas. Ins. Co. In applying for insurance coverage, Kiss represented that it was solely a painting company. However, it was sued by a construction worker and during the claim investigation, Rutgers learned Kiss had been serving as a general contractor and disclaimed coverage for the underlying action based on this material misrepresentation.

Kiss filed a declaratory judgment action against Rutgers seeking a defense and indemnification, and in an affirmative defense, Rutgers moved for recision of the policy. Rutgers motion for summary judgment was denied, but the Appellate Division reversed the decision and held the policy was rescinded.

Of interest is the fact that Rutgers did not formerly give notice of the recision prior to this action, nor did it return the premium. In addition, prior decisions of the Court held that an insurer’s duty to defend existed pending a judicial determination of its right to rescind. Although that point was reiterated here, it appears that an insurer with knowledge of a misrepresentation is not forced to assume a defense, provided it is ultimately successful in obtaining a judgment that recision was proper.

Thanks to Stephanie Chen for her contribution.

Hard Driving Employer Not Liable for Exhausted Employee’s Tort

In Riley v. Keenan, the plaintiff was injured by a sleepy, drunk driver. The plaintiff sued the driver’s employer, claiming that the employer overworked the driver to the point of exhaustion and was thus responsible for the happening of the accident. The court threw out the claim, noting that the driver was not acting within the scope of his employment at the time of the accident. The court added that the driver’s choice to drink was an intervening act that broke any connection between work fatigue and the accident.