NY Court Of Appeals Protects One and Two Family Dwelling Homeowners From Labor Law.

In Affri v. Basch, the defendant owned a two-family home and hired plaintiff to perform renovations on one of his apartments. While installing a vent on the roof of defendant’s home, plaintiff fell from a ladder and sustained severe injuries. The lower court held that defendant was entitled to summary judgment because plaintiff failed to show that the defendant maintained such a level of control over his actions as to exclude him from the Labor Law’s two-family dwelling exception.

The Court of Appeals affirmed that decision, finding that defendant had merely controlled the aesthetic decisions and exercised general supervision with respect to the project. The Court found that the fact that the defendant had requested that the vent run through the roof “did nothing more than what an ordinary homeowner would do in deciding how they wanted the home to look upon completion.”

The Court’s decision indicates that, unless a two-family dwelling homeowner provides their worker with equipment, work materials or direct supervision on the manner and method of the work, one and two family homeowners will be free from liability resulting from injuries to the workers they hired to beautify their home.

Thanks to Georgia Stagias for her contirbution to this post.

http://caselaw.lp.findlaw.com/data/ny/cases/app/159opn09.pdf

CPSC Issues Interim Report on Chinese Drywall.

The CPSC’s Interagency Task Force on Chinese drywall has just issued an interim report. In the report, the CPSC notes that it has found hydrogen sulfide and formaldehyde in the affected drywall. The CPSC believes that the sulfide is causing the reported corrosion and that the combination of sulfide and formaldehyde may account for the claims of sickness. This latter opinion is caveated, however, by the fact that the reported levels of formaldehyde and sulfide are below known irritant levels.

http://www.cpsc.gov/info/drywall/nov2009execsum.pdf

SDNY: Expert Claims Analysis Protected Under Work Product Doctrine

In Gross Construction Associates v. American Manufacturers Mutual Insurance Company, 07 Civ. 10639, Magistrate Judge Andrew Peck of the United States District Court, Southern District of New York examined the work product doctrine to a claims analysis by a contractor hired by an attorney. Gross Construction involved a multi-million dollar dispute over defects and delays in the construction of the Bronx Hall of Justice. The construction manager was not a party, and was not expected to be called to testify at trial. The owner’s attorney hired the “Claims Analysis Group” of the construction manager to perform a claims analysis, including the potential for litigation, and possible litigation strategy. The Claims Analysis Group only reviewed documents produced in discovery, and did not contact any party to perform its investigation.

The court analyzed the work product doctrine, and found that the claims analysis report was protected work product. While litigation had not been commenced at the time the Claims Analysis Group was hired by counsel, litigation was clearly contemplated; the Claims Analysis Group was a non-testifying expert; and, because the Claims Analysis Group relied on documents exchanged in discovery, substantial need could not be demonstrated. Therefore, the work product doctrine was applicable.

If you would like more information regarding this post, please email dtavella@wcmlaw.com.

PA Supreme Court Rejects Two Civil Procedure Changes That Would Have Impacted Insurers.

The PA Supreme Court Rules Committee has apparently declined to proceed with two proposed changes to the rules of civil procedure that would have impacted insurers.

The first proposal, Recommendation 240, would have amended Rule 1020 to require pleading a single cause of action to recover for personal injury and property damage arising from the same accident. This would have had a large impact on subrogation cases (especially in the auto context) where a carrier paid a property damage claim, but then the insured wished to proceed with a personal injury action. Under the now rejected amendment, all of the claims would have had to have been brought in the same lawsuit.

Recommendation 239 has also been tabled. Under this recommendation, Rule 212.3 and 212.5 would have been amended to give the court more authority to require the presence of an insurance representative at pre-trial and settlement conferences.

NY App. Div.: “As Is” Condition Defeats Products Liability Claim

One policy underlying products liability law is to shift responsibility where it seems most just when a product causes physical injury. The choices are few, with the law generally titling in favor of the injured party as opposed to a product manufacturer.

In Meyer v. Alex Lyon & Son, plaintiff purchased a man lift at an auction on an “as is” basis for use at work. After picking up the lift, he brought it to an equipment company for service and inspection, aware that it was not safe for use. Before that company could complete its inspection, plaintiff took possession of the lift. Ever the careful company, the inspector obtained a written assurance that plaintiff understood the dangerous condition of the equipment and required that he sign a hold harmless agreeement before the lift was released.

Plaintiff took the lift and used it for two days at work without incident. But as [bad] luck would have it, he was injured in a fall after the lift failed at his home. Not short on chutzpah, he sued the product manufacturer, the auctioneer and service company seeking recovery based on strict products liability, breach of warranty and negligence. Citing the plaintiff’s explicit knowledge of the product’s defect, the Appellate Division upheld the dismissal of plaintiff’s complaint. Plaintiff was aware of the dangerous state of the lift and was in the best position to avoid his own injuries.

Every now and then, common sense prevails…even in the law.

If you have any questions about this post, please email Paul at pclark@wcmlaw.com

http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08484.htm

Labor Law Claims Dismissed Against Homeowners (NY)

Property owners are invariably drawn into lawsuits involving Law Labor accidents. Fortunately, owners of one and two family homes are exempted from the strict liability of §240(1) and §241(6) when they do not direct or control the work being performed. These homeowners can also be exempt from common law negligence and Labor Law §200 claims when they have no obligation for safety at the work site.

In Chapman v. Town Of Copake, plaintiff (a subcontractor) sued the homeowners when he was injured when a retaing wall collapsed while he was digging holes to install concrete footers at the worksite.

The New York Appellate Division found that, although the homeowners were involved in the basic planning and coordination of the renovation project, their participation was not so significant as to support a finding that they served as their own general contractor. The homeowners pointed to the fact that they hired a contractor to direct plaintiff’s work. And even though the homeowners paid the subcontractor directly, the GC hired the subcontractors and coordinated their work at the site.

Plaintiff also cited to the facts that the homeowners completed the building permit application and provided sketches of the work that they wanted done. But the Court held their participation did not “cross the line from being a legitimately concerned homeowner to a de facto supervisor.” Thus, all claims against them were dismissed.

If you would like further information regarding this post, please e-mail mbono@wcmlaw.com

http://decisions.courts.state.ny.us/ad3/decisions/2009/506856.pdf

NJ: Insurance “Step Down” Provision Upheld

A clause in an insurance policy that reduced the available policy limit for a truck driver who was not named within the policy’s “Schedule of Reported Drivers” from $500,000 to the minimal statutory amount of $15,000 was upheld where the policy language was clear and unambiguous. Although the Court commented upon the substantial injuries sustained by the plaintiff who jumped from a moving train when it collided with a Freightliner truck, it concluded that sympathy for the plaintiff could not override the clear and unambiguous policy term.

Finding the policy term clear, the court held the policy holder to the term as written despite an argument that he may not have understood it due to a language difficulties. Additionally, although the plaintiff argued that such a “step-down” clause should be void as against public policy, the court disagreed. Specifically, the court affirmed the insurer’s “legitimate underwriting concern” to limit its exposure when a large commercial truck is operated by a driver who it had not investigated, rated or approved. Moreover, the Court noted that New Jersey’s Supreme Court has upheld similar provisions.

See Ford v. National Independent Truckers Insurance Co., 2009 WL 3762423 (App.Div. 2009)(unreported decision) www.judiciary.state.nj.us/opinions/a0167-08.pdf

If you would like more information regarding this post, please email denise at dricci@wcmlaw.com

NY State Court Imposes E-discovery Sanctions

Lawyers practicing in federal court have been dealing with e-discovery issues for a number of years pursuant to changes in the Federal Rules of Civil Procedure. But recently, in Einstein v. 357 LLC, a New York State Supreme Court justice decided those rules also applied in state court litigation.

Plaintiffs filed suit against the defendants, including the Corcoran Group, a prominent real estate broker, in connection with the sale of allegedly defective condominium units. Plaintiffs allege they were fraudulently induced to purchase the condos, in part, by a series of e-mail communications made by the Corcoran defendants, and they served discovery demands for the production of the e-mails. Plaintiffs later moved to strike Corcoran’s pleading when defendants failed to make a complete production, including specific e-mails plaintiffs already had in their possession. Citing the obvious existence of those e-mails, the Court ordered defendants to produce their hard drives for inspection and file recovery.

Defendants produced the relevant hard drives but the missing e-mails could not be retrieved. The Court conducted a hearing with Corcoran’s IT rep, who admitted he had not been consulted about e-mail production until long after the litigation commenced and that Corcoran made no effort to preserve any e-mails after litigation had begun. The Court also found that statements made by Corcoran’s attorney regarding Corcoran’s deletion policy was not properly represented.

The Court recognized that New York law was silent on the issue, and turned to the Federal Rules and resultant case law for guidance. The Court held that the failure to implement a litigation hold and to monitor the production of that discovery was a grossly negligent destruction of evidence, warranting sanctions for spoliation. The Court held plaintiffs were entitled to an adverse inference against Corcoran that the destroyed e-mails would have been unfavorable to the defendants — essentially establishing the necessary elements of plaintiffs’ claims. The Court also awarded plaintiffs attorney’s fees for the e-mail review.

It will be very interesting to see how this issue is dealt with on an appellate level. Although this was an extreme case that resulted in an extreme ruling, corporations should be careful to make sure certain protocols are in place to avoid deleting e-mails when involved in litigation.

If you would like more information regarding this post, please email mbono@wcmlaw.com.

Vague E-mails not a “Signed Writing” under Copyright Act (NY)

Under the Copyright Act, the transfer of an exclusive license, including a license for distribution of a copyrighted work, must be effected through a signed writing from the copyright owner or its agent. The Copyright Act grants copyright owners a number of “exclusive rights,” including the right to distribute the work “to the public by sale or other transfer of ownership.” 17 U.S.C. § 106(3).

Recently, in Weinstein Co. v. Smokewood Entertainment Group, LLC, plaintiff alleged defendant had conveyed the exclusive right to distribute a movie owned by the defendant through a series of confirmatory e-mails regarding the deal. When the defendant instead conveyed distribution rights to another company, plaintiff filed suit in federal district court, New York.

Briefly, the substance of plaintiff’s e-mails were, “We are pleased to confirm our deal.” While the defendant’s responses were not outright rejections of plaintiff’s claims, the defendant commented on remaining, unsettled, details regarding the negotiations.

The Court held that if a copyright owner’s intention in writing is unclear — even deliberately so — there is no legally valid transfer. The purpose of the signed writing requirement is to ensure that the copyright owner deliberately transfers its ownership interest in such a way that provides the parties with a clear guide to their rights and responsibilities. Because the e-mails between the parties here failed to accomplish that, the Court dismissed the Complaint.

If you would like more information regarding this post, please email mbono@wcmlaw.com.

http://pdf.wcmlaw.com/pdf/einstein%20decision.pdf