Jonathan Lippman became New York’s Chief Judge in January, 2009. After one year, it is now clear that he is moving the court to a more accepting and expansive point of view when rulling on personal injury claims.

Lippman has already written decisions in several cases dealing with injured workers and, in each decision, has sided with the plaintiff. In one decision, Lippman found that a prior court ruling that prohibited an injured teacher’s right to sue New York City was too restrictive and he expanded the teacher’s avenues for recovery. In another case, he ruled that the trial court had too narrowly construed a law regarding a worker’s right to seek damages from his/her employer.

In sum, Judge Lippman’s track record after his first year on the bench has been to expand plaintiffs’ rights of recovery rather than to follow the narrower rulings that came down over the last 16 years under his predecessor.

Posted by Georgia Stagias.

http://www.nytimes.com/2010/02/18/nyregion/18lippman.html?scp=1&sq=court%20of%20appeals&st=cse

In 2004, a joint investigation by New York insurance regulators and former New York Attorney General Elliot Spitzer leveled bid-rigging allegations against brokerages that resulted in prohibitions on contingent commissions. Since then, efforts have been made to create a broker compensation disclosure rule. Such a rule has now been published by the New York State Insurance Department, and it mandates that producers tell their clients, if asked, who is paying them and how much. The rule goes into effect January 1, 2011, and is expected to draw challenges by a number of agent organizations. The rule is designed to provide transparency by requiring agents and brokers to describe to consumers their role in a business transaction and how they are compensated.

Specifically, the regulation requires that when a consumer applies for an insurance policy, the agent or broker must explain to the consumer: (a) the agent or broker’s role in the transaction; (b) whether the agent or broker will receive compensation from the insurer based on the sale; (c) that the compensation insurers pay to agents or brokers may vary depending on the volume of business done with that insurer or its profitability; and (d) that the purchaser may obtain more information about the compensation the agent or broker expects to receive from the sale by requesting that information from the agent or broker.

Thanks to Chris O’Leary for his contribution to this post.

If you would like further information regarding this post, please e-mail

http://www.ins.state.ny.us/r_finala/2010/rf194txt.pdf

It was an icy night on January 2, 2003 when a UPS truck driver crested a hill on the New Jersey Turnpike to find an accident between two cars in progress in front of him. Fending off a phantom truck that sideswiped him as they both tried to slow down, the truck driver braked but not enough to prevent a collision with one of the cars now stopped on the roadway. The scene continued to unfold when a distraught woman emerged from the second car stopped on the shoulder and exclaimed that her boyfriend had jumped over the highway barrier to his death 100’ below.

Under these curious facts, in Cockerline v. Menendez, –N.J.—2010 WL 374766 (App.Div. 2010), the NJ Appellate Division reversed a trial court’s application of the evidentiary doctrine of res ipsa loquitur. After settling with the driver of the passenger car, the soon to be ex-wife of the deceased pursued her claim against UPS alleging that her husband had died as a result of the actions of the UPS driver. In fact, she argued that the instrumentality that caused her husband’s death was in the defendants’ exclusive control.

The Appellate Division disagreed zeroing in on the issue of proximate cause questioning the proof in the case on what exact instrumentality had caused the fatal jump. The investigating police officer had determined that there had been no contact between the truck and the decedent’s car. After an extensive review of the evidence, the Court found it unclear what led the decedent to go over the barrier and when in the accident sequence he had done so. Since the plaintiff failed to establish proximate cause, res ipsa loquitur was not properly applied, and the Court reversed a $2.3 million verdict.

See Cockerline v. Menendez, –N.J.—2010 WL 374766 (App.Div. 2010) at http://www.judiciary.state.nj.us/opinions/a4635-07.pdf

If you would like more information, contact

Effective January 1, 2010, Lloyd’s had implemented a pilot program in which marine, marine property and casualty reinsurance claims no longer had to go through Xchanging Claims Services, but rather could be handled by the syndicates “in-house.” The program was designed to assess whether claims handling efficiency could be improved. To date, Lloyd’s claims in these classes of business have been relatively low. If this pattern holds, the pilot program may need to be extended as there may be insufficient data to gauge the success of the new “in-house” claims handling model.

http://www.insurancetimes.co.uk/story.asp?source=itissueNews&storycode=382705

The application of the statute of limitations often presents parties seeking to recover art, jewelry, or other property with a significant hurdle. Recently, a New York federal court dealt with this tricky issue in Grosz v. Museum of Modern Art.

George Grosz was an early twentieth-century German artist, and his artwork was strongly anti-totalitarian and therefore anti-Nazi. As such, in 1933 he was forced to flee Germany as Hitler ascended to power. The Third Reich branded Grosz an “enemy of the state” and the government confiscated his assets, including some artwork. Ultimately, three of those works were obtained by the Museum of Modern Art, and his estate sued MoMa for the return of the works.

MoMa moved to dismiss, citing the State of Limitations. In New York, an action to recover chattel generally must be commenced with three years. Interestingly, under New York law, the statute of limitations for conversion and replevin automatically begins to run against a bad faith possessor on the date of the theft or bad faith acquisition — even if the true owner is unaware the chattel is missing. On the other hand, when an innocent purchaser is involved, pursuant to the “demand and refusal rule” the statute of limitations begins when the purchaser refuses the original owner’s demand for the return of the property.

In Grosz, the Court analyzed the dealings between the estate and MoMa to determine when the “refusal” occurred in response to a demand letter from the estate of November 24, 2003. There was a continued back and forth in correspondence between the parties; plaintiffs pointed to an April 12, 2006 letter, when MoMA notified plaintiff that its Board of Trustees had voted that the museum had no obligation to return the works; MoMa instead cited to a July 20, 2005 letter, in which it expressed its disagreement with plaintiff’s claims that the works must be returned.

The Court agreed with MoMa, even though the July 20, 2005, letter contained “temporizing language” that urged continued discussions. The Court found that language was designed to entice plaintiffs to continue negotiating and to prevent the dispute from becoming public or escalating into litigation, and ultimately did not change the defendant’s position set forth in the letter that indicated it would not — at least at that point — return the works. In applying the statute of limitations, the plaintiff’s claims were time-barred and the Complaint was dismissed.

As discussed in the article linked below, this Fall the US Supreme Court will decide whether it will hear this case.

The world is truly a global marketplace. Product manufacturers seek to sell their wares throughout the globe but are understandably concerned about being subjected to countless schemes of liability in the U.S. and beyond. What’s a manufactuer to do? The most common answer is to associate with a foreign distributor who has the “boots on the ground” to sell the product and hopefully insulate the manufacturer from lawsuits in the foreign market.

In Nicastro v. McIntrye Machinery America Ltd, the New Jersey Supreme Court wrestled with the question of whether a foreign manufacturer was subject to jurisdiction despite having insufficient contacts with the Garden State to satisfy the traditional tests of personal jurisdiction. In Nicastro, plaintiff lost 4 fingers while working on an allegedly defective recycling machine used to cut metal. The U.K. based manufacturer did not directly manufacture or market its equipment in New Jersey. However, it used an exclusive U.S. distributor who marketed McIntrye’s machinery on a national basis. The manufacturer’s president also attended several national trade shows in the U.S. over the years to support the sales effort of its distributor and was aware of the strategy of selling his company’s equipment througout the U.S.

Relying on the “stream of commerce” theory, the New Jersey Supreme Court ruled that the manufacturer was subject to jurisdiction and had to fight the case in a New Jersey court. Although its direct contacts with New Jersey were almost non existent, the Supreme Court noted that McInrye knew or should have reasonably known that the distribution of its product through a national distributor naturally lead to the sale of its machines to consumers in New Jersey. This knowledge was enough to support New Jersey’s power to hear the case.

The trend is for U.S. courts to support the exercise of jurisdiction over foreign manufacturers no matter have slim the reed supporting personal jurisdiction. The traditonal concepts of “minimum contact” or “presence within the state” are seemingly outdated given the outsourcing of product manufacturing beyond U.S. shores. A lesson learned: what the markets giveth, the courts (and juries) can taketh away.

http://www.judiciary.state.nj.us/opinions/supreme/A2908NicastrovMcIntyreMachinery.pdf

In Awon v Harran Transp. Co., Inc., the Second Department reaffirmed the importance of proving that the destruction of evidence has prejudiced a party that seeks to strike pleadings based on spoliation of evidence. If the destroyed evidence prevents an adversary from defending a claim or allegation, the party that destroyed the evidence is subject to severe sanctions. This principal even extends to situations where the destruction was not willful or contumacious. Conversely, if the evidence lost is not central to the case, the destroying party may escape unscathed, without any sanctions being imposed.

Thanks to Lora Gleicher for her contribution to this post.

http://www.courts.state.ny.us/reporter/3dseries/2010/2010_00638.htm

In Zubulake v. UBS Warburg, LLC, 229 F.R.D. 422 (S.D.N.Y. 2004), the Southern District of New York set certain standards for e-discovery. These standards have become the standards for federal litigation across the U.S. On January 15, 2010, the Southern District of New York revisited Zublake, in Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, No. 05 Civ. 9016 (SAS), 2010 WL 184312 (S.D.N.Y. Jan. 15, 2010).

In Pension Committee, the Court reemphasized the standards previously set, and cautioned litigants to view them as “guidance” that should not be ignored. The consequences of ignoring the “guidance”, and failure to implement certain standards range from monetary sanctions for negligent failure or case dismissal for willful/bad faith failures. In between negligent and willful/bad faith, is of course, gross negligence for failing to implement certain discovery standards.

The Court provided several examples of discovery “failures” that constitute gross negligence, namely:

1. Failure to issue a written litigation hold;

2. Failure to identify the “key players” and ensure their electronic and paper records are preserved;

3. Failure to cease deletion of e-mail or preservation of records of former employees in a party’s control; and

4. Failure to preserve backup tapes of “key players” or other employees if that is the sole source of that employees’ records.

The appropriate consequences for grossly negligent failures range from mandatory to permissive adverse inference jury charges.

In providing some specific examples of gross negligence and the consequential sanctions, the Pension Committee court warns those that attempt to permit employees to engage in self-collection/preservation (without attorney guidance), or to limit the number of employees involved. According to the decision, the only way to ensure compliance with the Pension Committee standards is for retained counsel to meet with “key players” early on to discuss preservation, identify other employees who may have necessary records (however incidental they may seem), and issue/implement a litigation hold to those individuals.

If you have any questions about this article or ESI, please contact Bob Cosgrove. Special thanks to Cheryl Fuchs for her contributions to this post.

http://ralphlosey.files.wordpress.com/2010/01/05cv9016-january-15-2010-amended-opinion.pdf

In Chacha v. Glickenhaus Doynow Sutton Farm Dev., LLC, the plaintiff, a carpenter, fell from a construction site while nailing plywood boards to the floor joists of the first floor. The plaintiff was working less than four feet away from the unprotected edge of the first floor, when a strong gust of wind blew a piece of plywood off a nearby stack, hitting the plaintiff and knocking him to the floor, 10 to 15 feet below. The plaintiff established that the defendants had violated Labor Law §240(1) by failing to provide him with an adequate safety device while working on an elevated job site, but he failed to prove the accident was foreseeable. The Court found that the gust of wind was an unforeseeable, independent, intervening act that attenuated the defendant’s failure to provide the plaintiff with adequate safety device. Since the accident was not a foreseeable consequence of the defendant’s failure to provide safety devices, the plaintiff’s Labor Law §240(1) claim failed.

Thanks to Chris O’Leary for his contribution to this post.

http://www.nycourts.gov/reporter/3dseries/2010/2010_00643.htm

Roslyn Schiffer was injured in an automobile accident. Lancer Insurance Company insured the owner and driver of the other vehicle. The policy limit was $100,000.

The Lancer policy contained a provision that Lancer would pay “All interest on the full amount of any judgment that accrues after entry of judgment….but our duty to pay interest ends when we have paid, offered to pay or deposited in court the part of the judgment that is within our Limit of Insurance.” This policy language closely tracked a NY Insurance Dept. regulation requiring that policies contain a provision that an insurer shall pay “all interest accruing after entry of judgment until the insurer has paid or tendered or deposited in court such part of such judgment as does not exceed the applicable policy limits…”

In the Schiffer personal injury case, Lancer Ins. Co. offered Schiffer its full policy limit of $100,000 before trial (and thus, obviously, before entry of judgment and the accrual of any interest). Schiffer rejected the offer and took her case to verdict. The verdict was $776,000. Judgment was entered on September 5, 2007.

Lancer sought a ruling that it owed no interest on the judgment because it had offered its full policy limit of $100,000 before the entry of judgment. A trial level court in New York has now ruled against Lancer. The court found that while Lancer had “offered” to pay its policy limit, this did not amount to “an unconditional tender of payment,” which the court found was required by the language of the Insurance Dept. regulation. Thus, the court ruled, interest began to accrue at judgment and Lancer must now pay interest on the full amount of the judgement ($776,000). Given that judgment was entered 28 months ago, the interest due on the full judgment is 21%, which comes to $163,000.

In short, Lancer offered (tendered?) its policy limit of $100,000 before trial in a good faith effort to protect its insured but now must pay not only its policy limit of $100,000 but an additional $163,000 in interest.