In NJ, A Convicted Drunk Can Sue The Tavern.

In the case of Voss v. Tranquilino, (App. Div. 2010), the plaintiff, who had a .196 BAC, was injured when his motorcycle collided with a vehicle operated by defendant Tranquilino. Although the plaintiff pleaded guilty to drunk driving, this did not stop him from seeking to finding someone else to blame for his injuries. He blamed Tranquilino and Tiffany’s Restaurant which he claimed negligently served him alcohol and thus was a proximate cause of the subsequent accident. Tiffany’s and Tranquilino moved to dismiss the complaint relying upon N.J.S.A. 39:6A-4.5(b) which provides that a driver of a motor vehicle who is convicted of or pleads guilty to driving while intoxicated (DWI), N.J.S.A. 39:4-50(a), in connection with an accident “shall have no cause of action for recovery of economic or noneconomic loss sustained as a result of the accident.” Voss did not oppose Tranquilino’s dismissal motion, but he did oppose Tiffany’s. Plaintiff argued that the Dram Shop Act, N.J.S.A. 2A:22A-4, which provides a cause of action if the bar/restaurant negligently serves alcohol to a visibly intoxicated person trumped N.J.S.A. 39:6A-4.5(b). In a case of first impression, the Appellate Division agreed, held that N.J.S.A. 39:6A-4.5(b) only applies to automobile claims, and denied Tiffany’s motion.

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App. Div: Nightclub’s Use Of Stanchions May Have Created Sidewalk Defect

In Harris v IG Greenpoint Corp., the plaintiff tripped and fell because of a claimed sidewalk defect that was approximately 15-18 inches from the curb line outside the entrance to the China Club. Although the China Club was the tenant and not statutorily responsible to repair the sidewalk, the plaintiff argued that the club used the sidewalk to allow its patrons entrance and also cordoned off a portion of the sidewalk using heavy metal stanchions. The club filed an immediate motion to dismiss for failure to state a cause of action. While the lower court granted the motion, the appellate court reversed stating that the plaintiff’s allegations that the cracks emanated from the club’s nightly dragging of the stanchions raised an issue of fact as to whether the China Club created the claimed hazardous condition.

Thanks to Bill Kirrane for his contribution to this post.

Hotel Not Responsible For Acts Of Independent Contractor

In Campbell v. HEI Hospitality, LLC, the Second Department affirmed the lower court’s dismissal of the plaintiff’s claims against the defendants. Campbell claimed that she was injured when she collided with a lifeguard who worked at the defendants’ pool. The defendants moved for summary judgment and offered proof that the lifeguard was not employed by the hotel but, rather was hired by an independent contractor that was responsible for managing and supervising the pool. The Appellate Division in its holding reaffirmed the general rule that one who hires an independent contractor may not be held liable for the independent contractor’s negligent acts.

Thanks to Lora Gleicher for her contribution to this post.

Everything Flows Downhill: New York AD Rules That Sub’s Insurers Must Fund Entire Settlement

New York construction litigation is like a multi-headed dragon: cut off one head (issue) and another one quickly emerges. In analyzing its ultimate exposure in this context, an insurer must consider both the underlying liability of all its insureds as well as how the coverage disputes amongst the various insurers will play out at the end of the case.

In Indemnity Ins. v. St Paul Mercury, the Appellate Division, First Department grappled with a mind numbing fact pattern after a general contractor’s employee was injured due to the negligence of a subcontractor. The case discusses the interplay between New York’s Labor Law, contractual indemnity and additional insurance requirements, the hierarchy of coverage and New York’s anti subrogation doctrine.

At the end of the day, the subcontractor’s insurers wind up footing the entire bill for the $3,000,000 settlement with no contribution from the owner or the general contractor. The First Department discusses the distinction between liability and coverage as well as the anti subrogation doctrine, which prevents the subcontractor’s insurer from seeking contribution from its additional insureds in an indirect effort to pick the pockets of the policies of the owner and general contractor.

Who says insurance coverage litigation can’t be fun?

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Wade To Be Featured Bad Faith Speaker at NYSBA Insurance Coverage Seminar.

WCM Partner Dennis Wade is a featured speaker at the New York State Bar Association’s 2010 Insurance Coverage Update: Emerging Issues for the Next Decade. Dennis’s topic –Extra-Contractual Damages Under “Bad Faith” Theories — focuses on new challenges facing insurers that write first party coverage in New York. Recent pronouncements from New York’s top court have seemingly resurrected bad faith exposures in New York. The program (attached) carries 7 MCLE credits. Dennis will be speaking in Melville on June 18 and in Manhattan on June 25. For more information about this seminar, please contact Dennis at Bad Faith.pdf

Watch Your Step

In Grabowski v. Consolidated Edison Company, the plaintiff was injured when he fell from a wooden bench that was used to provide access to a work trailer. The door to the trailer was two to three feet off the ground and the seat of the bench was midway between the door and the ground. The plaintiff moved for summary judgment arguing that the defendants violated Labor Law § 240 (1) and the defendants cross-moved to dismiss the 240 (1) cause of action. The lower court granted the plaintiff’s motion. On appeal the Appellate Division reversed, holding that the bench that the plaintiff fell from was used as a stairway for the trailer and did not fall within the purview of Labor Law § 240 (1).

Thanks to Ed Lomena for his contribution to this post.

Is it Deep Enough?

In Salazar v. Novalex Contracting Corp., the First Department examined prior Labor Law § 240 decisions and found that holes (trenches/troughs) in those cases were not deep enough to create an “elevation-related risk” for the workers who stepped into them. For example, in Rocovich v. Consolidated Edison Co., 78 N.Y.2d 509 (1991), the Court of Appeals found that there was no liability under Labor Law § 240 because it was “difficult to imagine how plaintiff’s proximity to” a 12-inch deep, 18- to 36-inch-wide trough “could have entailed an elevation-related risk”. Similarly, in Romeo v. Property Owner (USA) LLC, 61 A.D.3d 491 (2009), the worker stepped into an opening in a raised computer floor that was created when one of the floor tiles was removed. In Romeo the opening was 2 feet by 2 feet and 18 inches deep, and therefore the First Department held that it was not deep enough to create an elevation-related risk. In Salazar, the court found that the trench that plaintiff fell into was 4 feet deep and 15 feet long. The court held that, while the 12 to 18-inch drops in Rocovich and Romeo did not call for a protective device within the statute’s contemplation, the four-foot-drop in Salazar did. The court further elaborated by stating that the bottom of the trench in Salazar represented a separate level, which, relative to the floor itself, constituted a gravity-related hazard covered by section 240.

The First Department’s decision here makes the applicability–or lack thereof– of Labor Law § 240 even more fact intensive then before. When examining the potential applicability of Labor Law § 240, advocates must now take out their rulers to determine whether the hole at issue is deep enough for the statute to apply.

Thanks to Cheryl Fuchs for her contribution to this post.

Always Make Sure Your Lawyer Is, In Fact, A Lawyer.

Gucci, in its suit in the Southern District of New York, Gucci America Inc. v. Guess? Inc., 09 cv. 4373, accused Guess of “replicating entire Gucci product designs” in an apparent attempt to “Gucci-ize” its product line.
Gucci’s outside counsel filed a motion for protective order after Guess raised the issue of Gucci’s general counsel’s Jonathan Moss’ status as an attorney, and said it would seek discovery of Moss’ communications.
Gucci, which fired Moss on March 1, claims that Moss was a member of the California bar, albeit an inactive one, and a member of the U.S. district courts for the central and southern districts of California. Gucci argued that even if Moss was not authorized to practice, it was entitled to invoke the attorney-client privilege because its executives had every reason to believe Moss was authorized.

Guess, however, disagreed and argued that Gucci presented “a vivid picture of inattention and indifference” to Moss’ qualifications.. Gucci claimed that “even a few minutes of legal research would have revealed that the local rules for the Central District and Southern District Courts require that an attorney maintain continuing and active membership in the State Bar of California to remain a member of both federal bars.” Since Gucci did not make even the most elementary investigation of Moss’ status, Guess argued that it could not show it had a “reasonable belief” Moss was a bona fide attorney, a prerequisite for claiming privilege under federal law.
In an Affidavit, Moss claimed that he “believed it was permissible to work as an in-house counsel for a company in another state” even though he was not admitted to practice in that state.

Guess has now requested permission from Magistrate Judge James Cott, who is handling discovery issues in the case assigned to Judge Shira Scheindlin, to file a “brief submission” addressing Moss’ affidavit by April 20, 2010. We shall have to stay tuned to see how it all shakes out in federal court.’s%20Diligence%20in%20Checking%20Counsel’s%20Qualifications

Special thanks to Sheila Osei for her contributions to this post.

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The Pink Panthers: An Interesting Overview of a Major Jewelery Gang.

The Pink Panthers, a Serbian/Balkan affiliation of thieves, is credited with many of the world’s major jewelery heists over the past 10 years. The attached investigative article from The New Yorker provides some background on the gang and thus may be of interest to our friends in the JB/fine art/specie/CIT books of business. Panthers.pdf

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Federal Employer’s Liability Act Does Not Apply to Seamen’s Arbitration Agreements

In Harrington v. Atlantic Sounding Co., plaintiff Harrington suffered injuries to his back in April 2005 while working as a seaman aboard the Candace, which required lumbar surgery. Defendant employers sent Harrington a letter in July 2005 pursuant to 9 U.S.C. § 2, the Federal Arbitration Act (“FAA”), stating that plaintiff and defendant would agree to arbitrate plaintiff’s claim with the American Arbitration Association. Moreover, the letter stated that the decision of the arbitration panel would be binding, and that plaintiff would be precluded from bringing suit in the future. Defendants also agreed to send Harrington an advance of funds under a reservation of rights.

Harrington signed the agreement and remitted it to defendants. Just over a year later, in June 2006, plaintiff commended the present action under the Jones Act, 46 U.S.C. § 688, which incorporates the Federal Employer’s Liability Act (“FELA”) in a maritime context by giving injured workers the right to seek compensation for injuries via trial by jury. Obviously, plaintiff’s suit under the Jones Act was in conflict with the signed arbitration agreement.

The United States District Court for the District of New Jersey found the arbitration agreement to be both procedurally and substantively unconscionable, defendants appealed, and the U.S. Court of Appeals for the Second Circuit reversed. The Court found that that Section 6 of FELA did not apply to arbitration agreements at all, and thus the arbitration agreement was not unenforceable as a matter of law under § 2 of the FAA. Moreover, the Second Circuit found no substantive unconscionability, noting that that a completely one-sided agreement (which this concededly was) is not necessarily an unconscionable one. Therefore, because the arbitration agreement was enforceable, plaintiff’s suit for personal injuries was precluded.

This decision reflects “a healthy regard for federal policy favoring arbitration.” Moreover, the court notes that the when FELA was drafted, the drafters in no way contemplated an arbitral forum at all, and therefore, FELA can not mandate a right to a trial by jury when an arbitration agreement, executed by both plaintiff and defendant, is already in place. It will be interesting to see whether future scenarios where FELA and FAA are in conflict have a similar result.

Thanks to Brian Gibbons for his contribution to this post.