As a general matter of NY law, an insurance broker has a duty to either obtain the coverage that a customer specifically requested within a reasonable time or inform the customer of its inability to do so. This standard of care is often challenged by disgruntled insureds after a loss when, after a carrier successfully disclaims coverage, the insured is left without a recovery. In such cases, the insured often asserts a claim against its broker and alleges that the broker failed to properly advise as to the type of coverage most appropriate for the risk. NY’s Second Department has just rejected such an attack.

In Core-Mark International v. Swett & Crawford, the plaintiff alleged that its insurance brokers procured a scheduled loss property insurance policy rather than the general limits blanket policy that was needed and specifically requested. As a result, when the inevitable loss occurred, Core-Mark was not fully compensated for its damages by the policy. Core-Mark asserted negligence and breach of fiduciary duty causes of action against Swett & Crawford. The Court found that while a negligence action could be asserted, Swett & Crawford did not breach any fiduciary duty in procuring the improper insurance policy. The Court reasoned that under the particular facts before it, because (a) Swett & Crawford had not received compensation for any consulting services and (b) no course of conduct between Core-Mark and Swett existed which would put an objectively reasonable broker on notice that its advice was being sought and relied upon, a professional/fiduciary duty did not exist. The Court thus dismissed the breach of fiduciary duty claim. However, given the Court’s reasoning — which required proof of only (a) or (b), it is easy to imagine a fact pattern where the result could have been far different and a new duty of care precedent could have been established. Brokers beware!

Special thanks to Chris O’Leary for his contributions to this post. If you have any questions, please contact Bob Cosgrove at .

http://www.nycourts.gov/reporter/3dseries/2010/2010_02735.htm

The Third Circuit in Donovan v. Idant Laboratories, has dismissed a products liability suit against a sperm bank. In the suit, plaintiff alleged that the sperm sold by the bank contained genetic defects. Specifically, the sperm was a carrier of Fragile X, a genetic mutation known to cause a group of maladies that include mental retardation and behavioral disorders. The daughter resulting from the sperm donation was diagnosed with the Fragile X defect.

The Court found that the claim was essentially a claim for “wrongful life” which is not cognizable under New York law. New York law applied to the case even though the lawsuit itself was filed in federal court in Philadelphia. The Third Circuit wrote that plaintiff’s claims demand “a comparison between the Hobson’s choice of life in an impaired state and nonexistence . . . [a] comparison the law is not equipped to make.” The Court concluded: “Whether it is better never to have been born at all than to have been born with even gross deficiencies is a mystery more properly to be left to the philosophers and the theologians.”

Special thanks to Mendel Simon for his contributions to this post. If you have any questions, please contact Bob Cosgrove at .

http://www.ca3.uscourts.gov/opinarch/093460np.pdf

http://www.law.com/jsp/article.jsp?id=1202447538837&src=EMC-Email&et=editorial&bu=Law.com&pt=LAWCOM%20Newswire&cn=NW_20100406&kw=3rd%20Circuit%3A%20Defective%20Sperm%20Can’t%20Be%20Basis%20for%20Products%20Liability%20Suit

New York has been a “pure” comparative negligence state for several decades. Even in the most extreme circumstances, the plaintiff’s comparative negligence, no matter what degree, will not bar his action. For this reason, defendants seek any opportunity to argue that plaintiff assumed the risk of injury as a basis to dismiss his claim.

Is the primary assumption of the risk defense available outside the realm of athletic activities? Does a child assume the risk of injury when engaging in horseplay like sliding down a stairway banister at his local public school?

Apparently not, according to New York’s highest court. In the case of Trupia v. Lake George Central School District, the Court of Appeals limited the use of the primary assumption of the risk defense to athletic or recreational activities. Relying on a public policy argument, the Court explained that there was no value in protecting horseplay, particularly when it involves children. In contrast, sports “possess enormous social value, even while they involve significantly heightened risks.”

An important weapon in the arsenal of the defense has been holstered when athletic or recreational activities are not involved. However, the defense bar should continue to make creative arguments to support the use of this defense in appropriate cases. Tennis anyone?

If you have any questions about this post, please contact Paul Clark at

http://www.nycourts.gov/ctapps/decisions/2010/apr10/53opn10.pdf

Mark Buttitta developed mesothelioma at age 49 years old and died a little more than one year later. In litigation filed on his behalf and pursued by his estate following his death, he alleged that he had been exposed to asbestos at a General Motors distribution warehouse where he worked as a “picker” filling orders for parts that included asbestos containing products. His direct exposure was limited to three summers and winter breaks during 1971-1973 when he was otherwise enrolled at Colgate University. He also claimed indirect exposure to asbestos fibers that his father and brother carried home from their work at GM.

While a number of defendants in the case settled, two defendants proceeded to trial including Borg-Warner, a clutch supplier, and Asbestos Corp. Ltd, a Quebec supplier of raw asbestos to GM. The jury returned a verdict in excess of $30 Million dollars.

At issue in the appeal was the legal standard of causation applied by the trial court. Generally a plaintiff in a product liability action must prove that the product was defective when it left the manufacturer’s control and that defect caused injury to a reasonably foreseeable user. In a toxic tort product liability action, the plaintiff must also prove medical causation, e.g. exposure to the defendant’s asbestos product caused an illness. For asbestosis and lung cancer cases, medical causation is proven on the basis of frequency, regularity, and proximity of exposure.

However, the court noted testimony that mesothelioma can develop from the cumulative effects of only minimal or infrequent exposure thereby challenging the rigid application of the medical causation standard generally applied. Hence, the appellate court approved of the trial judge’s application of a “substantial factor” test that required only that the plaintiff provide direct or circumstantial evidence from which a reasonable jury could conclude that at some point in his work history, Buttitta was exposed and in close proximity to the defendant’s product frequently and on a regular basis.

Although the defendants also challenged the trial court’s denial of a remittitur, the appellate division found that the verdict was not so disproportionate that it shocked the judicial conscience.

If you have any questions about this post, please email Denise Ricci at .

See Buttitta v. Allied Signal at http://www.judiciary.state.nj.us/opinions/a5263-07a5268-07.pdf

As the old saying goes, “it could only happen in California.” California’s workers compensation system apparently is the venue of choice for many professional athletes who sustain “work related” injuries during professional athletic activities. The typical injuries are orthopedic in nature and involve painful –and expensive– joint replacements many years after the athletes have stopped playing their sport. The basis for California jurisdiction is easy to satisfy. The claimant need not have played for a California based team or be resident of the state; playing an isolated game in California will do the trick.

The first few claims seeking workers compensation benefits for the permanent effects of concussion and closed head trauma are working their way through California’s system. Although it has been decades since many of the claimants have played in a professional game, they seek life time benefits for the costs related to the care and treatment of what they contend is work related head trauma including dementia and brain damage.

The battle lines have been drawn about which states can adjudicate these workers compensation claims and whether the claimants can medically establish that their injuries were caused by head trauma sustained decades ago. Right now the NFL is the primary target of these claims but other professional sporting organizations will surely follow close behind. Stay tuned in this high stakes and high profile litigation.

If you have any questions about this post, please email Paul Clark at

http://www.nytimes.com/2010/04/06/sports/football/06worker.html?ref=football

A recent decision by a New York surrogate court in Matter of Flamenbaum reads more like the plot of an Indiana Jones movie than a typical estate dispute. In 1913, a group of German archaeologists discovered an ancient gold tablet in Iraq., and it was ultimately placed on display in a Berlin museum. The museum was closed during World War II, and when it re-opened in 1945, the museum discovered that the tablet was missing.

The tablet appeared as an asset in the estate of Riven Flamenbaum. Although there was speculation that the tablet was taken from the museum by Russian troops, how it wound up in Flamenbaum’s possession remains a mystery. Nevertheless when the estate was put to probate, the Berlin museum entered a notice of appearance and notice of claim in the surrogate’s court, bringing a replevin claim against the estate.

The Court held that, while the legal claim of the museum was timely under the statute of limitations, the equitable doctrine of laches barred recovery. The Court pointed out that the museum did not take any steps to investigate the loss, and did not even report the tablet missing to law enforcement or to art loss registries. Apparently, there was word that the tablet surfaced with a dealer in 1954, but the museum made no effort to contact that dealer. The Court held that the delay severely prejudiced the possessor, in large part because their main witness was obviously now deceased. Under those circumstances, the Court held that the doctrine of laches must be applied.

We suspect some sort of settlement will be worked out with the museum, as there is not a particularly extensive market for ancient gold tablets. But if not, it will be interesting to see how an appellate court deals with this case.

If you would like more information about this post, please e-mail

http://www.nylj.com/nylawyer/adgifs/decisions/040510riordan.pdf

In Majawalla v Utica First Insurance Co, the plaintiff’s owned commercial property leased to a convenience store proprietor. A woman allegedly fell in the parking lot of the store and commenced a personal injury action. The owner’s sought coverage from Utica (the tenant’s insurer) who disclaimed because the owner’s were not listed as additional insured’s under the policy. However, the Appellate Division denied Utica’s motion for summary judgment based on language in the commercial liability section of the policy. The policy contained an exclusion that stated Utica would not pay for bodily injury or property damage liability assumed under a contract. However, this exclusion expressly stated it did not apply to an “incidental contract.” By including this language, the court found that the lease and policy raised a triable issue of fact as to whether Utica was obligated to defend and indemnify the owners.

Additionally, Utica also disclaimed based on a provision in which that expressly excluded from coverage for parking lots. However, because this provision appeared in the “property coverages” section of the policy, and not the “commercial liability coverages” portion, the policy did not expressly exclude from coverage based on the commercial liability section for incidents occurring in the parking lot.

Special thanks to William K. Kirrane for his contributions to this post.

http://www.nycourts.gov/reporter/3dseries/2010/2010_02520.htm

In Mendez v. Mendez, Index No. 111435/04, 2010 NY Slip Op 02717, the First Department upheld the trial court’s denial of defendant’s motion for summary judgment, seeking the dismissal of plaintiff’s claims of permanent consequential limitation of use of body organ/member and significant limitation of use of body function/system resulting from a motor vehicle accident.

Simply because the defendant established a prima facie case that plaintiff did not suffer any permanent loss of use through expert reports did not entitle the defendant to summary judgment. Rather, plaintiff’s expert affirmations and MRI reports served to raise issues of fact as to the permanency of the injuries. The fact that the MRI reports were unsworn was of little consequence since plaintiff’s expert’s opinions were also related to their personal observation and findings.