Because of the specific liability exposures associated with working in the five boroughs of New York City, many insurers have added an exclusion to the standard CGL policy excluding coverage for worked performed in the five boroughs. However, a recent decision from the Supreme Court, Richmond County has called into question the application of the five borough exclusion.
In Bonded Waterproofing Svcs, Inc. v. Anderson-Bernard Agency, Inc., 12711/2009, the insured was performing work in Queens County when an injured pedestrian brought suit against the insured, alleging that the insured’s negligence caused the accident. After the carrier denied coverage based upon the five borough exclusion the insured brought a declaratory judgment action seeking coverage. The carrier moved to dismiss, and the court denied the motion.
The court held that questions of fact exist as to the applicability of the exclusion. The court cited to the fact that the carrier previously provided coverage for work within the five boroughs, and was aware that the insured performed work in the five boroughs. In addition, a certificate of insurance was issued naming the general contractor as an additional insured under the insured’s policy, and the certificate listed the job site as located in Queens. This was, according to the court, sufficient to raise questions of fact.
Of course, the court did not mention who issued the certificate (the insured’s broker was also a defendant), or why the fact that an insurer previously provided coverage in New York City precludes the application of the five borough exclusion exclusion in a subsequent policy. These issues will likely be the subject of an appeal.
If you have any questions about this post, please contact David Tavella at .
In Kusimba v. S & J Enterprises, the New Jersey Appellate Division affirmed the dismissal of plaintiff’s claim for coverage against Essex Insurance Company. The Court found the “PRODUCTS / COMPLETED OPERATIONS HAZARD EXCLUSION’ in the policy to be a clear, prominent and unambiguous exclusion, therefore enforceable. Coverage for plaintiff’s claim was excluded because plaintiff’s bodily injury took place away from the insureds premises ( motor vehicle accident) and arose out of the insureds work ( alleged negligent repair of brakes). The Court also found that Essex properly reserved its rights.
The Fourth Department, in Cragg v. Allstate Indem. Corp., was recently presented with an issue of first impression. The plaintiff-decedent and her mother lived with her grandparents and were covered under the grandparent’s homeowners’ insurance policy. The decedent drowned in the grandparent’s pool and the decedent’s father, who did not live with the decedent, brought an action against the mother on the decedent’s behalf.
The court held that the insurer did not have a duty to defend the mother against a wrongful death action brought by a noninsured party for the death of another insured party. The court pointed to the policy’s coverage exclusion clause, which excluded coverage for “bodily injury to an insured person. . . . whenever any benefit of this coverage would accrue directly or indirectly to an insured person.” In other words, it would go against the purpose of the policy to provide coverage to the decedent’s mother and allow her to benefit from such coverage.
Thanks to Georgia Stagias for her contributions to this post. if you have any questions, please contact Bob Cosgrove at .
Hip-hop artist Remy K. Smith has cultivated a persona often described as violent and anti-social. But it seems that even violent, anti-social hip-hop artists apparently crave the attention of a good birthday party in their honor. Remy invited plaintiff Makeda Barnes-Joseph to the party and then allegedly proceeded to shoot her guest, thus solidifying her reputation. The plaintiff filed suit against not just Remy but, in addition, against Universal Music Group, claiming that they negligently promoted Remy’s violent persona for profit but took no steps to prevent her from shooting people. The court rejected the claim against Universal Music on the narrow ground that Universal did not emply Remy (they just had a recording contract with her) and that, in any event, their relationship had ended before the rousing birthday party. http://www.courts.state.ny.us/reporter/3dseries/2010/2010_04041.htm.
A Kings County Judge has vacated a stay of a case pending arbitration because defendant failed to comply with discovery requests. In 528-538 W. !59th St. LLC v. Soloff Management Corp., Supreme Court, Kings County. 37782/05, a discovery schedule was ordered by the judge to in the Supreme Court. The parties then agreed to binding arbitration, and the Supreme Court case was stayed. The arbitration agreement specifically noted that the parties would continue with discovery. After members of the first arbitration panel resigned, a new arbitration agreement was entered into, without a specific mention of the outstanding discovery. Defendants refused to comply with the discovery demands, arguing that the second arbitration agreement did not provide for discovery. The arbitration panel advised that they could not reach a decision without the discovery.
Based these facts, the court held that the defendants breached the covenant of good faith and fair dealing, and frustrated the arbitration process. Based upon the doctrine of frustration, the court lifted the stay of the Supreme Court case, and ordered all parties to complete discovery.
If you have any questions about this post, please contact David Tavella at .
In Smithson v. Garcia, the Appellate Division reversed the denial of a new trial on damages where the jury found that plaintiff had sustained a permanent injury meeting the verbal tort threshold, but awarded nominal damages of one dollar. The Court found it clear that plaintiff’s permanent injury stemmed from 2 herniated discs attributable to the motor vehicle accident and concluded that allowing the jury’s one dollar damages award to stand would be manifestly unjust under the circumstances.
The great baseball catcher Yogi Berra witnessed a great many heroics during his tenure with the New York Yankees. Reportedly, after watching his teammates Roger Maris and Mickey Mantle hit back-to-back home runs in a game for the umpteenth time, he is reported to have said: It’s déjà vu all over again. When it comes to e-coli and US manufacturers and distributors, it certainly must feel the same way. Freshway Foods of Sidney, Ohio is recalling romaine lettuce because of e-coli contamination. The lettuce, which was sold in more than 25 US states, is suspected of causing more than 19 reported cases of sickness.
If you have any questions about this post, please contact Bob Cosgrove at .
It seems simple enough. If a plaintiff alleges that the defendant’s actions caused mental health issues, then the defendant should have access to plaintiff mental health records that predate the incident. After all, without such records, how can a baseline for damages be established? Surprisingly, achieving access to such records, has not been the norm in Pennsylvania. However, a new appellate decision bodes favorably for defendants.
In Gormley v. Edgar, the plaintiff was injured in an automobile accident. She alleged that the accident caused her mental injuries. However, when the defendant asked for relevant pre-accident records, she refused and objected to defendant’s subpoena. The trial court rejected the objections and authorized the disclosure. Plaintiff appealed. The Superior Court has now affirmed the trial court’s order. Applying common sense, it held that by putting her mental health at issue, the plaintiff had subjected herself to full disclosure. Common sense reigns supreme in the Commonwealth.
If you would like more information about this post, please contact Bob Cosgrove at .
Jose Cantu is an oil titan from Mexico, who made a dramatic rise from a laborer to an owner of oil refineries. Billy Flanigan, a businessman and President of a Bahamian corporation, obtained a judgment against a Mexican petroleum workers union. Despite never having met Cantu, Flanigan believed that Cantu had connections with the Mexican government that would assist in his efforts to collect the judgment, and Flanigan engaged in a course of conduct designed to pressure Cantu into either paying Flanigan the judgment, or using his influence to help Flanigan collect from the union.
Flanigan prepared an “amicus brief” that resembled a legal complaint, listing Cantu as a defendant and declaring that Flanigan sought monetary damages. The “amicus brief” stated that Cantu was the operations manager of a racketeering enterprise, and that he had laundered large sums of money. It further alleged that Cantu had participated in the bribery of government officials and that Cantu was present when Mexican President Zedillo was awarded a $350 million bribe. The “amicus brief” also alleged that Cantu was involved in drug cartels, that he headed the “Ramiro Garza crime family,” that he illegally smuggled oil into the United States, that he had conspired with Iraqi President Saddam Hussein to illegally circumvent sanctions against Iraq and that he was personally responsible for causing the price of gasoline to rise. Flanigan ultimately accused Cantu of having committed mail fraud, wire fraud, tampering, obstruction of commerce, unlawful travel, theft by conversion and extortion.
Flanigan provided details from his brief to a reporter from the popular and widely-circulated Mexican magazine Processo, and the magazine printed an article about Cantu. The story was featured on the front cover, and it repeated Flanigan’s allegations against Cantu. Due to the wide circulation of Processo magazine, Flanigan’s accusations were distributed throughout the world.
A potential business partner learned of the allegations contained in the Processo article and immediately cancelled a multi-million dollar contract, resulting in a personal loss to Cantu of roughly $35,000,000. Cantu also introduced evidence that the damage to his reputation had resulted in an inability to secure other multimillion dollar contracts. In addition to affecting Cantu’s personal and business relationships, the Processo article also prompted criminal investigations by the Mexican government and the United States Department of Justice – but Cantu was ultimately cleared of any potential wrongdoing.
Cantu filed suit in the Eastern District of New York, and a jury awarded him $38,000,000 in economic damages and $150,000,000 in non-economic damages to compensate Cantu for the harm to his reputation and the humiliation and mental anguish caused by Flanigan. In determining whether the judgment was excessive, the Court needed to determine whether the award deviated materially from reasonable compensation, using prior awards as not binding but instructive.
In calculating non-economic damages in a defamation case, including humiliation, mental suffering and damage to plaintiff’s reputation, a jury may properly consider a number of factors. In this case, the jury was instructed to consider: [1] the plaintiff’s standing in the community, [2] the nature of defendant’s statements made about the plaintiff, [3] the extent to which the statements were circulated, [4] the tendency of the statement to injure a person such as the plaintiff, and [5] all of the other facts and circumstances in the case.
The Court analyzed each of the above factors, and also considered the fact that Flanigan engaged in a deliberate course of conduct tantamount to attempted criminal extortion, and affirmed the judgment – perhaps the largest defamation judgment in US history. Whether Canto can ultimately collect on his judgment remains to be seen, but I certainly doubt he will create his own “amicus brief” to assist in his collection efforts.
In a coverage dispute between a primary and excess carrier, a motion judge refused to quash a subpoena served upon coverage counsel and the senior litigation specialist of the excess carrier. New Jersey Manufacturers Insurance Company v. National Casualty Company, — N.J.Super. –, 2010 WL 1706012 (App.Div. 2010). Despite potential privilege issues, the Appellate Division affirmed noting that the order only required counsel and the specialist to appear for depositions. No ruling was made with respect to any specific questions that might be asked.
The coverage case emerged from underlying litigation that involved a 1998 automobile accident in which a husband was killed and his wife severely and permanently injured. That case was tried two times ultimately resulting in a verdict of $1.64 million in damages and prejudgment interest of $580,322.
The excess carrier sought contribution from the primary carrier for more than its $1 million policy limit on grounds that it acted in bad faith when it failed to settle the claim within its policy limit. In an earlier appeal of summary judgment for the primary carrier, the Appellate Division ruled that there should have been an evidentiary hearing to determine if the primary carrier had acted in good faith. In response, the primary insurer launched into discovery of the excess carrier’s conduct relating to settlement negotiations.
At issue was whether the primary carrier had a realistic possibility to settle the action or whether the matter could have been resolved with a contribution from the excess carrier. If the excess carrier would not have contributed in the amount required to settle the case, then the primary carrier could show that the settlement could not have been achieved. Thus, the unusual depositions of counsel and litigation specialist were allowed.
