Michael and Constance Flaum, who in 1976 thought they had purchased a $50,000 Renoir painting, are now left with no recourse but to hang an expensive forgery in their home.

Since 2005, the Flaums insured the work of art, valued at $350,000, under a Valuable Articles Endorsement of their homeowner’s insurance policy. In the Spring of 2008, the plaintiffs sought to sell the Renoir painting at Christie’s auction house, only to be told that the painting was rejected from auction and deemed to be a forgery. Previously, the Flaums had received verbal confirmation from a Renoir expert that the painting was authentic.

Plaintiffs placed a $525,000 claim with their insurer for the loss, which was denied on the grounds that they had “not sustained a physical loss” under the terms of the insurance agreement. The Court agreed, finding that the painting still hangs in the plaintiff’s home and despite its now decreased value, no physical loss had occurred. The Court opined that, “to the extent the plaintiffs contend that they suffered a physical loss as a result of the forgery because the painting is not physically a Renoir, such a claim is without merit since under that theory the painting was never physically a Renoir; therefore, no loss occurred”

http://www.nycourts.gov/reporter/3dseries/2010/2010_20253.htm

Special thanks to Christopher D. O’Leary for his contribution to this post. If you have any questions, please contact Denise at .

If you’re going to the ball game and sitting in the front row, you better pay attention to the game! One Yankees fan found out that talking on his cell phone was not a wise move when Rob Johnson’s ground rule double bounced up and hit him in the face at the June 29, 2010 Yankee-Mariners game.

http://deadspin.com/5576040/yankee-fan-on-cellphone-catches-ground-rule-double-with-his-face

In construction venues, contracts requiring subcontractors to name owners and general contractors as additional insureds on liability policies are common. But what happens when the terms of the contract do not match the express language of the subcontractor’s general liability policy additional insured endorsement?

The answer boils down to whether the terms of the insurance policy are clear and unambiguous. If so, the insurer’s duty to the additional insured is defined by its policy language rather than the contract language between its insured and the party with whom it contracted. Only when there is an ambiguity in the insurance policy language will the court turn to extrinsic evidence such as the insured’s contract to clear up the gray areas of coverage.

In Jeffrey M. Brown Associates, Inc. v. Interstate Fire & Casualty Company, — N.J.Super. – (App. Div. 2010), New Jersey Appellate Division clarified this position in a coverage dispute between insurers of a general contractor and a subcontractor. The subcontractor’s insurance policy included a blanket endorsement naming as an additional insured “any entity the Named Insured is required in a written contract to name as an additional insured” for liability arising out of work performed by the named insured. However, the policy clearly stated that the insurance provided was “excess over any other insurance.” In contrast, the general contractor’s policy other insurance provision specified that it was primary except when other primary insurance was available.

The court concluded that regardless of contractual language between the general contractor and subcontractor requiring the subcontractor’s policy to be primary, the plain and unambiguous language of the policies would govern the respective duties of the insurers. Thus, the subcontractor’s policy was excess to that of the general contractor’s primary coverage, and the settlement of $750,000 in the underlying action was covered entirely by the GC’s $1million policy.

If you have any questions or comments about this post, please contact Denise Ricci at .

Jeffrey M. Brown Associates, Inc. v. Interstate Fire & Casualty Company, — N.J.Super. – (App. Div. 2010), http://www.judiciary.state.nj.us/opinions/a2325-08.pdf

Riding a jet ski is like being strapped to a water-based rocket. The thrill of slicing through the water is exhilarating with the whiff of danger always near. The darker side of these devices is that they can be very dangerous, particularly when placed in the hands of young, inexperienced riders. In response, many municipalities require that operators take a boating safety course that familiarizes them with the proper operation and potential dangers associated with jet skis. So far, so good. But is the local municipality liable for failing to confirm that an operator has taken the required course when the jet ski is launched from a city owned ramp?

No so according to the New Jersey Appellate Division. In Lynch v. Ocean City, a sixteen year was given a jet ski that her uncle had borrowed from a friend. It was uncontested that neither the uncle nor his niece were experienced in the operation of jet skis or had taken the required boat safety course. Tragically, the niece died after crashing the jet ski into a dock, sustaining fatal head injuries.

Relying on the immunities provided by the New Jersey Tort Claims Act, the court held that the Ocean City ramp attendant did not have a duty to check to see if the teenaged operator had taken the required course before letting her use the City’s boat ramp. More specifically, the City did not have a legal obligation to enforce the training course ordinance and could not be liable for allegedly failing to properly supervise the boat ramp on the day in question.

If you have any questions or comments about this post, please contact Paul at .

http://www.judiciary.state.nj.us/opinions/a1404-09.pdf

In 2008, we reported that the issue of ski waivers was soon to be taken up by Pennsylvania’s highest court in the case of Chepkevich v. Hidden Valley Resort –– http://www.wcmlaw.com/showarticle.asp?Show=115. The issue was important because the appellate courts had split on the issue of whether the waivers were enforceable. Now, some two years later, in the midst of an early summer heat wave, that long anticipated decision has finally come down. The Pennsylvania Supreme Court has just ruled that recreational skiing liability waivers are enforceable as a matter of Pennsylvania law. If the snows this year match last year’s records, this is certainly good news for Pennsylvania’s mountain resorts.

If you have any questions about this post, please contact Bob Cosgrove at .

http://pdf.wcmlaw.com/pdf/Ski Waiver.pdf

http://pdf.wcmlaw.com/pdf/Ski Maj.pdf

http://pdf.wcmlaw.com/pdf/Ski Co.pdf

http://pdf.wcmlaw.com/pdf/Ski Co2.pdf

In commercial disputes, the choice of law applied to the policy or contract is often dispositive — a point that has been proven in a recent PA decision. In the case of Ario v. Underwriting Members of Lloyd’s Of London Syndicates 33, 205 and 506, a Pennsylvania court was faced with the question of which law to apply in the context of a reinsurance dispute involving a Pennsylvania company and Lloyd’s syndicates. The choice of law issue was important in that depending on which law applied the cause of action may have been time barred. The PA court ruled that Pennsylvania law should apply because the case involved a Pennsylvania resident — a decision which allowed the lawsuit to proceed. The opinion cites to many deep legal principles in respect of why this is just and appropriate, but it seems to us that the case once again proves the merit of having a home court advantage when litigation results. We query whether the result would have been different if the reinsurance treaty had been clearer in respect of the choice of law that applied to disputes under its terms.

If you have any questions about this post, please contact Bob Cosgrove at .

http://pdf.wcmlaw.com/pdf/Lloyd’s Law.pdf

http://pdf.wcmlaw.com/pdf/Lloyd’s Law Op.pdf

Holidays usually result in a spike in engagements. Whether or not this Fourth of July pads the statistics remains to be seen. One thing is for certain — in Pennsylvania if you don’t go through with the wedding, you won’t get to keep your ring. In the case of Bowlen v. Wertz, a Pennsylvania trial court judge has just ruled that, under Pennsylvania’s “no fault” engagement regime, the ring donor is entitled to the return of the ring if the engagement does not ripen into wedding bells. This is contrary to the “gift” rule that applies in many states and is good news for all those unlucky potential grooms.

If you have any questions about this post, please contact Bob Cosgrove at .

http://pdf.wcmlaw.com/pdf/Ring.pdf

In McKanic v Amigos del Museo del Barrio, the trial court dismissed the complaint upon plaintiff’s failure to comply with a discovery order directing the plaintiff to provide authorizations for federal tax returns. The defendants were entitled to the authorizations because the defendants were unable to obtain plaintiff’s salary history either from her or from her purported former employers to evaluate her loss of wages claim. The order stated that the action would be dismissed if the plaintiff failed to comply. The Appellate Division affirmed the decision, stating the defendants established that the information was indispensable to the litigation and unavailable from other sources. When the plaintiff failed to provide the authorizations, the conditional dismissal “became absolute” and the case was dismissed.

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

http://www.nycourts.gov/reporter/3dseries/2010/2010_05478.htm

In Moracho v. Open Door Family Med. Ctr., Inc., 2010 NY Slip Op 05657 (1 Dept. 2010), plaintiff, an asbestos worker, was injured when he fell through an open skylight on the roof of a building owned by Open Door, which was being renovated by general contractor Scully. All parties moved for summary judgment, and plaintiff’s motion was ultimately granted as to liability on his Labor Law § 240(1) claim against defendants Open Door and Scully. The First Department reversed the trial court’s decision, holding that summary judgment should not have been granted because the record consisted of conflicting testimony as to whether a safety vest was available to plaintiff, whether he was aware of the expectation that he would “tie off” the vest, and, if so, whether “he chose for no good reason not to do so.” Thus, the First Department reaffirmed that the broad protections offered under Labor Law § 240(1) may still be restricted due to conflicting testimonial evidence as to the existence of safety equipment and the plaintiff’s failure to use such equipment.

Meanwhile, the court also upheld the denial of Scully’s motion for summary judgment, noting that although the asbestos contractor performed the relevant work, Scully, as general contractor, was still contractually responsible for preventing accidents and taking reasonable precautions to prevent injuries. What’s more, the record established that Scully had access to the site and involvement with the project. Thus, despite a lack of control over the subcontractor, the court reinforced the principle that the general contractor must still provide safety devices to prevent injuries.

Special thanks to Lora Gleicher for her contributions to this post. If you have any questions, please contact Bob Cosgrove at .

http://www.courts.state.ny.us/reporter/3dseries/2010/2010_05657.htm

It is well established that a defendant moving for summary judgment in an action involving a slip and fall on a transient condition must make a prima facie showing that it neither created the condition, nor had actual or constructive notice of the existence of the condition for a length of time sufficient to discover and remedy it. Because it is nearly impossible to determine how long a transient condition has been present, courts look at many factors, including whether it was ongoing, recurring or even dirty.

In Bruinsma v. Simon Property Group the plaintiff sustained personal injuries when she slipped on a bubble on the ground of the New Haven Mall. The defendant moved for summary judgment on the grounds that it did not have notice of the alleged condition. The Supreme Court Suffolk County denied the motion.

The Appellate Division Second Department upheld the lower court’s decision. Although courts look at many factors when determining notice of a transient condition, in this case, the Appellate Court’s decision was based solely on the defendant’s failure to submit evidence of when the ground was last inspected prior to the accident.

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

http://www.nycourts.gov/reporter/3dseries/2010/2010_04942.htm