Venue Change In Pennsylvania Proper If Any Defendant Does Not Do Business In County

On October 21, 2011 the Superior Court of Pennsylvania decided Schultz v. MMI Products et al, 2011 PA Super 225 (Pa. Super, 2011), which affirmed the trial court’s transfer of venue to Lehigh County.

The plaintiff was injured at a construction site in Lehigh County but filed suit in Philadelphia County. Of the five defendants, two objected to venue in Philadelphia, as they did not regularly conduct business there. The Superior court noted that corporations have a constitutional right to seek a change of venue. The court also explained that venue questions are particularly fact-based and can only be decided on a case-by-case basis.

In this case, three of the five defendants waived their objection to improper venue when they did not raise the issue in their preliminary objections. However, despite plaintiff’s claims, the court explained the fact that the other defendants waived their right does not have the effect of establishing proper venue for all other remaining defendants.

This case is useful to all corporate defendants as a reminder that corporate defendants can be successful in transferring venue out of Philadelphia County. If a corporation does not have significant contacts in the county, this strategy is one that could prove quite beneficial.

Thanks to Remy Cahn for her contribution to this post.

New Arguments for Summary Judgment Cannot Be Raised in Reply Papers

In Rhodes v. City Of New York, the First Department reaffirmed its rule prohibiting new arguments from being advanced for the first time in reply papers in support of motions for summary judgment. In Rhodes, an expert report contained an improper date and as such the court did not consider the expert’s opinion. In a motion to renew and reargue, the expert affidavit date was changed and the court considered the affidavit.

The First Department, however, found the lower court’s consideration of the affidavit on the motion to renew improper as the affidavit was attached to reply papers on the motion to renew. Moreover, the First Department recognized that the information was known to the parties at the time the affidavit was initially submitted and as such, was not a new fact that formed a proper basis for the motion to renew.

Thanks to Alison Weintraub for her contribution to this post.

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_07569.htm

Will the SeaWorld Tragedy Lead to Lawsuits?

The recent and tragic death of Dawn Brancheau, an experienced orca trainer, at SeaWorld’s Orlando park, has spawned much (and often sensational) news coverage. The thrust of much of the press coverage has been on the general questions of whether orcas, a/k/a killer whales, should ever be held in captivity or allowed to interact for daily shows with humans. The second, and for a legal blawg, the more interesting aspect of the tragedy is whether Tilikum, the whale implicated in the recent attack, has “violent propensities” — beyond that which should be expected from a “typical” orca. Indeed, it has now come to light that this is the third human fatality that Tilikum has caused (in whole or in part) over the last 20 years. Although, for the moment, Brancheau’s family has not expressed any interest in commencing a lawsuit against SeaWorld, given Tilikum’s apparent “violent propensities” a lawsuit of some kind by someone seems inevitable — especially if Tilikum (whom SeaWorld has annouced it will not put down) attacks again.

If you have any questions about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.

Emergency Car Crash Not Considered Negligent Driving

In Ardila v. Cox, et.al., (2011 NY Slip Op 07385) the plaintiff was driving eastbound on the highway when a car driving westbound swerved into oncoming traffic and collided with the plaintiff’s vehicle. Defendant Balch was operating an oil tanker truck behind the plaintiff’s vehicle. When he saw the cars collide, he applied the breaks and moved to the right. This caused him to crash into the plaintiff’s vehicle.

Balch moved for summary judgment under the emergency doctrine, which states that a driver faced with a sudden and unexpected circumstance which leaves no time for deliberation cannot be found negligent if his actions were reasonable and prudent. The Second Department held that a vehicle traveling in the opposite direction that suddenly crosses over into oncoming traffic is a classic emergency situation, implicating the emergency doctrine. Accordingly, the Court granted Balch’s motion.

http://www.nycourts.gov/reporter/3dseries/2011/2011_07385.htm

Thanks to Georgia Stagias for her contribution to this post

Living and Dying By the Sword in PA Coverage.

The knee jerk reaction of many insurers when faced with a state court action is – remove the case to federal court. But as the case of [i]Craker v. State Farm[/i] makes clear, this decision can be perilous if not fully thought through. In [i]Craker[/i], the plaintiffs sued their insurer in Pennsylvania State court to recover $200,000 in underinsured motorist (“UIM”) coverage which State Farm had refused to pay. The complaint asked for the value of the UIM coverage and bad faith damages. State Farm removed the case to federal court. Gary Lancaster, the chief judge of the Western District of Pennsylvania, was assigned to the case.

After failing to engage in meaningful discovery and when confronted with a motion to compel discovery, State Farm filed a motion to sever and stay the bad faith claims. Relying on Pennsylvania state law, State Farm reasoned that discovery on the bad faith claim should not proceed until after the underinsured motorist claim was resolved. Judge Lancaster denied the motion and ruled that:

[i]To the extent State Farm relies on and seeks the benefit of favorable rulings made by state court judges in this judicial district regarding the administration of bad faith claims, State Farm committed a strategic error by removing this case. Having single-handedly selected this forum, State Farm must now abide by our rules and procedures.[/i]

The tone of the language suggests that Judge Lancaster was upset by State Farm’s less than diligent conduct of discovery, and my own personal experience is that the WDPA doesn’t really like to handle coverage litigation. But nevertheless, the reality remains – if you want the benefit of federal judges, you have to live with the dangers (e-discovery and all) that come with federal jurisdiction.

If you have any questions about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.

A Sign of Things to Come in PA CGL Coverage?

In the case of [i]Heller v. Pennsylvania League of Cities, et al.[/i], Pennsylvania’s Supreme Court was faced with the question of whether a workers’ compensation exclusion in an employer-sponsored insurance policy violated public policy. The Court held that it did and thus was unenforceable.

Some background is in order. In this case, Heller was involved in an on-the-job auto accident. He recovered the full $25,000 policy limit from the tortfeasor’s insurance carrier. However, his damages exceeded that limit. So, Heller notified his employer’s insurer of an underinsured motorist (“UIM”) claim. The employer policy had an exclusion that stated that UIM coverage did not attach to “[a]ny claim by anyone eligible for workers[’] compensation benefits that are the statutory obligation of the Member.” Based upon this exclusion, Heller’s claim was denied.

Heller found this problematic. He argued that the language rendered the policy illusory since, after all, the vast majority of claims under the employer policy were going to be by employees who were eligible for workers’ compensation.

The Supreme Court agreed. It held that “our own analysis fails to reveal a scenario where the coverage will meaningfully apply to the intended beneficiaries — the Borough’s employees. Under the facts of the case, the exclusion renders the coverage illusory.”

This decision bears watching to all CGL carriers with an expanded employee exclusion in their policies. No doubt the illusory argument will be raised in the next coverage action in which an employee exclusion is run.

If you have any questions about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.

Eating 10 Cans Of Tuna Fish Each Week For 2 1/2 Years Not Unreasonable

In [i]Porrazzo v. Bumble Bee Foods, et.al.[/i] (S.D.N.Y. 10-CV-4367) plaintiff sued defendants in strict product liability after being diagnosed with mercury poisoning. Plaintiff ate 10 cans of tune fish per week for a period of two and a half years, and had a blood mercury level more than twice the recommended limit. One of plaintiff’s claims was that the tuna fish was not fit for the ordinary purposes for which tuna fish was intended. Defendants moved to dismiss, arguing that a diet consisting of nearly 1500 cans, or over 500 pounds, of tuna in thirty-three months was not the intended use of the product, and was unreasonable as a matte of law. The court disagreed.

The court held that what was “reasonable” was best left to a jury to decide. The court emphasized that such a decision, the reasonableness of plaintiff’s diet, was not proper for a motion to dismiss.

The case had several other issues regarding the propriety of plaintiff’s complaint, but most of the objections were rejected because of the status of the case, i.e. motion to dismiss. The court noted that the claims might not survive a motion for summary judgment or trial.

The lesson to take from this case is what one person believes is reasonable may differ from another, and thus the question is a quintessential “question of fact” for a jury.

If you would like further information about this post, please contact David Tavella at dtavella@wcmlaw.com.

Historian Accused of Theft Plot Allowed to Sell his Warhol

Barry Landau is one of the most prominent collectors of American historical documents and presidential memorabilia, accumulating more than 10,000 items over the years. But last month, Landau and an associate were arrested and accused of stealing many of those documents from historical societies, libraries, and universities across the United States.

Recently, the market for rare American documents has been booming. Last year, Sotheby’s sold a copy of the Emancipation Proclamation signed by President Lincoln and once owned by Robert F. Kennedy for nearly $3.8 million, and in 2009, Christie’s sold a 1864 victory speech hand-written by President Lincoln for more than $3.4 million. According to Sotheby’s, the overall auction market for rare American historical documents totals $30 million to $50 million annually.

The story recently took another interesting twist, as Landau, strapped for cash, needed to apply for permission from the court to sell an Andy Warhol print of Elizabeth Taylor and other collectibles to pay for his living expenses. In order to guard against the potential sale of stolen goods or evidence, one of the terms of Landau’s bail agreement is that he seeks court permission before selling or disposing of any assets. Last week, Judge Catherine Blake granted his application.

Landau has pleaded not guilty to the charges, but there is speculation he may change his plea at an upcoming hearing.

If you would like more information, please write to Mike Bono at mbono@wcmlaw.com

Third Circuit Clarifies Timing of Removal to Federal Court.

An issue that has tripped up many a litigator is the timing of just when a case must be removed to federal court. 28 U.S.C. §§ 1441, 1446, the federal removal statute, states that the removal must occur within 30 days of service on the defendant. But what happens in a multiple defendant case? Must the removal occur within 30 days of the service of the first served defendant or 30 days from service of the last known defendant or does each defendant get its own 30 day window?

The Fourth and Fifth Circuits have adopted the “first served” rule and held that the 30 day period ends 30 days after service on the first defendant. The Sixth, Eighth, Ninth and Eleventh Circuits have adopted the “later served” rule and held that each defendant gets 30 days from the date on which it, itself, was served to remove the case to federal court.

In the case of Delalla v. Hanover Insurance, the Third Circuit has just weighed in. It has adopted the later served rule. Good news if you are in a multiple defendant products liability case in places like Atlantic City or Philadelphia!

If you have any questions about this post or WCM’s product liability practice, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.

Excess Insurer Denied Right to Disclaim After Attending Mediation (NY)

Pursuant to New York Insurance Law §3420(d), insurers seeking to disclaim coverage to an insured must act expeditiously or risk being estopped from disclaiming coverage. The application of §3420 to excess insurers continues to evolve, and was addressed in a recent decision by the Appellate Division, First Department, in Yoda, LLC, et al. v. National Union Fire Insurance Company of Pittsburgh, PA.

In 2003, Yoda, a general contractor, tendered its defense and indemnification for an underlying personal injury suit to a subcontractor, and the subcontractor’s primary insurer accepted the tender. National Union, the subcontractor’s excess insurer, monitored and actively participated in the litigation for three years, including attending a mediation and engaging in settlement negotiations, without ever issuing any position letter. In 2006, after plaintiff was granted partial summary judgment in the underlying suit, National Union disclaimed coverage, arguing that the certificates of insurance it was previously provided were improper and that Yoda was not an additional insured, and, in any event, the loss was excluded based on a specific policy exclusion.

However, the Court held that the excess insurer’s inexplicable delay in issuing a disclaimer, based, in part, on its failure to timely obtain a copy of the primary policy, estopped the excess insurer from denying the tender three years later. As such, National Union was required to provide the owner and general contractor with coverage for the underlying action.

Thanks to Chris O’Leary for his contribution to this post. If you would like more information, please contact Mike Bono at mbono@wcmlaw.com.