Office Party Gone Wild: No Liability Where CFO Strikes Co-Worker

In Milosevic v. O’Donnell, plaintiff sued to recover for injuries she sustained after she was struck by her company’s CFO at an office party. Plaintiff sued her employer under the doctrine of respondeat superior, seeking to hold it responsible for the CFO’s actions. Plaintiff also sought to hold her employer liable in negligence for sponsoring the event, claiming that there was a “culture” of alcohol use at off-premises, company events.

With regard to the respondeat superior claim, the court held that there was no allegation that the CFO was acting within the scope of his employment when the attack occurred or that a work-related issue precipitated the assault.  Rather, the evidence showed that the CFO “lost control of his senses” and attacked plaintiff “for no apparent reason.”  With regard to plaintiff’s claim that the defendant negligently sponsored the office party, the court held that there was no evidence that the defendant knew of the CFO’s violent propensities when intoxicated or the possibility of an assault.  Therefore, the appellate court affirmed the lower court’s dismissal of the negligence and “intentional and/or wanton conduct” causes of action against the employer.

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_08633.htm

Thanks to Gabe Darwick for his contribution to this post.

NY: A&B Sub-Limit Applies To Primary But Not Excess Policy

It is a harsh reality that courts will give policyholders every benefit of the doubt in interpreting the terms, conditions and limits of policies of insurance. Insurers must be careful to place their insureds on notice of significant exclusions and limitations through the use of clear, concise and plain language in their policy forms. Even trickier, most states require that insurers timely advise their insureds and claimants if they conclude that the policy does not cover a particular claim or loss.

What obligation does an insurer have if it does not deny coverage outright but seeks to enforce a significant sub-limit of liability? Is the insurer bound by the same rules that control when the insurer seeks to disclaim liability?

Recently, in Santa v. Capitol Specialty Insurance, LTD., et al., plaintiffs filed suit against a Manhattan night club arising out of an alleged assault on plaintiffs. The third party administrator for the primary insurer became aware of the claim after it received the summons and complaint, which contained a specific count based on assault. Nine months later during discovery, the attorneys for the policyholder disclosed, for the first time, that the primary policy was subject to an assault and battery sub-limit of $50,000. The insurance disclosure also identified an excess policy with limits of $4,000,000 but made no reference to the sub-limit contained in the primary policy.

The claimants protested that the primary insurer must provide its full policy limits because it failed to provide timely notice of the assault and battery sub-limit. Further, they argued that the excess insurer must make its full policy limits available because its policy did not contain any explicit exclusion or sub-limit for claims based on assault and battery.

Of significance, the court held that the primary insurer was not subject to the normal rules requiring timely notice of disclaimer because it was not disclaiming or otherwise denying coverage. Rather, it was providing “the full measure of coverage available for the incident,” just with a reduced sub-limit of liability.

On the other hand, the excess insurer did not fare as well. The court cited a number of problems with the excess insurer’s stance including its failure to exclude or specifically minimize its limits of liability for claims based on assault and battery. Further, the court was troubled by the excess insurer’s failure to put the claimant on notice of the sublimit when the insurance disclosure was furnished to the claimant’s attorney during discovery.

The lesson of Santa is clear: while Santa may overlook minor errors in conduct and still arrive bearing gifts, insurers can expect no such generosity from the courts. Be clear, accurate and specific in the language contained in your policies and the disclosures made to your insureds and claimants.

http://pdf.wcmlaw.com/pdf/santa.pdf

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

No Link Between Auto Accident and Early Cesarean Section

In Johnson v. The City of New York, plaintiff was 12 days pregnant when a police vehicle backed into her as she walked across a street in Manhattan. Plaintiff alleged that as a result of the accident, she sustained a fractured right tibia. In addition, she alleged that the accident caused complications in her pregnancy, such as vaginal bleeding and placental abruption, resulting in plaintiff undergoing an emergency cesarean section at 27 weeks (just over 6 months). The court found that, based upon the emergency room records on the date of the accident, plaintiff demonstrated a connection between the accident and her leg fracture. As to the pregnancy complications, the medical records did not contain any specific link to the leg injury. Rather, “preexisting gynecological issues” were cited as the cause for at least some of plaintiff’s pregnancy difficulties. As such, the court ruled that there was no support to plaintiff’s argument that the auto accident caused any of the subsequent complications to her pregnancy.

http://www.courts.state.ny.us/reporter/3dseries/2011/2011_08458.htm

Thanks to Brian Gibbons for his contribution to this post.

Buyers Beware: Service Technicians Owe No Duty to Warn of Improper Installation

In Thorpe v. General Electric, plaintiffs purchased a General Electric refrigerator and had it installed in their vacation home (not by GE). The manual warned owners to only use copper tubing to connect the icemaker to house plumbing, and that plastic tubing posed a risk of water leakage over time. On the rear of the refrigerator near the waterline connection, a label further warned against using plastic tubing, and disclaimed liability for improper installation. Despite these warnings, the refrigerator was installed and connected with plastic tubing.

Five years later, in August 2006, plaintiffs entered into a twelve-month service contract with GE. The contract disclaimed liability for damages arising out of installation, for damages caused by plumbing, or for replacement of tubing. It also disclaimed liability for any consequential damages related to the performance of the service contract. In May 2007, a GE technician repaired the icemaker. Sixteen months later, the plastic tubing ruptured and water leaked into the house, causing substantial damage. In opposition to GE’s summary judgment motion, plaintiffs argued that GE’s service technician had a duty to inspect the installation and warn plaintiffs of the improper installation. The court however, would not read a duty to inspect or warn into the service contract, and granted GE’s summary judgment motion.

http://www.judiciary.state.nj.us/opinions/a2805-10.pdf

Thanks to Sheila Osei for her contribution to this post.

The Holy Spirit Comes in Pennsylvania.

Last year we reported on the case of Barrick v. Holy Spirit.  In Barrick, the  Pennsylvania Superior Court was faced with the question of whether correspondence between an attorney and her retained expert (which discussed case strategy) was discoverable. The Superior Court ruled that attorney/expert correspondence was discoverable under Pa.R.C.P. 4003.5(b) that requires an expert to disclose “the substance of the facts and opinions to which the expert is expected to testify” as well as “the grounds for each opinion.” This disclosure “right”, reasoned the Court, trumped the attorney work-product privilege.

A howl of protest immediately ensued and the Superior Court agreed to revisit the issue.  In a newly issued decision, the Superior Court has reversed itself.  The Court wrote that disclosure of “correspondence between an opposing party’s attorney and the expert witness retained by that party falls outside the express language of Pa.R.C.P. 4003.5(a)(1).”  The Court further wrote that because “correspondence between Appellants’ counsel and Dr. Green [the expert] constitutes attorney work product pursuant to Pa.R.C.P. 4003.3, we conclude that it is not discoverable under the Pennsylvania Rules of Civil Procedure.”  The bottom line is that attorneys can talk to their experts in peace, free from fear that their communications will become discoverable.
If you would like more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.

A Butterfly Effect of Business Interruption Claims?

In chaos theory, there is a concept known as the butterfly effect.  In essence, the theory is that depending on when a butterfly flaps its wings in Tokyo, you get rain and not sunshine in New York.  The underlying premise of the butterfly effect is that the world is interconnected in ways that we cannot possibly fully predict or understand.

The recent Thailand floods may support this proposition.  To the layperson, “Thailand” may elicit a number of different thoughts, but major manufacturing center is not likely to be one of them.  Yet, many of the component parts used in advanced electronics (for example 45% of the world’s computer hard-drives) are produced in Thailand.  The recent floods  submerged these factories and there is no known resumption date.  This is bad news for any manufacturer which production abilities rest, in whole or in part, on the state of the Thailand factories.  Major insurers and re-insurers should pay close attention to the developments in Thailand since business interruption claims could be significant.

For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.

 

Failure To Provide Discovery Leads To Striking Of Answer

Although it sometimes seems that cases in New York can go on forever, with no penalties for dilatory conduct, courts will, eventually, enforce sanctions against a party that fails to provide discovery.  In Solomons v. Chaudhry, (Supreme Court, New York County, 110637/10) the defendant failed to provide discovery requested by plaintiff.  A compliance conference led to an order requiring production of the requested discovery, and provided that “failure to comply with the Order absent a showing of good cause shall result in dismissal of the complaint in the case of the plaintiff; or a striking of the answer, affirmative defenses and counterclaims, or a preclusion of evidence at trial in the case of the defendants, upon written notice of motion, of such non-compliance.”

After defendants failed to provide the ordered discovery, plaintiff moved to strike and/or compel the discovery.  The Court granted the motion.  After defendants again failed to provide discovery, plaintiff made another motion.  In response, defendants’ attorney provided an affirmation when he stated that the discovery was provided, but did not attach copies of the discovery or an affidavit of service. 

The court found that the failure to provide discovery was willful, and defendants failed to provide an adequate explanation for the failure.  The court, therefore, stuck defendants’ answers, but did not hold the defendants or the attorney in contempt for failure to comply with a the court orders.

This case shows that, while it takes time, a court will enforce discovery orders, and the parties must eventually comply with discovery requests.

For more information regarding this post please contact David Tavella at dtavella@wcmlaw.com.

 

“Special Errand” For Employer Puts Accident On Trip Home From Work Under Workers’ Compensation

In Matter of Borgeat v. C & A Bakery, the New York Appellate Division, Third Department upheld a finding that injuries caused by an accident involving an employee traveling home was compensable under Workers’ Compensation because the employee was performing a “special errand” for the employer. 

The employee, who died in the accident, worked at a bakery.  He was often asked to deliver cakes to a restaurant on his way home from work.  After the accident, which took place only two blocks from the restaurant in question, a cake box was found in the car.  This was sufficient to support a finding that the decedent’s death arose out of and in the course of his employment.

For more information on this post, please contact David Tavella at dtavella@wcmlaw.com 

http://decisions.courts.state.ny.us/ad3/Decisions/2011/511442.pdf

Mode Of Operation Does Not Apply Just Because Self Service Bins Are Present.

In Cordasco v. Walgreen’s, the New Jersey Appellate Division affirmed an order granting summary judgment to Walgreen’s. Plaintiff claimed that she was walking down an aisle in Walgreen’s and that as she approached the end of the aisle, she slipped and fell on a waxy /crayon like substance on the floor next to 2 self servce bins containing mechandise. She had no idea where the substance on the floor came from, how long it had been there or whether any Walgreen employee knew about it prior to her fall. Plaintiff alleged that she was entitled to an inference of negligence under the mode of operation rule because Walgreen’s was engaged in a self service operation in the area where she fell.

The Appellate Division affirmed summary judgment finding no evidence that the self service bins contained open bags or containers, that the waxy / crayon type material was in the bins for sale or that the substance on the floor came from the bins. It therefore found that the mode of operation rule did not apply and that Plaintiff was required to prove actual or constructive notice which she could not do.

http://lawlibrary.rutgers.edu/courts/appellate/a1636-10.opn.html

Please contact Robert Ball with any questions regarding this post.

Facebook Disclosure Trends in PA.

We have previously reported on the status of Facebook discovery in PA. The law continues to evolve.  In the case of Largent v. Reed, a Franklin County, PA trial court was faced with the question of whether, in the context of an auto accident, the plaintiff had to turn over her Facebook username and password to the defendant.  The trial court ruled for the defendant and ordered the disclosure.  In the lengthy ruling, the court held that there can be “little expectation of privacy” on a social networking site because “only the uninitiated or foolish could believe that Facebook is an online lockbox of secrets.”  More good news for defendants looking to unearth a secret or two to impeach the plaintiff’s credibility!

For more information about this post, or WCM’s Pennsylvania practice, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.