Pink Slime: Cause for Concern for Product Recall Underwriters?

Pink slime is all over the news these days.  It is the derogatory term for “meat product made by processing leftover beef trimmings.”  In other words, it’s meat filler made from leftovers with the addition of amonia.  It sure doesn’t sound very tasty, but it’s been in use for more than 20 years.  Public concerns about its safety have led some stores to offer free refunds/recalls.  A claim to the insurers of those stores or suppliers cannot be far behind.

It also makes you think that maybe you want to stick with lamb or chicken for Easter or Passover dinner…

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Contract Terms Trump Specifications In Labor Law Personal Injury Action

In Fraser v. Pace Plumbing Corp., the appellate court affirmed the lower court’s decision to deny Pace Plumbing Corp.’s summary judgment motion.  Fraser was injured when the scaffold on which he was standing slipped into an open, uncovered hole in the concrete floor causing him to tip over.  The contract between Pace and the construction manager required that Pace “cut, fit, patch and protect its work.”  Pace argued that the specifications portion of the contract provided that the openings left in the floor would be patched up “by others.”  This argument failed because the agreement provided that in the event of a conflict, the agreement would take priority over the specifications.  Further, the court held that in light of Pace’s obligations set forth by the contract, there still remained triable issues of fact as to whether Pace was a “statutory agent” of the construction manager, and as such may be liable under Labor Law sections 200, 240(1) and 241(6).  To be treated as a statutory agent, the subcontractor must have been “delegated the supervision and control either over the specific work area involved or the work which gave rise to the injury.” 

Thanks to Sandy Debbas for her contribution to this post.

Vehicle Itself Must Be The Proximate Cause Of Injures For No Fault Law To Apply

In Cividanes v. City of N.Y., 2012 NY Slip Op 02179, plaintiff was allegedly injured when she stepped into a hole and fell after alighting from a bus owned and operated by the City defendants. The defendants moved for summary judgment, arguing that the plaintiff’s injuries did not meet the “serious injury” requirement of No-Fault Law. In affirming the lower court’s denial of the motion, the First Department held that No-Fault Insurance Law only applies if the vehicle is the proximate cause of plaintiff’s injuries. Here, plaintiff’s accident did not occur because of the bus, but rather, occurred outside the bus. Thus, the court held that: (1) the accident did not arise out of the “inherent nature” of the bus;  (2) the accident did not arise within the “natural territorial limits” of the bus, as plaintiff fell on the street; and, (3) the bus itself was not the instrumentality that produced the alleged injury. As a result, plaintiff did not have to meet the “serious injury” threshold requirements, thus limiting a defendants ability to succeed on a threshold summary judgment motion where the vehicle in question was not the specific cause of the accident, but still seemingly related to the accident.

In NJ MVA Case, “Discovery Rule” Inapplicable Were Plaintiff Was Aware Of Worsened Injury Prior To Expiration Of The Statute Of Limitations

In Fabiano v. Pagalilauan, the plaintiff filed suit for injuries sustained in a motor vehicle accident on April 16, 2008.  An x-ray taken on the day of the accident revealed a large, benign bone tumor on the plaintiff’s right knee right knee.  Several months later, the plaintiff underwent an MRI on October 11, 2008 that revealed a malignant transformation of the bone tumor.  He eventually underwent surgery to remove the tumor, but there was no biopsy to confirm the malignancy and it was never confirmed that the alleged malignancy was casually related by the motor vehicle incident.

On July 12, 2010, the plaintiff filed a suit seeking damages for the malignant transformation of the bone tumor and the resulting surgery.  The defendant moved to dismiss the complaint arguing that the applicable two-year statute of limitations had expired.  The defendant’s motion was granted and the plaintiff appealed arguing that the “discovery rule” applied.  Specifically, the plaintiff claimed that he had two years from October 11, 2008, the date the malignancy was discovered, to file his complaint.

The Appellate Court disagreed and upheld the trial court’s dismissal of the plaintiff’s complaint finding that the discovery rule did not apply in this case since the plaintiff was aware of the alleged malignant transformation before the applicable two-year statute of limitations for bodily injury stemming from a motor vehicle accident expired.  The court further noted that there was no medical evidence confirming the malignancy and causally relating it to the accident.  Lastly, the court noted that a cause of action for automobile negligence ordinarily accrues when the accident takes place, even if the initially sustained injuries later turn out to be more serious then originally believed.

Thanks to Heather Aquino for her contribution to this post.

Employment Contracts In The Third Circuit

In Edwards v. Geisinger Clinic, the Third Circuit Court of Appeals had an opportunity to rule on whether a physician had alleged sufficient evidence to support his breach of contract claim following his termination after roughly one year of employment.  In Edwards, the physician believed that he was guaranteed employment at least until he completed the four-year program necessary for his board certification.  The court rejected the physician’s argument upholding the dismissal of his complaint.  The court reasoned that in order to overcome the presumption of employment at-will, a party must demonstrate with “clear and precise evidence” that the parties intended to enter into an employment contract for a definite term.  The court noted that an employee’s “subjective expectation” of employment for a definite term does not demonstrate that there was in fact an employment contract for a definite term.  Similarly, an employer’s “hope” that an employee would remain employed for a certain time would not demonstrate the existence of an employment contract for a set term.  Thus, this case seems to evidence Pennsylvania’s strong presumption of employment at-will and the need to clearly set forth in the terms of a document a party’s desire to enter into an agreement for employment for a set period of time.

Thanks to Colleen Hayes for her contribution to this post.

The Fun Side of the Insurance Business.

Not all things are created equal.  And some things are just more “fun” than others.  To the outsider, insuring Hollywood certainly would seem to fall into that “fun” category as this article in today’s NYT makes clear.  Of course, as we all know, things are never quite what they seem as poor underwriting decisions (e.g. failing to ask the right questions) and commercial realities can conspire to make claims “payable upon receipt” as opposed to the subject of a detailed and strenuous claims analysis.  Hats off to Hollywood indeed.

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A Recurring Condition ≠ Actual or Constructive Notice

In Pfeuffer v. New York City Housing Auth., the plaintiff, a police officer, slipped and fell on a staircase inside defendant’s building on a wet substance he believed to be urine. He alleged that the defendant was negligent in permitting the stairway to remain in dangerous, defective, slippery, and wet condition. Plaintiff, and two fellow police officers, testified that the building was a known drug location and that the steps were generally dirty. The defendant’s superintendent and the defendant’s caretaker both testified that the staircase was inspected twice a day and that any liquids would be mopped up. Relying on the testimony that the debris on the stairs constituted a recurring condition, the lower court denied the defendant’s motion for summary judgment.

The First Department reversed, finding that the defendant did not create or have notice of the condition of the staircase. It emphasized that a defendant cannot be expected to patrol its staircases 24 hours a day and that, even if the problem was recurring, the defendant addressed it by cleaning up garbage and daily spills and inspecting the stairs twice a day. The Court also noted that this was not a case where the defendant negligently failed to take measures to avoid the creation of a dangerous condition.

Thanks to Gabe Darwick for his contribution to this post.

Fewer LSAT Takers . . . Fewer Lawyers

For the first time in a long time, LSATs and law school applications seem to be down. A NY times article noted on March 20, 2012 that the number of LSAT takers has dropped from over 170,000 two years ago to less than 130,000 during the most recent test.  This trend seems to be a function of both the recession and, more importantly, the immense debt carried by young lawyers upon graduation from law school.  Recent college grads, upon hearing tales of $200,000 debt from friends and relatives, are beginning to look elsewhere for financial security.  A slowly improving economy may diminish this trend in coming years, but lower tuition (and lower educational debt) will likely continue to be an issue.

Thanks to Brian Gibbons for his contribution to this post.



New Jersey Skiers Beware of the “Season Pass”

In Dearnley v. Mountain Creak, plaintiff purchased a season pass to Mountain Creek Ski Resort in 2008.  As part of the application process, plaintiff signed an agreement fully releasing Mountain Creek from any and all liability for personal injury.  While visiting Mountain Creek in January 2009, plaintiff suffered serious injuries and subsequently filed suit against Mountain Creek.  Oddly, plaintiffs then re-applied for a season pass several months later and signed a “Season Pass Waiver” agreeing to release all claims that they may have had against Mountain Creek.  The court granted Mountain Creek’s motion for summary judgment based on the 2009 waiver finding that plaintiff surrendered the right to maintain the suit in exchange for the benefits afforded to season pass holders.

Plaintiff appealed claiming that the contract entered into was one of adhesion and contrary to public policy.  The Appellate Division noted that contracts will ordinarily be enforced as written.  Avoidance of such a contract requires clear evidence of mistake that is so grave as to make enforcement of the contract unenforceable.  Because plaintiff gained a benefit from holding the season pass, and that the terms were not one-sided, the trial court’s decision was affirmed.  Under these circumstances, the plaintiff’s ‘releasor’s remorse’ was not sufficient to remand the matter.

Thanks to Andrew Marra for his contribution to this post.




NJ Plaintiff Gets Court Blessing To Continue Lawsuit Against Church.

In New Jersey, the general rule is that non-commercial entities do not owe a duty of care to a pedestrian injured as a result of the condition of abutting sidewalks.  With respect to religious, charitable or other nonprofit organization, the court looks to the nature of the use of the property, and its “capacity to generate income” in a determination of whether the property is commercial or residential.

In Mohamed v. Iglesia Evangelica Oasis de Salvacion, plaintiff sued the defendant church after she stepped into a depression on the sidewalk abutting the church property.  The church moved for summary judgment and argued that its property was non-commercial, as it was used exclusively for religious purposes.  In opposition, the plaintiff pointed to the deposition testimony of the church’s pastor who stated that the church would receive monetary “donations” for the use of its parking lot and for permitting people to use its basement for parties.  Faced with this evidence, the trial court granted defendant’s motion for summary judgment, finding that the church was not a commercial landowner and therefore not required to maintain the sidewalk under New Jersey law.

On appeal, the Appellate Division reversed and remanded for further proceedings , finding that the trial court should have given the plaintiff the opportunity to conduct discovery on the issue of the nature of the church’s use of the property, including whether the church was only engaged in religious activities or in commercial activities as well.

 Special thanks to Cheryl Fuchs for her contributions to this post.

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