Monthly Archives: May 2012

Is Getting The Right Panel Key to Appeal In NY’s First Department ?

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In New York’s Appellate Division, First Department, forget precedent, the key is getting the right Court panel. In Maniscalco v. New York City Transit Auth., the plaintiff, a pedestrian, was struck by the defendant’s side-view mirror, as she crossed the street within the crosswalk with the light in her favor. The plaintiff moved for and was granted summary judgment by the Supreme Court.

On appeal, the defendant did not challenge the Supreme Court’s finding that he was negligent and that his negligent was the substantial cause of the accident. Rather, he contended that questions of fact existed as to the plaintiff’s comparative negligence, precluding summary judgment.

In 1993, the Court of Appeals, in Thoma v. Ronai, held that a plaintiff is not entitled to summary judgment where there is an issue of fact as to comparative negligence. While this should have resolved the issue once and for all, it did not. In 2010, a panel of judges on the First Department declined to follow it. But just two years later, a different panel of the same court followed Thoma.

After a long look at the mixed precedent on the matter, the Maniscalco Court reversed the Supreme Court, denied plaintiff summary judgment, and decided to follow Thoma. It reasoned that the point of Thoma and its progeny is that, where there is evidence that both the defendant and plaintiff were negligent and that each one’s negligence may have been a substantial factor in causing the injury, whether one party’s negligence was a substantial factor in causing the injury should not be determined in isolation. Rather, each party’s liability should be considered and determined simultaneously with the material, and overlapping, issue of whether the other party was also culpable.

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_03548.htm

Thank you for Gabe Darwick for this post.

The Big Legal Problem in NYC? Bad Trees.

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When you think of New York City, capitol of the universe, you probably think of such things as skyscrapers, crowds, hot dogs and the Yankees.  But what you probably don’t think of is trees.  Yet it is trees that are causing an increasing number of legal headaches for the Big Apple.  NYC has approximately 2.5 million trees in the City’s parks and streets and there are plans to plant 1 million more over the next few years.  The problem is that, as a result of poor training and a lack of budget funds, the trees are not being properly monitored for damage/disease or other problems.  Thus, over the last 5 years, 49 people have been injured and 2 people have been killed by falling trees.  Certainly, these are not enormous numbers, but when the NYT runs a front page essay  on the problem (and cites trial and deposition testimony) you can bet that the plaintiffs bar is paying attention.  You can also surely bet that the Mayor’s office is paying attention – might a change to tree responsibility be around the corner (similar to the sidewalk liability changes of 2003)?  Stay tuned to find out.

For more information about this post, please contact Bob Cosgrove at .

No Immunity For Utility’s Negligent Placement Of Pole

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In Seals v. County of Morris , the New Jersey Supreme Court held that Jersey Central Power & Light was not immune from liability for its negligent placement of an electrical pole. The Court held that if a government entity directed the utility where to place the pole, then N.J.S.A. 48:3-17.1 conferred immunity on the utility. However, where there is no governmental dictate or order , as in Seals, ordinary negligence standards apply and utility companies that place their poles without considering whether they are in dangerous locations can be held liable for resulting injuries.

In Seals , the utility pole had been at its location , an old stagecoach route, since approximately 1937. The location had been the site of several prior accidents and the pole had previously been replaced three times.

http://lawlibrary.rutgers.edu/collections/courts/supreme/a-84-10.opn.html

 Please contact Robert Ball with any questions regarding this post.

 

Young People Understand, and Ignore, Risk of Texting While Driving

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While it is unclear whether a funded study was necessary for this conclusion, a recent Consumer Reports survey has found the following two statements to be true: First, young people (ages 16 to 21) fully understand the increased danger of texting while driving. Second, that same age demographic nevertheless continues to text while driving.

Moreover, a recent study conducted by the U.S. National Highway Traffic Safety Administration found that drivers age 18-20 are three times more likely to send or receive texts or emails while driving than drivers older than 25.

Studies like these will most likely be cited in the growing movement (among some special interest groups, at least) to ban all cell phone use, even with a hands-free device, while driving.
It is unclear exactly how much steam this movement has gained, but we suspect lobbyists in the employ of companies like Bluetooth would “respectfully disagree” with such a pervasive ban of hands-free devices.

Thanks to Brian Gibbbons for this contribution.

 

NY Upholds Dismissal of Claim by Passenger in Stolen Car

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In Kalafatis v. Royal Waste Management, the plaintiff was a passenger in a stolen vehicle that ran a red light and collided with the co-defendant’s truck. The co-defendant’s motion for summary judgment was granted. The plaintiff appealed and moved to re-argue.

The lower court granted the plaintiff’s motion to reargue and, accordingly, the plaintiff never perfected his appeal. The plaintiff’s motion to reargue was heard and the court upheld its prior decision. Once again, the plaintiff appealed.

The Second Department stated that, as a general rule, it does not consider issues on a subsequent appeal that could have been or were raised in an earlier appeal. Nevertheless, the Court used its inherent jurisdiction and discretion and agreed to hear this appeal. Unfortunately for the plaintiff, the lower court’s prior decision was, once again, upheld.

Thanks to Georgia Stagias for this post.

For more information, contact Denise Ricci at

 

NY: Cross That Snow Mound At Your Own Risk

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In Quintana v. The New York City Housing Authority, the plaintiff was injured when he slipped and fell while attempting to climb over a mound of snow created along the curb of the sidewalk by NYCHA’s snow plow. The First Department held that, in the absence of evidence that the mound obstructed the crosswalk or was of such magnitude at the corner that it was more reasonable for a pedestrian to cross the street where plaintiff made his attempt, NYCHA could not reasonably have foreseen that a person in the circumstances in which plaintiff found himself would have acted as he did. Moreover, even assuming that an issue of fact exists as to whether the crosswalk was blocked by the mound, plaintiff was not in an “emergency situation,” and had other, albeit less convenient options for crossing the street, including walking back down the block, rather than crossing over the mound outside of the crosswalk.

Thanks to Ed Lomena for his contribution.

For more information, contact Denise Ricci at

Not Enough Judges in NJ?

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Litigation can be slow enough, but, in NJ, it’s likely to get even slower.  There are as many as 60 judicial vacancies in NJ.  This seems unlikely to change in light of NJ’s budget deficits and (potentially) Governor’s Christie’s role as a vice-presidential candidate.  As if there wasn’t enough to worry about in litigation…

For more information about this post, please contact Bob Cosgrove at .

 

Anti-Assignment Provisions Preempted by Bankruptcy Code in the Creation of Asbestos-Related Trusts

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According to a recent Third Circuit decision, asbestos defendants may properly transfer their insurance rights to personal-injury trusts created under § 524(g) of the Bankruptcy Code. In the case of In re: Federal-Mogul Global, Inc., Federal-Mogul, one of the nation’s largest automobile part manufacturers, had previously filed for Chapter 11 bankruptcy in the wake of over 500,000 pending asbestos claims. Pursuant to §524(g) of the Bankruptcy Code, Federal-Mogul incorporated the creation of a personal-injury trust into its reorganization plan. The trust was funded with numerous assets, but most notably included Federal-Mogul’s right to recover under a variety of insurance policies. Although the terms of reorganization contained “insurance neutrality”, a provision allowing insurers to assert any defenses available under the original agreements, it prohibited them from claiming that the rights were improperly transferred. Consequently, Federal-Mogul’s insurers sued, challenging the transfer of rights despite the existence of anti-assignment provisions in their contracts.

Following unfavorable decisions in the bankruptcy and district courts, Federal-Mogul’s insurers appealed to the Third Circuit where a three-judge panel considered whether the anti-assignment provisions were preempted by the provisions of the Bankruptcy Code. In an opinion penned by Judge Anthony Scirica, the Court of Appeals ultimately held that the transfer of insurance rights to the §524(g) trust was permissible because the Bankruptcy Code expressly preempts private contracts that include anti-assignment provisions. Initially, the Court noted that a similar issue had been reached in the case of In re: Combustion Eng’g, Inc., 391 F.3d 190 (3rd Cir. 2004), where the Third Circuit stated that “even if the subject insurance policies purported to prohibit assignment [of] . . . insurance proceeds, these provisions would not prevent the assignment of proceeds to the bankruptcy estate.”

However, the Court moved beyond the holding in Combustion Eng’g to examine the language and construction of § 1123(a)(5)(b) of the Bankruptcy Cole which provides for corporate reorganization by the transferring of property to one or more entities “notwithstanding otherwise applicable non-bankruptcy law.” While the insurers argued that a scarcity of legislative history required narrow preemption, Judge Scirica readily concluded that the “thin and vague legislative history . . . says nearly nothing about the intended preemptive scope of § 1123(a)” and was not enough “to overcome the plain and unambiguous meaning of the words Congress chose.” The Second Circuit then readily applied this preemption to insurance contracts founded on state law, consistent with the Supreme Court’s 1991 decision in Norfolk & W. Ry. Co. v. Am. Train Dispatchers Ass’n, 499 U.S. 117.

Finally, the Court of Appeals touched upon certain policy considerations that supported preemption in this context. Specifically, the Court noted that assignment to a personal-injury trust did not impose a greater risk on insurers than they had originally bargained for, and that preemption furthered the Congressional design of § 524(g) by ensuring adequate compensation for asbestos litigants.

http://www.ca3.uscourts.gov/opinarch/092230p.pdf

 Thanks for Adam Gomez, law clerk, for this submission.  If you have any questions or comments, please email Paul at

Insurer Has Duty to Defend Allegations of Negligence, Despite Insured’s Admission of Intentional Conduct in Criminal Proceedings.

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In Am. Auto. Ins. Co. v. Sec. Income Planners & Co., a federal district court in New York recently held that the American Auto Insurance Company had the duty to defend negligence claims against Security Income Planners & Co., LLC, despite plea allocution by the insured’s president and CFO where he admitted to intentional conduct.

American Auto insured Security Income under a life insurance agents errors and omissions policy, which included a “Commingling, Misappropriation or Conversion” exclusion, as well as an “Improper Personal Profit” exclusion.  After a criminal investigation, the president/CFO admitted he “engaged in a scheme constituting a systematic ongoing course of conduct with the intent to defraud ten or more people by false or fraudulent pretenses, representations or promises, and obtained property from one or more such persons.”  With the assistance of a knowledgeable and clever attorney, several of the defrauded individulas brought an action against Security Income and the the president/CFO for unjust enrichment and misrepresentation, and later amended the complaint to include allegations of negligence, negligent training and supervision, and breach of fiduciary duty. 

American Auto denied coverage to Security Income based on the two policy exclusions noted above.  A coverage battle ensued.  The court rejected American Auto’s position, holding that the two exclusions did not apply to the negligent supervision claim against Security Income.  The court reasoned that negligence and negligent supervision claims arising from fraudulent or intentional acts were not excluded by the policy’s “Comingling, Misappropration or Conversion” and “Improper Personal Profit” exclusions because the claim for negligent supervision did not allege Security Income comingled, misapprpriated, or converted any funds or gained any improper personal profit through its alleged negligent supervision.  

With regard to at least the duty to defend, insurers must realize that the actual facts are largely irrelevant.  The allegations contained in the complaint, if assumed to be true, control the insurer’s duty to defend.  If the principle — and policy forms and exclusions – is worth defending, be prepared for lengthy litigation where a trial may be required to determine whether plaintiff’s allegations are true and the insurer’s duty to indemnify is triggered.

http://web2.westlaw.com/find/default.wl?cite=2012+WL+957528&rs=WLW12.04&vr=2.0&rp=%2ffind%2fdefault.wl&sv=Split&fn=_top&mt=407

Thanks to Joe Fusco for this post.  If you have any questions or comments, please email Paul at

 

 

 

Capacity to Generate Income May Impose Duty on Commercial Owner in NJ

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In Ethel Gray v. Caldwell Wood Products, New Jersey’s Appellate Court has held that a commercial property owner of a vacant building has a duty to maintain the vacant building’s abutting sidewalk.  Plaintiff slipped and fell on the sidewalk abutting defendant’s vacant commercial building that had allegedly not been cleared of snow and ice.

Defendants were granted summary judgment by the trial judge who relied on Abraham v. Gupta, 281 N.J. Super. 81 (App. Div. 1995) which held that “the owner of the vacant commercial  lot could not be held liable because that property: (1) was not owned by or used as part of a contiguous commercial enterprise or business; (2) did not entertain a daily business activity on the lot to which safe and convenient access was essential; and (3) had no means of generating income to purchase liability insurance or to spread the risk of loss.”   

Plaintiff demurred and argued that issues of fact remained surrounding the building’s potential to generate income, the active marketing of the building at the time of the accident, the eventual sale of the property, and the owner’s ability to spread the risk as evidenced by commercial insurance coverage on the property.  The Appellate Court distinguished Abraham and held that the commercial property owner here was liable because the building had the capacity to generate great income.  Moreover, because the commercial property owner was showing the building to potential buyers, it had a duty to maintain the premises in a reasonably safe condition.  As such, the Appellate Court reversed the trial court’s decision and remanded the case for further proceedings.

http://www.judiciary.state.nj.us/opinions/a0120-11.pdf

Thanks to Alison Weintraub for this post.  If you have any questions or comments about this post, please email Paul at .