WCM Obtains Summary Judgment in New York County Premises Liability Case

New York, NY 

Counsel Cheryl Fuchs and associate Gabe Darwick obtained summary judgment in a premises liability suit in New York County.  In Deanne v. Alrose, 32 LLC, plaintiff alleged that she slipped and fell on an interior staircase while at work. Our client owned the building but had relinquished control to the plaintiff’s employer.

With this backdrop, we took an aggressive approach, moving for summary judgment before depositions. We argued that our client was an out-of-possession landlord that was not contractually obligated to make repairs; that it did not exercise control over the building; that plaintiff’s accident did not arise out of a structural defect; and that even if plaintiff’s accident did arise out of a structural defect, the defect did not violate a specific statutory provision. Plaintiff cross-moved to compel an expert inspection of the property and opposed the motion on the basis that it was premature.

The Court accepted our arguments, rejected plaintiff’s, and granted our client summary judgment.

Art Scholars Fear Liability for their Opinions on Authenticity

According to a recent article in the New York Times, one of the downsides of the booming art market is that many art scholars no longer feel they have the right to be wrong when opining on the authenticity of works.  Because there can be so much money at stake, some experts have found themselves the target of lawsuits due to unfavorable opinions.

In fact, the Andy Warhol Foundation for the Visual Arts, the Roy Lichtenstein Foundation, as well as other museums and institutes have stopped authenticating works in order to avoid litigation.    Although art experts have been sued for years over their opinions, the amount of exposure due to the value of many works has created the current problem.  And whether insurance responds to such lawsuits is, in some cases, unclear.

Whether this leads to the sale of more fakes, or causes experts to sit idly by when a known forgery is being sold remains to be seen.  But we will continue to follow this development.  Please write to Mike Bono at mbono@wcmlaw.com if you would like further information.

Homeowner Insurer Files Coverage Action in Sandusky Matter (PA)

On Monday July 23, 2012, State Farm filed a declaratory judgment action in federal court requesting that the court of the Middle District of Pennsylvania declare that State Farm has no duty to defend Jerry Sandusky in either the criminal or civil cases filed against him.  In addition to his criminal conviction of 45 counts of sexual abuse against 10 male victims, also pending is Doe A v. Second Mile, a Philadelphia Court of Common Pleas civil case that was filed against Sandusky’s charity, The Second Mile, and Sandusky individually.

According to State Farm, the homeowner policy which covered Sandusky and his wife from 1991 through 2008 holds that there is no coverage for a bodily injury if it is due to the “willful and malicious acts of the insured.”   Furthermore, it alleges that the 45 counts of sexual abuse that Sandusky is charged with do not count as occurrences, as Sandusky’s actions were deliberate and intentional.

State Farm previously denied Sandusky’s tender for his criminal defense, and although Sandusky did not challenge State Farm’s decision, State Farm is now looking for the Middle District of Pennsylvania to confirm its right to deny coverage for both the civil and criminal defense.

As this case proceeds, WCM will continue to provide updates on the court’s decisions.  WCM previously commented on the Sandusky litigation.  For more information see: Sandusky litigation.

Thanks to Remy Cahn for her contribution to this post.  If you would like more information, please write to mbono@wcmlaw.com.




Court Tosses Badmintion Claim Arising out of Errant Shot (NY)

The New York Appellate Division has reaffirmed that an injured participant in a sporting contest has an uphill battle to survive summary judgment when they bring personal injury actions.
In Gibbons v. Pine Bush Cent. Sch. Dist., the plaintiff was injured while playing badminton in his high school gym class. An opposing player hit an errant shot and the shuttlecock hit plaintiff in the eye.  Plaintiff claimed that the school did not provide proper supervision and should have supplied protective eye wear to the students.
But the appellate court agreed that dismissal on summary judgment was proper because the plaintiff was not able to show that supervision would have prevented the other student’s errant shot.   In addition, the school was not required to provide protective eye wear because there was not a generally accepted standard or practice in high schools to do so.
Thanks to Mendel Simon for his contribution to this post.  If you would like further information, please write to mbono@wmclaw.com

Declaratory Judgment Actions Are Not A Discovery Tool (NJ)

One of the methods used by No-Fault providers to fight fraudulent claims is to establish that improprieties with a health care provider’s ownership structure, billing practices, and regulatory compliance.  But recently, the Supreme Court of New Jersey held that an insurance company cannot file a declaratory judgment action solely seeking discovery of in an effort to prevent insurance fraud, even where an insured patient has assigned personal injury protection (PIP) benefits to the health care provider.

In Selective Insurance Company of America v. Hudson East Pain Management, Selective filed for declaratory judgment against Hudson East Pain Management and several other entities because it noticed what it considered to be “suspicious patterns” in the treatments rendered to Selective’s insured patients, as well as in the corporate links among the various entities.  Selective’s insureds had assigned their PIP benefits to the health care providers after being injured in motor vehicle accidents.  Although it had requested information on ownership, billing practices, and regulatory compliance from the various entities, Selective did not receive the information it sought, and as a result, filed its declaratory judgment action, citing the “cooperation clause” in its insurance policies, as well as New Jersey statutory authority.

The trial court sided with Selective, and ordered the health care providers to produce the requested materials.  The Appellate Division reversed this order, holding that Selective’s reliance on the cooperation clause in its insurance policies was improper, and that its demands for discovery went beyond the statutory authority of New Jersey law.

On review, the Supreme Court of New Jersey affirmed the Appellate Division, but for different reasons than expressed in the Appellate Division’s decision.  The court held that because an assignee of benefits as no greater rights than an assignor, the assignee also cannot have greater duties than the assignor under the contract.  Therefore, because the Selective insurance policies did not require the insured patients to provide the information sought by Selective in its declaratory judgment action, the policies could not require the health care providers to present that information.  Additionally, the court agreed with the Appellate Division that the PIP statute, N.J.S.A. 39:6A-13, did not provide for the sort of discovery sought by Selective.  Finally, the court held that, although New Jersey had a clear public policy against insurance fraud, the means employed by Selective were not the correct avenue for preventing insurance fraud.

Although this case does not undermine the ability of an insurance company to seek injunctive or other relief, along with discovery, through the use of a declaratory judgment complaint, it does stand for the proposition that a quest for this sort of discovery cannot be the sole object of the complaint.

Thanks to Christina Emerson for her contribution to this post.  If you would like more information, please write to mbono@wcmlaw.com



Right to Deny Spousal Coverage Upheld (NY)

Although “spousal immunity” no longer exists in New York as a bar to civil lawsuits by one spouse against another, under Section 3420(g) of the New York Insurance Law, an insurer does not need to provide coverage for a personal injury claim asserted by a spouse unless the policy provides for that specific type of coverage.  The legislature passed the statute with the intent to prevent spouses from colluding to seek to recover for fraudulent liability claims.  Recently, in Osuna v. GEICO, the Eastern District of New York was presented with a interesting challenge to Section 3420(g) on the basis that the law was unconstitutional as a “bill of attainder.”

The insured commenced an action against GEICO, his auto insurer, seeking coverage for a personal injury claim made by his wife.  The insured then moved for summary judgment claiming that Section 3420(g) is a constitutionally prohibited bill of attainder.  In prior litigation, the Supreme Court has held that a “bill of attainder is a legislative act which inflicts punishment without a judicial trial.” United States v. Lovett.  In brief, plaintiff claimed that the statute “specifically targets lawfully married persons solely by virtue of their marriages,” which was, in effect a marriage penalty.

The court did not agree with the insured’s characterization of Section 3420(g), and ruled that the law is constitutional because there is no “punishment” as defined by both the Supreme Court and the Second Circuit.  The noted that the increased premium required for supplemental spousal insurance pursuant to Section 3420(g) does not compare to historically forms of “punishment,” such as death and imprisonment.

Citing the Second Circuit’s decision in ACORN v. U.S., the court ruled that there was also no “grave imbalance or disproportion between the burden and purported nonpunitive purpose.”  The “burden” was not a heavy one, as the insured simply had to pay an additional premium to include a spouse in the insurance policy.  Requiring the payment of a fee to extend coverage to a spouse “can be reasonably said to further the nonpunitive ends of the statute,” which is to prevent collusion and fraud.  Finally, the court found that the insured failed to demonstrate that the legislature clearly intended to inflict punishment.

Thanks to Steve Kay for his contribution to this post.  If you would like more information please write to mbono@wcmlaw.com

Permanent Structures Afforded Labor Law § 240 Protection

In Burton v. CW Equities, LLC, et al, , the First Department reversed the lower court’s denial of plaintiff’s motion for partial summary judgment on his Labor Law § 240(1) claim. The plaintiff had fallen  from a permanent concrete walkway that provided access to the rear yard of a building under construction. The walkway extended over a 15-foot deep vaulted area below grade level and had no guardrails or barriers. In reversing the lower court, the First Department held that simply because the walkway was a permanent structure did not mean that it was not protected under Labor Law § 240(1).  Rather, since the plaintiff’s injuries were the direct result of a failure to provide adequate protection against a risk arising from a physically significant elevation differential, he was entitled to the protections afforded by Labor Law § 240. As for the Labor Law § 200 claim, the fact that the plaintiff’s injury did not arise from the method he used to perform his work, but from a dangerous condition, was not dispositive on the issue of defendant CW Equities’ control of the worksite.


WCM Obtains Directed Verdict in NY Civil Court Jury Trial

New York, NY 

Associate Lora H. Gleicher obtained a directed verdict in a jury trial in a New York County Civil Court matter.  In Newmark v. New York Urban Athletic League, plaintiff, an experienced volleyball player, was participating in a volleyball scrimmage on an allegedly sub-par volleyball court.  Prior to his participation, plaintiff did not execute a waiver or release because the scrimmage was conducted pre-season.  During the game, plaintiff was injured and he commenced suit as a result.

At trial, plaintiff testified that his injury occurred because the court was not regulation size and had poor lighting.  He also claimed that the use of stanchions to secure the volleyball net was improper and caused the net to sag. During an aggressive volleyball scrimmage, plaintiff jumped up to block the ball. When he did so, the opposing front-center player jumped as well, got caught in the net, and fell forward onto the plaintiff, causing the plaintiff to injure his left ankle/foot on the metal stanchion.

At trial, through our cross-examination, we were able to attack the plaintiff’s credibility and prove that, contrary to his representations, he was aware of the dangers in playing volleyball and yet decided to play all the same.  The trial court agreed and, before the jury got the case, granted a directed verdict in favor of our client, the New York Urban Professional Athletic League.

Defendants Not Liable For Injuries Caused By Uneven Sidewalk

In the recent unreported decision of Maloy v. Schneider, the plaintiff mail carrier brought suit after he tripped on a raised slab of public sidewalk in front of the defendants’ house.  Plaintiff argued that the sidewalk’s uneven condition had been produced by roots growing from a tree located in defendants’ yard.  It was undisputed that the defendants did not plant the tree in question.  Additionally, the defendants denied being aware that the sidewalk was in a dangerous condition prior to plaintiff’s fall.

The defendants moved for summary judgment arguing that, as residential landowners, they were not liable for the public sidewalk’s uneven condition, even if the condition was caused by roots emanating from a tree in their front yard.  The trial court agreed, and dismissed plaintiff’s complaint, noting that the defendants had not planted the tree, nor had they undertaken any other conduct to produce the dangerous condition.

The Appellate Court upheld the trial court’s decision, noting that, for decades, the New Jersey Supreme Court has declined to impose a common-law duty upon residential property owners to generally maintain the public sidewalks in front of their home in a safe condition.  Although an exception may apply if the defendants cause the hazardous condition, in this particular case, there was no proof of any affirmative actions on the part of the defendants to create a hazard condition on the abutting sidewalk.

Thanks to Heather Aquino for her contribution to this post.


PA District Court Rules On Plaintiff’s Defective Product Claims

In Sikkelee v. Precision Airmotive Corporation et al, an aircraft accident at the Transylvania County Airport in Brevard, North Carolina resulted in the death of David Sikkelee. The Plaintiff alleged that the accident was caused by a faulty carburetor and sued multiple parties involved in the manufacturing of the plane’s engine. Among the defendants was Lycoming Engines, the original engine manufacturer and division of industry giant AVCO Corporation. The plaintiff asserted negligence and strict liability claims to which Lycoming moved for summary judgment.

Judge John Jones of the Middle District of Pennsylvania affirmed in part and denied in part the defendant’s motion.  First, the court held Lycoming was a de facto manufacturer of the allegedly defective engine despite the fact the engine was subsequently modified (the installation of the faulty carburetor) by a separate company after it left Lycoming’s control.  The court reasoned that even though Lycoming did not physically modify the engine, Lycoming was in exclusive control of the design and manufacture of the replacement component parts that were installed in the engine. Thus, this would subject Lycoming to potential products liability under PA law, and plaintiff’s claims should not be dismissed.

Additionally, the court denied the defendant’s motion to dismiss the plaintiff’s negligence claims based, inter alia, on the following.  Lycoming moved for summary judgment contending that the plaintiff failed to submit evidence that the defendant breached the applicable standard of care, thus, plaintiff’s negligence claims could not stand.  The court had previously held that federal standards of care promulgated by the FAA apply in aviation cases such as this one and can be utilized by the plaintiff to show breach of duty.  Since the plaintiff had submitted evidence of the breach of these federal standards, the court would not dismiss plaintiff’s negligence claims.

Thanks to Colleen Hayes for her contribution to this post.