Monthly Archives: July 2012

Plaintiff’s Typo Leads To No Liability Coverage For The Insured

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On June 27, 2003, Merrimack Mutual Fire Insurance Company had an insurance policy in effect providing liability coverage to 25 Avenue C New Realty, LLC.  On June 27, 2005, Alea North America Insurance Company had an insurance policy in effect providing liability coverage to 25 Avenue C.

Eamonn Grimes filed a lawsuit against 25 Avenue C to recover for personal injuries sustained on 25 Avenue C’s property on June 27, 2005.  25 Avenue C gave timely notice of the claim to Alea.  Alea then undertook the defense of this case and assigned defense counsel.  In May 2007, an investigator discovered that the accident actually occurred on June 27, 2003, not June 27, 2005.  In August 2007, defense counsel received a bill of particulars from Grimes stating the accident occurred on June 27, 2003.  On October 4, 2007, defense counsel took the deposition of a nonparty witness who testified that Grimes’ accident occurred on June 27, 2003.

Inexplicably, it was not until May 15, 2008 that Alea’s third-party claims administrator spoke with 25 Avenue C and determined that Merrimack was the actual insurer on June 27, 2003.  At that point, defense counsel tendered the defense to Merrimack and notified them that Alea’s policy was not in effect at that time.  Thereafter, on July 8, 2008, Merrimack rejected Alea’s tender on the grounds that it was not given timely notice of the claim.  Alea then advised 25 Avenue C on August 11, 2008 that it was declining coverage because the actual date of the incident predated coverage.  25 Avenue C then brought this action seeking a declaration that either Alea or Merrimack was obligated to defend and indemnify them in the underlying personal injury action.

The Supreme Court granted 25 Avenue C’s motion for summary judgment against Merrimack, finding that Merrimack was obligated to defend and indemnify 25 Avenue C as Merrimack “was notified within a reasonable time under the facts and circumstances and there is no apparent prejudice, as discovery is ongoing.”  The court also granted Alea’s motion for summary judgment, allowing Alea to bow out.

The Appellate Division upheld the decision as to Alea, but reversed in favor of Merrimack, finding that under these facts, the five-year delay in notifying Merrimack was unreasonable.  The Appellate Division found fault in Alea, stating that Alea should have notified 25 Avenue C as early as May 2007, and that Alea’s attorneys were conclusively aware in August and October of 2007 that the correct date of the accident was June 27, 2003, not June 27, 2005.  Further, the court was critical of Alea’s third-party claims administrator for waiting until May 15, 2008 to contact 25 Avenue C to determine which insurer covered the premises in June 2003.

This decision leaves 25 Avenue C without coverage from either Merrimack or Alea in the underlying personal injury suit.  Given the mistakes made and the language in this decision, it will be interesting to see which party 25 Avenue C goes after.   

Thanks to Michael Nunley for his contribution to this post.

http://www.courts.state.ny.us/reporter/3dseries/2012/2012_04672.htm

 

At Least the City is Still Responsible for Fire Hydrants!

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In Burwell v City of New York, the plaintiff was allegedly injured when her car hit the protruding base of a fire hydrant as she drove over a sidewalk while attempting to enter the parking lot of a commercial premises.  Plaintiff sued the property owners, tenant and the City of New York alleging that defendants negligently maintained the curb, sidewalk, and hydrant in violation of Administrative Code of the City of New York §§ 7-210 and 19-152.  Specifically, plaintiff alleged that defendants negligently permitted the curb of the sidewalk to deteriorate to such an extent that it provided no barrier between the sidewalk flagstone and the roadway, and that they permitted the broken hydrant to obstruct the normal flow of traffic into and out of the parking lot. 

The property owners and tenant moved for summary judgment arguing that (1) the alleged deterioration of the curb was not a proximate cause of the accident; and (2) they had no duty to maintain or repair the hydrant.  The lower court denied the motion, but the Second Department reversed and dismissed the case as against the property owners and tenant.  The Second Department affirmed the denial of the City’s summary judgment motion on the basis that there may have been notice of the defective hydrant by virtue of a notation in a Big Apple Pothole and Sidewalk Protection Corporation Map. 

This case is one of those rare instances where the City still faced liability while the adjacent landowners got out.  We note, however, that the Big Apple Pothole and Sidewalk Protection Corporation has stopped producing their maps, and so notice against the City is harder for a plaintiff to prove in more recent sidewalk accident cases.

http://www.nycourts.gov/reporter/3dseries/2012/2012_05489.htm

 

When Does Claim For Unlawful Harvesting Of Body Parts Occur ? NJ Supreme Court Decides.

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In Memorial Properties v. Zurich American Ins. Co. , the New Jersey Supreme Court held that 2 insurance companies that issued policies to a cemetary are not obligated to cover claims for the illegal harvesting of  human remains sent to the cemetary for cremation. Seven lawsuits were filed against the cemetary by family members of decedents alleging emotional distress when they learned of the unlawful harvesting of tissue and organs from loved ones prior to being sent for cremation.

Zurich denied coverage on the ground that the occurrences were outside the policy period. Another carrier relied on an “improper handling ” exclusion. For purposes of determining coverage , the Supreme Court held that the relevant occurrence took place in 2006 which was outside Zurich’s policy period, when the decedent’s families learned of the unlawful harvesting, not in 2003 when the harvesting took place.  The Supreme Court affirmed trial and appellate court decisions that neither policy was required to defend or indemnify the cemetary .

Please contact Robert Ball with any questions regarding this post.

 

http://www.judiciary.state.nj.us/opinions/supreme/A11910MemorialPropertiesvZurichInsurance.pdf

Sticks and Stones May Break The Bones…

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In Rosborough v. Pine Plains Central School District, the plaintiff, an eighth grade student, was struck in the eye by a stick thrown by a fellow student during a fire drill. The lower court granted the school’s motion for summary judgment, and the Second Department affirmed. The Appellate Division found that schools cannot be expected to continuously supervise and control the students’ movements and activities. Rather, a school will only be held accountable for a third-party’s acts that are foreseeable. In this case, the plaintiff failed to demonstrate that the school had knowledge or notice of the injury-causing act.

Thank you to Georgia Stagias for her contribution.

For more information, please contact Denise Fontana Ricci at .

 

Cart With Sheetrock Not Subject to NY Labor Law Safety Device Requirement

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In Grygo v. 1116 Kings Highway Realty, LLC, the Second Department gave the defendants a rare win in a Labor Law § 240 suit. In this matter, the plaintiff was injured when a cart holding sheetrock toppled over, causing the cart and sheetrock to strike the plaintiff. At the time of the accident the plaintiff was removing a piece of plastic he had previously placed over the cart to protect it while he painted the worksite.

 The Supreme Court granted the defendants summary judgment dismissing the Labor Law § 240 claim and the Second Department affirmed, finding that the plaintiff’s injuries arose from a general hazard encountered at a construction site and were not from “the direct consequence of a failure to provide” an adequate safety device. The court underscored the point that the safety devices enumerated in § 240 were meant to protect “against a risk arising from a physically significant elevation differential.”

 By highlighting that the safety devices were meant to protect against physically significant elevation differentials, the implication is that Labor Law § 240 should not apply to de minimis differentials. It seems that the Second Department may have thrown defendants a bone, as several recent decisions, particularly in the First Department, have allowed plaintiffs to recover under § 240 where the height differential was minimal.

Thanks to Gabriel Darwick for his contribution to this post.

For more information contact Denise Ricci at .

 

Soda Delivery an Unusual Hazard? Not in NJ.

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Under what circumstances will a delivery person be found to have a duty to notify businesses of hazards when deliveries are made? In a 2003 case, the New Jersey Appellate Division found that a deliveryman who had tracked snow into a hotel kitchen that created a five foot wide puddle had a duty to bring this condition to the hotel’s attention. LaRussa v. Four Points at Sheraton Hotel, 360 N.J.Super. 156 (App.Div. 2003).

 Seeking to expand on this legal theory, a plaintiff, injured when she bumped into soda canisters delivered to the tavern at which she worked, sued the dispensing company. In Fry v. Pepsi Bottling Co., the plaintiff alleged that the delivery person placed the canister in a narrow hallway closer to the refrigerator than usual. When she walked by, her knee cap contacted the canister causing an injury.

 The Appellate Division did not buy the plaintiff’s arguments and affirmed summary judgment for the soda dispensing company. The delivery person had in fact been instructed by the plaintiff’s employer that canister deliveries were to be placed in the hallway. Even if this particular delivery was not in the exact spot of prior deliveries, the minor deviation was not an unusual hazard like the five foot pool of water in LaRussa. Significantly, the court did not find that a deliveryman must notify owners and employees that deliveries have been made in the general area where they were instructed to do so.

For more information, contact Denise Fontana Ricci at .

 

Children’s Sporting Event Disturbance Lands Dad on TV

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We’ve all been to children’s sporting events when tempers flare perhaps more than they should and parents sometimes lose their “filter.” The story told in Rossi v. CBS Corp should serve as a cautionary tale and a reminder to all to keep the games in perspective.

In 2006, Mr. Rossi was an assistant coach of his son’s Little League baseball team for ten to twelve year olds. His son’s team, the White Sox was undefeated when it played the undefeated Red Sox. After the game, which the Red Sox won, the boys lined up to shake hands. At that point, Mr. Rossi observed what he perceived as a threatening maneuver by a Red Sox player towards his son, the White Sox pitcher.

Witnesses claim that Mr. Rossi used some choice words on the perceived attacker and may have even advanced on the player. As a result of the incident, Mr. Rossi was suspended from coaching and restricted from attending games for two weeks.

The incident might have otherwise gone unnoticed, but it was anonymously reported to CBS, who dispatched a reporter to investigate during a rematch of the teams just days later. Mr. Rossi did not like the news coverage that ensued and sued for defamation.

The court found that the incident was a matter of “public concern,” i.e. violence erupting at youth sporting events. Thus, the court found that the plaintiff had to meet the standard of actual malice. In other words, the plaintiff had to prove that the statement was false and that at the time made, the speaker knew that it was false or stated it in reckless disregard for the truth. The plaintiff could not vault either of these proof burdens, and summary judgment was affirmed.

The moral of the story is that, in this day and age, you never know when you can become the 6 o’clock news item of the night.  A calm head and cool approach could be best.

For more information, contact Denise Fontana Ricci at .

 

App. Div: Detrimental Reliance Exception to Espinal Rule Can Be Inferred From Conduct of Contracting Party.

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In All Am. Moving & Stor., Inc. v. Andrews, a property damage action arising out of a warehouse fire, defendant Allstate Sprinkler Corp entered into an inspection services contract with the tenant D’Agostino Supermarket. Allstate moved to dismiss the plaintiff-owner’s action arguing that, under the Espinal v. Melville Snow Contractors decision, its contractual obligation to the tenant did not give rise to tort liability in favor of a third party.

In affirming the denial of the motion, the First Department carefully analyzed the Espinal rule. There are three exceptions to the Espinal rule: 1) where a contracting party launches a force or instrument of harm, 2) where the party enters into a comprehensive and exclusive service agreement, and 3) where a third party has detrimentally relied on the continued performance of the contracting party’s duties.

The Appellate Division agreed that the first two exceptions where inapplicable. However, the Court held there was a question of fact as to whether the plaintiff, a beneficiary of the contract, detrimentally relied on Allstate’s continued performance of its contractual duties. In doing so, the Court pointed to Allstate’s admitted failure to inspect the sprinkler system for months before the fire and its failure to report to the owner that it had found the sprinkler system shut off during several inspections. Thus, rather than point to evidence that the owner had in fact relied on the contracting party, the Court utilized evidence of the contracting party’s wrongdoing to infer that such reliance existed.

Special thanks to Bill Kirrane for his contributions to this post.  For more information about this post, please contact Bob Cosgrove at .

N.J. Court Requires Higher Standard of Care for Fire Safety System Inspections.

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In Wayne and Irene Davis v. Brickman Landscaping, Ltd., et. al., the N.J. Appellate Division discussed the standard of care applicable to fire-safety system inspection professionals. Here, plaintiffs (mother, daughter and son) were staying at a hotel in a second-floor suite from which their only means of ingress and egress was a staircase with a storage closet underneath it. The storage closet did not have any fire sprinklers installed. A lit cigarette was thrown onto landscaping mulch located next to the building.  Thereafter, a fire ignited, spread to the storage closet and up the staircase to the second floor where both children died. The plaintiffs filed suit against the companies that inspected the sprinkler and fire alarm system.

The Trial Court noted that New Jersey adopted the National Fire Protection Association’ (“NFPA”) regulations in determining the responsibilities of fire-safety inspection professionals. While the original version of the NFPA required installation of sprinklers throughout a residential building, subsequent versions only required inspectors to conduct visual examinations for normal wear and tear with no obligation to find installation flaws. Testimony revealed that the defendants (3 separate inspection companies) had periodically inspected the fire safety systems, but all failed to note that the storage closet was void of sprinklers. Plaintiffs’ expert opined that the NFPA was the minimum standard of care for sprinkler system inspections, and that inspectors have a higher standard (reasonable care). Defendants argued that there was no evidence that they violated the NFPA and plaintiffs’ expert’s testimony that a “reasonable care standard” applied was simply an unsupported “net opinion”. The Trial Court entered summary judgment in favor of the defendants finding that they complied with the NFPA which was dispositive on the issue of negligence. Plaintiffs appealed the Trial Court’s decision arguing that simple compliance with NFPA is in fact not dispositive on the issue of negligence.

The Appellate Division agreed with the plaintiffs finding that the N.J. Supreme Court has announced many times that compliance with a safety regulation is not always dispositive on the issue of negligence. The risk posed by a certain trade or industry by dangerous hazards requires use of the “reasonable care” standard. The Court noted that the appropriate standard is what a reasonable member of that particular industry or community would have done. Compliance with a regulation does not prevent a finding of negligence if a reasonable person would have taken additional precautions. The Appellate Division therefore reversed the trial court and remanded the case finding a genuine issue of material fact as to whether defendants exercised reasonable care despite their compliance with the NFPA.

Special thanks to Andrew Marra for his contributions to this post.  For more information about this post, please contact Bob Cosgrove at .

Imagine This: No World Without Color at the Dakota.

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In Fletcher v. Dakota, Inc., an African American plaintiff sued New York’s famous Dakota building and individual defendant board members on the basis that he was discriminated against after attempting to purchase the apartment adjacent to his for the purpose of combining the two apartments.  He was successful at trial and defendants appealed the trial court’s decision. In addressing the claims against the individual board of director defendants the Appellate Division, First Department clarified its own ruling in Pelton v. 77 Park Ave. Condominium, 38 A.D.3d 1 (2006). It stated that while breach of contracts will not generally give rise to individual director liability, the participation of a director in a corporation’s tort will be sufficient to give rise to individual liability.

The individual director defendants further appealed the trial court’s decision based on the fact that the complaint failed to allege acts separate and distinct from those that were taken as board members.  The Appellate Division upheld plaintiff’s retaliation claims against the corporation and individual defendants to the extent plaintiff alleged (1) plaintiff engaged in a protected activity by opposing conduct prohibited thereunder; (2) defendants were aware of that activity; (3) plaintiff was subject to an adverse action; and (4) there was a causal connection between the protected activity and the adverse action.

Reviewing the complaint, plaintiff was able to maintain his claims against the corporate defendant, but not yet as against one of the individual director defendants, as he joined the board after plaintiff’s alleged opposition to conduct occurred. Moreover, additional defamation claims were dismissed against the corporation because the Appellate Division found that the complaint did not properly allege that, in respect of certain conduct, that the defendants “knew or should have known that plaintiff was opposing discrimination” when he made certain complaints.

As a result, the Appellate Division made substantial modifications to the trial court’s order, which it otherwise affirmed.

Special thanks to Alison Weintraub for her contributions to this post.  For more information, please contact Bob Cosgrove at .