Monthly Archives: July 2013

Law Firm Seeks Business Interruption Coverage Due to Hurricane Sandy (NJ)

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The Atlantic City law firm of Cooper, Levenson, April, Niedelman & Wagenheim is suing its insurance company for denying its business interruption claim after being forced to close due to Hurricane Sandy. Harleysville Insurance Company paid Cooper Levenson $25,000 for loss of electrical service following Sandy. The firm contends, however, that being forced to remain closed for business during the storm resulted in approximately $900,000 in additional damage for which it has not yet been compensated.

Following Governor Christie’s order for the mandatory evacuation of Atlantic County, in effect from October 28, 2012 through October 30, 2012, the firm made a timely claim against its policy, which was allegedly written to provide coverage for professional liability, business interruptions and extra expenses.  According to Harleysville, the claim was accompanied by tax returns listing an annual gross income of $28.6 million, from which the $900,000 damages claim was calculated. Harleysville denied coverage on two occasions, except for the $25,000 mentioned above.

The suit, originally filed in state court in Atlantic County, was removed to federal court in Camden. Cooper Levenson seeks a declaratory judgment that Harleysville owes the firm coverage. Additionally, Cooper Levenson alleges that Harleysville engaged in unfair claims settlement practices, deceptive conduct, misrepresentations and false information by issuing the policy and then improperly denying coverage. Finally, Cooper Levenson seeks compensatory and punitive damages, pursuant to the Consumer Fraud Act.

The firm contends that Harleysville denied coverage based on the wording of the policy; however, it disputes the insurer’s interpretation of its policy language. Coverage is often contingent on physical damage to property.  However, in this case, the firm’s claim focuses on Governor Christie’s Order of mandatory evacuation of Atlantic County areas and civil authority coverage.  Harleysville maintains no coverage is owed and that the firm will not be able to sustain the bad faith claim.

Special thanks to Samantha Epstein for her contribution.

For more information, contact Denise Fontana Ricci at .

 

Contractor Has Reasonable Expectation Of No Liability 10 Years After Substantial Completion of Work (NJ)

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When it comes to construction defects, New Jersey courts and Legislature have wrestled with how to provide time for claims to be brought without an unending risk to contractors and developers. At common law, there was a “completed and accepted rule” that limited the exposure of architects, contractors, and the like once the work was completed and approved by the property owner. However, as the courts whittled away at this with the discovery rule, the Legislature reacted with the Statute of Repose, which fixes a ten year period in which a party can bring a suit for defective design or construction. With this statute providing an outside date by which a contractor or architect could reasonably expect to have no further potential liability, the courts entirely repudiated the completed and accepted rule. One might think that the statute settled the issue once and for all. However, an argument can always be made, and it was.

In Fairview Heights Condominium Association, Inc. v. R.L.Investors, the plaintiff condominium association brought suit against the developer and others related to construction issues dating to 1988. The association sought to circumvent the Statute of Repose since the development was not turned over to the association until 75% of the units were sold in 2001. Thus, the association argued that the statute should not be applied the same against it as it is against other potential claimants and sought exception for its suit filed in 2008 – twenty years after substantial completion of the project.

The New Jersey Appellate Division did not agree. It held that the triggering point for the statute of repose is substantial completion of the project irregardless of when the developer relinquishes control of the managing association. Ten years means ten years. The court thus, upheld summary judgment granted to the developer. In reaching this decision, the Court spoke of fairness to the defendant and its right to be “secure in its reasonable expectation that the slate has been wiped clean of ancient obligations.”

For more information, contact Denise Fontana Ricci at .

WCM Awarded Summary Judgment in Hunterdon County, New Jersey Sports Liability Lawsuit.

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Mountainside, NJ 

Partner, Denise Fontana Ricci, obtained summary judgment in Deska v. Wildcat Wrestling Club, a personal injury lawsuit in which a spectator at a wrestling match allegedly fell due to water on a gym floor from melted snow.   The central issue in the case was whether the New Jersey Charitable Immunity Act precluded the plaintiff ’s claim as the Wildcat Wrestling Club fell under the Act’s protections and all negligence claims were barred.

In a creative attempt to escape this immunity, the plaintiff argued that the Club had been grossly negligent in holding the match on a night when it snowed – as gross negligence would overcome the statutory immunity.  In opposition, we argued that although the plaintiff asserted that the snowstorm on the night of the match was a nor’easter or blizzard, historical data dispelled this account.  We therefore argued that under the facts presented, there simply was no evidence to support a claim of gross negligence based upon a failure to cancel the match for mere snow.  The trial court agreed and granted our motion.

WCM Awarded Summary Judgment in Bergen County, New Jersey Declaratory Judgment Action.

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Mountainside, NJ 

Partner, Denise Fontana Ricci, was awarded summary judgment in the case of Puglisi v. AJD v. Burlington, a declaratory judgment action involving a general contractor’s attempt to obtain additional insured insurance coverage from a subcontractor.   In the underlying action, Puglisi v. AJD Construction, a mason died after falling backwards from a platform that served a hoist elevator used to bring personnel and supplies to the upper floors of the building that was being constructed.   The decedent’s estate alleged that the decedent fell while leaning on a horizontal girt support for a canopy over the platform.   Notwithstanding the fact that the decedent’s estate sued the scaffold and hoist company, a Burlington Insurance Company insured, the plaintiff ’s expert faulted only AJD, the general contractor, that had overall responsibility for safety on the jobsite.   No expert opined that the scaffold and hoist company’s design or initial installation of the platform or hoist was negligent.  In the absence of such evidence, the Court granted summary judgment to Burlington’s insured.

Notwithstanding this reality, AJD still sought additional insured coverage from Burlington on the basis that the scaffold and hoist company’s Burlington insurance policy included a blanket additional insured endorsement that provided additional insured coverage when the named insured was required to procure such coverage in a written contract but only in situations where the tender arose out of the insured’s work.  In this case, because there was no evidence to the contrary, the judge agreed that the tender did not arise out of the insured’s work.   The court therefore ruled in favor of Burlington and held that no coverage attached.

WCM Awarded Summary Judgment in Brooklyn Construction Accident.

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New York, NY 

Associate Gabriel Darwick obtained summary judgment in a Kings County Labor Law suit. In Calciano v. 343 LLC, the plaintiff, an employee of our client, JM3 Construction, tripped and fell on a battery while attempting to walk down a staircase at a construction site. JM3, a carpentry subcontractor, was one of many contractors working at the building at the time of the accident.

The plaintiff sued the owner and general contractor, asserting violations of the Labor Law. The owner and general contractor, in turn, sued JM3, seeking contractual indemnification under the broad terms of the indemnity agreement in JM3’s contract with the general contractor.

We moved to dismiss the third-party complaint on the basis that the plaintiff’s accident did not “arise out of” JM3’s work. We argued that the general contractor could not trigger the indemnity provision because there was no causal relationship between JM3’s work and the accident. We pointed to the facts that: (a) JM3 was not working in the stairwell at the time of the accident, (b) the battery could have come from any one of the numerous subcontractors on the site, and (c) plaintiff, who was on the way to the bathroom at the time of the accident, was not performing any work when it occurred. The court agreed with our analysis and granted JM3 summary judgment.

WCM Obtains Summary Judgment in Berks County, PA Coverage Case.

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Philadelphia, PA 

Partner Robert J. Cosgrove and associate Colleen E. Hayes were awarded summary judgment in a Berks County, PA coverage dispute.  In the case of Kelly v. Nautilus Insurance Company, et al., the plaintiff, the administratrix of the estate of Justin Kelly, initiated a coverage and error and omissions lawsuit arising out of Justin Kelly’s fatal on-the-job accident.  At the time of the accident, Kelly was working as an independent contractor for the insured of our client, Nautilus Insurance Company (“Nautilus”).  When confronted with the claim, Nautilus disclaimed coverage on the basis of its broad employee exclusion that defined as “employees” individuals who were not on the direct payroll of the insured.  In light of the absence of coverage, to settle the underlying wrongful death action, the insured agreed to a $1,000,000 consent judgment (which was approved by the court) and assigned his rights against Nautilus and the insurance broker to Kelly’s estate.  Thereafter, Kelly’s estate initiated a declaratory judgment and errors and omissions lawsuit against Nautilus and claimed that the employee exclusion was overbroad and illusory and thus unenforceable as a matter of law.

At the close of discovery, we moved for summary judgment and argued that Nautilus’s broad employee exclusion was clear and unambiguous and thus should be applied to the facts of the case.  The trial court agreed with our analysis and dismissed all claims against Nautilus.  The case against the broker continues.

If You’re Practicing Being Arrested, You Just Might Get Hurt.

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In the case of Sarasky v. Law Enforcement Training and Consulting Service, the plaintiff, an ASPCA “special agent” (and the quotations are ours), was injured during a recertification class that the defendant was conducting. Specifically, the plaintiff was hurt when she was pretending to be the “arrestee” who was being subdued by an arresting officer. Rather than correctly subdue the plaintiff, however, the defendant’s employee fell on top of her. The instant negligence lawsuit resulted.

The trial court dismissed the complaint on the basis that the plaintiff did not establish a prima facie case of negligence and an appeal resulted. The First Department affirmed the dismissal. It held that the plaintiff’s reliance on an unqualified expert failed to raise a triable issue of fact.

If you have any questions about this post, please contact Bob Cosgrove at .

Judge to FDA: Get Your FSMA Regulations Done Already.

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As we have long reported, the FDA has been quite derelict in getting the new Food Safety Modernization Act regulations in place. Deadlines have come and deadlines have gone and still no guidelines. This delay has resulted in the case of Center for Food Safety, et al. v. Margaret Hamburg, et al., USDC, NDCA. There’s a history of decisions in the case that make clear the Court’s frustration with the FDA and that frustration has now boiled over. In a recent decision, the Court has ordered the FDA to publish all proposed regulations by November 30, 2013, with the comment period to end by March 31, 2014, and the final regulations to be published by June 30, 2015. We’ll see if a court order compels action where bureaucratic momentum did not.

If you have any questions about this post, please contact Bob Cosgrove at .

Nazi Art Remains a Problem.

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In 1998, through the Washington Principles on Nazi-Confiscated Art, governments and museums agreed to honor a special responsibility to repair the damage caused by Nazi looting of Jewish owned art. According to the NYT, this special responsibility has been hijacked by museum lawyers who are running technical defenses to have claims dismissed on statute of limitations claims. Good lawyering does not always make good publicity, so perhaps special care needs to be taken to focus on substantive merits and not procedural gamesmanship. Of course, one man’s game is another man’s substance.

If you have any questions about this post, please contact Bob Cosgrove at .

Too Few Judges in NJ?

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Based upon the recent Supreme Court Order assigning judges in New Jersey, it appears that New Jersey’s state court judicial shortfall will continue. Essex, Camden and Monmouth Counties are all down judges – a reality that will make the pace of justice or the civil facsimile that we strive for all the harder to achieve.

If you have any questions about this post, please contact Bob Cosgrove at .