In Davis v. Fidelity Nat’l Ins. Co., Pennsylvania’s Court of Common Pleas addressed whether an insurer’s delay in resolving an insured’s claim constituted bad faith. In October 2004, Davis purchased a piece of property for development. Fidelity National Insurance Company’s authorized agent issued a title insurance policy to Davis for the property. In October 2007, when Davis applied for zoning ordinances, the owner of the adjacent property objected, claiming he was the record owner of the property Davis had purchased. Consequently, Davis filed a claim with Fidelity. In November 2007, Fidelity’s agent inquired into the situation and discovered that the adjacent property owner, in fact, held the deed to the subject property. The agent informed Fidelity and a few weeks later, notified Davis that the claim was being evaluated. In June 2009, Fidelity advised Davis that the claim was valid and they were working on a proposed solution. Almost three years later, Fidelity initiated settlement negotiations with the adjacent property owner. In November 2010, Davis inquired on the status of the claim and one month later, without a case assessment report, Fidelity offered the adjacent property owner $25,000 to settle the title issues. Subsequently, Davis filed a complaint against Fidelity alleging bad faith and breach of contract.
Ultimately, the court held that Fidelity committed multiple violations of the Unfair Insurance Practices Act and acted in bad faith by unreasonably delaying the resolution of Davis’ claim. Specifically, the court noted that Davis had produced clear and convincing evidence that Fidelity knew or recklessly disregarded the fact that it had no reasonable basis to delay making a decision regarding the claim. Consequently, the court exercised its discretion and awarded Davis punitive damages in excess of $1.5 million, four times the amount of Davis’ compensatory damages. In reaching this conclusion the court stated that a five-year delay was extreme and unnecessary and constituted bad faith on behalf of Fidelity. The court further noted that Fidelity consistently failed to reach a prompt and equitable settlement and failed to timely acknowledge Davis’ continual correspondences and inquiries into the claim.
Special thanks to Colleen Hayes for her contributions to this post. For more information, please contact Nicole Y. Brown at .
In the recent unreported decision of Vanderslice v. Stewart, the court considered whether to confirm an arbitration award although the defendants had failed to timely file a demand for trial de novo following a non-binding arbitration. Vanderslice alleged that he was injured in a motor vehicle accident. A mandatory, non-binding arbitration was held on January 18, 2012, with a determination that the County was 100% liable to Vanderslice for approximately $145,000 in damages. The time to reject the arbitration award and file a demand for trial de novo expired on February 17, 2012. After confirming that no such demand was filed, on February 23, 2012, Vanderslice filed a motion to confirm the arbitration award and the defendants cross-moved to permit a late filing.
In their cross-motion, the County’s attorney reported that an attorney from his office had prepared the demand and had given it to a secretary to file. Although the demand was sent to the court, the required fee was not attached. Rather, a direct voucher accompanied the filing, not an actual payment. The County’s attorney argued that they had substantially complied with the standard within the required time. The judge agreed and granted the County’s motion. The case eventually went to trial and the jury rendered a defense verdict. Vanderslice appealed.
The Appellate Court held that the time for rejecting an arbitration award is to be strictly enforced and should only be relaxed upon a showing of exceptional circumstances. The Court further noted that counsel’s inattention, carelessness, neglect or lack of substantial compliance did not constitute an extraordinary circumstance. Ultimately, the Appellate Court found that in this specific case the County attorney’s lack of diligence was not an exceptional circumstance, so the arbitration award was confirmed and judgment was entered in favor of the plaintiff.
Special thanks to Heather Aquino for her contributions to this submission. For more information, please contact Nicole Y. Brown at .
The quest for social media through discovery is still relatively new. While most courts acknowledge a privacy interest in the world of cyberspace and require defendants to establish a factual predicate for disclosure, some courts simply apply the rules applicable in traditional discovery disputes. In Wilson v. Fantastic Trans., the plaintiff alleged personal injuries that prevented from teaching her dance class. The defendant requested access to her Facebook account because the account might contain information relevant to her alleged injuries. Although the court did not cite any publicly available content in the plaintiff’s Facebook profile, it nevertheless ordered the plaintiff to produce all content depicting her dancing or teaching her class. In other words, the defendant was allowed access to potentially relevant information; no more, no less. But the Nassau County Supreme Court’s decision in Wilson appears to be the exception to the rule.
A textbook example of the approach taken by most courts is Pereira v. City of New York. There, the plaintiff alleged that he was injured after being knocked to the ground while working as a superintendent on a construction site. During the discovery process, the defendants demanded access to the plaintiff’s Facebook and MySpace profiles. The plaintiff objected, claiming the request was overly broad and unlikely to lead to the discovery of admissible evidence. Fortunately for the defendant, there were publicly available photographs from the plaintiff’s Facebook profile and a hockey blog depicting him playing golf and hockey. Based on these posts, the court granted the defendant’s motion to compel. The court displayed some concern for the plaintiff’s privacy, however, and ordered an in camera review of the plaintiff’s social media profiles.
Publicly available social media content that contradicts a plaintiff’s allegations is usually sufficient to open the door to the private areas of an online profile. But sometimes, plaintiffs are willing to lend a helping hand. In Paccione v. Bradica, not only did the plaintiff’s Facebook profile show materials contradicting claims about his physical injuries, they also contradicted his sworn deposition testimony about vacations he had taken and fights he has been involved in. Based on discrepancies in his deposition testimony, the court ordered an in camera review of the plaintiff’s Facebook profile to determine if the private areas of the account contained information relevant to the issue of plaintiff’s injuries. The court recognized that “a plaintiff’s mere possession and utilization of a Facebook account is an insufficient basis to compel a plaintiff to provide access to the account or to have the court conduct an in camera inspection of the account’s usage.” But because the publicly available content on the plaintiff’s Facebook account contradicted sworn testimony, the court ruled that discovery into the private areas of the plaintiff’s account was warranted.
Courts may show some concern for a plaintiff’s privacy during discovery, but once the publicly available information opens the door to disclosure, the door may swing wide open. In Jennings v. TD Bank, the court ordered the plaintiff to provide access to the private areas of her Facebook account because the publicly available photographs showing her in front of a cruise ship established the factual predicate necessary for a defendant to obtain access to the private areas of the plaintiff’s social media account. Recognizing plaintiff’s privacy interest, the court ordered an in camera review, but the scope of the disclosure was sweeping. Not only was the plaintiff required to provide access to her private areas of her Facebook account, the court also ordered her to send an authorization to Facebook to retrieve the deleted materials as well.
The message of these cases is to avoid blunderbuss discovery requests for social media data. You must first do your homework: Search for publicly available data that calls into question some aspect of plaintiff’s case. With that App in hand, you have a much better chance of getting information from the “private” space.
The backlash was swift and sustained: Did K2 really mean what it said, namely, that automatic indemnity was imposed on an insurer who breached its duty to defend? What coverage defenses were still available after such breach?
The Court of Appeals may have taken notice of the stir it caused. On September 3, 2013, it granted a motion to reargue the K2 decision at the request of the defendant insurer, American Guarantee, joined by the Complex Insurance Claims Litigation Association and the American Insurance Association who submitted their own motion as friends of the court. The amici politely suggested, “The Court’s Decision creates an unexplained conflict with longstanding New York law reflected in Servidone Construction Corp v. Security Insurance Co., misapprehends Lang v. Hanover Insurance Co., and will substantially impact insurers and policyholders throughout the State.” No briefing schedule has been established but some clarification of K2 seems likely from New York’s highest court.
Stay tuned!
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In Haynes v. Modh Jewel Hossain and Baxter Cab Corp., the defendants moved post-note of issue, to stay the trial and to conduct a new orthopedic examination of the plaintiff with a new orthopedist. The basis of the motion was that the previously designated independent medical examiner received a Statement of Charges from the New York State Board for Professional Medical Conduct. Thereafter, the doctor entered into a Consent Agreement and Order whereby he was placed on probation for a period of three years; his license to practice medicine was limited to preclude him from engaging in any practice as an independent medical examiner; and he agreed to voluntarily stop practicing as an independent medical examiner. The defendants argued that the terms of the consent order rendered the doctor unavailable as a trial witness, entitling them to a further examination of the plaintiff.
In denying the defendants’ application, the trial court concluded that an expert is not rendered unavailable as a matter of law simply by virtue of the fact that a disciplinary action has been commenced against the expert resulting in restriction of the expert’s medical license. Moreover, it is important to note that the plaintiff presented the court with an opinion letter from the Deputy Counsel for the Medical Board that clarified the limitations of the consent order for the sanctioned doctor. The opinion letter stated that if, in the future, the doctor testified about acts performed, observations or findings made, or opinions and/or diagnoses rendered, at a time that predates the effective date of the order, the Board would not consider that to be reportable as a possible violation. In relying on this letter, the trial judge noted that the doctor was available to testify at the time of trial.
Special thanks to Lora Gleicher for her contributions to this post. For more information, please contact Nicole Y. Brown at .
In Bock v. LouMarita Realty Corporation, the plaintiff slipped and fell on a wet sidewalk in front of the defendants’ premises. Bock testified at his deposition that when he exited the premises, he suddenly slipped and fell to his left, striking his head on a metal rail. He described the sidewalk as “an extremely slippery piece of rock or concrete off a very much coarser piece of pavement . . . the surface was shiny and firm.” The owner’s representative testified that the sidewalk was made of granite that was connected to masonry by a cement strand, there were no defects in the sidewalk and it was raining at the time of the accident. The defense’s expert engineer also submitted an affidavit stating that the sidewalk was of an acceptable slip resistance and there was no evidence of a tripping hazard or defect in the sidewalk.
In opposition, Bock claimed that a question of fact existed as to whether the defendants neglected to maintain their property in a reasonably safe condition and that the concrete patch of sidewalk, in and of itself, was a sidewalk defect. In support, he submitted an affidavit from his engineering expert who found that the concrete “patch” was a tripping hazard and that the slip resistance test revealed the surface to be above the maximum allowable co-efficient.
The trial court found that despite his expert’s affidavit, Bock failed to show the existence of a defective or dangerous condition in the sidewalk, nor that the defendants created or had knowledge of such a condition. Specifically, the court found Bock’s expert affidavit merely stated in a conclusory fashion that the sidewalk was inherently dangerous because it was slippery and slick when wet.
Just because a sidewalk becomes slippery when wet, does not necessarily mean that it is a dangerous or defective condition, even if the plaintiff’s expert engineer says so.
Special thanks to Michael Nunley for his contributions to the post. For more information, please contact Nicole Y. Brown at .
In Smith v. RMS Residential Properties, LLC, Defendant, RMS purchased a property in Queens through a foreclosure auction in 2008. The former homeowner refused to vacate the premises or provide access to RMS or its Realtor (tasked with re-selling the property) until she moved out in late 2011/early 2012. Plaintiff, a visitor of the former homeowner, was injured when a bathroom light fixture fell on him in August 2011. Plaintiff sued RMS, and RMS moved for summary judgment as an “out of possession” landowner. Plaintiff opposed the motion by invoking New York Multiple Dwelling Law §78,which requires that “[e]very multiple dwelling, including its roof or roofs, and every part thereof and the lot upon which it is situated, shall be kept in good repair.” However, the court noted that, “an owner will not be held liable under section 78 where it has completely parted with possession and control of the building.” Here, RMS had no control of the building, thus had no duty to maintain or repair the property and, therefore, could not be held liable for plaintiff’s injuries.
Most “out of possession” landowner arguments are made where a lease discharges the landlord’s duty to repair or maintain the premises. Here, though RMS was not legally discharged of the duty via a written lease, the court found that it owed no duty to the plaintiff since it did not factually have control of the building.
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Lost amidst the summer holidays was detailed narrative reporting on this past July’s $136,000,000 diamond and jewelry theft at the Intercontinental Carlton Hotel in Cannes, France. In the robbery, a thief hidden by a bandana and motorcycle helmet and armed with a gun managed to take the Leview diamonds and other stones and jewelry and disappear.
In this interesting article from The Atlantic, the details of the robbery, its potential causes and the likely culprits (perhaps the Pink Panthers (on whom we have previously reported) are discussed.
One thing is certain – given the size of the insurance claim being presented to the London market, there will no doubt be much discussion on the adequacy of the pre-show surveys and whether the Policy’s warranties were heeded.
For more information about this post, please contact Bob Cosgrove at .
Under common law, citizens could not sue the sovereign. The New Jersey Tort Claims Act is somewhat more liberal – but with very specific limits. When a person is injured due to a dangerous condition of public property, the Act does permit recovery, provided the plaintiff can prove each element enunciated by the Legislature. Since the Act includes a statement of legislative intent to broadly limit public entity liability, courts are to exercise restraint when novel theories are presented.
In Sherman v. Rutgers, the plaintiff alleged that she fell while walking to her car after attending a Rutgers football game against Louisville. She had left the game at halftime and was walking along a sidewalk near the Hale athletic center when she observed lights on in the building. Thinking that she saw football players inside, she took a turn off the sidewalk to get closer to the building to peer into the window. Intent on the window, she did not pay attention to the ground in front of her. Bordering the edge of the sidewalk was a retaining wall that protected a well between the sidewalk and the building designed to address waterproofing for the building. The plaintiff tripped over the retaining wall dislocating both arms and sustaining fractures for which surgery was required.
The plaintiff complained that the area was poorly lit and a dangerous condition of the public property. Rutgers countered that the plaintiff’s detour from the sidewalk was unforeseeable. As such, it was clear that the plaintiff did not use the property with objective due care as required by the Act. Moreover, with no other such accidents reported since the area was constructed in 2007, it had not acted palpably unreasonably, i.e. it was not manifest and obvious that the university should have taken some action to adress any alleged condition.
The Appellate Division affirmed summary judgment for the university. The court agreed that walking perpendicular to the sidewalk towards the building’s opaque glass walls to look into a window was not a normal, foreseeable use of the walkway. Had the plaintiff walked along the direction of the sidewalk, she would not have been injured. Moreover, the lighting would have been sufficient to safely traverse the walkway had she not chosen to peek in the windows to see the football players. The court was not persuaded she had been drawn off course by “an attractive display” inside the building at eye level.
For more information, contact Denise Fontana Ricci at .
Insurers who are signatories to arbitration forums such as Arbitration Forum, Inc. to resolve disputes amongst other signatories should be aware that New Jersey courts will enforce such agreements. In a recent case, Excelsior Insurance Co. v. One Beacon Insurance Co., the Appellate Division noted the Legislature’s encouragement of this “speedy, inexpensive, expeditious and perhaps less formal manner” to resolve such disputes.
The dispute involved two insurers who wrote succcessive policies to the same insured housing developer. When claims were brought for water infiltration against the developer, Excelsior, who had first insured the risk, denied coverage claiming that the water infiltration had not manifested during its policy term. One Beacon defended the insured under a reservation of rights and, then, pursued Excelsior in the arbitration forum after judgment had been entered against the insured. Excelsior failed to timely answer One Beacon’s pleading in arbitration resulting in an award against it.
Excelsior unsuccessfully turned to the New Jersey Superior Court to set aside the arbitration award. Excelsior contended that it contested coverage owed to its insured- taking the controversy out of the scope for such arbitration. In fact, the arbitration agreement provides that a company shall not be forced to submit to arbitration where coverage is contested. However, Excelsior failed to follow the special rules for arbitration it agreed to follow when it failed to affirmatively plead its defense. Additionally, had it sought to raise the coverage issue, the nature of the denial did not fall within the guidelines for such an affirmative defense. Such a coverage denial is applied only where the claim is against an individual who is not covered or with respect to a policy that was not in effect at the time of the incident. The Appellate Division did not consider Excelsior’s denial based upon a “manifestation trigger” as meeting this guideline term.
Thus, the court was not moved by Excelsior’s arguments and found no abuse in discretion by the arbitration forum or the lower court judge. The award was upheld.
For more information contact Denise Fontana Ricci at .
