Delay Damages Awarded In Connection With Future Medical Expenses (PA)

In Roth v. Ross, the Pennsylvania Superior Court addressed the issue of whether delay damages could be awarded in connection with future medical expenses.  If requested in a civil case, delay damages can be added to a compensatory damages award, the effect of which is to encourage early settlement and to compensate the plaintiff for any delay in receiving a monetary award.

Roth sought monetary relief for damages sustained following a motor vehicle accident and commenced suit against the opposing driver and the driver’s insurer seeking damages that included past and future medical expenses, lost wages, lost earning capacity and emotional distress.  The court ultimately awarded Roth damages for past pain and suffering and future medical expenses.

Following the verdict, Roth filed a motion for the inclusion of delay damages pursuant to Pa. R.C.P. 238.  The trial court granted the motion with respect to past pain and suffering, but denied delay damages for future medical expenses reasoning that Roth had failed to provide sufficient case law that future medical expenses fell within the definition of bodily injury under Rule 238.

Roth appealed arguing that a plain reading of Rule 238 established that she was entitled to delay damages for future medical expenses.  On appeal, the Pennsylvania Superior Court agreed and specifically rejected the lower court’s basis for denial of the delay damages.  The Superior Court stated that the correct inquiry in determining if delay damages should be awarded is whether future medical expenses constitute monetary relief for bodily injury.  The court held that future medical expenses did, in fact, constitute such relief, and thus, Roth plaintiff was entitled to delay damages for these expenses.

Special thanks to Colleen Hayes for her contribution to this post.  For more information, please contact Nicole Y. Brown at

Undefined Policy Term Not Ambiguous (NJ)

Undefined phrases in insurance policies can lead to confusion and ambiguity.  The court dealt with this issue in Lubik v. Harleysville Insurance Company and ruled in favor of the carrier.

Lubik owned unit 800 in a condominium complex and water from unit 100 leaked into his causing $60,000 in damages.  Lubik had a Perils Insured Against policy that covered specified damage to his residence.  According to the policy, coverage did not include loss caused by accidental discharge or overflow that occurred off the “described location,” but the policy did not define this term.

Lubik filed a claim with Harleysville seeking coverage for the water damage and Harleysville denied coverage stating that the water came from off the “described location.”  Harleysville eventually moved for summary judgment on this issue and the trial court granted the motion finding that the described location in the clause of the Perils Insured Against section clearly, only referred to Lubik’s specific unit.  Lubik appealed arguing that described location means the entire condominium building.  The appellate court ruled that the clause was not ambiguous and that summary judgment was appropriate since Lubik did not meet his burden of proving that the claim was within the basic terms of his policy.

Special thanks to Heather Aquino for her contribution to this post.  For more information, please contact Nicole Y. Brown at

Beware Of Boozy Patrons (NY)

Owners of establishments that serve alcohol must be conscious and wary of selling alcohol to those who have had too much to drink.  Sullivan v. Mulinos of Westchester reaffirms the Dram Shop Act’s purpose to prevent such establishments from escaping liability for their blatant disregard for a person’s visible intoxication.

Sullivan died after he lost control of his car, struck a lamp pole, went over a guardrail and plunged into the Hudson River.  He was allegedly intoxicated and had patronized Mulinos’ establishment and Trotters Tavern.  Sullivan’s estate sued Mulinos and Trotters Tavern under the Dram Shop Act based on a claim that they had sold alcohol to Sullivan while he was visibly intoxicated.

During trial, testimony was elicited from several witnesses who had been with Sullivan at Mulinos and later drove him to Trotters Tavern.  According to the witnesses, Sullivan had consumed numerous drinks before leaving Mulinos and was visibly intoxicated.  Despite this, the trial court granted a directed verdict for the defendants at the close of evidence.

On appeal, the Second Department found that there was a reasonable connection between Mulinos’ alleged unlawful sale of alcohol and the resulting damages.  Similarly, the court found that the evidence was sufficient to establish that Trotters Tavern served Sullivan while he was visibly intoxicated.  Thus, the court held that the matter should have been submitted to a jury as to whether the defendants violated the Dram Shop Act.

Special thanks to Lora Gleicher for her contribution to this post.  For more information, please contact Nicole Y. Brown at

Statements In Police Report Insufficient To Create Issue Of Fact (NY)

In automobile cases where there was a police response, sometimes we get a great police report that contains statements favorable to our defense, but we caution that these statements may not be admissible as Roman v. Cabrera demonstrates.

Roman was changing a tire on the shoulder of I-95 when Cabrera struck him with her car.  Cabrera claimed that she was avoiding Lawrence’s car that was disabled in the left lane.  During Lawrence’s deposition, he testified that his car became disabled after he was struck by an unknown vehicle causing him to hit the median divider.  The police report contained a notation from the responding state trooper that Cabrera had swerved to avoid Lawrence’s vehicle and in so doing lost control of her vehicle and struck Roman.  Lawrence moved for summary judgment after his deposition.  Roman opposed the motion relying heavily on the statements in the police report.  The trial court eventually ruled that issues of fact existed as to whether Lawrence was negligent.

On appeal, the First Department reversed, finding that the police report was inadmissible hearsay, since the state trooper had not witnessed the accident.  The court further noted that even if the report were admissible, it was still insufficient to raise an issue of fact since liability may not be imposed on a party who simply furnishes the occasion for an incident to occur, but was not one its causes.  The court held that the report did not raise an inference that Lawrence’s actions caused the emergency created when his vehicle hit the median.

Special thanks to Michael Nunley for his contribution to this post.  For more information, please contact Nicole Y. Brown at

Partial Form Fall Within the Industrial Code Provision to Support Plaintiff’s Labor Law 241(6) Claim.

New York Labor Law 241(6) requires that all areas of construction, demolition and excavation provide reasonable and adequate protection to those employed or frequenting those places. To support a 241(6) cause of action, the plaintiff must point to a specific industrial code provision that was violated. Oftentimes applicability, or lack thereof, of a provision will hinge on the legal interpretation of extremely specific facts.

In Morris v. Pavarini Construction, plaintiff claimed that a piece of a “form” used for shaping concrete fell on his hand. Plaintiff relied upon industrial code provision section 23-2.2 (a) to support his Labor Law 241(6) claim that required “forms” to be “braced or tied together to maintain its position or shape.” Since the form was not yet completed and only a portion fell on his hand, the defendants moved to dismiss on the basis that the provision applied to completed forms and not to portions of a form. After several rounds of appeal and a remand to the trial court for an evidentiary hearing, the Court of Appeals held that the provision applied to portions of a form since the section that fell on the plaintiff was the back wall of the form, which according to the experts ought to have been braced. The Court of Appeals affirmed the denial of the defendants’ motion and granted plaintiff summary judgment on his Labor Law 241(6) claim. This decision is in line with many other recent Court of Appeals decisions involving Labor Law claims. That is, New York Courts, appear extremely liberal in applying the Labor Law and Industrial Code, and unsurprisingly come out in favor of their application so as not to dismiss a plaintiff’s claim. It is with that in mind that some in the New York construction industry have begun petitioning the legislators for Labor Law reform. We will of course stay atop of pending legislation and report any changes if they (ever) do occur.

For any questions about this post, contact Cheryl at

CANY Upholds “Sloppy” Disclaimer

New York courts are strict when it comes to disclaimers.  In addition to being timely, disclaimers must unequivocally and unambiguously advise the insured of the grounds upon which they are based.  One insurer’s “sloppy” disclaimer resulted in a legal battle fought all the way up to the New York Court of Appeals. 

In QBE Ins. Corp. v. Jinx-Proof, Inc., the insured owned a tavern.  In the underlying action, a patron claimed she was injured when one of the tavern’s employees threw a glass in her face. Upon notice of the claim, the insurer sent two letters to the insured.  The first stated that the insurer would not defend or indemnify the insured “under the General Liability portion of the policy for assault and battery allegations” but wrongly asserted that there was no liquor liability coverage.  The second letter acknowledged that there was liquor liability coverage but read:

“[W]e are defending this matter under the Liquor Liability portion of the [general commercial liability] coverage, and under strict reservation of rights for allegations of Assault and Battery. Your policy excludes coverage for assault and battery claims . . . Therefore, should this matter proceed to verdict, any awards by the Court stemming from allegations of Assault and Battery will not be covered under your Commercial General Liability policy.”

After the negligence and Dram Shop causes of action were dismissed, the insurer filed a declaratory judgment action to be relieved of its duty to defend and indemnify.  The trial court, and later the Appellate Division, upheld the disclaimer, notwithstanding the insured’s claim of ambiguity. Over Justice Piggott’s instructive dissent, the top Court agreed.  The Court acknowledged that the letters “contained some contradictory and confusing language,” but upheld the disclaimer nonetheless because it was “sufficient” to apprise the insured the disclaimer was based on exclusion for assault and battery.

The takeaway here is that great care must be taken to draft clear and comprehensive disclaimers.  As Justice Piggott wrote in his sharply-worded dissent: “As the majority concedes, both letters contained contradictory and confusing language.  Language such as this simply cannot serve to properly advise an insured of his rights and remedies under the policy.”  QBE Ins. Corp. v. Jinx-Proof, Inc. was a significant victory, but the battle was hard-fought, and the margin of victory, slim.  The moral? Write clearly and use overwhelming force.

Thanks to Michael Gauvin for his contribution to this post.  For more information, please email Dennis Wade at

Absence of Meat Inspectors Limits FSMA Impact.

The implementation of the Food Safety Modernization Act continues to proceed in drips and drabs — a reality that is directly correlated to the absence of sufficient funding. Apparently the latest problem in this regard is the absence of a sufficient number of meat inspectors. In the absence of sufficient inspections, the potential for contaminated meat to hit the market and ultimately result in a recall is only likely to increase.

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

Recalcitrant Insureds: CANY Sanctions “Late” Disclaimer For Non-Cooperation

Here, in Of Interest, we often stress the need to issue timely disclaimers.  But what happens if your insured gives you the “run around”?  Do you need to fire off an immediate disclaimer?  New York’s top court grappled with this question in Country-Wide Insurance Co. v. Preferred Trucking Services Corp.

The Court of Appeals held that while an insurer makes diligent and good faith efforts to obtain its insured’s cooperation, it need not assume the worst.  A duty to disclaim does not arise until it becomes clear that the insured will not cooperate — which is a case-specific inquiry.

Preferred Trucking and Carlos Arias were insureds under a business auto policy issued by Country-Wide.  After sustaining injuries when unloading a vehicle owned by Preferred Trucking and operated by Arias, a worker commenced a lawsuit against them and others.

Upon receiving formal notice of the lawsuit in October 2007, Country-Wide published a reservation of rights letter to the insureds.  Country-Wide made repeated attempts to obtain the cooperation of the insureds.  In October 2008, Arias agreed to submit to a deposition but later refused to appear or even reschedule his deposition.  After the trial court struck the insureds’ answer, Country-Wide disclaimed coverage for failure to cooperate.

The Appellate Division ruled against Country-Wide ruling that Country-Wide’s disclaimer “was untimely, since it came approximately four months after it learned of the ground for the disclaimer.”

In reversing the Court of Appeals began by noting that the timeliness of a disclaimer of coverage is determined on a case-by-case basis.  Whether a disclaimer is merited for non-cooperation is “often not readily apparent.”  As the operator of the vehicle, Arias was obviously the key witness for Preferred Trucking. As the Court found, Arias “had personal knowledge of the accident and was in a position to provide a meaningful defense, or, alternatively, testify in such a way as to bind Preferred Trucking.”

The Court of Appeals agreed with Country-Wide’s argument that it could not know for certain that Arias would not cooperate until he refused to appear for or reschedule his deposition in October 2008.  Therefore, Country-Wide’s disclaimer was timely.

Thanks to Steven Kaye for his contribution to this post.  For more information, please email Dennis Wade at


Hidden Car Key Leaves Thief Holding the Bag (NY)

Generally, a vehicle owner is not liable if a car thief is negligent in his operation of the vehicle.  However, New York law leaves an opening if an owner negligently leaves the keys in an obvious place in the car – thereby enabling the car thief.  Yet, the law recognizes that owners should be permitted to leave a spare key hidden in the vehicle in case it is ever needed.

In Alvarez v. Bivens, the owner of a truck parked his vehicle and placed a spare key in a hide-away-box behind his rear tire.  Upon returning hours later, he found that his truck had been stolen. Although the truck was ultimately recovered, it was not found until after the thief struck the plaintiff with the stolen vehicle.  The plaintiff filed suit against the owner and the thief to recover for personal injuries.

The motion court denied the owner’s motion for summary judgment, but the First Department reversed.  Given that the car was stolen, the Appellate Division found that the owner had not given his consent to the thief.  Moreover, the court found that the owner had not violated Section 1210(a) which requires drivers to turn off their ignition and remove the key from the vehicle since it absolves a driver of liability with respect to a key stashed in the car for emergencies so long as it is hidden from sight.  The court found the owner’s placement of the key behind the rear wheel’s frame was a sufficient hiding spot as the thief would have to be “peeking around a little bit” in order to find the key.

Thanks to Georgia Stagias for her contribution.

For more information, contact Denise Fontana Ricci at


Condition Precedent vs. Limitation Period… Which Insurance Condition Governs For Property Claim? (NY)

When an insurance policy includes terms that would otherwise be reasonable but which when applied to the facts of a given claim make their application unreasonable, what is a court to do?  The 2nd Circuit Court of Appeals recently turned to New York’s highest court for an answer to this question.

In Executive Plaza, LLC v. Peerless Insurance, the insured sustained a fire loss to an office building on February 23, 2007.  The $1,000,000 insurance policy gave the insured a choice between ACV or replacement cost.  The policy also mandated that the carrier would not pay replacement cost until the damaged property is repaired or replaced.  But, the policy also mandated that no insured may bring an action unless “the action is brought within 2 years after the date on which the direct physical loss … occurred.”

Over the course of two years, the insured received  $757,812.50 of the $1,000,000 policy limit for ongoing repairs.  However, the repairs were not complete after two years, and the balance of the policy limit was in jeopardy.   Thus, on the eve of the two year limitation period, Executive Plaza, filed suit.  The court agreed with Peerless that the suit was premature given that repairs were ongoing and, hence, a condition precedent was unmet.  When the repairs were completed, Executive Plaza re-filed suit.  Peerless defended once again and sought dismissal on the basis of expiration of the two year limitation clause.  The district court agreed with Peerless and dismissed the case.  Whereupon the 2nd Circuit was called upon to consider the merits of the summary judgment granted.  Given the unique facts, the Circuit Court certified the question to New York’s highest court.

The New York Court of Appeals first noted that nothing is inherently unreasonable about a 2 year limitation period for the insured to bring suit.  (In fact, six-month limitation periods have been found to be reasonable.)  However, the limitation was not reasonable given  a condition precedent that could not reasonably be accomplished within that period.

The Court noted, “It is true that nothing required defendant to insure plaintiff for replacement cost in excess of actual cash value, but having chosen to do so defendant may not insist on a “limitation period” that renders the coverage valueless when the repairs are time-consuming.”  Thus, in this circumstance, the court found that the limitation period was more of a nullification of coverage altogether and advised the Circuit Court of Appeals that the limitations term was unreasonable and unenforceable.

Property insurers should note that the lapse a two year limitation from accrual date to suit may no longer bar a DJ action, if repairs are still incomplete.  It will be interesting to see if this holding applies to similar claims with a Loss of Use element, wherein an insured “drags out” replacement/repair of property damage, all the while increasing the restoration period and potential value of a Loss of Use claim.  We will keep potential application of Executive Plaza in mind in the coming months, and in particular, in October 2014, once Hurricane Sandy claims are two years removed from the date of loss.

Thanks to Brian Gibbons for his contribution.

For more information, contact Denise Fontana Ricci at