WCM is pleased to announce Michael Bono has been elected as a member of the Federation of Defense & Corporate Counsel (FDCC). The FDCC is a prestigious and highly selective organization for attorneys who devote a substantial amount of their professional time to the representation of insurance companies or others in the defense of civil litigation. FDCC membership is by nomination only, and the qualifications of each candidate are exhaustively investigated to insure that those selected have distinguished themselves professionally. The review process requires not only client referrals but recommendations from peers and adversaries. Mike now joins Dennis Wade, an FDCC member since 2011.
Monthly Archives: February 2014
Punitive Damages Not Recoverable In PA No-Fault Action
The U.S. District Court for the Easter District of Pennsylvania recently considered whether punitive damages are available to parties who seek recovery under the Motor Vehicle Financial Responsibility Law (“MVFRL”), which provides No-fault benefits to injured parties in Pennsylvania.
The MVFRL provides that if an insurer denies a claim for medical expenses but a court later determines that such expenses were “medically necessary” and should have been paid by the insurer, the insurer must pay the expenses as well as a 12% interest payment, attorney’s fees and the cost of the challenge. Furthermore, if the conduct of the insurer is deemed “wanton” then the insurer will be subject to treble damages as well.
In Yang v. State Farm Mutual Automobile Insurance Company, et al., plaintiff claimed that in addition to compensatory damages, she was also entitled to punitive damages because the insurer’s wrongful conduct caused her to incur costs and may have adversely affected her credit.
The punitive damage claim was brought pursuant to Pennsylvania’s bad faith insurance statute, which provides for an award of 3% interest, punitive damages, and attorney’s fees where there is a finding of bad faith. The Court, however, found that plaintiff’s bad faith claims were preempted by the specific provisions of the MVFRL, because the statute provides for its own penalties for improper conduct that do not include punitive damages. Therefore, plaintiff’s punitive damage claims were dismissed.
Thanks to Thalia Staikos for her contribution to this post. If you would like more information, please write to Mike Bono.
Common Interest Privilege Protects Independent Adjuster’s Documents (NJ)
Carriers without a physical presence in a given location often turn to Independent Adjusters to handle claims The case of Friedman Route 10, LLC v. Certain Underwriters at Lloyd’s London, et al. highlights the sometimes choppy waters that carriers must navigate in order to protect communications between all of the involved parties when an IA is retained to adjust the claim.
The insured submitted a property damage claim under a policy issued by Certain Underwriters at Lloyd’s, London. As was Lloyd’s practice, it engaged an IA to investigate and administer the claim, and also to serve as the point of contact for the insured. Lloyd’s also retained legal counsel for purposes of rendering a coverage opinion relative to the insured’s claim. Counsel also operated under the local direction of and in consultation on all legal issues with the IA
Unable to resolve the claim, the insured filed suit, initially against Lloyd’s only, seeking compensatory damages in excess of the policy limit. The plaintiff issued a subpoena to the IA seeking production of its file. Before issuing a response to the subpoena, the IA turned its file over to counsel, who withheld certain communications between counsel and the IA that it contended were protected from disclosure under the attorney-client privilege. The plaintiff argued that the IA was a separate entity from Lloyd’s and never a client of the attorneys and therefore not entitled to privilege. After an in camera review of the withheld documents, the judge ordered complete production.
Ultimately, the defendants, eventually including the IA, filed an interlocutory appeal to preclude production of the documents they argued as privileged. The Appellate Court found that counsel’s retention by Lloyd’s was not simply for routine claims investigation, but instead was for the specific purpose of analyzing the legal issues surrounding plaintiff’s claims using the investigation and findings of the IA and its consultants. On the theory that the IA shared “a common interest” with Lloyd’s, the Court found that the communications at issue with counsel were indeed privileged and not subject to disclosure.
Thanks to Emily Kidder for her contribution to this post. If you would like more information, please write to Mike Bono.
Diner Beware: Restaurant Not Liable For Broken Chair (NY)
A recent premises decision provided a reminder about the importance of holding a plaintiff to proof of notice of a dangerous condition. In Catalano v. Tanner, the trial court denied the defendant-restaurateur’s motion for summary judgment in a case where a customer was injured when his chair collapsed underneath him.
Plaintiff patronized the defendant’s restaurant for years, going there for breakfast five times per week, and dinning with companions at the same table and in the same chairs. Defendant testified that she had not received any prior complaints about the chairs, that none of the chairs previously broke, and that the restaurant continues to use the same chairs. In respect of her inspection practices, defendant claimed that at the close of business every day she wipes down the chairs, and inspects the chairs each month.
The Appellate Division reversed the trial court and held that the defendant’s inspection practices were reasonable and she therefore did not have constructive notice of the alleged defect in the chair.
Thanks to Steve Kaye for his contribution to this post. If you would like more information, please write to Mike Bono.