PA Court Interprets Notice Requirement

Citizens Insurance Company brought a declaratory judgment action against its insured Gerald Ung seeking a declaration that it was not obligated to defend and indemnify Ung’s son under the issued homeowner’s policy for an underlying civil action in which the plaintiff claimed injuries after Ung’s son shot him.  Citizens argued that there was no coverage under the policy because of Ung’s untimely notice of the complaint; the claims did not constitute an occurrence; and the intended or expected exclusion was a bar to coverage.

In response to Citizen’s notice argument, the court concluded that performance of the notice provision only required Ung to substantial comply and any failure to notify needed to be substantial and material.  The court ultimately determined that Ung’s son was not aware that his parents had a homeowner’s policy or that the policy would cover him.  Despite this, the court determined that Citizen was not prejudiced by the delay as it had failed to sufficiently plead how it was prejudiced or how the delay had deprived it of an opportunity for appellate review if an adverse decision was reached in the underlying action.

Additionally, with respect to Citizen’s lack of occurrence/intended or expected exclusion arguments, the court determined that summary judgment could not be granted on this basis as the underlying complaint alleged negligence as well as intentional acts.  Thus, Ung’s son’s negligent acts may have been covered by the policy, thereby triggering Citizen’s obligation to defend.

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

Wrong Way Cyclist May Still Recover (NY)

It seems unfair that someone who was traveling the wrong way on a one-way street should be allowed to recover for alleged injuries if he gets into an accident, but that was not the case in Espiritu v. Shuttle Express Coach, Inc.

Espiritu was riding his bicycle the wrong way on a one-way street when he was struck at the intersection by a Shuttle Express bus that Michael Wright was driving.  There was a construction fence around 85 Adams Street located on the northeast corner of the intersection that both Espiritu and Wright testified blocked their view of the intersection.

At the close of discovery, the defendants moved to dismiss the complaint and the lower court granted the motion ruling that Espiritu’s negligence was the sole proximate cause of the accident because he was traveling the wrong way on a one-way street.  In reversing the lower court, the Second Department noted that even though Espiritu was negligent in that he violated the Vehicle and Traffic Law, there can be more than one proximate cause of an accident.  Since the defendants failed to establish that Wright was free from any comparative fault, there were questions of fact as to whether Wright failed to see what was there to be seen through the proper use of his senses, failed to exercise due care, or was traveling at a reasonable and prudent speed.  Similarly, there were questions of fact as to the negligent placement of the fence.  Thus, despite the obvious negligence on Espiritu’s part, he could still present his case to a jury.

Special thanks to Lora Gleicher for her contributions to this post.  For more information, please contact Nicole Y. Brown at nbrown@wcmlaw.com.

Maybe Somebody Was Listening?

On February 13, 2014, we reported on WCM’s victory in New York Hospital Medical Center of Queens v. Microtech Contracting Corp. , in which the Court of Appeals ruled that hiring undocumented workers (a violation of federal law) does not abrogate the protections afforded to employers under § 11 of the Workers Compensation Law.  We argued – – and New York’s top court agreed – – that the judiciary had no power to create a new exception to WCL §11 for “illegal” employment contracts.

But it now appears that the Manhattan D.A. is investigating Workers’ Comp fraud and, in particular, the practice of hiring undocumented workers “off-the-books.”  Manhattan D.A. Cyrus Vance launched a grand jury investigation into Workers Compensation abuses.  The grand jury’s report cites a 2013 study by the Fiscal Policy Institute estimating that New York State and the City lost over $400 million in 2011, resulting from construction laborers being paid off the books or falsely labeled as “independent contractors.”  The report recommends legislation to increase fines and impose other sanctions for attempts by employers to shortcut the system.

It‘s too early to tell what impact Vance’s grand jury report will have on the legislature.  But watch this space!  If you have any questions about Workers Compensation Law §11 or the grand jury’s report please contact Dennis Wade at dwade@wcmlaw.com.

Waiver of Liability Unenforceable For Kettlebell Injury (NY)

While participating in an instructional kettlebell course presented by KettleBell Concepts, Inc. at a Hilton hotel, Eric Gallant was injured when a kettlebell struck him in the back of the head.  Before starting the course, Gallant had signed a waiver in which he agreed to “assume and accept full responsibility for any and all injuries or damages that may occur…and forever fully release, remise, indemnify, and agree to defend and hold harmless [defendants]…from any and all causes of actions, costs, damages, expenses, and liability whatsoever.”  Despite this, Gallant sued Hilton Hotels, KettleBell and its instructor.

At the close of discovery, the defendants moved for summary judgment arguing, primarily, that Gallant’s action was barred because he had waived all liability.  In opposition, Gallant argued that the waiver did not express in unequivocal terms the parties’ intention to relieve the defendants of liability for their own negligence.

The court examined the waiver that Gallant signed and noted that the law frowns upon contracts that intend to exculpate a party from the consequences of its own negligence and to the extent that such agreements purport to exempt liability for willful or grossly negligent acts the courts have viewed them as void.  The court further noted that in order for this waiver to be clear and unequivocal, it must plainly appear that the limitation of liability extends only to negligence of the party attempting to shed ordinary responsibility.  The court ultimately ruled that the waiver was unenforceable.

As an aside, the court noted that the defendants had available to them the defense of assumption of risk as Gallant assumed the risk of attending a course in which he knew people would be swinging kettlebells.  The defendants, however, failed to raise this defense at the outset and only did so for the first time in their reply papers.  While a valid defense, the court was not required to consider this late argument.

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

Hearsay or Admission: What Medical Records Reveal About Mechanism of Injury (NY)

 Medical records often contain statements that describe what happened to cause an injury.  Oftentimes, those statements provide a stark contrast to later descriptions offered during litigation.  Defendants often seek to introduce these statements to establish the earliest account of the mechanism of injury.  The question of whether the records are admissible revolves around evidentiary hearsay rules. The medical records are themselves hearsay, albeit most likely excepted and at least partially admissible as business records. However, each level of hearsay in the document must be evaluated.  Statements regarding the cause of the injury can fall within the business records exception provided they are germane to the treatment or diagnosis of plaintiff’s injuries.  Alternatively, the entry may be admissible as an admission, but only if there is evidence that connects the party to the entry.

 In Benavides v. City of New York, the plaintiff filed litigation alleging excessive force by the NYPD while attempting to flee arrest.  Benavides, an admitted drug dealer, alleged that he was pushed off a fence by a Bronx Narcotics officer in pursuit during a drug investigation. from the fence came from his interviews with doctors in the weeks and months after the accident.

The question was whether the emergency room records from Lincoln Hospital, which may have contained information provided by the police, including references to plaintiff’s “jump,” should have been admissible before the jury.  Plaintiff contended he deserved a new trial because the jury’s determination (of no liability) was based upon inadmissible hearsay statements from the police.

Interestingly, the Court found that statements attributable to the NYPD were hearsay and should have been excluded from jury consideration.  However, their admissibility at trial was deemed “harmless error,” and the jury’s finding in favor of the defendant was affirmed.  The Court based it’s decision on multiple other references throughout plaintiff’s treatment to the fact that he jumped, and was not pushed, from the fence.

Had plaintiff not sought follow up treatment, and therefore, not offered other medical records that referenced his “jump” from the wall, the error of admitting the officers’ hearsay statements may not have been so “harmless.”  Clearly, this particular plaintiff did not formulate his plan to bring a lawsuit until his treatment was well underway, and his medical records were “tainted” by his initial honesty.

Thanks to Brian Gibbons for his contribution.

For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com.

 

Arbitration Awards Nearly Unassailable (NJ)

New Jersey’s public policy favors the settlement of disputes through arbitration.  Typically, contracts include a provision memorializing the parties’ intentions to resolve disputes out of court and may even designate an arbitration association such as the American Arbitration Association (“AAA”) in the contract.  The arbitrator’s award is usually brief, one page, and typically only lists the amount awarded to the prevailing party without mentioning the basis for the award.  The NJ Arbitration Act of 2003 governs the conduct of the arbitration.  An award  cannot be modified or vacated unless it meets one of six criteria specified in the Arbitration Act.

Recently, the New Jersey Appellate Division vacated a trial court modification of an arbitration award in Merion Construction Management LLC v. Kemron Environmental Services, Inc.  Kemron, a subcontractor, brought Merion, a general contractor, to arbitration seeking recovery of  fees Merion allegedly owed.  After the arbitration, Kemron’s attorney contacted the Arbitrator to rectify “an oversight” in the award because $200,000 owed to the subcontractor was omitted qualifying as a computation or technical error under The Act.  Merion’s attorney argued that the arbitrator’s award precluded any modification when it stated, “The award is in full settlement of all claims and counterclaims submitted to this Arbitration.  All claims not expressly granted herein are hereby denied.”

On appeal, the court reversed the trial court emphasizing the party seeking to modify or vacate an arbitration award bears a heavy burden.  In this case, the prevailing party was not permitted to amend the award to add claims not specifically included, and attempt characterize the omitted claims as “computational errors.”  This ruling makes clear that in arbitrations the parties are obligated to specify all their claims in detail, and confirm the arbitrator understands those claims and the amount of damages associated with each claim, prior to the written award.  If not, once the award is issued, it is likely the ship has sailed.

Thanks to Ann-Marie M. Andrews for her contribution.

For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com.

 

No Proof As To Cause of Fall… No Cause of Action! (NY)

A finding that a defendant’s negligence, if any, proximately caused the plaintiff’s injuries in a slip-and-fall case cannot be based on speculation.  Thus, it is incumbent upon the plaintiff to provide competent proof as to what specifically caused the fall.   Where the plaintiff cannot do so, as in the recent case of DiLorenzo v. S.I.J. Realty Co., LLC, such a failure resulted in another fall of sorts – that of the case falling out of the court system.

In DiLorenzo, the plaintiff thought that she fell because of a wet floor due to a recent cleaning.  However, plaintiff did not know when the floor had most recently been cleaned and could not even verify whether the floor was actually wet when she fell.  Thus, plaintiff’s arguments were based solely upon speculation.  The Appellate Division, Second Department, affirmed the trial court’s ruling that granted summary judgment in favor of the property owner and cleaning service, based on this fatal flaw.

Thanks to Johan Obregon for his contribution.

For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com.

 

Does a ROR Allow an Insured to Settle the Case and Then Pass the Bill to the Insurer? (PA)

The Pennsylvania Supreme Court has agreed to hear arguments on a $95 million radiation injury coverage appeal. The Supreme Court will decide if an insured’s settlement of an underlying and covered claim without the insurer’s consent results in a forfeiture of coverage when the insurer is defending under a reservation of rights, the insurer has not offered any amount in settlement, and the settlement is deemed to be fair and reasonable.

In Babcock & Wilcox Co. et al. v. American Nuclear Insurers, which was decided this past summer, the Superior Court panel vacated a $95 million judgment against ANI and remanded the case for a new trial. The Superior Court held that the trial court applied the wrong standard when determining if Babcock & Wilcox were entitled to reimbursement. The trial court examined whether the settlement was fair and reasonable. The Superior Court held that the focus should have been whether Babcock & Wilcox rejected ANI’s defense of the claim, and furthermore, whether ANI’s failure to participate in settlement negotiations was an act of bad faith.

The original suit was filed by the parents of a woman who allegedly died from exposure to radiation near Babcock & Wilcox’s nuclear fuels plant. Babcock & Wilcox agreed to settle for $80 million and then filed suit against ANI to compel reimbursement. ANI argued that Babcock & Wilcox forfeited its right to coverage when it unilaterally settled the underlying suit against the advice of ANI. The Superior Court, in a break from PA precedent, ruled in favor of Babcock Wilcox.

Now, the Pennsylvania Supreme Court will determine the legal ramifications for an insured who unilaterally agrees to a fair and reasonable settlement against the wishes of the insurer, when there is no evidence of bad faith. The decision could greatly affect the balance of power between insurer and insured in settlement negotiations moving forward.

Special thanks to Eric Clendening for his contributions to this post. For more information, please contact Bob Cosgrove at rcosgrove@wcmlaw.com

What is SEPTA really?: Commonwealth Court Allows SEPTA Sovereign Immunity Protection (PA)

In Muldrow v. Southeastern Pennsylvania Transportation Authority (“SEPTA”), the plaintiff fell down the bus stairs while disembarking a SEPTA bus.  Muldrow sued SEPTA, alleging negligence.  SEPTA filed a motion for summary basis claiming that SEPTA was immune from liability as an arm of the commonwealth.  However, Muldrow opposed the motion on the basis of the Supreme Court’s ruling in Goldman v. SEPTA, which held specifically that SEPTA is not an arm of the commonwealth under the Eleventh Amendment and thus not immunized from suit by the Sovereign Immunity Act.  The court of Common Pleas disagreed and granted SEPTA’s motion for summary judgment.

Muldrow appealed, again citing Goldman.  SEPTA argued that Goldman was inapplicable here because it involved the Eleventh Amendment, and the instant case concerned only state common law sovereignty.  Here, the Commonwealth Court agreed with SEPTA and held that this was a state action and did not involve federal law.  As such, Goldman does not deny SPETA immunity protection under the Sovereign Immunity Act.

This case should serve as a guide for future state lawsuits involving SEPTA.  Since Goldman, the law has been somewhat in flux as to SEPTA’s position regarding immunity.  As Muldrow suggests, it appears SEPTA will continue to receive the protection of the Sovereign Immunity Act in state law cases.

Thanks to Remy Cahn for her contribution.

For more information contact Denise Fontana Ricci at dricci@wcmlaw.com.

 

Take Me Out at the Ballgame: Owner of Baseball Field Not Necessarily Liable When Players Hit It Out of the Park

Anyone who has ever watched a baseball game knows that ballparks only provide safety screens in the area around home plate. That’s because it is reasonable to assume that those around home plate may not be able to react in time to batted balls in their immediate vicinity. Other spectators who voluntarily enter a ballpark are supposed to know that batted baseballs may travel to their seats and therefore assume the risk of being hit.

Under a recent decision from the First Department, the duty to pay attention around ballparks is not limited to the people inside the park. In Cocco v. City of New York, the plaintiff was walking down Lexington Avenue on the Upper East Side when a baseball hit out of the defendant’s schoolyard struck her in the face. In granting the defendant’s motion for summary judgment, the court held that the defendant could not be held liable for the injuries sustained by a pedestrian walking outside of the park. The court reasoned that because the area behind home plate is the most dangerous, a ballpark proprietor is only under a duty to erect a screen around the home plate area.

With this ruling, the court made it clear that a rule designed to recognize the assumption of risk of those who knowingly enter a ballpark also applies to those on the outside who have no intention of watching a game that day. For pedestrians who don’t see it coming, “Take Me Out at the Ballgame” now appears to be the law of the land.

Special thanks to Michael Gauvin for his contributions to this post. If you have any questions about this post, please contact Dennis Wade at dwade@wcmlaw.com.