Monthly Archives: April 2014

Concealing Free Repairs to Yacht Leads to Fraud Claim (NJ)

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The Superior Court of New Jersey recently addressed the issue of whether an insured is required to reimburse its insurer where the damaged property is ultimately repaired at no cost to the insured.   Likely impacting the outcome was the fact that the property at issue was a yacht – and that the insured inaccurrately denied that such repairs had been made.

In AIG Casualty Company of New York, Inc. v. Donna Walsh,  the Walshes insured a yacht under an all risk policy, and in August of 2009, discovered that the port engine was damaged and would require repairs of $23,975.  AIG issued a check for $15,975 for the amount of repairs minus the policy deductible. In September of 2009, however, Hinckley, the yacht company, informed the Walshes that the engine manufacturer would replace the engine free of charge, and the company eventually did.

When AIG learned that the Walshes had not sustained any loss with respect to the engine repair it demanded the return of the $15,975, and the Walshes continuously refused. In December of 2010, AIG sued for reimbursement and was later awarded summary judgment.

The decision was affirmed on appeal, and the Court also held that AIG was entitled to summary judgment for its claim under the Fraud Prevention Act. The Court rejected the Walshes’ argument that they did not receive another payment for their loss so they were entitled to keep the payment received from AIG. The court held that the free repair by the engine manufacturer was, in essence, a payment and therefore AIG was entitled to reimbursement.  Further, the fact that the Walshes concealed the fact that the engined had later been repaired entitled AIG to the award under the Fraud Prevention Act.

Thanks to Thalia Staikos for her contribution to this post.  Please write to Mike Bono for more information.

 

Court Swats Basketball Injury Claim (NY)

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In sports and recreational activities, the assumption of risk doctrine covers any dangers and risks associated with the nature of the sport and participation within it.  Such assumed risks also include the construction of the playing field and any open and obvious conditions on it.

In Perez v New York City Dept. of Educ., the issue of assumed risk dealt with a condition in close proximity to the “playing field,” but not actually on or related to the basketball court itself.  Plaintiff was playing basketball in defendant’s gymnasium, when he jumped to block an opponent’s layup.  However, while doing so, plaintiff’s right arm  shattered the glass window pane of the gymnasium’s entrance door, which had no padding.  Plaintiff brought suit against the gymnasium owner, but the owner’s motion for summary judgment was granted by the trial court.

On appeal, the Second Appellate Department affirmed the trial court’s decision.  The Court held that the proximity of the door to the basketball court was an obvious and inherent risk for anyone playing basketball in that gym.  Further, plaintiff’s expert affidavit relied upon non-mandatory guidelines relating to door proximity and padding was insufficient to raise an issue of fact.  The Court also noted that lack of supervision was not a proximate cause as well, since the accident occurred suddenly.

Thanks to Jung Lee for his contribution to this post.  Please write to Mike Bono for more information.

Employer Not Liable For Upset Security Guard’s Actions (NY)

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The doctrine of respondeat superior is intended to encourage employers to responsibly supervise their employees or risk being held vicariously liable for their employee’s conduct.  But a recent Appellate Division decision, Ali v. State of New York, reminds us that there are some situations where employers can successfully defend against such claims.

On a cold day in February 2009, a security guard for the New York State Compensation Board in Brooklyn received very sad news while talking on his cell phone; his grandmother had died.  The claimant was seated nearby on a wooden bench reading a newspaper in the waiting area.  The news of his grandmother’s death so upset the security guard that he marched into the waiting area and punched a wooden bench,  causing it to fall on the claimant.

The claimant filed a claim against the State of New York on the theory of respondeat superior.  The Court of Claims granted the State’s application to dismiss the claim.In affirming the Court of Claims’ decision, the Appellate Division held that even though the security guard was an employee of the State and was working at the time of the incident, the security guard was not acting in furtherance of his employment at the time of the incident. “The security guard was acting solely for personal motives unrelated to the [State’s] business at the time of the incident.”  There was no evidence to suggest that the security guard’s conduct was reasonably foreseeable under the circumstances.  As such, his employer was not held liable.

Thanks to Steve Kaye for his contribution to this post.  Please write to Mike Bono for more information.