In construction projects, accidents often occur and there are many individuals potentially at fault for those accidents. As a result, many defendants seek to join those additional defendants that may not have been sued to transfer the risk.
In Element Constr., LLC v. Dougherty, Element Construction, LLC was the manager of a renovation project owned by 5th Street, LLC. Element and 5th Street retained Lunar Agency, Inc., an insurance brokerage company, to obtain the necessary insurance policies and manage any claims. While working on the project, a subcontractor allegedly crashed a forklift into a wall resulting in damages of almost $3 million. Element and 5th Street filed an action against Lunar and its principals for failing to timely notify their insurer of the accident, which resulted in the insurer denying coverage. Lunar subsequently joined the subcontractor responsible for the accident to the lawsuit seeking contribution, to which the subcontractor filed objections because it claimed it was not a joint tortfeasor.
Addressing that issue, the Court recognized that the joint tortfeasor statute required “the parties must either act together in committing the wrong, or their acts, in independent of each other, must unite in causing a single injury…A joint tort is defined as where two or more persons owe to another the same duty and by their common neglect such other is injured.” Neal v. Bavarian Motors, Inc., 882 A.2d 1022, 1028 (Pa.Super. 2005). The Court found that there was no evidence that the Subcontractor acted together in committing a wrong, or that their independent actions united to cause a single injury. The Court found that the two negligent acts-Lunar’s purported failure to timely handle an insurance claim, and the Subcontractor’s negligence in crashing the forklift- had nothing in common. Thus, the Court denied the joinder motion.
Joinder is a great strategy for limiting liability, but care must be taken that those sought to be joined actually share some part in causing the single (specific) injury. There was no correlation between the subcontractor’s purported negligence and that of the insurance broker. Although negligence was claimed against both the subcontractor and broker, they were based on two separate actions that caused to separate injuries.
Thanks to Malik Pickett for his contribution to this post.