You Only Plead Twice – Second Department Upholds Right to Amend Complaint to add Wrongful Death Seven Years Later (NY)

In Assevero v Hamilton & Church Props, the Second Department recently allowed plaintiffs to amend their 2008 complaint to include new allegations of wrongful death after the plaintiff passed away in 2015 – seven years after the underlying accident.

The case arose from a 2007 accident in which Hugh Assevero sustained injuries while working at a renovation project at a building owned by the defendants. Assevero alleged that he was descending an unsecured ladder, which shifted suddenly, causing him to fall from the third floor of the building to the basement. He commenced an action in 2008 to recover damages based upon, inter alia alleged violations of Section 240(1) and 241(6) of the Labor Law. Following the completion of depositions, Assevero moved for summary judgment on his 240(1) claim, and the defendants cross-moved for summary judgment dismissing the 240(1) and 241(6) on the basis of the homeowners’ exception. In 2012, the court granted defendants cross motion to dismiss the statutory claims and denied Assevero’s motion. Assevero appealed. Several months after the court partially granted the defendants’ cross-motion – i.e., during the pendency of his appeal –Assevero died. His wife substituted in as administrator of his estate. Approximately three years after Assevero’s death, the Second Department issued a decision on Assevero’s appeal, and denied the defendants’ summary judgment motion, finding that they failed to make a prima facie showing that their home qualified as a two family home.

Then, approximately three months after the Second Department’s original decision, the plaintiff moved the Supreme Court for leave to amend the complaint and add a new cause of action for Assevero’s wrongful death. The plaintiff argued that Assevero died as a result of “complications of treatment for pain resulting from” his fall from the ladder. In support of her motion, she submitted Assevero’s autopsy report, which indicated that the cause of his death was “acute intoxication due to the combined effects of fentanyl, benzodiazepines, lidocaine and cyclobenzaprine,” and that the manner of death was “misuse of prescription medication.” The Supreme Court granted the plaintiff’s motion to amend the complaint, and defendants appealed.

Now before the Second Department for the second time, the justices noted that under the CPLR, “leave to amend a pleading should be freely given when there is no significant prejudice or surprise to the opposing party and where the evidence submitted in support of the motion indicates that the proposed amendment may have merit.” The Court went on to note a movant’s low burden in these situations, explaining, “leave to amend will be granted unless such insufficiency or lack of merit is clear and free from doubt.” In the case at bar, the Second Department held that because Assevero died during his appeal and its prior order reinstated the causes of action alleging violations of §§ 240(1) and 241(6), the defendants failed to demonstrate surprise or prejudice resulting from the delay in asserting the wrongful death cause of action. Further, the Court held that the plaintiff’s the proposed amendment was “neither palpably insufficient nor patently devoid of merit.”

Perhaps what is most striking about this outcome is not the application of the law, but the underlying facts and the significant delay. Of course, this goes to show that even where a new allegation – especially in the case of wrongful death – significantly alters a defendant’s valuation of the case, courts mean it when they say, “leave to amend a complaint should be freely given.”  Thanks to Evan King for his contribution to this post.  Please email Brian Gibbons with any questions.

Court of Appeals finds Question as to Constructive Notice Despite Security Footage (NY)

Premises cases can hinge on notice of an allegedly defective condition, and an eventual accident. For defendant property owners, proving that you did not create or have notice of the dangerous condition is a continuous uphill battle. It is even more difficult when the condition is water or debris that is transient and could manifest at any time.  Under such circumstances, a defendant property owner must show when the area was last inspected and/or cleaned on the date of the accident to establish that the condition was not present for a sufficient period of time to constitute constructive notice.

In Parietti v. Wal-Mart Stores, Inc., 140 A.D.3d 1039, 34 N.Y.S.3d 474 (2d Dept. 2016), reversed (Sept. 14, 2017), plaintiff slipped and fell on a wet spot near an ice machine inside a Wal-Mart store. Wal-Mart submitted affidavits from store employees who were working in the area at and around the time of the accident and surveillance footage which showed a Wal-Mart employee constantly walking and inspecting the area where the accident occurred. The Appellate Division, Second Department, reversed the trial court’s initial denial of the defendants motion and found that defendant Wal-Mart established that the alleged wet condition was not present for a sufficient period of time for Wal-Mart’s employees to discover and remedy it prior to the accident. This was supported by plaintiff’s own testimony that she did not see the water when she initially walked in the area.

Thereafter, plaintiff sought leave to appeal to the Court of Appeals. The Court of Appeals heard the case and concluded that despite the evidence presented, a question of fact exists as to the length of time the water was present and if it were long enough that Wal-Mart should have discovered and remedied the condition. While the Court did not elaborate, it is possible that the footage actually hurt Wal-Mart’s position in that the area was constantly inspected so the condition, should have been noticed and cleaned immediately.

This decision highlights the difficulty in obtaining summary judgment on a slip and fall case for a defendant. It is even more difficult when the defendant does not have footage or a witness to testify about when the area was last inspected or cleaned on the date of the accident.  We expect Parietti to be widely cited by the plaintiff”s bar in summary judgment motion practice going forward.  Thanks to Dana Purcaro for her contribution to this post.  Please email Brian Gibbons with any questions.

Second Circuit Reaffirms Privity Requirement In Additional Insured Endorsement (NY)

It is easy for claims professionals, contractors, and others to look no further than an underlying contract when determining whether a tendering party qualifies as an additional insured.  After all, when the promise to procure additional insured coverage is memorialized in a written contract, parties may expect the coverage to follow.

Of course, the experienced professional knows that insurance policy language determines additional insured status, not an underlying contract.  But it is important to carefully parse policy language as well, because even judges are capable of struggling with the application of clear policy language.  One additional endorsement that often causes confusion in the construction, legal, and insurance industries is the additional insured endorsement requiring contractual privity.

The Second Circuit recently addressed that issue in Cincinnati Insurance Company v. Harleysville Insurance Company.   There, the injured claimant was the employee of a sub-subcontractor on a construction project who was injured while performing his job duties.  After suit was filed, the general contractor’s insurer claimed its insured was an additional insured under the sub-subcontractors policy because the sub-subcontractor’s contract required it to name the general contractor as an additional insured.

Like many policies, the sub-subcontractor’s policy contained a blanket additional insured endorsement.  However, that endorsement conferred additional insured status on a third party “when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy.”  When the issue was presented to the trial court, it ruled that the general contractor was an additional insured because the underlying contract required that party to be named as an additional insured, but the Second Circuit reversed.

Relying on relatively recent New York precedent, the Second Circuit reasoned that when interpreting the intention of parties to an insurance contract, courts are confined to the four corners of the policy, not extrinsic evidence such as underlying contracts.  Because the policy required privity between the insured and purported additional insured, the general contractor was not an additional insured.

Cincinnati should serve as a reminder to always start with policy language when analyzing rights and obligations under a policy.  Even then, words are to be afforded their actual meaning. We expect this decision to widely cited going forward, to support the privity requirement in assessing AI status.  Thank you to Michael Gauvin for his contribution to this post.  Please email Brian Gibbons with any questions.


We Didn’t Start the Fire: First Department Uphold Denial of Building Owner’s MSJ (NY)

Living in New York City offers unmatched opportunities and experiences.  There are, of course, trade-offs – high rents, small living spaces, and old infrastructures.  Residents do the calculus and decide that living in New York justifies these downsides.  Unfortunately, living in an older building can present additional considerations, including maintenance concerns and structural issues which, can lead to lawsuits.

In Daly v. 9 East 36th LLC, the Appellate Division, First Department affirmed the lower court’s denial of defendant’s summary judgment motion.  The apartment building was built in the 1930’s and there was no evidence that any interior electrical upgrade had ever been performed.  On June 19, 2013, plaintiff, a tenant in the building, sustained personal injuries from a fire in his rent-stabilized studio apartment.  The Fire Incident Report of the fire department’s Bureau of Fire Investigation found that the fire originated in an area of electrical wiring and noted multiple extension cords plugged in to one outlet with a power strip.

Before the fire plaintiff had on multiple occasions requested to the building superintendent that more outlets be installed and showed the existing outlets were in disrepair.  Plaintiff utilized extension cords for many of his appliances as a result.  Plaintiff purportedly also complained that the fuses in the apartment would blow and shut down the electric in his apartment and occasionally the building. The super testified that he had conversations with the plaintiff regarding updating the electrical system and that the defendant had repeatedly refused to make repairs due to costs.

The court denied the defendant’s motion for summary judgment finding that there was a triable issue of fact as to whether defendant had actual or constructive notice that a dangerous condition existed in plaintiff’s apartment that it failed to remedy, specifically that plaintiff’s expert opined that the building’s 1930’s electrical system constituted a dangerous condition and whether there was notice of the same.  The majority of found that the building owner had a non-delegable duty to maintain its property in a reasonably safe condition, taking into account the foreseeability of injury to others and that it was an issue of fact whether defendant’s decision not to upgrade the electricity kept the apartment reasonably safe.  The majority was unwilling to conclude as a matter of law that plaintiff’s lifestyle and electrical consumption were above and beyond the reasonable needs of any modern tenant.

The dissent argued that the plaintiff should have adapted his electrical usage to the building’s limitations rather than seek any kind of upgrade.  Further, the dissent noted that the absence of any evidence that the building’s wiring did not meet code standards or was otherwise defective, no basis exists for imposing liability for declining to upgrade the building’s wiring to suit plaintiff’s electrical usage.

The dissent’s arguments appear reasonable and account for a common sense approach.  However, the majority, in allowing the matter to proceed, put considerable weight on the plaintiff’s expert testimony in spite of the fire marshal’s finding. Thanks to Justin Pomerantz for his contribution to this post.  Please email Brian Gibbons with any questions.

To Repair or Replace: Damages for Replacement Costs Upheld (PA)

The Pennsylvania Superior Court recently affirmed a damages award that came under appeal after defendants argued that it was not supported by competent evidence.  In 700 EBA v. Weaver’s Glass & Building, No. 1868 MDA 2016, defendants Weaver’s Glass & Building Specialties, Inc. appealed the amount of the damages awarded by the trial court in the underlying non-jury trial, which involved a dispute between Weaver and plaintiffs 700 EBA, LLC, after 700 EBA hired Weaver to furnish and install several windows in one of 700 EBA’s buildings.  After installation, 700 EBA discovered that a majority of windows contained “major window failure” and permitted water to penetrate into the building during periods of heavy rain.  Subsequently, 700 EBA sued Weaver for breach of contract for improperly installing the windows.

Following a bench trial, the trial court ruled in favor of 700 EBA and awarded $67,420.25 in damages, which included the cost of replacing the windows.  Weaver appealed the damages award on the grounds that replacement of the windows was not necessary, and that the problem could be resolved by simply repairing the existing windows, which would cost less than replacing the existing windows with brand new ones.  As evidence in support of their appeal, Weaver cited 700 EBA’s expert testimony that replacement of the windows was not necessary.

On appeal, the court articulated the standard of review applied to challenges of a non-jury verdict – whether the findings of fact of the trial court are supported by competent evidence and whether the trial court committed error in application of the law.  The trial judge’s findings of fact must be given the same weight as if they were found by a jury, however the appellate court has plenary review power to address questions of law.  As to the specific issue of damages, the appellate court stated that the evidence must be considered in the light most favorable to the trial verdict winner, and that appellate courts should defer to the trial court on decisions regarding damages.

In reviewing the award, the appellate court cited an expert report from the window manufacturer that stated that the existing window frames should be removed, as well as expert testimony from a building remediation company and a building consultant who testified that the windows should be replaced.  Additionally, the court cited expert testimony that opined that the plan to replace rather than repair the windows was reasonable, as was the quoted cost estimate.  Thus, the Superior Court ultimately ruled that the trial court did not err in its damages award based on the replacement costs of the windows, and affirmed the award.  This case offers aclear articulation of the standard of review applied by an appellate court when reviewing a damages award,  and illustrates the heightened burden that an appellant must carry.  THanks to Greg Herrold for his contribution to this post.  Please email Brian Gibbons with any questions.


Plaintiff Fails to Connect Jurisdictional Dots, Prompting Dismissal of Products Case (PA)

On October 10, 2017, the Superior Court of Pennsylvania handed down a decision affirming the dismissal of a case in Lawrence v. Robland International B.V. et al.  The case arises from a workplace injury on May 3, 2013 when plaintiff, Henry Lawrence, injured his hand while using a Robland table saw.  On October 28, 2015, Lawrence and his wife filed a complaint naming fifteen defendants, alleging strict liability, negligence, and breaches of warranty.  Several of the defendants are located in Belgium and the Netherlands.

These foreign defendants filed preliminary objections arguing that the suit should be dismissed for lack of personal jurisdiction.  The court granted their objections the Lawrence’s appealed, raising the issue of whether Pennsylvania courts could exercise jurisdiction over the foreign saw manufacturers.

When looking at personal jurisdiction, one must do so under the due process clause of the Fourteenth Amendment and see whether a defendant has maintained meaningful contacts with the forum.  This jurisdiction comes in the form of either specific or general.  Specific jurisdiction arises when a certain activity, action, or event gives rise to the exact cause of action.  For example, purposefully selling an item in a state which then causes an injury is an event that gives rise to specific jurisdiction.  General jurisdiction arises when either a corporation has its headquarters and/or principal place of business in a forum state or maintains connections with the state that are “so continuous and systematic as to render them essentially at home”.  An example would be that a company sells so many products in a single state that it is essentially at home there, even if none of those products caused an injury.

Upon review, the Superior Court found that the appellants had waived any argument as to general jurisdiction as they conceded that certain defendants did not have “constant and pervasive contacts with Pennsylvania” in their appeal brief.  The court then looked at whether there was specific jurisdiction.  In Pennsylvania, to prove specific jurisdiction one must show that a company’s specifically identified activities are covered under Pennsylvania’s Long-Arm Statute, which grants specific jurisdiction in certain situations.  Once this is shown, once must then prove that jurisdiction is proper under the Constitution’s due process clause by showing it does not offend “traditional notions of fair play and substantial justice”.

Once again, the court found that the appellants had waived their argument because they had skipped the step of showing that specific jurisdiction was proper under Pennsylvania’s Long-Arm Statute and had skipped ahead to the due process analysis.  Because of this, the court stated the record and appellate brief submitted were insufficient and failed to meet the burden of showing jurisdiction.  Plaintiff failed to set up his chess pieces properly, and ended up facing “checkmate.”  Thanks to Peter Cardwell for his contribution to this post.  Please email Brian Gibbons with any questions.

If You Appear for a “Reasonably Requested” IME, “Nationwide is on Your Side” (PA)

On October 6, 2017, the Superior Court of Pennsylvania affirmed an order entered in the Court of Common Pleas of Jefferson County, compelling Gene Moore  to submit to an independent medical examination at the request of Nationwide Mutual Insurance Company.  The case stems from a motor vehicle accident involving Moore and Amy Shiock.  Shiock was driving a motor vehicle insured through Nationwide, while Moore was riding his bicycle with no such policy.

Following the accident, Moore submitted his medical expenses to Nationwide which were subsequently paid.  Moore also received two months of treatment from Keystone Physical Therapy until he reached his treatment plateau.  Approximately one month after his release from treatment, Moore reported to Pottstown Memorial Medical Center complaining of back pain.  During treatment, Moore indicated to his medical providers that moving furniture triggered his back pain.

Moore attempted to submit his Pottstown Memorial Medical Center medical bills to Nationwide as being related to the motor vehicle accident.  Prior to deciding, Nationwide requested Moore undergo an IME, which he declined.  Thus, Nationwide filed a petition to compel an IME based on the language in the insurance policy which requires injured persons seeking benefits to submit to medical examinations as often as “reasonably requested.”  The trial court ruled in favor of Nationwide basing its decision on the petition, its exhibits, and the statutory language of 75 Pa.C.S. § 1796.

Moore filed a timely appeal arguing: (1) he was not a party to the insurance contract and therefore could not be compelled to submit to an IME; and (2) the policy provision relied upon to compel the IME is void against public policy, as it does not comply with the statutory “good cause” requirement of 75 Pa.C.S. § 1796.  The Superior Court found no issue with the trial courts statutory interpretation or its finding of good cause.  Moore claimed that the trial court specifically relied on Fleming v. CNA Ins. Co. (Pa. Super. Ct. 1991) which was patently false.  The trial court used a multitude of factors including the policy language and 75 Pa.C.S. § 1796 to make its decision.  Further, because the trial court’s decision did not rest upon an interpretation of the Nationwide policy, the court did not need to examine Moore’s claim that the Nationwide policy violates public policy.

Thus, the Superior Court affirmed the trial court’s ruling that Moore was required to submit to an IME under the policy.  It makes sense that a claimant to an insurance policy will necessarily have to comply with the directives of that insurer in order to substantiate his/her claim.   The Court’s decision is consistent with that logic.  Thanks to Garrett Gittler for his contribution to this post.  Please email Brian Gibbons with any questions.

Food for Thought Regarding Quantum of Bodily Injury Damages

As defense attorneys and claim professionals, we collectively talk about case values in nearly certain terms.  A surgically repaired meniscus is worth X, a SLAP tear is worth Y, a cervical fusion is worth Z, and so on.  (I’m not posting injury values here, lest a crafty plaintiff attorney reference our blawg at a mediation some day.)   And while the facts of a case, differing treatment histories, witness presentation, or intangible factors invariably offer reasons to deviate from our initial numbers, the injury itself does offer a starting point, a baseline.   And we develop these baselines from our experience, from verdict searches, and by assessing risk at trial.

But for the most part, the jurors who actually decide on the case values begin their jury service with absolutely no idea what an injury is “worth,” in terms of compensatory damages.

Case in point — we were recently on trial in New York County, which, compared to other NYC boroughs, trends toward more reasonable damages awards.  (Of course, this is a very broad characterization of the boroughs.)   Without getting into the specifics, plaintiff’s counsel was looking for $250,000 for her client, who was injured in a pedestrian knockdown, and already had summary judgment on liability.  We saw damages much closer to $100,000.  (The case settled after plaintiff’s testimony for $125,000.00.)

After the jury was disbanded, we spoke with one of the dismissed jurors, who was curious about how settlement talks had progressed.  (Jurors are savvy enough to realize that settlement discussions are taking place outside of their presence.)  We informed the dismissed juror that the plaintiff, who had just testified, and was not particularly endearing or sympathetic, had been seeking at least $200,000 to settle.  The juror, who was college educated, attentive, and worked for a venture capital firm, immediately responded, “Oh, is that all?  I would have thought way more.”  Yikes. Granted, we had not yet presented our witnesses, but the $125,000 settlement now looked even better.

When the jury is only asked to decide a quantum of damages, as opposed to issues of credibility, liability or causation, their calculus may be less scientific than we would prefer.  Perhaps jurors are used to seeing subway ads, which constantly remind commuters about multi-million dollar verdicts.  Or, perhaps those who work in the venture capital world, like my juror, deal with too many “zeroes” in terms of dollars, and are not ideal defense jurors for damages.   Who knows?

We continue to rely on our experience, and on intimately knowing the facts and law of our case, so we can stick to our guns on values.   But jurors do not bring the same experience into the courtroom.  It’s our job to mold their thinking toward our planned conclusion.

Watch Where You Step: 2nd Department Affirms Sole Proximate Cause Defense (NY)

New York Labor Law §§ 240(1), 241(6) are notoriously plaintiff-friendly, and liability defenses are often limited at trial.  Defenses usually center on the sole proximate cause argument, which is often difficult to prove.  However, in Melendez v 778 Park Ave. Bldg. Corp., 2017 Slip Op 06175, the Second Department  affirmed the dismissal based on the sole proximate cause defense as well as other causation based arguments.

Plaintiff and coworkers were erecting a scaffold in the yard area of the defendant’s building to make a platform even with the sidewalk.  Plaintiff was building the platform portion of the scaffold by placing wooden planks on top of steel I-beams when he stepped onto an unsecured wooden plank, causing him to fall.  Plaintiff alleged violations of Labor Law §§ 240(1), 241(6), and 200, and common-law negligence against the owner and general contractor.  The Supreme Court granted the portions of defendants’ motion to dismiss the Labor Law §§ 240(1), 241(6) cause of action.  The plaintiff appealed.

The Appellate Division affirmed the Supreme Court’s judgment.  The Court opined that in order to succeed on a cause of action alleged violation of Labor Law § 240(1), a plaintiff must demonstrate that there was a violation of the statute and that violation was a proximate cause of the accident.  In this case, the plaintiff was found to be sole proximate cause as he chose to step upon an unsecured plank that he had just seconds before placed on a narrow steel beam rather than standing upon the secured planking that was available to him and which he had used in the time leading up to the accident.

The Appellate Division affirmed the dismissal of the Labor Law § 241(6) cause of action because the alleged violations of the Industrial Code provisions were not a proximate cause of the plaintiff’s injuries, or conversely, did not apply to the facts of this case.  The Court also affirmed the dismissals of the Labor Law § 200 and common-law negligence actions as against the general contractor, determining that the plaintiff’s injuries did not arise from a dangerous condition on the premises, but from the manner in which the work was being performed.  On that basis, a defendant must have the authority to exercise supervision and control over the work to be liable.  Here, the defendant did not have the authority to control, direct or supervise the method or manner in which the work was performed.

The sole proximate cause defense is case specific and often difficult to prove.  However, this case provides an example of the Appellate Division rendering a decision, taking the events leading up to the accident into fair account.   The Court’s common sense analysis resulted in a properly affirmed dismissal. Thanks to Justin Pomerantz for his contribution to this post.  Please email Brian Gibbons with any questions.

Defendant Breached Partnership Agreement, Corporate Veil Pierced (PA)

A plaintiff in Philadelphia recently prevailed in a business dispute with his former real estate partner.  In Bravo v. 2536-38 North Broad Street Associates, C.P. Philadelphia No. 141101464, the defendant was ordered to pay his former business partner over $782,000 as a result of a breach of their partnership agreement by failing to pay the plaintiff money owed under the terms of the limited liability partnership.

According to the judge’s opinion following a bench trial, the parties formed a real estate partnership in 2010. The plaintiff initially joined as a limited partner and purchased a 10% ownership stake in the business, for which he was to receive a 10% cash flow payment from the partnership.  A few months later, the plaintiff invested additional funds in exchange for a 51% ownership stake of the business.  However, subsequently, the plaintiff did not receive his proportion of cash flow payments from the partnership, and the defendant also failed to inform him that there was a lien on one of the partnership’s properties, and that the property was listed for foreclosure sale.

During the time period in which the plaintiff did not receive his proportional disbursements, the judge also found that the defendant had transferred hundreds of thousands of dollars from the partnership to other business entities under the defendant’s control; and that the defendant had paid himself a salary from the partnership.  The defendant claimed that the money was diverted from the partnership in order to maintain his ability to secure a mortgage loan for the partnership, however the judge determined that such diversion of partnership funds was not contained in the partnership agreement between the plaintiff and the defendant.  The judge was similarly un-receptive to the defendant’s claim the plaintiff was not issued cash flow payments because the partnership was unable to obtain a mortgage loan.

Ultimately, the judge determined that the corporate veil should be pierced, since the defendant essentially ignored corporate formalities.  Morover, by failing to pay the plaintiff his proportional share of the partnership’s cash flow, the defendant had breached the partnership agreement.  We surmise that the judge’s findings relied heavily on financial data supporting the plaintiff’s claims of, essentially, theft, which supported the plaintiff’s version of events.  Thanks to Greg Herrold for his contribution to this post.  Please email Brian Gibbons with any questions.