Holiday gatherings bring together family, friends, pets, and joy… until someone gets hurt. Then the specter of social host liability raises its head. Unlike businesses which have a duty to invitees to make their premises reasonably safe, social hosts are required only to warn guests who might not appreciate the existence of a dangerous condition or discover a latent defect in the home.
In Parella v. Compeau, a Christmas dinner guest filed suit against her host for injuries sustained when she tripped over a dog lying in the hallway, near the threshold of the dining room. The plaintiff argued that, since she was a social guest, the host had a duty to warn her of dangerous conditions in the home – even sleeping dogs. She claimed that the defendants knew that the dog was lounging in the hallway and that allowing a dog to lie in front of a doorway posed a tripping hazard.
In response, the defendants argued that the plaintiff was aware of the presence of the dog in the home, and that the dog did not constitute a dangerous condition based on the size of the dog and its location in the hallway, which made him easily seen and avoided. The trial court agreed, and granted summary judgment on behalf of the defendants.
The Appellate Court upheld the dismissal, noting that the presence of the dog was open and obvious. The mere presence of a dog sleeping in a hallway did not create an unreasonable risk of harm or a dangerous condition, triggering defendants’ legal duty to warn guests walking in their home. The judges were particularly dismissive of plaintiff’s contention that the dog was below eye level.
Thanks to Heather Aquino Obregon for her contribution.
For more information, contact Denise Fontana Ricci at
A New York court recently fleshed out the concept of an unavoidable accident in a motor vehicle accident case in which the plaintiff sought summary judgment. The claim in Wood v. Deschamps arose out of a winter storm related motor vehicle accident. By all accounts, the plaintiff was entirely blameless in the accident. She had been proceeding at a reasonable speed, well below the posted limit, and within her lane of travel when the defendant’s vehicle fishtailed and entered her lane of travel. It had been snowing for some time with about 1.5″ accumulation on the ground.
The defendant had been traveling somewhat under the speed limit, in light of the weather conditions, but lost control of her vehicle as she rounded a bend. She agreed that the accident occurred quickly after she entered the plaintiff’s lane.
The defense fought plaintiff’s partial summary judgment motion on the issue of liability arguing that the emergency doctrine or unavoidable accident theory applied. The Court declined to extend the “emergency doctrine” to this situation finding that there had not been a sudden and unexpected event. Although the accident was certainly sudden, the factors leading up to it were not. The defendant admittedly knew that it was snowing and that the roads were slick as she continued on her journey.
However, the Court found that a jury could conclude that the collision was an unavoidable accident if neither party was negligent. In this case, the plaintiff was clearly free from fault as she drove at a reasonable speed and maintained control of her vehicle when she was struck by a vehicle that fishtailed into her path of travel. Similarly, the Court found that a jury could find the defendant blameless if they believed that she was traveling in a reasonable and prudent manner given the weather conditions and that her loss of control was beyond her control.
Thanks to Christopher Gioia for his contribution.
For more information, contact Denise Fontana Ricci at .
Risk transfer is only available if the transfer occurs before the risk becomes reality. Unfortunately for many, the recognition that there is a risk only comes after reality. Insurance brokers who deal in that risk transfer transaction are uniquely situated to bridge that gap. But exactly what can or should a broker do to ensure that a client understands the risk and purchases the proper insurance? In Satec, Inc. v. The Hanover Group, the plaintiff property owner appreciated the risk too late, but the court did not buy that its broker or insurer was to blame.
Satec, Inc. owned property with a warehouse and business offices in a New Jersey flood zone. It consulted with an independent insurance broker, who obtained a proposal for property coverage from Citizens Insurance, a subsidiary of Hanover Insurance. Along with the proposal, the broker provided a letter with a recommendation that Satec carefully review the limits and, in particular, consider additional coverage. Significantly, the optional coverage included flood and earthquake coverage that was otherwise explicitly excluded from the property coverage in the proposal. Satec accepted the proposal without any additional coverage.
Over the next four years, Satec renewed the policy annually. Before each renewal, the broker sent Satec a letter advising of the availability of flood and earthquake insurance, and Satec opted to renew the policy without this coverage.
Of course, the inevitable happened when Hurricane Irene struck New Jersey. The property flooded with a resulting $2.3 million in damages. Satec filed a claim with Hanover that was denied as explicitly excluded by the policy.
Satec then filed a complaint against Centric, Hanover, and Citizens. Satec alleged, among other things, a breach of contract, negligence, and professional malpractice. Upon the closing of discovery all defendants moved for summary judgment and, after precluding Satec’s expert’s testimony and opinion, the trial court granted the motion as to all defendants. On appeal Satec argued that (1) an insurance broker owes a fiduciary duty to advise the insured and no expert is needed to establish that the defendants breached this duty; (2) Satec’s expert opinion was valid; and (3) Hanover should be vicariously liable for the negligence of the independent broker, Centric.
The appellate court acknowledged that an insurance broker does owe a duty to his principal to exercise diligence in obtaining coverage in the area his principal seeks to be protected. However, expert opinion is generally needed to establish a breach of this duty. Satec’s expert, while he was able to articulate a broker’s duty of care, failed to site any authority or industry standards beyond his personal experience; thus, rendering his opinion inadmissible.
The court was not persuaded that the plaintiff could sustain the broker malpractice claim on the basis of common knowledge. This doctrine applies where “jurors’ common knowledge as lay persons is sufficient to enable them, using ordinary understanding and experience, to determine a defendant’s negligence without the benefit of specialized knowledge of experts.” Rather, the court found that the field of insurance brokerage is beyond the ken of the average juror, and, thus, expert testimony is necessary.
Satec also argued that the insurer should be vicariously liable for the failings of the broker based upon agency principles. Under this theory, it sought to impute any negligence of the broker in failing to properly assess and advise of its flood insurance needs. Significantly, the broker was an independent of the insurer and not an agent. New Jersey has long recognized that an independent broker’s actions are not imputed to an insurer. Basically, when an independent broker is making recommendations to a client, he is acting on behalf of that client, not the insurance companies.
Thanks to Marcus Washington for his contribution.
For more information, contact Denise Fontana Ricci at .
Plaintiffs get to choose litigation venue by filing a complaint in any court that meets jurisdictional rules – State or Federal. While defendants have limited means to select venue, one consideration is whether a matter can be removed to federal court. Particularly where an out of State defendant is involved in an action meeting diversity requirements, federal court may provide a more favorable venue. However, the decision must be made quickly as the rule requires removal in thirty days from service of the complaint.
In JUDITH KOERNER v. GEICO, the defendant insurer removed a UIM claim to Pennsylvania Middle District Court only after the plaintiff amended the complaint some eight months into the State court litigation. The insurer contended that the only after the amended complaint did the amount in controversy exceed the jurisdictional requirement of $75,000. The plaintiff sought remand on the grounds that the removal came well after the allotted 30 days.
The plaintiff, Judith Koerner (“Korner”) alleged that she was injured in an auto accident, when objects from an unidentified vehicle were thrust into the roadway and forced her into a guardrail. As a result, she sustained injuries for which she sought uninsured motorist benefits from her insurer, Geico, which denied the claim.
Koerner filed her original complaint in Pike County Court of Common Pleas, without a quantification of damages, but demanded an unspecified judgment in the amount to cover damages she sustained in the accident. Nearly a year later, Koerner amended her complaint, adding individual counts for breach of contract and bad faith against Geico. Notably, Koerner alleged that Geico was liable for Pennsylvania common law and statutory bad faith damages, including punitive damages (which under Pennsylvania jurisprudence can be up to ten times the compensatory award).
Subsequent to Koerner’s amended complaint, Geico filed a notice to remove the case to federal court, based on diversity jurisdiction. In support of its notice, Geico stated that the policy’s UIM limit was $15,000, noting that the demand for punitive damages in Koerner’s amended complaint satisfied the jurisdictional requirement of a $75,000 amount in controversy. Geico argued that the removal was timely because it was not until the filing of the amended complaint that it could ascertain the amount in controversy as meeting the threshold for removal.
Koerner counter-argued that Geico’s petition to remove the case was untimely because Geico should have filed for removal within 30 days of filing the original complaint. Koerner relied on 28 U.S.C. § 1446(b)(3), which states:
(3) Except as provided in subsection (c), if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.
Although the original complaint did not allege damages in excess of $75,000, Koerner argued that under 28 U.S.C. § 1446(b)(3), Geico could surmise that the amount in controversy exceeded $75,000 prior to her amended complaint, based on “other papers” including medical reports.
The Middle District denied plaintiff’s motion reasoning that the use of the word “ascertain” in § 1446(b)(3) means that the thirty-day removal period is triggered only when the documents “make it `unequivocally clear and certain’ that federal jurisdiction lies.” Because Koerner provided no basis to conclude that medical records supplied in response to a request for production of documents makes the amount in controversy ascertainable—the documents did not “make it unequivocally clear and certain that federal jurisdiction lies.” This was particularly so when the operative complaint at the time only alleged with specificity that Koerner was entitled to uninsured motorist benefits from Geico and those benefits under the policy were $60,000 shy of the amount in controversy required for federal jurisdiction. Only when bad faith was alleged did Pennsylvania’s Bad Faith statute make punitive damages in issue and, in theory, increase the amount in controversy in excess of $75,000. Therefore, federal court jurisdiction was proper.
Thanks to Sathima Jones for her contribution.
For more information, contact Denise Fontana Ricci at
In 2012, Superstorm Sandy caused millions of dollars in damages to residential and commercial property owners on the Jersey Shore. Five years later, some claims are still making their way through the Courts. The New Jersey Supreme Court granted certiorari in Oxford Realty Group Cedar v. Travelers Excess and Surplus Lines Company to interpret an insurance policy at issue in one of the Sandy claims involving flood limits coverage and debris removal coverage.
The plaintiff, a Jersey Shore apartment complex located in a flood zone, was insured by Travelers for property coverage with a $1,000,000 limitation for a flood occurrence. Travelers paid plaintiff’s $1 million claim – the full policy flood limit. However, plaintiff sought additional coverage for $207,961.28 of storm-related debris removal costs pursuant to the policy’s Property Coverage Form. Travelers denied this additional claim, and litigation ensued.
The Trial Court granted partial summary judgment in favor of Travelers finding that there was no ambiguity in the flood coverage language or the terms of the debris removal coverage. While the Court acknowledged that the policy appeared to allow additional debris removal coverage, it concluded that, “the general condition that the debris removal is an additional coverage [that] must yield to the specific term in the Supplemental Coverage Declarations that the [$1,000,000] coverage [which] applies to ‘all losses’ caused by flood.” In a subsequent motion, the Court granted summary judgment in favor of Travelers on the remaining issues and dismissed the action in its entirety. Plaintiff appealed.
The Appellate Division reversed the Trial Court finding coverage for plaintiff’s storm-related debris removal costs. The Appellate Division agreed with the Trial Court that the flood coverage and debris removal coverage were unambiguous. However, the panel ultimately concluded that the policy entitled plaintiff to a maximum of $500,000 for debris removal coverage in addition to the $1 million Flood Limits. It held that the $1 million limitation in the Supplemental Coverage Declarations applied to insured “buildings” rather than insured “occurrences.” On the other hand, the Court found that debris removal coverage applied to all “Covered Property,” not just plaintiff’s buildings. The Court interpreted the policy’s Flood Endorsement to apply “only to loss or damage to covered property caused by flood, meaning Oxford’s building” [Emphasis added]. Therefore, the Appellate Division awarded plaintiff the $207,961.28 for storm-related debris removal costs reversing the Trial Court. Travelers appealed.
Writing for a majority of the Court, Justice Fernandez-Vina held that the policy’s sublimit for debris removal coverage could not be interpreted as a self-contained policy provision separate and apart from the policy’s $1,000,000 flood limit. Once the Court decided the terms of the Policy were unambiguous, plaintiff’s reasonable expectations argument failed. This rule of contract construction is also known as verba fortius accipiuntur contra proferentem roughly translated that every presumption is construed against the drafter. In upholding the policy’s $1 million flood Limit in favor of the insurer, the New Jersey Supreme Court took the position that the contra proferentem rule is a “doctrine of last resort” when interpreting terms of a policy of insurance. “If the language is clear, that is the end of the inquiry.” In addition, the Court explained that “sophisticated commercial insureds … do not receive the benefit of having contractual ambiguities construed against the insurer.”
Thanks to Ann Marie Murzin for her contribution.
For more information, contact Denise Fontana Ricci at .
The question of whether the contents of a disclaimer letter could limit an insurer in a later denial of a property damage claim was addressed recently by the Second Department in Swanson v. Allstate. Therein, the court determined that an insurer does not waive its right to rely on an exclusion in the policy if that exclusion was not cited in the initial disclaimer letter.
Swanson owned commercial property that was vacant for six months before a fire damaged the building. Swanson made a claim for loss with its carrier, Allstate. Allstate’s initial disclaimer letter failed cite to the policy’s “vandalism” exclusion that excluded fire damages if caused by vandalism in a building left vacate for more than 90 consecutive days. Based upon the town fire investigator’s report, the fire was intentionally set, and the owner had admitted to the vacancy in excess of 90 days.
A lower court denied Allstate’s summary judgment motion finding that the exclusion was waived under Insurance Law 3420(d) because it was not mentioned in the disclaimer letter. However, the Second Department reversed finding that Section 3420(d) only applied to claims involving death and bodily injury, and hence, not applicable to a pure property damage claim.
Thanks to Georgia Coats for her contribution.
For more information, contact Denise Fontana Ricci at .
Senior Partner Paul Clark and Associate Peter Luccarelli III successfully convinced the Appellate Division, First Department to reverse a New York County trial court’s decision denying our client’s motion for summary judgment in an alleged sexual assault case. Lerner involved a claim of a 19 year old participant in an overseas trip by our client, a charitable and religious organization. At the end of the day’s sponsored activities, plaintiff and several other trip participants, all of whom were of legal drinking age, retired to the hotel bar. At the hotel bar, plaintiff met, and later left with other male hotel guests who were not members of the trip. Hotel personnel later found plaintiff disoriented in a hallway, and the investigating officers determined that she may have been sexually assaulted and possibly drugged by her assailants. Plaintiff filed suit against our client for allegedly failing to properly supervise her and prevent her assault at the Hotel after all sponsored activities were over.
We moved for summary judgment on the basis that there was no duty to supervise an adult who drank in a hotel bar not owned, maintained, or controlled by our client. We further argued that any duty of care owed by our client to plaintiff was severed by the acts of the criminal third-parties who were unknown to our client. The trial court initially denied our motion on the basis that our client failed to prevent plaintiff from drinking excessively. On appeal, the First Department unanimously reversed the trial court order and granted our motion for summary judgment. The First Department held that even assuming a duty to prevent an adult plaintiff from drinking excessively, there was nothing our client could have done to prevent plaintiff’s alleged assailants from perpetrating an unforeseeable—and unfortunate—criminal act against her.
If you have any questions about this post, please email Paul at .
May you live in interesting times!—a blessing and a purported Confucian curse.
On late Tuesday afternoon my iPhone 7 pinged: Trump fires Comey. The next morning, sleepy-eyed, and really focused on the day’s crossword puzzle, I snatched the NYT and WSJ from outside my apartment door and opened both to the editorial page. The NYT blared: A Saturday Night Massacre akin to dismissal of Watergate prosecutor Archibald Cox. The WSJ said, in essence, Comey had to go: Why did it take so long? Interesting times, indeed.
But political alliances aside (and here I mask my views), POLITICS do matter in insurance, As defense and coverage counsel, we must assess risk, venue by venue, bench by bench, bias by bias, appointment by appointment; How, in the relevant jurisdiction do the sitting judges view insurance contracts: “As written” or in light of the “reasonable expectations” of the insured. Of course, other variables do exist, but political leaning is a factor that must be digested. Why else, for example, is Judge Gorsuch’s elevation to the high bench deemed such a liberal defeat (when his job is to “apply the law” as written)?
We don’t have any definitive answers. But our job is to predict, to forecast, the ultimate outcome of a legal controversy. As such, we take on board the political climate of the jurisdiction controlling the outcome. But, in these interesting times, WCM begs your indulgence, because the leaves, on the bottom of the cup, are susceptible to differing interpretations. Meanwhile, embrace the interesting times in which we live and work.
If you have any questions about politics and insurance, please call or email Dennis.
When an accident occurs and someone has an unfortunate injury, must someone else always be responsible? A creative lawyer can theorize a duty that has been breached in almost any scenario. However, whether they can raise that theory beyond speculation is the issue. At the end of the day, it depends on what facts can be proven to support the theory.
In Latuso v. Maresca, the plaintiff commenced a personal injury action arising out of a motorcycle accident allegedly caused by an errant garbage can that had blown into the roadway. When he swerved to avoid it, his motorcycle contacted sand on the roadway causing him to lose control and hit a tree on the defendants’ property. Seeking a culpable party, the plaintiff concluded that the defendants had to be negligent for placing their garbage can on a berm near the roadway in windy conditions.
The defendants countered that they had not created nor did they have notice of the condition of which the plaintiff complained. While the defendants did not persuade the motion judge who denied summary judgment, the Second Department was swayed and reversed finding that there was no triable fact citing the principle that “mere conjecture, suspicion or speculation is insufficient to defeat a motion for summary judgment.”
Thanks to Lauren Tarangelo for her contribution.
For more information, contact Denise Fontana Ricci at .
In a case of first impression, a New Jersey appellate court issued a “bright line” rule disallowing expert opinion on the concept of symptom magnification, malingering, or any other negative terminology impugning a plaintiff’s believability.
In Rodriguez v. Wal-Mart Stores, Inc., the plaintiff filed suit after she allegedly sustained injuries in an un-witnessed incident involving a metal display rack alleged to have fallen on her while shopping. At trial, the plaintiff’s medical experts diagnosed Complex Regional Pain Syndrome. The defense presented the testimony of an expert neurologist who testified that the plaintiff had some initial soft tissue injury but no damage to her nerves. He denied that the plaintiff had any objective findings to support the diagnosis of Complex Regional Pain Syndrome. Further, he opined that the plaintiff was exaggerating and magnifying her injury symptoms. The jury returned a defense verdict.
On appeal, the court found that the defense expert’s opinion was an improper attack on the plaintiff’s overall credibly. Ultimately, the Appellate court held that such opinion evidence from a doctor should be categorically disallowed at trial.
The Rodriguez opinion is important since it will restrict defense medical experts from classifying a plaintiff as a malingerer during trial. We note that a qualified expert may still testify that a plaintiff’s subjective complaints appear to be inconsistent with objective medical testing, without using labels such as “malingerer” or “symptom magnification.” Going forward, it will be important for defense expert witnesses to properly frame any testimony surrounding inconsistent subjective complaints so that the testimony will be admissible at trial.
Thanks to Heather Obregon for her contribution.
For more information, contact Denise Fontana Ricci at .
