Intruder Alert: Blame the Landlord (NY)

The decedent-plaintiff was delivering meals to the elderly at a New York Housing Authority-owned building.  He was in the building’s lobby when an unidentified assailant entered the building and fatally shot the plaintiff.  The Housing Authority moved for summary judgment, arguing that the building’s entrance door lock was functional at the time of the shooting.  The Supreme Court granted the motion and dismissed the plaintiff’s complaint.

On appeal, the Second Department clarified that a plaintiff could recover against a landlord when inadequate security is alleged only if the injury was caused by an intruder (not a tenant or a guest of a tenant) and only if the assailant gained access to the premises through a negligently maintained entrance.  Further, there must be a causal link between the landlord’s negligence and the attack.  In reviewing the record, the Second Department held that, while the front door lock was working at the time of the incident, there was still an issue of fact as to whether the accident was caused by a negligently maintained entrance.  In other words, given that the assailant entered through the front door, it was up to a jury to determine whether the landlord failed to provide proper protection to the plaintiff given that he somehow made it inside the building.

This Aminova, etc., et al. v. New York City Housing Authority decision calls into question whether a landlord has to go above and beyond when it comes to maintaining a safe premises.  Specifically, this decision seems to imply that a fully functioning door lock, which may have been left open/unlocked by a tenant, might not be enough security to protect a landlord from facing liability for injuries caused by non-tenants.  It also calls into question whether a landlord’s possible liability exposure is contingent on the landlord having notice of prior instances where intruders have entered a building or whether such prior breaches of the security system are not necessary in order to find liability against the landlord.

Thanks to Georgia Coats for her contribution to this post. Please email Vito A. Pinto with any questions.

When a Verdict’s Too Good to be True (NY)

A recent Second Department decision in Avissato v McDaniel reminds defense practitioners the best time to settle a case may in fact be after an apparent victory.  The underlying fact pattern is a common one:  plaintiff was stopped at a red light when defendant driver rear-ended plaintiff’s vehicle.  Unsurprisingly, plaintiff prevailed on a summary judgment as to liability and the case proceeded to a trial as to damages.  2019 NY Slip Op 00084 (2d Dep’t. 2019).

The jury found the accident was the proximate cause of plaintiff’s injuries and resulted in a permanent consequential limitation of use of a body organ or member as a result of the accident—in other words, they found plaintiff’s injuries qualified as a serious injury under the Insurance Law, and that plaintiff would have symptoms moving forward into the future.

However, the jury award was for $12,500 for past pain and suffering and $12,500 for past medical expenses with no award for future damages.  Although plaintiff’s motion to set aside the verdict as against the weight of the evidence was initially denied, on appeal, the Second Department reversed and remanded for a new trial on the issues of damages for past and future pain and suffering.  The Second Department reasoned the verdict was inconsistent in awarding no damages for future pain, given their conclusion plaintiff had sustained a permanent injury, and that the award for past damages was too low.

We do not know the details of any settlement negotiations.  However, one suspects defendants were pleased with the jury verdict, despite the obvious inconsistencies it contained.  Instead of reaching an economical settlement at that point with the leverage of the verdict in their pocket, defendants are now faced with the costs of a second trial and opposing plaintiff’s successful appeal.  Even in a moment of victory, defendants should evaluate whether a settlement is the best option anyway.

Thanks to Nicholas Schaefer for his contribution to this post. Please email Vito A. Pinto with any questions.

“Fallin’ in the Rain” – Concert Venue’s Wet, Grassy Slope is not a “Dangerous Condition” (NJ)

In Spigai v. Live Nation Worldwide, Inc., et al., the plaintiff and friends attended a concert at the PNC Bank Arts Center in Holmdel, New Jersey. After parking in one of the commuter lots, at the foot of a grassy hill, the plaintiff and her friends took a courtesy shuttle bus to the venue. Unfortunately for concertgoers, rain started early in the day and continued throughout the concert. After being separated, the plaintiff elected to walk with a crowd to her car rather than waiting for a shuttle. Although the commuter lot is accessible via a staircase, the plaintiff followed others down the wet, grassy slope to her vehicle. Mid-descent, she slipped and broke her leg. She subsequently filed suit against the owner and operator of the venue.

The PNC Bank Arts Center is owned by the New Jersey Turnpike Authority/Garden State Parkway (“Turnpike Authority”) and is operated by Live Nation Worldwide, Inc. (“Live Nation”). Following discovery, defendants moved for summary judgment. The Turnpike Authority argued it was immune from liability under the Tort Claims Act. Live Nation, for its part, argued it did not breach a duty of care to the plaintiff. Plaintiff, in opposition, relied on an affirmative expert report opining that defendants failed to adequately assess the risk of accidents, failed to have a surveillance plan, failed to provide physical barriers, and performed negligent crowd control. The trial court, unpersuaded by the affirmative expert, granted summary judgment to all defendants.

Plaintiff appealed, arguing the trial judge misapplied the summary judgment standard by refusing to submit the issue of liability to the jury. In upholding the trial judge’s ruling, the Appellate Division agreed that the grassy slope, even wet with rain, did not constitute a “dangerous condition.” Permitting the existence of a natural hill, on the land, made wet from the weather, was not palpably unreasonable. The Appellate Division further agreed that the obvious nature of the wet grass on the hill made it impossible for the plaintiff to recover against Live Nation, as its duty of care did not extend to warning the plaintiff that grass is slippery when wet or to take steps to prevent walking down the hill in the rain instead of using the provided staircase.

Despite plaintiff’s injury, the defendants provided adequate legal accommodations to concertgoers to account for their safety. Thus, although injuries may occur on commercial premises, it is important to conduct thorough investigations and establish a comprehensive record that accounts for any and all distractions and contributing factors. Here, by establishing that the plaintiff was on her cell phone, traversing a wet, grassy hill wearing flip-flops and carrying a chair and tarp, the facts aligned with premises liability case law to support granting summary judgment to each defendant.

Thanks to Brent Bouma for his contribution to this post. Please email Vito A. Pinto with any questions.

Up Against the Wall: When an Exception Negates a Tort Liability Defense for Governmental Immunity (PA)

We have all heard the saying or experienced the frustrating phenomenon of “hitting a brick wall.”  Well imagine literally running and colliding into a wall made completely of cement. This encounter is the basis of the case, Brewingon v. City of Philadelphia, which was decided by the Pennsylvania Supreme Court on December 28, 2018.  In this case, a 9-year old student ran and fell into a cement wall while participating in gym class, which led to injuries that persisted following the incident.  His mother filed suit in the Philadelphia County Court of Common Pleas against the school and school district.  Her argument was that the defendants should be held liable for negligence for not padding the cement walls, which allowed for her son’s injuries.  The defendants filed a motion for summary judgment, which the trial court granted, asserting immunity from liability.  The Commonwealth Court reversed the lower court ‘s decision stating that the school fell into an exception that negated the immunity.

The Political Subdivisions Torts Claims Act allows for governmental immunity for local governmental entities.  Under this Act, the child’s school and school district could have been immune from liability for the injuries sustained in the incident.  However, the Act allows for exceptions that can exclude the immunity.  In this case, the exception at issue is the real property exception.  This exception states that a local entity will be held accountable for tort liability if (1) they would have been liable under statutory or common law without protection of the Act; (2) defendants’ “negligent acts” caused the injury; and (3) the defendants were responsible for the “care, custody, or control of [the] real property”.  The parties argued whether the issue was the lack of padding on the wall, which would be classified as personalty and not apply under the exception, or an issue of realty, meaning that the wall was part of the structure of the property under the agency’s control and thus leads to liability.  Each party discussed previous cases of similar school-related incidents in an attempt to strength their arguments.

The Supreme Court found in favor of the mother’s argument by stating that ultimately, the cement wall, which is part of the school’s realty, caused the child’s injuries.  The school is responsible for maintaining the wall in such a way as to avoid tort liability.  The school argued that they were not liable because of the gym teacher’s negligent supervision.  The Court rejected this argument by stating that the mother never asserted this claim and it does not dismiss the fact that the school was responsible for the wall, which caused the harm.

The bottom line is that in cases where local government entities may be immune from tort liability for incidents that occur on their premises, if the cause of the injury is a piece of realty on their property that they are responsible for, then liability remains on the table.  Therefore, local entities may have hit a (cement) wall when it comes to avoiding these exceptions.

Thanks to Gabrielle Outlaw for her contribution to this post. Please email Vito A. Pinto with any questions.

Middle District of Pennsylvania Dismisses Bad Faith Claim Against Underinsured Motorist Claim for Inadequately Pled Complaint (PA)

The Middle District of Pennsylvania recently dismissed a bad faith claim which lacked adequate factual support that an insurance company acted unreasonably in valuing an underinsured motorist claim.  In Clarke v. Liberty Mutual Insurance Company and LM General Insurance Company, the Court granted an insurer’s Motion to Dismiss and dismissed the matter without prejudice once it found that the plaintiffs’ complaint did not state a plausible bad faith claim.

The lawsuit arose when the plaintiff, Angela Clarke, was injured in a motor vehicle accident with an underinsured motorist.  Angela Clarke and her husband (“Plaintiffs”) settled their claim with the underinsured motorist for the policy limits of $15,000.00 and later sought out additional benefits from Liberty Mutual Insurance Company and LM General Insurance Company (“Defendants”).  The Defendants refused to provide the additional benefits because they believed that the Plaintiffs’ claim was not worth more than the amount they already received from the initial settlement.  As such, the Plaintiffs alleged that the Defendants breached the terms of their insurance agreement and acted in bad faith in violation of Pennsylvania law, 42 Pa. C.S.A. § 8371.

In response, Defendants moved to dismiss the bad faith claim, arguing that the Plaintiffs’ claims were devoid of any well-pled factual allegations of bad faith and that the complaint only pled a disagreement as to the value of their claim.  In siding with the Defendants, the Court determined that the Plaintiffs failed to plead adequate factual mater to support the allegation that Defendants did not act reasonably in valuing the underinsured motorist claim.  The Defendants Motion to Dismiss was granted without prejudice and the Plaintiffs were able a further amended complaint to set forth sufficient facts to state a plausible bad faith insurance claim.

In reaching its conclusion, the Court reviewed the standard for recovery in a bad faith action which requires a plaintiff to “present clear and convincing evidence (1) that the insurer did not have a reasonable basis for denying benefits under the policy and (2) that the insurer knew of or recklessly disregarded its lack of a reasonable basis.”  Rancosky v. Washington Nat’l Ins. Co., 170 A.3d 364, 365 (Pa. 2017).  In deciding whether an insurer has a reasonable basis for denying benefits, a court examines the factors the insurer considered in evaluating the claim.  The Court explained that “[b]ad faith claims are fact specific and dependent on the conduct of the insurer vis á vis the insured.”  The Court noted that, in this case, the Plaintiffs’ claim was simply that that the Defendants acted in bad faith without providing any factual support to establish that claim.  Rather, the Court explained, the Plaintiffs would need to provide details as to how the Defendants allegedly acted unreasonably in valuing the claim.  The Court also emphasized that, as a general matter, an insurer’s failure to immediately accede to a demand for the policy limit cannot, without more, amount to bad faith.  Thus, the Court did not find that the Defendants violated § 8371 and granted their Motion to Dismiss.

Thanks to Zhanna Dubinsky for her contribution to this post. Please email Vito A. Pinto with any questions.

Be Careful What You Wish For (NY)

In Karras v Margaret Tietz Ctr. for Nursing Care, Inc. the Court assessed a motion to re-argue a prior decision to dismiss for lack of capacity. The initial suit listed “Marina Karras, as Proposed Administratrix of the Estate of Georgina Goyanes, deceased” as the plaintiff.  The Court also amended the initial caption to eliminate the word proposed.

Though Courts in New York are often liberal in their allowance to amend and cure defects.  However, in this case the Court determined that this initial error could not be cured, as the plaintiff did not have standing the bring the suit, even though it was demonstrated that Marina Karras did eventually gain Letters of Administration and became the administratrix of the estate of Georgina Goyanes.

This case serves as an important lesson for litigators who do not specialize in estate work when dealing with a deceased litigant.  Often the practice of law leads us to encounter close relatives of our clients, some of which we may work with often.  Notwithstanding how inevitable it may seem that a close family member becomes substituted for a client, litigants must allow that process to formalize before taking further action.  Similarly, when an adverse party deceases, do not necessarily trust the actions of adverse counsel, as they may have overlooked formalized proceedings and purport to represent someone who they have no fiduciary or legal relation to.

Thanks to Christopher Gioia for his contribution to this post. Please email Vito A. Pinto with any questions.

Examinations Under Oath: Helpful Whether the Insured Appears or Not (NY)

Examinations under oath or “EUOs” are an excellent tool to flesh out the details of a claim which at first glance appears confusing or suspicious. The New York Supreme Court recently issued a reminder that these proceedings are not a mere formality, but a condition precedent for coverage at all.

In Nationwide Affinity Ins. Co. of Am. v. Jamaica Wellness Med., P.C.,the claimant submitted bills for medical treatment rendered pursuant to a no-fault insurance policy.  However, the principal of the claimant had previously been found guilty of Medicare fraud, and there was reason to believe he was himself hospitalized at a time when some of the services claimed were rendered.  2017 NY Slip Op 32943(U)

The insurer served the claimant with four notices requesting an EUO, one in each of July, August, September, and October of 2016 and the claimant failed to appear.  The insurer commenced a declaratory judgment action, arguing no coverage whatsoever was owed under the policy for this failure to appear, submitting affidavits explaining the reason for the necessity of the EUO and attempts to serve the claimant with the proper notices.

Judge Greenwood granted the insurer’s motion for summary judgment, ruling the claimant had violated a condition precedent to coverage, contained both within the insurance policies at issue and the relevant regulation governing no-fault insurance, which vitiated the contract as a matter of law.

When in doubt, an EUO can shed important light on critical areas in questions of coverage—and, sometimes, if the insured fails to cooperate, may provide a basis to disclaim coverage in its own right.

Thanks to Nicholas Schaefer for his contribution to this post. Please email Vito A. Pinto with any questions.

Explicit Insurance and Lease Language Govern Ruling on Primary or Excess Coverage (NJ)

In Lopez v. Palin Enterprises, Associated, the New Jersey Appellate Division reversed a trial court’s decision that a tenant’s insurance policy provided coverage to the landlord as an additional insured that was excess over the landlord’s own insurance policy where the lease did not require the coverage to be primary.

Palin Enterprises, Associated, owned a commercial property and leased part of it to Agile Trade-Show Furnishings, Inc. An Agile Trade-Show employee became injured while using a freight elevator inside the leased premises. Palin, the building owner, tendered the defense to the tenant’s insurer: Wausau Insurance (Wausau). The owner argued it was entitled to primary insurance coverage as an additional insured under the tenant’s policy. The trial court agreed and ordered Wausau to provide primary insurance to the property owner.

On appeal, Wausau argued that the “other insurance” language in its policy meant that it provided coverage in excess of the primary insurance policy issued by the property owner’s insurer: Greater New York Mutual Insurance Company. Specifically, the Wausau policy stated that it “shall be excess over any other insurance available to the additional insured whether such insurance is on an excess, contingent, or primary basis, unless [] obligated under a written agreement to provide liability insurance [] on any other basis.” According to Wausau, this policy language supported its position that its policy applied to excess coverage only.

The New Jersey Appellate Division agreed with Wausau and reversed the trial court’s order. After conducting a review of the insurance policy, the appellate court found that Agile Trade-Show did not have a contractual obligation to obtain primary insurance for the property owner. Since the lease agreement was a “written agreement,” it could require its tenant to procure primary liability insurance. The lease agreement here, however, did not specify the type of coverage required under its terms. Because the written lease agreement did not specify that the tenant was required to obtain primary coverage, the property owner was afforded excess coverage.

Thanks to Brent Bouma for his contribution to this post. Please email Vito A. Pinto with any questions.

One Method of Defense to Claims of Bad Faith: 12(b)(6) Motions (PA)

On September 11, 2016, Anita Das, a newly enrolled student at the University of Pennsylvania who had only recently moved into a new temporary apartment for the school year, was riding her bicycle in Philadelphia when she was struck by another motorist on the road.  Unfortunately, she suffered catastrophic injuries.  Although Ms. Das settled with the driver, the settlement was insufficient to cover the total loss she suffered in the accident.   Accordingly, Ms. Das turned to her parents’ automobile insurance policy, which contained underinsured motorist coverage and benefits for “resident relatives.”  After disclaiming UIM coverage to Ms. Das, Amica Mutual Insurance Company (“Amica”) commenced a Declaratory Judgment Action against Ms. Das and her parents (“Das”) in the United States District Court for the Eastern District of Pennsylvania.  Subsequently, Das filed an answer, which included counterclaims against Amica for three causes of action: (1) Ms. Das is entitled to UIM benefits as an insured “resident relative” under the Amica insurance policy; (2) breach of contract; and (3) Amica withheld benefits under the Amica insurance policy in bad faith.  Das also sough relief for punitive damages pursuant to Pennsylvania’s bad faith statute, 42 Pa. C.S. § 8371.

In response, Amica filed a motion to dismiss the bad faith claim for failure to allege sufficient factual allegations and the damages claim for failure to state a claim upon which relief can be granted.  Ultimately, for reasons addressed below, the Court granted Amica’s motion to dismiss for failure to state a claim and ordered Das to file a second amended counterclaim for bad faith and punitive damages (and held that if Das elected not to proceed, such claims would be dismissed with prejudice).

To support its decision, the Court in Amita Mut. Ins. Co.v. Anita Das, et al., applied long-standing principles of federal civil procedure in conjunction with the elements under Pennsylvania’s bad faith statute, which entitles insureds to recover punitive damages, interest, attorney’s fees, and court costs if the insurer is found to act in bad faith when investigating a claim.  In doing so, the Court determined that Das failed to allege any specific facts meeting the threshold to overcome a motion to dismiss.  First, the Court noted that Das simply recited the elements of a bad faith claim, instead of asserting “fact specific” allegations regarding Amica’s conduct in handling and evaluating Ms. Das’ claims for UIM benefits.  In this regard, Das’ failure to assert any factual averments relating to howAmica lacked a reasonable basis in its interpretation, administration, investigation, or delay of UIM benefits to Ms. Das or describing “who, what, where, when and how the alleged bad faith conduct occurred” was detrimental to Das defeating Amica’s motion.  Second, the Court emphasized that, since an insurer’s delay in settling a claim is a relevant factor in determining whether bad faith occurred, Das failure to detail any dates was also harmful.

This decision exposes a significant barrier for bringing bad faith claims in federal court under Pennsylvania substantive law.  It also illuminates a mechanism for insurers to combat such claims early in litigation.   Yet (and possibly most significant) it reminds us of the detail required when asserting claims, crossclaims, and counterclaims in federal court.

Thanks to Lauren Berenbaum for her contribution to this post. Please email Vito A. Pinto with any questions.

Eastern District of Pennsylvania Determines Insurer’s Declaratory Action Unripe (PA)

The Eastern District of Pennsylvania recently denied a Motion to Dismiss a Declaratory Judgment Complaint as premature when there was yet to be liability found against the insureds in the underlying actions.  In First Specialty Insurance Corporation v. Hudson Palmer Homes, Inc. et al., the Court denied an insurer’s Motion to Dismiss and dismissed the matter without prejudice once it found the case to be unripe.

The underlying matter arose in state court and involved ten construction defect lawsuits that alleged systemic construction defects involving improperly installed stucco on multiple homes. At the time of the stucco installation, an insurance policy was issued to Hudson Palmer Homes, Inc. and the Cutler Group, Inc. (collectively, “Cutler”) by First Specialty Insurance Corporation (“First Specialty”).  This policy provided insurance for “property damage” caused by an “occurrence” defined in pertinent part as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”  The policy at issue has a $1 million per “occurrence” limit and a $2 million aggregate limit for “products-completed operations.”

Stemming from the state court matter, First Specialty brought a declaratory judgment action to determine the extent of its coverage obligations under the policy.  First Specialty sought a ruling that: (1) all damages alleged arose out of a single occurrence and were subject to a $1 million per occurrent limit of liability; (2) First Specialty’s duty to defend and indemnify Cutler was to be extinguished after the $1 million per occurrence limit of liability; (3) any and all declarations necessary for the resolution of that dispute; and (4) an award of reasonable attorneys’ fees and costs.  Opposing this position, Cutler maintained that the damages were not subject to the single occurrence limitation and First Specialty’s Motion to Dismiss should be found unripe.

At the time the lawsuit was filed, liability had not been established within the state court action. Furthermore, First Specialty was not denying its duty to defend Cutler but only attempted to limit its exposure to the single occurrence limitation when it filed its Motion to Dismiss.  As such, the Court determined that First Specialty’s declaratory judgment actions was not ripe and must be dismissed without prejudice.

In reaching its conclusion, the Court determined that the parties lacked adverse interests because First Specialty had not contested its duty to Cutler in the underlying action and because any determination of First Specialty’s indemnification obligation would be premature until Cutler was actually held liable for any claim within the policy. The Court utilized the three-factor test laid out in Step-Saver Data Sys., Inc. v. Wyse determine whether ripeness existed.  The three-factor test required the Court to evaluate: (1) the adversity of the interest of the parties; (2) the conclusiveness of the judicial judgment; and (3) the practical help, or utility, of that judgment.

First, the Court concluded that, because First Specialty did not dispute that it had a duty to defend Cutler under its policy, there was no adversity of interest.  Next, the Court determined that the insufficient record rendered the matter inconclusive and inappropriate for judicial resolution by way of declaratory judgment.  The Court emphasized that “[b]ecause there has been no ruling in the Underlying Actions on the conduct for which Cutler defendants are liable, the Court has no way to determine what conduct, if any, would provide for liability under the Policy.” Finally, when considering the utility of judgment, the Court determined it did not have an adequate record for ruling on First Specialty’s indemnity obligations and could not provide a declaratory judgment of “significant utility.”  As all three factors weighed against the finding of ripeness, the Court denied First Specialty’s Motion to Dismiss without prejudice.

Thanks to Zhanna Dubinsky for her contribution to this post. Please email Vito A. Pinto with any questions.