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Author Archives: Vito Pinto
Recreational Sports Participants Require Showing of Reckless or Intentional Conduct (NJ)
In C.H. v. Rahway Board of Education, a minor fourteen year old plaintiff (“C.H.”) was injured while participating in a student-teacher fundraising basketball game. Student participation was voluntary and the game was officiated by at least one referee. The minor plaintiff injured her knee retrieving a rebound after being boxed out by an adult teacher. The teacher was whistled for a foul; a few years later, the school district was served with a complaint.
The facts describe normal activity that occurs when players attempt to make rebounds during a basketball game. Plaintiff C.H. testified that she and the teacher both jumped to retrieve a rebound. The teacher, however, “shove[d] back,” which caused her to land off-balance after their upper bodies collided. This off-balance landing caused her to injure her knee. C.H. subsequently filed a claim seeking damages for negligent supervision and recklessness. After the discovery phase ended, the school district moved for summary judgment as a matter of law.
The trial court ruled for the school district. The court noted that C.H. failed to present any evidence that the district had engaged in negligent supervision, considering (1) the game was officiated by a referee, (2) five non-participating teachers supervised, and (3) C.H. failed to show how the injury could have been prevented by further supervision. The trial court also ruled that a participant in a recreational sport activity cannot assert a claim of mere negligence against a co-participant; instead, a plaintiff must show that the co-participant engaged in reckless or intentional conduct that caused the injury.
On appeal, a unanimous Appellate Division panel upheld the trial court’s grant of summary judgment.
Although school officials have a duty to supervise children in their care, that supervisory duty extends to “foreseeable dangers … [that] arise from the careless acts or intentional transgressions of others.” Frugis v. Bracigliano. 177 N.J. 250, 268 (2003). The undisputed facts in this case, based on deposition testimony and first-hand accounts, did not reveal a game being conducted in a reckless or out-of-control manner. C.H.’s injury therefore was not the result of lacking supervision, or a breach of a school official’s supervisory duty, but rather her participation in a recreational sport activity.
Participants in recreational sports that cause injuries to other participants in a recreational sporting activity cannot be found liable for simple negligence. “[T]he duty of care applicable to participants in informal recreational sports is to avoid the infliction of injury caused by reckless or intentional conduct.” Schick v. Ferolito, 167 N.J. 7, 12 (2001) quoting Crawn v. Campo, 136 N.J. 494, 497 (1994). Since C.H. conceded that the teacher was not trying to injure her intentionally, the court looked for genuine issues of material fact showing the teacher acted recklessly when he jumped for the rebound. It found none.
Finally, and perhaps most importantly, the court rejected C.H.’s argument to impose a negligence standard in connection with the parties’ teacher/school official-student relationship. Rather than conduct an analysis examining the interplay between a school official’s duties to his or her students, the court simply ruled the facts in the record did not demonstrate that the teacher used his position to conduct himself any differently than a normal basketball player. As a result, there is no basis to impose a greater duty on him than any other participant in a recreational sporting activity.
Thanks to Brent Bouma for his contribution to this post. Please email Vito A. Pinto with any questions.
Close Only Counts in Horseshoes, Hand Grenades, and the Duty to Defend (NY)
In New York, it is well-settled an insurer’s duty to defend arises whenever the allegations in a complaint are even potentially within the language of the insurance policy. The duty to indemnify is narrower, as even where there is a duty to defend, there may still be an issue of fact as to whether the underlying occurrence was within the scope of coverage. The Second Department recently reiterated how broadly Courts will interpret the scope of these obligations.
In One Reason Rd., LLC v. Seneca Ins. Co., Inc., a landlord sought coverage from Seneca as an additional insured under a tenant’s policy for an underlying personal injury action. Seneca argued the policy did not cover the claim because the alleged accident did not occur on the portion of the property which had been leased to the tenant and the policy only applied to liability arising out of ownership, maintenance or use of “that part of the premises.”
However, the Court held Seneca owed the landlord both a duty to defend and indemnification. Although the alleged injury was a slip and fall on snow and ice in the parking lot, the Court observed the tenant had leased a portion of the warehouse and parking lot and “any necessary easements, privileges or rights of way over the adjoining premises.” Taken together with the tenant’s obligations to contribute to the maintenance of common areas and the extremely broad interpretation of the phrase “arising out of,” the Court held the accident occurred on a portion of the property which was part of the tenant’s lease.
The ruling is a salutary reminder that courts can be creative in finding coverage even when an insurer believes they have limited the coverage grant in their policies.
Thanks to Nicholas Schaefer for his contribution to this post. Please email Vito A. Pinto with any questions.
Estopped from Disclaiming (NY)
In a recent decision, the Second Department reminded defense attorneys and insurers that coverage analysis is a continuing obligation, not merely a binary yes or no decision at the time a claim is made.
The plaintiff in Mazl Bldg., LLC v. Greenwich Ins. Co. was added as an additional insured on a policy purchased from the defendant by a third party. Accordingly, when plaintiff was sued for personal injury, the defendant accepted plaintiff’s tender, agreeing to defend and indemnify plaintiff.
One year later, the defendant learned plaintiff had previously assigned its indemnification rights to a third party. Although this would be a basis to disclaim coverage and withdraw, the defendant continued to defend the case. In fact, defendant did not attempt to disclaim until almost four years after learning about plaintiff’s assignment, after jury selection had already been completed. Plaintiff was forced to settle the case out of pocket and pursue the defendant for reimbursement.
The Second Department affirmed plaintiff’s summary judgment motion in its resulting declaratory judgment action, ruling the defendant was estopped from disclaimer. The Court highlighted defendant’s failure to, at the very least, serve a Reservation of Rights promptly when it learned of a potential basis upon which to disclaim coverage.
While this decision does not posit a bright line rule or specific time period wherein an insurer should disclaim coverage when it learns of facts vitiating the policy, defense counsel and insurers should take note. Just because coverage may appear to exist at the outset of a case, new facts may arise which permit disclaimer at a later date. And should those facts arise, counsel and insurers must act promptly, or they may waive an opportunity to get out of a case. At a minimum, when in doubt, a reservation of rights could go a long way as a failsafe measure.
Thanks to Nicholas Schaefer for his contribution to this post. Please email Vito A. Pinto with any questions.
The “Long-Arm” of the Law (NY)
This interesting New York action arose out of a crane accident that occurred in 2015. In Jones v 260-261 Madison Ave. LLC, Marine & Industrial Supply Company (MISC) made a motion to dismiss all claims against it arguing the court lacked personal jurisdiction. MISC manufactured a sling that snapped and caused plaintiff’s injury, while 260-261 Madison Ave. LLC owned the premises and Skylift operated the crane.
MISC argued that it could not be subject to personal jurisdiction in New York as it was an Alabama company with its principal place of business in Mobile, and the sling sale negotiations took place in Alabama and Connecticut. MISC argued that it did not therefore have any contact with New York and was not subject to jurisdiction.
Skyline and Madison argued MISC is subject to general in personam jurisdiction in New York pursuant to CPLR§301 because MISC solicited business through its website and advertised it would be present at an expo in New York. Alternatively, Skyline and Madison argued that Marine is subject to “long-arm” jurisdiction pursuant to CPLR§301(a)(3)(i) and (ii).
The Court ruled that MISC held itself out as a national vendor, derived revenue from interstate commerce, has offices in more than one state and conducted business in New York through its attendance at the Buffalo, New York expo. Further, Skyline and Madison provided proof that MISC was registered as an interstate carrier with the U.S Department of Transportation. This showing was sufficient to establish that the exercise of personal jurisdiction over MISC by this court was not a frivolous argument. Therefore, the Court denied MISC’s motion for dismissal without prejudice to renew upon the completion of limited discovery on the issue of personal jurisdiction.
Thanks to Jonathan R. Avolio for his contribution to this post. Please contact Vito A. Pinto with any questions.
Exploding Gas Not Utility Company’s Fault (NY)
In Deitrick v. Long Island Power Authority, Hurricane Sandy uprooted a tree in front of the plaintiff’s neighbor’s home. In the process, the tree disturbed the natural gas service line leading to the neighbor’s home. An explosion ensued, sending debris into the plaintiff’s home and injuring the plaintiffs. Keyspan Gas, the utility company responsible for this gas line, moved for summary judgment and the lower court denied its motion.
Upon appeal, the Second Department found that utility companies can only be held responsible for accidents that occur as a result of their negligent installation or negligent maintenance of their systems. Specifically, the Appellate Division held that utility companies cannot be expected to unearth their entire system and go beneath sidewalks and roadways to inspect for possible defects. Rather, there has to be some warning or notice alerting the company of a possible defect, such as a pre-existing condition on the property before the gas line is installed or reports of gas leaks. In the instant matter, Keyspan Gas proved that the tree was not present when the gas line was initially installed through the use of an expert that measured the age of the tree that uprooted the gas line. The expert concluded that the tree was installed after the gas line had been installed and before the community in the area had even been formed. Moreover, Keyspan Gas provided reports of inspections it had conducted in the area mere three years prior to the accident, which detected no issues. Accordingly, the Appellate Court was satisfied that Keyspan could not have known that the tree would uproot its gas line because the tree was not present when the gas line was installed and there were no records of reported issues with the subject line.
Of interest are the large number of ongoing cases related to Hurricane Sandy and the court’s treatment of accidents that resulted from this natural disaster. The Deitrick action indicates that courts are not willing to place responsibility on parties for accidents that did not result from their direct negligence but, rather, were caused by this unfortunate “force majeure.”
Thanks to Georgia Coats for her contribution to this post. Please contact Vito A. Pinto with any questions.
Exclusions Can Still Prevail in Close Cases (NY)
Every New York insurer evaluating a question of coverage has heard the duty to defend described as “exceedingly broad” and “broader than the duty to indemnify” in one way or another more often than they can count. They also know exclusions are interpreted narrowly, the burden of demonstrating a claim falls within a policy exclusion is on the insurer, and exceptions to exclusions are construed broadly in favor of finding coverage. However, as the First Department recently reminded us, despite all of these obstacles, insurers can still win summary judgment on coverage issues.
In Zurich Am. Ins. Co. v ACE Am. Ins. Co., the underlying personal injury case arose out of an accident wherein the claimant was injured during the unloading of rebar cages on a truck. Defendant insurer, ACE, asserted its “Aircraft, Auto or Watercraft” exclusion, which barred coverage for injuries “arising out of the ownership, maintenance, use or entrustment of any…auto…” where “[u]se includes operation and loading or unloading” to deny coverage for the accident. In opposition, the plaintiff insurer argued the claimant alleged the accident was caused in part because the cages were improperly constructed, maintained, and secured, which would fall outside the exclusion.
On appeal, the First Department reversed the trial court’s decision and held ACE had no duty to defend in the underlying personal injury action, because the accident still “‘arose out of’ the loading and unloading of the truck’” and therefore the exclusion was applicable. And although ambiguities are the enemy of a disclaimer, an ambiguity does not exist simply because the parties have different interpretations of a policy term. So while it is important to be realistic about chances of success and anticipating opposing arguments when evaluating coverage, courts will still enforce exclusions if asserted properly, and the mere existence of a credible opposing interpretation does not alone create a duty to defend.
Thanks to Nicholas Schaefer for his contribution to this post. Please contact Vito A. Pinto with any questions.
Beyond the Statute of Limitations: Insured’s Lawsuit Found Timely by Middle District of Pennsylvania (PA)
The Middle District of Pennsylvania recently ruled that an insured’s breach of contract lawsuit against his auto insurer was not barred by the applicable four-year statute of limitations. In Legos v Travelers Casualty Company of Connecticut, the Court denied Travelers Casualty Company’s (“Travelers”) Motion for Summary Judgment against the breach of contract claim brought against it by Ronald Legos (“Legos”).
The lawsuit arose out of a car accident between Legos and Willard Grasavage (“Grasavage”) in which Grasavage’s underinsured car collided with Legos’ automobile. As a result, Legos suffered serious personal injuries and initiated a third-party lawsuit against Grasavage on April 29, 2005. Additionally, on August 29, 2009, Legos filed an underinsured motorist claim with Travelers.
On March 7, 2012, Legos and Grasavage entered into a settlement release for the amount of $75,000.00. Over four years later, on April 23, 2016, Legos received a letter from Travelers stating that the statute of limitations on his underinsured motorist claim had expired and that Travelers’ was closing his underinsured motorist file. As a result, Legos asserted a breach of contract claim against Travelers. In response, Travelers filed a Motion for Summary Judgment claiming that the four-year statute of limitations period for breach of contract cases had run and Legos’ lawsuit was untimely.
The key issue in this matter was when the statute of limitations period started. Travelers’ argued that the statute of limitations period began when Legos signed the settlement release with Grasavage, on March 7, 2012. However, Legos claimed that the statute of limitations period began when he received the letter from Travelers advising him that the statute of limitations of his underinsured motorist claim had expired on April 23, 2016. The Middle District of Pennsylvania agreed with Legos and ruled that the statute of limitations began to run when Travelers issued the letter to Legos, not when Legos entered into the settlement release with Grasavage.
The Court focused on the Erie Insurance Exchange v. Bristol decision in reaching its decision. In Bristol, the Pennsylvania Supreme Court held that the statute of limitations begins to run on an insurance case when the insurer is alleged to have breached its duty under the insurance contract. In Bristol, as in a majority of other jurisdictions, it is the accrual of the right of action that commences the statute of limitations period to run. Thus, a statute of limitations begins to run from the moment a potential plaintiff has a complete and present cause of action.
In contrast, Travelers relied on the argument that Bristol only applied to uninsured motorist benefits claims and not to underinsured motorist claims, such as the one at issue. The Court rejected Travelers’ position, stating that it was clear that the Bristol opinion repeatedly referred to uninsured and underinsured motorist claims collectively and did not distinguish the two at any point. Therefore, the Court determined that the Bristol decision clearly applied under these set of facts.
The Court held that the statute of limitations period commenced on April 23, 2016 and that Legos would have had until April 23, 2020 to file his underinsured motorist claim with Travelers. In so doing, the Court denied Travelers’ Motion for Summary Judgment and found in favor of Legos.
Thanks to Zhanna Dubinsky for her contribution to her post. Please email Vito A. Pinto with any questions.
Auto Salvage Business Entitled to Coverage Against Claims Resulting From Explosion in Yard (PA)
The Superior Court of Pennsylvania recently held that an auto salvage business is entitled to coverage against claims that an explosion in its yard resulted in fire damage to neighboring properties. In Tuscarora Wayne Insurance Company v Hebron Inc, the Superior Court was tasked with, inter alia, evaluating the applicability of a commercial general liability policy’s Designated Ongoing Operations endorsement (the “Exclusion”), which provided that the policy did not apply to “property damage arising out of [vehicle dismantling], regardless of whether such operations are conducted by you or on your behalf or whether the operations are conducted for yourself or for others.”
According to the Superior Court, the fire broke out while one of Hebron, Inc.’s (“Hebron”) truck drivers was trying to refuel a flatbed truck, as another employee was moving an extension cord connected to the pump. As “vehicle dismantling” was not defined in the policy, the trial court determined that the Exclusion barred coverage to Hebron because the property damage arose “out of . . . vehicle dismantling”, which constituted “ongoing business operations.” Accordingly, the trial court awarded summary judgment in favor of Tuscarora Wayne Insurance Company (“TWIC”), thereby holding that TWIC did not owe a duty to defend or indemnify Hebron.
One of the fundamental questions on appeal was whether the trial court committed errors of law and abuse of discretion in awarding summary judgment in favor of TWIC. In accordance with its authority, the Superior Court evaluated whether the trial court misapplied the law and whether it exercised its discretion in a manner lacking reason. Through this lens, and after considering all arguments, the Superior Court concluded that the trial court did abuse its discretion because it reached a conclusion that was not in conformity with the facts and circumstances underlying the declaratory action. Specifically, the Superior Court noted that the fire occurred away from the vehicle stripping area and broke out half an hour after the yard’s dismantling operation had finished for the day. Accordingly, the Superior Court held that the trial court committed error of law in declaring that TWIC was not required to defend or indemnify Hebron based on the Exclusion. Therefore, the Superior Court reversed and remanded the case holding that Hebron was entitled to summary judgment and TWIC is required to defend and indemnify Hebron.
Thanks to Lauren Berenbaum for her contribution to this post. Please email Vito A. Pinto with any questions.
Exploding Gas Not Utility Company’s Fault (NY)
In Deitrick v. Long Island Power Authority, Hurricane Sandy uprooted a tree in front of the plaintiff’s neighbor’s home. In the process, the tree disturbed the natural gas service line leading to the neighbor’s home. An explosion ensued, sending debris into the plaintiff’s home and injuring the plaintiffs. Keyspan Gas, the utility company responsible for this gas line, moved for summary judgment and the lower court denied its motion.
Upon appeal, the Second Department found that utility companies can only be held responsible for accidents that occur as a result of their negligent installation or negligent maintenance of their systems. Specifically, the Appellate Division held that utility companies cannot be expected to unearth their entire system and go beneath sidewalks and roadways to inspect for possible defects. Rather, there has to be some warning or notice alerting the company of a possible defect, such as a pre-existing condition on the property before the gas line is installed or reports of gas leaks.
In the instant matter, Keyspan Gas proved that the tree was not present when the gas line was initially installed through the use of an expert that measured the age of the tree that uprooted the gas line. The expert concluded that the tree was installed after the gas line had been installed and before the community in the area had even been formed. Moreover, Keyspan Gas provided reports of inspections it had conducted in the are a mere three years prior to the accident, which detected no issues. Accordingly, the Appellate Court was satisfied that Keyspan could not have known that the tree would uproot its gas line because the tree was not present when the gas line was installed and there were no records of reported issues with the subject line.
Of interest, is the number of ongoing cases related to Hurricane Sandy and the court’s treatment of accidents that resulted from this natural disaster. The Deitrick action indicates that courts are not willing to place responsibility on parties for accident that did not result from their direct negligence but, rather, were caused by this unfortunate “force majeure.”
Thanks to Georgia Coats for her contribution to this post. Please email Vito A. Pinto by email with any questions.