Insurer Off the Hook for Loss of Business Income Due to Clogged Toilet (NJ)

A New Jersey appellate court recently decided whether an insurer must provide additional coverage for damage caused to a restaurant by sewage backup in FOUZIA SALIH v. OHIO SECURITY INSURANCE.

After a dreadful toilet clog in a New Jersey restaurant, plaintiff sought coverage in excess of its policy’s $25,000 limit for heavy damage to the restaurant under a lost business income provision.  The clog destroyed the water heater, furnace, restaurant’s tiles, basement, first-floor bathroom, and kitchen, causing $162,933.63 in total damage.   The policy’s general provisions excluded coverage for water damage caused by backup or overflow but included a custom endorsement which provided a $25,000 sublimit for such events.

A public claims adjuster determined that the loss was caused by water discharge while the insurer determined that the cause of loss was raw sewage backup.  The insurer issued checks for $25,000 for the damage and plaintiff filed a lawsuit after finding that the damages far exceeded the endorsement limit.  In the lawsuit, plaintiff sought more coverage and alleged that the insurer breached its terms to provide benefits covered under the policy.

The insurer moved for summary judgment and plaintiff filed an opposition relying on the business income provision, which states that the insurer will cover the actual loss of income sustained due to damage.  The lower court ruled in favor of the insurer, finding that the custom endorsement put plaintiff on notice that the business income provision would not cover damages if the water damage coverage was only created as a result of the endorsement.  Finding that the policy terms were clear, unambiguous, and supported the insurer’s interpretation of the policy, the appellate court affirmed the lower court’s decision.

Thanks to Chelsea Rendelman for her contribution to this post.

Spotlight on Broadway Theater’s Duty to Pedestrians (NY)

A theatergoer forced into the street due to a crowded lineup loses her bid to be compensated for her injuries that occurred not on that crowded sidewalk, rather in the street.

The First Department has upheld a Manhattan Supreme Court Justice’s grant of summary judgment to defendant landowner in Quigley v Nederlander Org., Inc, where plaintiff injured in front of a Broadway theatre. Plaintiff testified that upon arriving at the theatre, she and her group were directed to join the line to enter the building. As plaintiff followed her group to the back of the line, she stepped onto the street and her heel was caught in a crack between two metal plates causing her to fall. Plaintiff alleged that the theater was negligent because she forced to maneuver her way through a crowded sidewalk onto the street.

Defendant theatre owner, Nederlander Organizations, Inc. d/b/a The Lunt-Fontane Theatre, established entitlement to judgment as a matter of law. Defendant was not on notice of any dangerous crowding condition or of a hazardous condition on the street close to the area where patrons stood in line.

Notably, plaintiff did not identify that an overcrowding condition restricted her movement or that defendant directed her to walk on the street. Plaintiff acknowledged that the sidewalk traffic was made up of pedestrians and patrons and that the crowd was tame. The court noted that, even if the entire width of the sidewalk had been overtaken by the crowd, defendant owner still could not be liable for plaintiff’s injuries absent prior notice of a dangerous condition. Further, it was unforeseeable that directing plaintiff to join the line would have placed her in harm’s way.

Thus, since plaintiff was unable to raise a triable issue of fact as to defendant’s negligence, the First Department upheld summary judgment, based on evidence showing that plaintiff’s own culpable conduct in attempting to strategically maneuver her way through the crowd and ultimately caused her injuries.

We see an increasing number of cases involving pedestrians who claim injuries due to sidewalk configurations. This case clarifies the landowner’s duty for future litigation.

Thanks to Theresa Dinh for her contribution to this post.

The Espinal Defense and Plaintiff’s Pleadings (NY)

When defending a contractor, understanding what plaintiff’s pleadings fail to allege can allow one to prove the contractor’s entitlement for summary judgment even when affirmative evidence that negates the contractor’s duty to a non-contracting plaintiff does not exist.  In Cayetano v. Port Authority of New York and New Jersey, 2018 WL 5624037, 2018 N.Y. Slip Op 07285 (2nd Dep’t October 31, 2018), the plaintiffs, employees of American Eagle Airlines, Inc., slipped and fell on ice that accumulated near Gate C5 at LaGuardia Airport.  The plaintiffs commenced an action against the snow removal company, CTE Incorporated, among others.  CTE moved for summary judgment, and was denied, upon which they appealed.

As CTE was a contractor who did not contract with the plaintiffs, CTE would normally not owe the plaintiffs a duty of care unless the three Espinal exceptions applied, which are (1) where the contracting party, in failing to exercise reasonable care in the performance of [its] duties, launche[s] a force or instrument of harm; (2) where the plaintiff detrimentally relies on the continued performance of the contracting party’s duties and (3) where the contracting party has entirely displaced the other party’s duty to maintain the premises safely.

The Court ruled that CTE established its prima facie entitlement to summary judgment by showing evidence that plaintiffs were not parties of the on-call snow removal agreement, and that, therefore, they did not owe them a duty of care.  Importantly, the Court ruled that CTE were not required to affirmatively demonstrate that the Espinal exceptions do not apply when the plaintiffs failed to pled facts that would establish their applicability.

In opposition, plaintiff failed to raise a triable issue of fact regarding the instrument of harm exception, as CTE only plowed three days prior to the accident, and thus, claiming that they caused the thawing and refreezing of snow would be merely speculative.  Additionally, the plaintiffs failed to show that they detrimentally relied on CTE’s continued performance of their contractual duties.  As such, the Second Department reversed the lower court’s decision, ruling the CTE’s motion for summary judgment should have been granted.

This case shows how important it is to analyze the pleadings in contractor cases as plaintiffs’ own pleadings, by not including facts that establish the Espinal exceptions applicability, may make establishing the prima facie burden for entitlement to summary judgment easier.  This allows experienced counsel to move for and win summary judgment in cases where evidence may initially seem lacking.

Thanks to Jonathan Pincus for his contribution to this post.

Obscured Open and Obvious Condition May Be a Trap for the Unwary (NY)

Plaintiff tripped and fell on a “hump” on a baseball field in the Town of Smithtown and injured himself as he was attempting to move through the entrance of the field. This “hump” was caused by the Town’s installation of a drain, which was covered with asphalt. This hump extended to the area between the players’ benches and the entrance to the field on the third base side.

Plaintiff sued the Town of Smithtown in Suffolk County Supreme Court. Smithtown moved for summary judgment, contending that the condition of the hump was open and obvious and not inherently dangerous. The Supreme Court granted the motion, and the plaintiff appealed.

In Dillon v Town of Smithtown, the Appellate Division confirmed the duty of landowner is to maintain its premises in a reasonably safe condition.  And the Appellate Division confirmed that an exception to this duty exists when there is an open and obvious, and not inherently dangerous condition.  Further expanding on the “open and obvious” principle, the Appellate Division held that a condition that is ordinarily apparent to a person making reasonable use of their senses may be rendered a trap for the unwary where the condition is obscured or the plaintiff is distracted.

Applying that distinction to the facts of this case, the appellate court found that the Town failed to prove that the hump was open and obvious and not inherently dangerous given the surrounding circumstances at the time of the accident.  In reversing the Supreme Court’s summary judgment decision the court highlighted plaintiff’s testimony that at the time of the accident, the hump was completely covered with dirt and sand and players were standing around it, thus obscuring his view of the hump.

The case highlights the reality that certain defenses, such as the open and obvious defense and other issues of fact need to be resolved by appellate courts, rather than the trial courts. Litigators presented with such issues should be prepared at an early stage to be mindful of the possibility of appellate practice.

Thanks to George Parpas for his contribution to this post.

UIM Coverage Does not Apply to Rented Vehicles, According to Eastern District (PA)

In Achenbach v. Atlantic Specialty, the plaintiff was a passenger in a rental car being driven by her co-worker, when the vehicle she was traveling in was rear-ended by a truck driver.  The rental car was rented through the plaintiff’s employer, while the plaintiff and her co-worker were on a work trip in Wisconsin.  Plaintiff suffered injuries as a result of the accident, and the truck driver was uninsured.  As a result, the plaintiff sought uninsured motorist benefits through the car rental agreement, which offered coverage of up to $25,000.00.  Plaintiff settled with the rental car insurer for the policy limit.  As the plaintiff’s claimed damages exceeded that amount, she also sought secondary coverage through her employer’s insurance policy with Atlantic Specialty.  In attempts to recover from Atlantic Specialty, plaintiff’s counsel and Atlantic Specialty exchanged email communications about her eligibility from July 2013 to October 2015.  Plaintiff then demanded payment of the full amount of Atlantic Specialty’s policy as settlement for her outstanding claim, which was denied.  Atlantic Specialty claimed she was not eligible for uninsured motorist insurance under the policy.

Plaintiff then brought suit for breach of contract, bad faith and promissory estoppel.  Atlantic Specialty removed the matter to federal court and filed a motion to dismiss.  The Court, finding that Wisconsin law applied, dismissed plaintiff’s bad faith claim, as Wisconsin law did not support a viable claim for bad faith based on failing to investigate her claim and making misrepresentations during the claim adjustment process.

Plaintiff argued that defendant breached its contract with her employer by denying the claim.  Defendant responded that the policy did not provide coverage for uninsured motorist benefits to rented vehicles.  The Court found that the plain language of the policy limited uninsured motorist coverage to owned vehicles and excluded rental vehicles.  Plaintiff’s reliance on the alleged assurances from the defendant that the policy covered rental vehicles did not change the plain and unambiguous language of the policy.  This claim was dismissed as well.

Finally, plaintiff brought a promissory estoppel claim based on the representations made by the defendant’s employees as to the availability of uninsured motorist coverage during the claim adjustment process, and that she relied on those representations to her detriment.  The Court agreed that plaintiff plead sufficient facts to support this claim, as the emails between the parties supported the assertion that the defendant made an “express promise” that the uninsured motorist coverage was available to plaintiff, which was reasonable. Therefore, this claim was allowed to proceed.

This is a cautionary tale to avoid making any promises or representations to claimants during the adjustment process before making coverage decisions.

Thanks to Alexandra Perry for her contribution to this post.

ANSI Violation Constitutes Evidence of Negligence, According to NY’s Highest Court (NY)

In Bradley v HWA 1290 III LLC, plaintiff commenced an action against the building owners and elevator consultant, seeking to recover damages for wrongful death of an elevator mechanic who was electrocuted as a result of coming into contact with a transformer while servicing a malfunction in one of the building’s elevators.

Defendants moved for summary judgment dismissing the complaint, but said motion was denied by Hon. Lucy Billings, allowing plaintiffs to pursue their common law negligence and Labor Law § 200 claims based on the alleged inadequate lighting in the motor room and the alleged lack of a cover over the transformers. The lower court reasoned that defendants failed to demonstrate that the uncovered transformers and the lighting did not create dangerous conditions readily observable to defendants. The Appellate Court reversed the lower court’s decision, holding that: plaintiffs failed to establish liability based on inadequate lighting in the motor room; the building owner and consultant did not cause or create the hazardous condition; plaintiffs failed to establish that owner or consultant has actual or constructive notice of the hazardous condition; and, any failed to comply with American National Standards Institute (ANSI) requirements did not constitute negligence.

The Court of Appeals disagreed with the First Department’s ruling that ANSI standards cannot be used as evidence of negligence because they are not a statute, ordinance, or regulation with force of law, and held that “to the extent that a violation of ANSI constitutes evidence of negligence, plaintiffs’ reliance on those standards was proper.” Nevertheless, plaintiffs failed to raise a triable issue of fact as to whether defendants had either actual or constructive notice of the alleged dangerous condition, and the Court of Appeals upheld the reversal that granted summary judgment to the defendant.

This is a direct rejection of the rule that standards can only be used to show evidence of negligence if they have force of law required by statute, regulation, or ordinance, which has been a trend in the First and Second Departments.

Thanks to Margaret Adamczak for her contribution to this post.

Skier Maneuvers Through Summary Judgment Minefield (NY)

In ­­­­­­­­­­­Sopkovich v. Smith, Plaintiff commenced this action seeking damages for injuries sustained when he and defendant, a snowboarder, collided on a ski trail. Defendant moved for summary judgment under the theory of assumption of the risk and that defendant did not engage in any “reckless, intentional, or other risk-enhancing conduct not inherent in the activity.” The lower court dismissed this case and the plaintiff appealed.

The Appellate Division, Fourth Department reviewed the facts and ruled the lower court erred in its granting of summary judgment. Although there is an inherent danger in skiing and snowboarding, the other prong of the test was that the defendant was not reckless or engaged in conduct not inherent in the activity. Both plaintiff and defendant were veteran skiers/snowboarders.

Plaintiff testified that he was “slow[ly]” skiing down a beginner trail when defendant merged onto that trail from an intermediate trail and impacted plaintiff from the left.” By contrast, defendant, an “advanced” snowboarder who was familiar with the trails, testified that he had already safely merged onto the beginner trail at an “average” or “normal” speed, was further down the beginner trail than plaintiff and was “very close to a complete stop” at the time of the collision, having observed plaintiff “going fast” “down the hill in a straight line.”

Plaintiff submitted an affidavit from an emergency room physician who was also an 11–year veteran of the National Ski Patrol. Based on his review of the depositions and other records related to the case, the expert opined that, given the nature and extent of plaintiff’s injuries, “there [was] no question [that] the force with which [defendant] impacted [plaintiff’s] left side and back was immense” and that plaintiff’s injuries were “not consistent with [defendant’s] deposition testimony” that he had come to or nearly come to a complete stop. The expert thus concluded that defendant had “unreasonably increased the risk of harm” to plaintiff.

The Appellate Division concluded that plaintiffs raised triable issues of fact whether defendant engaged in reckless conduct. As the record established that the collision was exceedingly violent there is “at least a question of fact … whether … defendant’s speed in the vicinity and overall conduct was reckless.”  As such, the expert testimony contradicted the defendant, thus creating a question of fact.  A fine maneuver by the plaintiff and a reminder that summary judgment will rarely be upheld if there is credible expert testimony sufficient to take the case before a jury.

Thanks to Paul Vitale for his contribution to this post.


Supplemental Bill of Particulars Not an Unusual or Unanticipated Circumstance (NY)

In Drapper v Horan, 2018 WL 4623041, 2016 N.Y. Slip Op. 06330 (1st Dep’t September 27, 2018), the First Department affirmed a lower Court’s denial of a motion to vacate a note of issue and compel a medical examination of an injured plaintiff despite the service of a supplemental bill of particulars for new treatment relative to a traumatic brain injury.

Plaintiff in this matter stated that he suffered injuries, including a traumatic brain injury, when the car he was driving was rear-ended by the defendants.  Following plaintiff’s disclosures that he was suffering headaches and that an MRI of his head revealed traumatic injury, plaintiff filed a note of issue.  Defendants, thereafter failed to notice a physical examination, and then filed an untimely motion to vacate, which was denied.

Prior to trial, plaintiff filed a supplemental bill of particular that stated plaintiff received additional medical treatment for his traumatic brain injury.  Thereafter, defendants renewed their motion to vacate and compel plaintiff to appear for a medical examination.

The defendants failed to offer an excuse why they originally failed to notice a medical examination before the note of issue was filed, and also failed to demonstrate how the additional treatment was an “unusual or unanticipated circumstance” to warrant vacatur and a medical examination. As such, the 1st Department affirmed the lower court’s denial of a motion to vacate a note of issue and compel a medical examination of an injured plaintiff.

Although this case leaves open the possibility of further discovery after a supplemental bill of particulars is made prior to trial, this case is also an example of why experienced defense counsel do not rely on curing their missed deadlines based on later filings, but make sure to adhere to discovery and motion deadlines.  Both, failing to timely notice a medical examination and timely file a motion to vacate a note of issue can be detrimental to defending the case and difficult, if not impossible, to cure prior to trial.

Thanks to Jonathan J. Pincus for his contribution to this post.

New Jersey Homeowners May be Liable to Injured Contractors (NJ)

It is well settled law in New Jersey that a landowner has a duty to use reasonable care to protect an invitee on their property against known or discoverable dangers. However, a recent New Jersey court decision examined the duty owed when that invitee is an independent contractor performing work on the premises.

In the recent case of Gilvary v. Cerza, the plaintiff filed suit against the defendant homeowners when she was injured while working as a home health nurse on the defendants’ property. Specifically, the plaintiff allegedly injured her back while lifting a patient, and claimed that the defendants were responsible for failing to obtain the proper equipment necessary to lift the patient.

The Appellate Court noted that the duty to provide a reasonably safe working place for independent contractors does not relate to known hazards which are part of or incidental to the very work the contractor was hired to perform. However, that exception only applies when the landowner does not retain control over the means and methods of the work. In this case, the record revealed that the defendants retained a sufficient level of control and instruction over the nurse’s work, therefore precluding a dismissal of the plaintiff’s claim.

This case is important because it reveals that a homeowner may be responsible for injuries sustained to a contractor working on their premises if the homeowner is directing the work performed.

Thanks to Heather L. Aquino for her contribution to this post.

No Picnic for Plaintiff – Tree Roots are Open and Obvious (NY)

In Ibragimov v Town of N. Hempstead, the plaintiff, while at a picnic at Whitney Pond Park in Nassau County New York, tripped on an exposed tree root and fell after getting up from a picnic table.  He filed a lawsuit in Nassau County Supreme Court against the Town of North Hempstead claiming the Town was negligent in the maintenance of the picnic area and the tree root was dangerous.

The Town filed a motion for summary judgment, arguing that the lawsuit should be dismissed because exposed tree root was an open and obvious condition which was inherent or incidental to the nature of the property; and that the exposed tree root was not inherently dangerous.  The Supreme Court agreed with the Town of North Hempstead and granted the motion, dismissing the case.

The plaintiff appealed the dismissal, and the Appellate Division, Second Department, reviewed the case.  The Appellate Division affirmed that a landowner has a duty to exercise reasonable care in maintaining its property in a safe condition under all of the circumstances, including the likelihood of injury to others, the seriousness of the potential injuries, the burden of avoiding the risk, and the foreseeability of a potential plaintiff’s presence on the property.  However a landowner has no duty to protect or warn against an open and obvious condition that is inherent or incidental to the nature of the property, and that could be reasonably anticipated by those using it.  The Court ruled that the tree root fell within this principle, known as the “open and obvious” rule.   The Appellate Division agreed with the Supreme Court’s decision and affirmed the dismissal of the lawsuit based upon the open and obvious nature of the tree root in the picnic area of the park.

Thanks to George Parpas for his contribution to this post.