Holiday Party Goers and Party Hosts Beware (NY)

Social hosts and party rental companies need to be extra cautious in connection with the safety of their premises in order to avoid injuries by festive party goers. In Poliziani v. Culinary Institute of America, the appellate court reversed the order of the lower court which granted summary judgment to the defendant Culinary Institute of America dismissing the plaintiff’s personal injury complaint.

Here, plaintiffs were attending an event hosted by the Culinary Institute of America. After dinner, the plaintiff began dancing on a temporary dance floor. While dancing, the plaintiff fell, after she slipped on the beveled edge between the dance floor and the adjoining rug strikign her her head, injuring her right wrist and losing consciousness. Plaintiff subsequently commenced this action against the defendant and the company that provided the tent rental who also supplied the temporary dance floor. The defendants argued that they were entitled to summary judgment on the grounds that the beveled edge was not defective or hazardous, and constituted a nonactionable “trivial” defect. The Supreme Court granted this motion and the plaintiff now appealled.

The appellate court held that whether a dangerous or defective condition exists on the property of another so as to create an actionable issue of liability depends on the peculiar facts and circumstances of each individual case. A defendant who is seeking dismissal of a complaint on the basis that the alleged defect is trivial must make a prima facie showing that the defect is, under the circumstances, physically insignificant and that the characteristics of the defect do not increase the risks posed by the equipment. The Court of Appeals held that even a physically small defect may be actionable, like a jagged edge or irregular rough surface, especially in situations where the defect is located where people are distracted from easily observing it (like in this case where people were not expected to look down at their feet). Thus, in reversing the trial court’s order of summary judgment in favor of the defendants, the appellate court concluded that there are triable issues of facts as to whether there was a dangerous condition created even by a small defect. As such, party goers and party hosts should remain diligent, as this case sets a clear warning that even small, relatively insignficant defects can give rise to liability.

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

Slipped not Spoiled – Appellate Division Overturns Spoliation Charge in Slip and Fall Action (NY)

In Sarris v Fairway Group Plainview LLC, plaintiff was allegedly injured when she slipped and fell on ice in a parking lot outside the store operated by defendant.  Her counsel sent a demand to defendant to preserve “any and all video footage depicting the location of my client’s accident” and the Supreme Court ordered them to “preserve such footage of the incident, including the 24 hours preceding same”.

The store had four separate security cameras.  The store’s security manager testified that one camera showed plaintiff’s accident.  Footage from that camera, including the ten hours preceding the accident, were preserved.  The footage from the other cameras was automatically deleted after 30 days, the normal protocol for the cameras.

Plaintiff moved for spoliation of evidence against defendants for deleting the other videos.  The Supreme Court partially granted the motion partially, allowing for a negative inference charge to be given at trial.  The Appellate Division ruled that the Supreme Court improvidently exercised its discretion and overturned the ruling.  The Court held that the defendant was not on notice to preserve the other footage because it was only ordered to preserve the footage of the actual accident.

The case provides a valuable lesson for all litigants.  First, direct your clients to save as much as possible, if not for anything else to avoid unnecessary discovery litigation.  Second, when making requests for discovery, be as specific as you are able to be.  If you want all the security footage a party has, say that, don’t limit it to the accident where it occurred.

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

To Redact or Not to Redact? (PA)

In December 2015, Paige Barnard (“Barnard”) was involved in an automobile accident. At the time of the accident, she was insured by Liberty Mutual Insurance Corporation (“Liberty”) under her parents’ auto insurance policy. After receiving first party medical and income loss benefits for some time, Liberty ceased providing the benefits, as it determined, through a peer review organization, that Barnard’s treatment was no longer appropriate, necessary or reasonable.   Consequently, Barnard brought claims for, inter alia, statutory bad faith against Liberty.

After initial discovery was exchanged, Barnard served interrogatories and request for production of documents on Liberty.  After receiving Liberty’s responses, Barnard objected to, inter alia, Liberty’s redactions and privilege log, asserting she was entitled to the entirety of the documents’ contents. Liberty objected to the production of the documents, arguing the information and documents requested were privileged, not relevant to the instant matter, covered by attorney-client and work-product privileges, prepared in anticipation of litigation, and/or outside the scope of Federal Rule of Civil Procedure 26.  Accordingly, in Barnard v Liberty Mutual Insurance Corp., the U.S. District Court for the Middle District of Pennsylvania was tasked with determining whether Barnard was entitled to the requested documents and answers to her interrogatories.   Before making its determination, the Court directed Liberty to produce its documents alleged to contain privileged information to the Court for in camera inspection.

In pertinent part, the Court focused on whether Liberty was required to produce a copy of the peer review section of Liberty’s policy manual, copies of the policies and procedures that govern the way Liberty’s employees handle inquiries, and the entirety of its claim files, including logs and notes.

First, the Court held that Liberty was required to produce the peer review portion of its policy manual and the employee policy or procedures for handling inquiries.  In doing so, the Court explained that Liberty’s methods for handling its peer review process and policy and procedures governing the way Liberty’s employees evaluate inquiries about insurance policies were relevant to Barnard’s bad faith claim, as a departure from established procedure “is probative evidence” for Barnard to demonstrate Liberty acted in bad faith.  Nevertheless, the Court accepted Liberty’s contention that the foregoing documents contained confidential information, such as trade secrets and propriety information – accordingly, the Court ordered Barnard to keep the documents confidential.

Second, in regard to the question of whether Liberty was required to produce the entirety of its claim files, including logs and notes, the Court relied on Federal Rule of Civil Procedure 26(b)(3)(A), which shields from discovery “documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party’s attorney, consultant, surety, indemnitor, insurer, or agent”.   In addition, the Court noted that it is generally accepted in the Third Circuit that insurers cannot reasonably argue that claim files are accumulated in anticipation of litigation, particularly where insurers have a duty to investigate and make decisions with respect to claims by their insureds.  With this foundation, the Court held: (1) Liberty could have reasonably anticipated litigation once it received notice of Barnard’s dissatisfaction with the peer review process; (2) Liberty improperly redacted the claim status reports, as they were not mental impressions, conclusions, opinions, or trial strategies; and (3) Liberty’s claim notes made after Liberty learned of Barnard’s dissatisfaction were properly redacted as work product, but entries made before such notification were improperly redacted since they related to Barnard’s underinsured motorist claim and first-party benefits.

Finally, the Court held that Liberty was permitted to redact its mental impressions, conclusions, reserves, and opinions relating to the value or merit of the claim or defense in its financial documents.  In doing so, the Court reasoned that because Barnard’s bad faith claim focused on the denial of coverage (i.e., Liberty’s review process was biased and unfair) – as opposed to the value of the claim or Barnard’s estimate of liability – Liberty was not required to produce unredacted versions of its financial documents, such as information related to its reserves.

In sum, this discovery ruling illuminates the distinction between discoverable and non-discoverable information in the context of statutory bad faith claims against insurers.

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

Unlisted Vehicle Does Not Require Underinsured Policy Coverage (NJ)

The Appellate Division, in Katchen v. Government Employees Insurance Co., re-affirmed the need for clients to be proactive with personal insurance policies and attorneys to thoroughly review all client and carrier documentation at the start of every suit. In Katchen, the plaintiff filed for underinsured motorist benefits after being injured in a 2015 motorcycle accident with an underinsured driver whose policy had a 25,000 policy limit. Litigation ensued after GEICO denied coverage.

GEICO’s argument was clear: although Katchen owned and operated the motorcycle at the time of the incident, it was not specifically listed on his insurance policy. Since exclusions in the body of the policy specifically excluded underinsured motorist coverage involving a motor vehicle “owned by an insured and not described in the declarations,” GEICO argued the policy had a clear and easily understood exclusion that applied to the facts of the case.

Katchen cunningly countered by directing the court’s attention to the declarations page, which stated GEICO would “pay damages for bodily injury and property damage caused by an accident which the insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle or underinsured motor vehicle arising out of the ownership, maintenance, or use of that vehicle.” Since the declarations page did not list any exclusions, according to Katchen, the insurance coverage followed the insured individual rather than the vehicle.

The majority of a split Appellate Division panel sided with GEICO, concluding the policy language, rather than the declaration page, controlled. According to the court, “the fact that the [vehicle] exclusion is not mentioned on the declaration sheet does not bar its enforcement,” as it does not automatically render the policy ambiguous. To rule differently, as the trial court did, would “eviscerate the rule that a clause should be read in the context of the entire policy” and needlessly complicate already-complex policies.

Judge Karen Suter’s strong dissent, arguing that coverage follows an insured rather than a vehicle identified in the policy, may offer a glimpse into how future courts may interpret similar exclusions when confronted with similar facts. Since the case was a published decision, however, it carries a weight that will hopefully influence other courts interpreting similar exclusions in other policies.

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

WCM’S NEW JERSEY OFFICE LEADS THE WAY IN STATEWIDE HIGH SCHOOL MOCK TRIAL PROGRAM (NJ)

Wade Clark Mulcahy’s New Jersey office led the way in Union County in participating in the annual Vincent J. Apruzzese High School Mock Trial Program which is sponsored by the New Jersey Bar Foundation.  The Mock Trial Program provides high school students in the state of New Jersey with an opportunity to develop their advocacy skills and to experience what it is really like to be a trial lawyer.  Teams are comprised of five individuals from each participating high school.  Two students act as attorneys while three students act as fact and expert witnesses.

Trials are conducted before experienced litigators who act as judges along with a student-comprised jury and often last three hours.  In order to make the experience more realistic, the trials are conducted in actual courtrooms in the Union County Courthouse so students are able to feel what is like to try a case in a courtroom.  The final round in the County is judged by a panel of sitting New Jersey Superior Court Law Division judges.  The ultimate champion from each County then participates in a statewide contest with the winner of the statewide contest then proceeding to the national competition to compete against winners from the other 49 states and the District of Columbia.

WCM’s New Jersey office had four of its attorneys participating as judges (Paul Clark, Tony Pinto, Mike Noblett and Brent Bouma) and was recognized by the state Bar Foundation for having the largest contingency of volunteer judges than any other firm in the County.   In their role as judges, WCM attorneys not only adjudicated the trial but also provided detailed feedback to the teams regarding their performances and provided our own insight into actual trials.  In other years, WCM attorneys have also participated in the program as team coaches for high schools, volunteering our time to meet with competing teams twice a week to assist with preparing the teams for their competition.  We were happy to participate in this worthy cause as a way to give back to our local community and to share our zeal and enthusiasm for trial advocacy.

Is the Independent Medical Exam Landscape about to Change in Pennsylvania?

The Pennsylvania Supreme Court has granted the Third Circuit’s petition for certification of a question of law that has puzzled insurers and their attorneys. The issue is whether an insurer can mandate that claimants undergo an unlimited number of medical exams by a doctor of the carrier’s choosing  — without a court order — before they can receive first-party medical benefits.

Insurance companies such as Allstate have been including contractual provisions in their motor vehicle insurance policies that requires insured to submit to independent medical examinations by a physician selected by the insurer, “when and as often as the insurer may reasonably require,” as a condition precedent to the payment of benefits. The problem is that these provisions may conflict with the Motor Vehicle Financial Responsibility Law (“MVFLR”), 75 Pa.C.S. Section 1796(a), which gives courts the authority to order such examinations.

In Sayles v. Allstate, U.S. District Judge A. Richard Caputo of the Middle District ruled that Allstate’s policy provision conflicted with the state MVFLR because the plain language of Section 1796 prohibits precisely this type of provision. The plaintiff in Sayles argued that Allstate violated the MVFLR because it never petitioned the court to compel the independent medical exam. Allstate argued that the MVFRL does not mandate a court order and it only suggests when a court may order a person to submit to an IME.  But there is no prohibition in the MVFLR that requires court intervention before an insurer requests medical examinations before paying 1st party benefits.

Once the Pennsylvania Supreme Court rules on this question of law, both auto insurers and insurance attorneys will know how to proceed with respect to independent medical examinations, and whether court intervention will be necessary in advance of every such examination.

Opposition to MSJ Requires Rebuttal Evidence, not just Rebuttal Allegations (PA)

American Southern Insurance Company, Inc. was victorious recently when its summary judgment decision regarding a contractual indemnification dispute was upheld on appeal. In American Southern Ins. Co. v. James A. Halbert , et al., PA Superior Court, No. 504 MDA 2018, the Pennsyvlania Superior Court upheld the trial court’s granting of summary judgment in favor of American Southern.

The underlying case involved a performance surety bond for public improvement in North Cornwall Township, PA.  Back in 2006, American Southern had entered into an indemnity agreement with the Halbert family (on behalf of the Oaklea Corporation) wherein the Halberts agreed to indemnify American Southern from any claim or liability arising from the issuance of a performance bond.  Subsequently, American Southern issued a performance bond in favor of North Cornwall Township to secure completion of improvements for local development by the Oaklea Corporation.  In July 2016, the Township informed American Southern that Oaklea refused to respond or perform certain improvements that were demanded by the Township.  The Township demanded compensation from American Southern, who in turn, demanded indemnification from the Halberts.  The Halberts responded that the improvements demanded by the Township were unnecessary.

In October 2017, American Southern moved for summary judgment asserting that there were no genuine issues of material fact in dispute and that American Southern was entitled to indemnification against the Halberts, as a matter of law.  In response, the Halberts cited their Answer and defense that the improvements were unnecessary and also argued that the indemnification agreement was an unconscionable contract of adhesion.  The trial court concluded that Halbert failed to show that the improvements were unnecessary and that the agreement was not a contract of adhesion. The Halberts appealed.

On appeal, the Superior Court explained that the Pennsylvania rules governing summary judgment explicitly prohibit a non-moving party from merely relying on the allegations or denials of the pleadings, thus rendering the Halberts’ position deficient.  The Halberts conceded that an operative provision of the indemnification agreement granted American Southern the exclusive right to determine whether claims such as the ones brought by the Township should be settled or defended; thereby nullifying Halberts’ repeated defense that the demanded improvements were not necessary.  Furthermore, while the court entertained the Halberts affirmative defense that the indemnification agreement was a contract of adhesion, it concluded that the Halberts failed to cite to any evidence detailing the circumstances that would support their assertion that the contract was, in fact, a contract of adhesion.

Ultimately, the Superior Court denied the Halberts appeal and affirmed the granting of summary judgment in favor of American Southern, emphasizing the Halberts’ failure to cite evidence of record that would support their claims.  Thanks to Greg Herrold for his contribution to this post.  Please email Brian Gibbons with any questions.

Natural Accumulation is Key to Application of “Hills and Ridges Doctrine” (PA)

On January 24, 2019, the Superior Court of Pennsylvania affirmed an entry of summary judgment in favor of Turkey Hill Minit Markets, the Kroger Co., and D670 Kroger C Stres/Turkey Hill/Minit Mr’s (Collectively “Appellees”) in Brock v. Turkey Hill Minit Markets.  The case stems from a slip and fall, when plaintiff Rebecca Brock was walking toward the entrance of the Store when slipped and fell on ice in the parking lot.  However, whether the slipping hazard was man-made or made naturally became a point of contention.

The “Hills and Ridges Doctrine” precludes liability “where the accident occurred at a time when general slippery conditions prevailed in the community as a result of recent precipitation.”  However, the hills and ridges doctrine can only be applied in cases where the snow and ice complained of are the result of an entirely natural accumulation following a snowfall.  Therefore, on appeal, Appellant attempted to argue that the accumulation of ice in the parking lot was due to employees of the Appellees plowing and salting the parking lot.

The defendant-appellees produced an expert report, which cited that the snow/ice was the result of natural accumulation — and this report was unopposed by the plaintiff-appellant.  As such, the Court affirmed the lower court’s ruling.  Still, the underlying argument in this case is a reminder that a court reading the phrase “natural accumulation” very narrowly could pose problems for defense counsel. Thanks to Garrett Gittler for his contribution to this post.  Please email Brian Gibbons with any questions.

Art Law & Litigation Conference

Dennis Wade, a member of the planning committee for the Federal Bar Association Art Law & Litigation Conference, served as a moderator at a day long CLE program on February 7, 2019 at the National Arts Club.  The program addressed cutting edge topics across the spectrum of art law, litigation and copyright issues in the digital age. For more information on the program’s substance, please call or email Dennis at dwade@wcmlaw.com.

Plaintiff’s Suit against Golf Course Not Up to Par (NJ)

Plaintiff, a New Jersey resident, visited Greenbrier golf course in West Virginia after seeing advertisements during golf events broadcast on national network television  and in nationally circulated golf magazines. While staying at Greenbrier, plaintiff slipped and fell on the golf course, suffering significant injuries. He treated for his injuries in New Jersey and New York City.

Plaintiff sued Greenbrier in New Jersey, and Greenbrier subsequently moved to dismiss based on lack of jurisdiction. During discovery, Greenbrier asserted it had no direct advertisements on any New Jersey television stations or in any New Jersey magazines. Its advertisements were limited to nationally televised media sources, national golf magazines, and social media pages. Greenbrier’s only direct contact with New Jersey was through letters and e-mails sent to New Jersey residents who had previously stayed at Greenbrier.

Following discovery exchange, Greenbrier renewed its motion to dismiss for lack of jurisdiction in New Jersey. The trial court, upon reviewing Greenbrier’s position, granted the motion and dismissed plaintiff’s claim because Greenbrier did not have any direct contact with New Jersey, and there was no evidence of the minimum contacts required from Greenbrier to permit New Jersey Courts to exercise jurisdiction over the golf course located in West Virginia.

Plaintiff filed a motion for reconsideration, arguing general jurisdiction, rather than specific jurisdiction, permitted their claims against Greenbrier in New Jersey courts. Even with the change in plaintiff’s legal position, Delgatto v. Greenbrier that general jurisdiction required systematic and continuous activity in New Jersey, and plaintiff failed to demonstrate such activity.  Thanks to Steve Kim for his contribution to this post.  Please email Brian Gibbons with any questions.