Emergency Doctrine Not Enough to Save Mechanic from Liability in Motor Vehicle Accident (NY)

In D’Augustino v. Bryan Auto Parts Inc., 2017 Slip Op 05708 (2d Dept. 2017), defendant Boyle parked his car on a street near Bryan Auto Parts to obtain a New York State Inspection. Prior to conducting the inspection, defendant Rattray, a mechanic working for Bryan Auto Parts, drove Boyle’s car, intending to move it in to the garage for the inspection.

On the way from where Boyle parked the car into the garage, Rattray came upon an intersection where he was to stop at a stop sign. At that time, plaintiffs, who had the right of way through the intersection and no stop sign, were travelling through when the Boyle vehicle struck the plaintiffs in the side in the middle of the intersection. Rattray claimed that he attempted to stop but that despite his efforts the brakes were not working and he could not get the car to stop before hitting plaintiffs.

The lower Court granted the mechanic’s motion for summary judgment wherein they claimed that they were free from negligence under the “emergency doctrine.”  The defendants claimed that they had no knowledge that the brakes were broken and that Boyle did not tell them that there were issues with the brakes when he dropped off the vehicle.

The Appellate Division reversed the lower court finding that the shop and mechanic failed to show that there are no questions of fact as to whether an emergency actually occurred and as to whether Rattray acted reasonably under the circumstances to attempt to avoid the accident.  There was no corroboration of the brake failure, and in fact, defendant Rattray apparently repaired the brakes shortly after the accident.

The above decision reinforces how difficult it is for a defendant in New York, even one who did not own or maintain the vehicle, to obtain summary judgment in their favor in motor vehicle accidents, especially where the plaintiffs had the right of way.  Thanks to Dana Purcaro for her contribution to this post.  Please email Brian Gibbons with any questions.

Permissive Operator Cannot Bestow Owner’s Permission to Another Operator (PA)

On June 26, 2017, the Superior Court of Pennsylvania affirmed an order granting summary judgment to State Farm Mutual Automobile Insurance Company (“State Farm”) in State Farm v. Fuller et al. in a declaratory judgment action it filed against Paul Fuller (“Fuller”), Mark Czyzyk, Michele Czyzyk and Rose Nealon (“Nealon”).  The underlying lawsuit was filed by Nealon against Fuller and the Czyzyks after Nealon was involved in a car accident with Fuller when she was a passenger in the car with him.  Nealon alleged that Fuller was under the influence of drugs and alcohol at the time of the accident and that the Czyzyks negligently entrusted him with their vehicle.

The trial court granted State Farm’s summary judgment motion on the basis that Fuller was driving the car without permission and that the vehicle was only insured under Michele Czyzyk.  Nealon appealed on several issues, one of them being that jurisdiction is improper because State Farm was seeking an invalid advisory opinion from the court with its declaratory judgment action.  The Superior Court, upon review, disagreed with Nealon and found that because Nealon sought indemnification and there was a possibility that State Farm would have to provide a defense in an action that its policy was applicable to the litigation and that is was not a mere advisory opinion being sought but an adjudication of a controversy.

Nealon also raised the issue that the Czyzyks knowingly entrusted the car to Fuller.  The record indicated that only Michele Czyzyk was the car’s owner and the named insured on State Farm’s policy.  She gave permission to her brother, Mark Czyzyk, to run short errands with the car.  There was no evidence that she gave her brother permission to lend the car out to other people, including Fuller.  Under the State Farm policy, Fuller would be covered if he was a permissive user of the vehicle.  Permission requires a showing on behalf of the named insured/owner that warrants a connection and consent to the use.  Here the court found that the record was devoid of an issue of fact as to whether Michele Czyzyk permitted Fuller to use the car.  It did find that she did permit her brother to use the car for errands but did not permit him to lend the car out then.  Because of this, the court affirmed the summary judgment motion in favor of State Farm.

This case demonstrates the importance of fully assessing coverage issues in tandem with conventional defense litigation.  By analyzing the consequences of coverage, one can possibly limit potential risk and exposure on a claim.  In addition, a final declaratory judgment and order from a court can provide clarity on an issue and allow a clearer analysis of a lawsuit and potential liability since now one will know the extent to which a policy will apply to the instant action.

This analysis is not unexpected.  In New York, there have been literally thousands of instances where the police would pull over a rental car, and find that the driver is not the person who actually rented the car.  Under such circumstances, the operator is “unauthorized” (by Enterprise, for example) to use the car — and is then subject to arrest.  The point is, only the owner/lessee has the ability bestow permission to an operator.  That permission does not “pass through” to additional operators.  Thanks to Peter Cardwell for his contribution to this post.  Please email Brian Gibbons with any questions.

Deemer Statute Inapplicable to Out-of-State Pedestrians (NJ)

New Jersey’s Deemer Statute, N.J.S.A. 17:28-1.4, applies to out-of-state drivers who are injured in accidents in New Jersey.  Under the Deemer Statute, if you are an out-of-state resident and you are hurt in an accident in New Jersey, you will be subject to New Jersey’s restrictive limitation on lawsuit or “verbal threshold” if your insurance company is licensed to transact business in New Jersey.  The verbal threshold places limitations on the right to recovery for injuries sustained in a motor vehicle accident.

In Leggette v. GEICO, plaintiff, a Virginia resident, was struck by a N.J. licensed driver as she crossed a street in Princeton. The trial court granted defendant’s summary judgment dismissal of her declaratory judgment complaint against GEICO. Plaintiff appealed the trial court’s decision, seeking PIP benefits pursuant to the Deemer Statute, since her Virginia policy was deemed to provide standard PIP coverage while her vehicle was in this state. The trial judge concluded that the Deemer Statute was inapplicable.

Plaintiff drove her Virginia registered vehicle insured by GEICO to Princeton University to visit her daughter. Plaintiff parked her vehicle and was walking across the street when she was struck by an automobile. Plaintiff settled her claims against the driver of the automobile, and then initiated a declaratory judgment action against defendant GEICO for PIP coverage to satisfy the $113,825.47 in medical bills.  Plaintiff argued that GEICO was authorized to conduct business in New Jersey and was therefore legally obligated under the Deemer Statute to provide minimum standard automobile insurance policy PIP benefits.

Defendant GEICO refuted this interpretation, arguing that plaintiff, a pedestrian, was not using or operating her vehicle at the time of the accident and so coverage required by the Deemer Statute was not triggered.  Defendant argued that a nexus between the out-of-state automobile and the accident is necessary.

The Appellate Court agreed with GEICO, since the Deemer Statute specified the terms “occupying…or using” an automobile in the context of eligibility for PIP benefits.  Here, plaintiff parked her car, locked the doors, walked away, exited the parking lot, and was crossing a street when she was struck by a vehicle. At the time she sustained her injuries, her “use” of her vehicle had ended. As such, the Deemer Statute was not triggered and the Appellate Court affirmed the trial court’s decision.  Thanks to Steve Kim for his contribution to this post.  Please email Brian Gibbons with any questions.

Burden on Defendant to Establish Collateral Source (NY)

Under New York law, collateral offsets are an important tool in limiting damages and preventing plaintiffs from receiving duplicative recovery in a personal injury case. But a recent decision underscored the fact that the defendant is the party who carries the burden of establishing, to a reasonable certainty, that the plaintiff will receive collateral source payments. In McKnight v. NYCTA, the Second Department addresses the burden of proof necessary for a defendant to obtain a collateral source off-set.

Plaintiff Rosemary McKnight was injured when a bus she was riding to school was involved in a motor vehicle accident. She obtained a judgment in her favor, which included $190,000 for past medical expenses, $80,000 for past lost earnings, and $400,000 for future lost earnings. The defense sought to have these awards off-set under CPLR 4545, on the basis that the plaintiff was already receiving both social security benefits and workers’ compensation benefits from a 2002 work-related accident.

The defense provided testimony from the plaintiff and documentary evidence showing that the plaintiff was receiving $205 a week in workers’ compensation benefits. The Court found that evidence sufficient to grant a collateral offset, and the plaintiff’s awards of past and future lost wages were reduced in kind.

However, the defense provided no documentary evidence from the Social Security Administration regarding the amount or duration of plaintiff’s social security benefits. The defense did offer testimony from the plaintiff indicating that she received monthly benefits, but that testimony was inconsistent as to the amounts received. The court found this proffer of evidence insufficient, and found that the defense failed to establish with a reasonable degree of certainty that plaintiff was receiving social security benefits; therefore, no collateral source offset was granted.

Thanks to John Collins for his contribution to this post and please write to Mike Bono for more information.

PA Court Enforces Settlement Where Policy Limits Demanded And Offered

In Wise v. Hyundai Motor Company, a passenger died in an automobile accident and her estate sued the owner of the car, the driver of the car, and various insurance companies. This lawsuit was originated in Monroe County, Pennsylvania and implicated Pennsylvania law. Of interest here was that the estate of the decedent sent a policy limit demand to the insurance company of the driver and owner of the car (USAA).

USAA’s counsel replied, “offering” the policy limit of $115,000. At no point, in either the letter to USAA’s counsel or the reply, was the word “settlement” used. Plaintiff’s counsel never responded to the policy limit offer. From that point, USAA’s counsel was minimally involved in the matter, as the case primarily focused on products liability against Hyundai.

Four years after the policy limit demand, decedent’s estate settled with the products defendants and subsequently asserted a bad faith claim against USAA for failure to defend the driver and owner of the car, as USAA did not participate in any pre-trial proceedings or offered an expert and thus, arguably, could not assert a defense at trial. Decedent’s estate asserted this is cause for a bad faith claim. USSA, in response, moved to enforce the earlier $115,000 “settlement.”

The court held that, he policy limits were demanded and offered in return, and as such there was a settlement.  Although optimally there would be evidence that plaintiff send a letter accepting the policy limit offer, the course of conduct of the parties can also establish acceptance. The course of conduct showed that USAA had minimally been involved in the litigation after the policy limit offer, did not engage in discovery, and circulated a letter to all counsel stating USAA would not be involved in the litigation as the full policy limits had already been tendered. As such, all parties acted with the belief that settlement had been reached – including the plaintiff and the court therefore agreed to enforce the settlement.

Thanks to Matt Care for his contribution to this post and please write to Mike Bono if you would like further information.

New Car Stacks UIM Coverage Unless Waived (PA)

In Pergolese v. The Standard Fire Insurance Co., the Pennsylvania Superior Court was tasked with determining whether an insured was entitled to stacking of underinsured motorist benefits.  At issue was whether an added vehicle to a preexisting insurance policy provided coverage under its general terms or triggered that policy’s after-acquired vehicle provision.  The distinction was significant with respect to whether the insurer was required to obtain a new stacking waiver.

In the early 1990s, the Pergoleses purchased an auto insurance policy from Standard.  That policy contained a continuous after-acquired vehicle provision.  Over the years, the Pergoleses replaced and sometimes reduced the inventory of their vehicles. In May of 1996, the Pergoleses had four vehicles insured under their policy.  The Pergoleses also signed a rejection of stacked UIM in May of 1996 in relation to the policy.   In April of 1998, the Pergoleses contacted their insurance agent and requested insurance coverage for a vehicle that they were purchasing that day but did not yet own.  Their agent provided them with an insurance card for the vehicle and amended the Pergoleses’ auto insurance policy’s declaration page to include the new vehicle in addition to the three that were already covered under the policy.  Standard did not request a new waiver of stacked UIM coverage from the Pergoleses at that time.

In 2001, Mr. Pergolese suffered severe injuries when he was rear ended by a drunken driver.  He submitted a claim to Standard and asserted that he was entitled to stacked benefits. Standard denied the stacked benefits claim, and the Pergoleses filed a declaratory judgment action.  After discovery, the parties filed cross motions for summary judgment.  The court denied Standard’s and granted the Pergoleses’ motion.

The appellate court affirmed relying on its opinion in Bumbarger v. Peerless Indem. Ins. When an insured takes ownership of a vehicle and simultaneously informs his insurer of the new vehicle, the language and purpose of the after-acquired vehicle provision in the policy is never triggered.  An after-acquired vehicle provision merely extends existing coverage to a new vehicle until the insured notifies the insurer that he wishes to insure the new vehicle under his policy with the insurer. The after-acquired vehicle clause extends temporary, stop-gap coverage, thereby protecting the insured until the policy can be amended.  However, once an insured advises its insurer that an new auto is to be added,  the after-acquired vehicle provision is not applicable.  In such event, the Pennsylvania Supreme Court’s holding in Sackett v. Nationwide, 919 A.2d 194 (2007) (“Sacket I”) is controlling.  There the Supreme Court held that the addition of a new vehicle to an existing multi-vehicle policy constitutes a purchase for which the insurer must obtain a new waiver of stacked coverage.

Thanks to Marcus Washington for his contribution.

For more information, contact Denise Fontana Ricci at dricci@wcmlaw.com.


Lender Beware– Suit Against Motorcycle Owner Survives MSJ (NY)

The Tompkins County Supreme Court recently denied summary judgment to a motorcycle owner in Perkins v. Cnty of Tompkins, 2014-0037 (March 2017) because of an issue of fact as to the owner’s entrustment to the operator of her motorcycle.

Perkins arose in 2012 when a motorcycle owner lent her motorcycle to her 30 year old brother, an experienced rider.  She also spent 10 minutes showing her brother how to operate that specific motorcycle.  Shortly thereafter, the operator’s brother collided with another motorist.

The motorcycle operator brother brought suit against the other motorist claiming negligence.  The motorist then brought a third party action against the motorcycle owner, seeking contribution/indemnification claiming the operator negligently entrusted the motorcycle to her brother.

The motorcycle owner moved for summary judgment arguing that the motorist lacked standing for his claims since the operator is not a third party injured by the entrustment. The court found that “unquestionably the harm to third parties in this case is not the direct, physical injury ordinarily caused by dangerous instruments.”  Id.  But that the financial harm resulting from potential liability of a ‘concurrent tort-feasor’ is sufficient to give rise to a cause of action for indemnification.  Here, the operator had standing to bring a claim against the motorcycle owner.

The court found that although most cases of negligent entrustment involve an adult entrusting a dangerous instrumentality to a minor,  negligent entrustment can be based upon “the degree of knowledge the supplier had concerning the entrustee’s propensity to use the chattel in an improper fashion.” The Owner argued that the operator was not a minor and she was aware that the operator had previously owned and operated a motorcycle.  Unfortunately, she denied knowledge of knowing whether the operator had a license to operate a motorcycle or whether the operator had undergone any training or instruction on the motorcycle.  The court found that as a matter of law, it cannot be said that Owner exercised reasonable care in determining whether the operator possessed the requisite intelligence and training, finding at a minimum she should have inquired as to the status of his license.

The Court’s ruling demonstrates the extreme importance of taking precaution before lending your vehicle — especially a motorcycle.  Frankly, the ruling is not surprising, considering that motor vehicle owners are often kept in lawsuits under similar circumstances.  Thanks to Patrick Burns for his contribution to this suit.  Please email Brian Gibbons with any questions.

Pre-existing Injuries Present Hurdle to Plaintiff Proving Serious Injury “Threshold”

In Khan v. Goldman Hacking Corp., the Appellate Division, First Department unanimously reversed the Supreme Court’s denial of defendant’s summary judgment motion, stemming from a BI motor vehicle accident case.

Plaintiff alleged  serious injuries in a rear-end motor-vehicle accident, including cervical bulges, lumbar and thoracic sprains, and dysfunction of the jaw.  Defendants met their prima facie burden of showing that plaintiff did not suffer permanent consequential or significant limitations of the use of his jaw or his cervical, thoracic, and lumbar spine through affirmed reports of a dentist and neurologist.  Defendants also relied on plaintiff’s medical records that indicated he complained of back pain less than a month before the accident and was diagnosed with thoracic strain and sprain.

In reversing the lower court’s denial of defendant’s “threshold” motion, the First Department found that plaintiff failed to raise an issue of fact as to causation regarding plaintiff’s cervical and thoracic spine because he failed to address the findings of degeneration in plaintiff’s own MRI by offering another, legally sufficient, cause for the claimed spinal injuries.  The Court found that plaintiff’s expert’s opinion that the alleged accident itself caused the alleged injuries was insufficient to raise an issue of fact as the expert first examined plaintiff approximately six years after the accident.

While plaintiff’s expert acknowledged plaintiff’s prior diagnosis of thoracic strain, he did not offer any opinion as to how the claimed thoracic injury differed from the pre-existing condition.  Further, plaintiff did not submit objective medical evidence of lumbar spine injury as the MRI was performed more than five years after the accident which was too remote to show a causal connection to the accident, and incidentally were not part of the record.

This decision emphasizes the importance of counsel zealously pursuing all records of a plaintiff’s pre-accident condition in defending a matter.  Further, this decision highlights the importance of carefully parsing a plaintiff’s expert’s opinion and attacking its logical and evidentiary gaps, particularly as to causation.  Generally, “threshold” motions are difficult to win — but holding a plaintiff to his burden can sometimes be fruitful.  Had plaintiff and his expert crafted a more tailored affidavit alleging exacerbation of the pre-existing condition, we suspect the First Department would have affirmed the lower court’s ruling.  Thanks to Justin Pomerantz for his contribution to this post.  Please email Brian Gibbons with any questions.

Sleep Issues Not Serious Physical Injury in DWI Accident (PA)

In Vetter v. Millerthe plaintiffs were driving home from a wedding, where apparently they both drink a fair amount of alcohol.  Plaintiff Vetter was chosen to be the driver, but had no memory of the events of the evening.  Plaintiff Jones, the passenger, said that Vetter became annoyed that defendant Miller was tailgating their car, so Vetter exited his vehicle to confront Miller.  Miller, alleging that Vetter “did not look right” attempted to flee but knocked the plaintiff down and dragged him with his vehicle. Responding paramedics noticed a smell of alcohol on Vetter, who was cited with DUI, driving with a suspended license and harassment, and he eventually pleaded guilty to criminal charges.

Despite their actions, Vetter and Jones sued Miller for negligence and recklessness, and Jones brought a claim against Miller for negligent infliction of emotional distress. The defendant filed a motion for partial summary judgment, seeking dismissal of the negligent infliction of emotional distress claim, arguing that Jones could not establish that she suffered serious bodily injuries as required under PA law. The court granted the motion, dismissing that claim. The case went forward, and  at trial the jury found plaintiff Vetter 74% negligent and awarded no damages.

On appeal, Jones contended that the trial court erred in dismissing the negligent infliction of emotional distress claim. The Superior Court found that the trial court properly dismissed the claim, as the passenger had elected limited tort coverage on her driver’s insurance policy, and therefore had to establish a serious bodily injury, which meant a “serious impairment of a body function.” The Court found that Jones’s testimony that she suffered from sleep deprivation did not amount to a serious injury because she remained able to perform her full-time job, pursue a nursing degree and care for her son.

However, a new trial was awarded to Vetter, because although evidence of his intoxication was relevant, the appellate court found that evidence that Vetter pleaded guilty to criminal charges in connection with this incident ought to have been excluded.

Thanks to Alexandra Perry for her contribution to this post and please write to Mike Bono for more information.

Untimely Expert Report Leads to Dismissal (NJ)

In New Jersey, the verbal threshold limits plaintiffs from bringing a lawsuit for injuries sustained in an automobile accident.  Specifically, this limitation requires a permanent injury or one that results in a whole or partial loss of a body member or function in order to file suit. Plaintiffs must produce expert reports or documents that support a finding of some level of permanent injury in order to vault the limitation-on-lawsuit threshold as soft-tissue injuries are not sufficient.

In Resua v. Hachkian, plaintiffs were rear-ended by a vehicle operated by an intoxicated defendant. The principal issue was plaintiffs’ damages, as both plaintiffs alleged various soft-tissue injuries that were not sufficient to vault the limitation-on-lawsuit threshold without an expert report supporting a finding of permanent injuries.

During the lawsuit, plaintiffs’ attorney had a relapse on an illness that caused delays in discovery. As such, he failed to produce expert reports within the discovery deadline. After an unsuccessful arbitration, defendants filed a motion for summary judgment. Plaintiffs produced expert reports in late August and additionally filed a cross-motion seeking an extension of the discovery end date.

The trial court denied plaintiff’s motion and granted defendant’s motion for summary judgment, opining that plaintiffs’ attorney’s illness did not constitute an exceptional circumstance warranting an extension of discovery, and finding that plaintiff’s medical records without the support of expert opinion did not suffice to establish permanent injuries.  On appeal, the appellate court agreed that that plaintiffs’ attorney failed to show how his illness impacted his ability to function in the months leading up to the latest discovery end date when his expert reports were due.  As such, the plaintiffs’ expert reports were to be disregarded and without expert reports, plaintiffs failed to show permanent injury.  Thanks to Steve Kim for his contribution to this post.  Please email Brian Gibbons with any questions.