Cyber Rules About to Get Real.

We have previously reported on NY’s onerous cyber rules. The rules go into effect by month’s end.

Specifically, n August 28, 2017, insurance companies that do business in NY will be obligated to institute policies and procedures that preserve and protect PII of clients, insureds, and other entities in accordance with 23 NYCRR §500 (et seq.). The rationale of the policy was explained by the Superintendent of the DFS:
Consumers must be confident that their sensitive nonpublic information is being protected and handled appropriately by the financial institutions that they are doing business with. DFS designed this groundbreaking proposed regulation on current principles and has built in the flexibility necessary to ensure that institutions can efficiently adapt to continued innovations and work to reduce vulnerabilities in their existing cybersecurity programs. Regulated entities will be held accountable and must annually certify compliance with this regulation by assessing their specific risk profiles and designing programs that vigorously address those risks.

Insurance companies, and other covered entities, are required to perform cybersecurity assessments in accordance with a written policy developed by the covered entity, that includes:
• An evaluation of encryption of data containing PII (both in transit and at-rest);
• The development of a Crisis Response Team (“CRT”) to respond to a breach;
• TFA or MFA;
• Identify and assess internal and external cybersecurity threats;
• Utilize defensive infrastructure in conjunction with appropriate policies and procedures to protect PII;
• Capability of detecting and responding to any intrusion;
• Ability to fulfill the statutorily required breach notification statutes.

Moreover, the regulations require a specific policy that regulates 14 different aspects of the covered entities operations. If this is not enough to develop specific in-house policies, the regulations also require that insurance companies ensure that other entities it does business with and transfers materials containing PII, to maintain and adhere to strict cybersecurity regulations that include a requirement for TFA, encryption, written policies, and periodic assessments of the efficacies and compliance to the policies. The insurance company is required to promulgate a policy for its third-party service providers that complies with the above requirements. If not, the insurance company may be held liable.

Furthermore, we note that this will soon be the policy in all 50 states. It is easier to implement these changes and requirements now as opposed to being forced to implement the policies at a rush and possibly not achieving full compliance.

Special thanks to Matt Care for his contributions to this post.

For more information about this post please e-mail Bob Cosgrove.

WCM Partner to Speak at Privacy Shield Certifications Webinar.

WCM Partner Bob Cosgrove, a CIPP-US and CIPM, will be one of two speakers at an August 31, 2017 webinar entitled Privacy Shield Certifications: Things You Need to Know. Mr. Cosgrove will focus his portion of the presentation on:
1. Privacy Shield: Requirements and advantages of participating in the event of litigation.
2. Serving Two Masters: The litigation process, discovery, and data transfer from the European Union.
a. Why discovery involving European Data is a challenge and what Privacy Shield does and does not do to remedy the problem.
3. There is Nothing New Under the Sun: The implications of Privacy Shield on member state data blocking legislation.
a. Blocking legislation in member countries is still effective.
b. How the United States courts have handled blocking legislation and data transfer restrictions.
4. Privacy Shield Enforcement: The arbitration process and liability for failure to comply with Privacy Shield requirements.
If you are interested in the webinar, more information can be found here, or e-mail Bob Cosgrove.

WCM Wins Summary Judgment in Philadelphia Penile Numbing Cream Products Case.

Partner Bob Cosgrove and associate Matt Care were awarded summary judgment in Philadelphia County in the case of Lowe v. The Kama Sutra Company, et. al. In Lowe, the plaintiff, a MMA fighter, sued the designer, manufacturer, and distributor of a prolonging gel, meant to prevent premature ejaculation, after alleging injuries to his penis after repeated use. Lowe utilized the gel in combination with other products and alleged that the gel caused permanent disfigurement to his member and decreased sexual performance.

After years of discovery and countless depositions, WCM was able to convince the court that our client, a wholesale distributor of adult novelties and romance products, did not distribute a defective product. Consequently, the court dismissed all of the plaintiff’s negligence, strict product liability, breach of express warranty, breach of implied warranty of merchantability, and breach of implied warranty of fitness for a particular purpose claims, and all cross-claims against our client.

For more information about this post please e-mail Bob Cosgrove.

First Department Enforces Settlement Reached via Emails After Plaintiff Attempted to Renege (NY)

By and large, most personal injury lawsuits settle.  Following discovery and as the liability picture becomes clearer the parties can engage in good faith settlement discussions and equitably resolve the matter. An essential element of good faith negotiations is that the attorneys have the authority to negotiate and settle. Plaintiff attorneys must be in sync with their clients during this phase, since settlement is ultimately a plaintiff client decision.  Once terms are agreed, the attorneys, clients, and carriers reasonably believe the matter is resolved and all that remains is the final paperwork and draft.

Unfortunately, there are occasions when a party either gets cold feet or blatantly reneges on an agreement.  Frustration, consternation, and, in matter of Jimenez v Yanne, motion practice and appeals to enforce settlement follows.    In Jimenez The First Department Appellate Division, reversed the trial court’s decision and granted the defendants’ motion to enforce a settlement agreement.

CPLR Section 2104 states: “an agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered…” The trial court rejected the defendants’ argument that a series of emails negotiating and agreeing to the settlement was enforceable.  Defendants’ attorney wrote, “Ok, we can agree to settle this matter for $13,000 to Jimenez and $17,000 to Morales.  Please confirm.  Thanks.”  The trial court note that defendants’’ attorney’s name was not typed at the end of her email.  Plaintiff attorney replied, “All good.  The power of email.” In a following email on the same day, plaintiffs’ attorney emailed, “Are you doing releases?” Plaintiffs’ attorney’s name was not printed at the end of either email.  The court found that as plaintiffs’ attorney did not type is name and the end of his email that confirmed the settlement; the emails do not qualify as signed writings pursuant the N.Y. General Obligations Law or the case law.  Therefore the settlement agreement was not binding upon plaintiff Morales, who changed her mind regarding the settlement.  (Plaintiff Jimenez provided a Stipulation of Discontinuance and a General Release).

In reversing, the appellate division found that the email communications between the plaintiffs’ counsel and defendants’’ counsel sufficiently set forth an enforceable agreement to settle the claims, including that of Morales.  The appellate division noted that plaintiff counsel typed his name at the end of the email accepting defendants’ office, which satisfied the CPLR requirement that settlement agreements be in a “writing subscribed by him or his attorney” in order to be enforceable.

This case highlights potential pitfalls of the negotiating process and the old Yogi Berra adage, “It ain’t over till it’s over.”  Professional ethics dictate that an agreement is an agreement.  Professional practice, however, illustrates that that is not always the case.   The attorneys signing their names to an email took on added significance, which resulted in appellate practice — and added litigation costs — over a relatively modest settlement.    Thanks to Justin Pomerantz for his contribution to this post.  Please email Brian Gibbons with any questions.

Municipal Animal Shelter “Sheltered” From Liability In Dog Bite Case (NY)

New York State is relatively lenient when it comes to imposing liability on dog owners in dog bite cases: an animal owner will be held liable for a dog bite when he knows or should have known about his animal’s vicious propensities and those propensities cause the plaintiff’s injuries.  A recent decision from New York’s Second Department shows that New York’s relatively lenient standard is even more lenient when the defendant is a government-run animal shelter.

In Abrahams v. Mt. Vernon, the plaintiff was the mother of an infant who was attacked by a dog when visiting the back room of an animal shelter.  In its motion for summary judgment, the City relied on its municipal status to argue that it could not be held liable.  The court agreed, and dismissed the complaint against the City.  In doing so, the court recognized that a municipality can only be held liable in this context if it had a special relationship with the plaintiff, which could only be proven if: (1) the municipality violated a statutory duty enacted to protect a specific class of persons; (2) it voluntarily assumed a duty on which the plaintiff justifiably relied to its detriment; or (3) it assumed control in the face of a known, blatant, and dangerous safety violation.

Because the City merely provided a governmental function designed to benefit the public at large, there was no special relationship and the City could not be held liable.  In passing, the court noted that the City would not have been liable under the standard applicable to private persons either, as there was no evidence of vicious propensity for this particular dog.

Abrahams is a reminder that government often enjoys greater legal protection than those it governs.  And both governments and private citizens who own dogs have greater protections from potential liability in New York than elsewhere in the United States.  Thanks to Michael Gauvin for his contribution to this post.  Please email Brian Gibbons with any questions.

 

Property Owner and Snow/Ice Contractor Shielded Against Slippery Plaintiff (PA)

On July 24, 2017, the Superior Court of Pennsylvania summary judgment in favor of the defendants in Castaldi v. Light Acadia 11-89 et al..  The case arose out of an alleged slip and fall when on January 17, 2012, the plaintiff, Dina Castaldi (“Castaldi”), claimed she fell in the parking lot of a shopping center that was owned by Light Acadia 11-89, LLC (“Light Acadia”).  She claimed there was a patch of ice that caused her to fall.  Defendant Grass Works Landscape Management, Inc. (“Grass Works”) was retained by Light Acadia to perform snow and ice removal at the parking lot.

Both Light Acadia and Grass Works filed for summary judgment on the basis of the hills and ridges and out of possession landlord doctrines.  The trial court granted both of their motions.  Castaldi then appealed.

In Pennsylvania, the hills and ridges doctrine is designed to protect landowners from liability for generally slippery conditions resulting from ice and snow where the owner has not permitted the ice and snow to unreasonably accumulate.  Courts recognize that to impose a duty on landowners to keep their walkways free of ice and snow at all times is an impossibility.  Therefore, to make a case, a plaintiff must show: 1) that snow and ice accumulated to a degree to unreasonably obstruct travel and to constitute a danger; 2) that the property owner had notice of such condition; and 3) that the accumulation caused their fall and injuries.  A plaintiff can also make a case if they show that an accumulation was from an “artificial origin”, i.e. plowing.

The court agreed with the defendants and found the Light Acadia had no notice of snow/ice accumulation in the lot and that the accumulation was not large enough to constitute a danger.  In addition, the court stated that Grass Works was covered by the hills and ridges doctrine because it was actively treating snow and ice with salt and thus was acting reasonably.  The court also found that Light Acadia was not liable because it was an out of possession landlord, and owed no duty to third-parties.  As such, Light Acadia was granted summary judgment on this point as well.

Courts have recognized owning property as a benefit, on the whole, to society and seek to encourage.  As such, several defenses have been established in common law and statute to protect landowners in certain situations.  The hills and ridges and out of possession landlord doctrines are two examples of such defenses.

It is important therefore to recognize early on the type of ownership that a client has in a property, their interest in the property, how they use it, whether they have leased it out, and other factors to see if they qualify for a certain defense. Thanks to Peter Cardwell for his contribution to this post.  Please email Brian Gibbons with any questions.

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.

Additur: Lowest Possible Verdict Standard Applies (NJ)

 

Additur is a legal mechanism, seldom seen in some jurisdictions, wherein a court may correct a damages verdict, if the court feels 1) the verdict rendered constitutes a manifest injustice, 2) the verdict can be corrected without disturbing the liability verdict. Appellate-plaintiff attempted to use this mechanism in the Orientale v. Jennings case, wherein a jury trial resulted in a $200 award for pain and suffering on behalf of the plaintiff.

Following a motor vehicle accident, plaintiff settled with the negligent driver for $100,000 and subsequently filed suit against her own insurer, defendant Allstate New Jersey Insurance Company, under the UIM provision of her policy.  A damages trial was conducted to determine the extent of plaintiff’s injuries. The jury awarded no money on the loss of consortium claim. Although the jury found that plaintiff had suffered permanent injury, they awarded $200 in damages.

Plaintiffs sought a new trial and filed a motion for an additur. The trial judge determined that the $200 award constituted a miscarriage of justice and that additur was appropriate. The judge determined that the lowest verdict that a reasonable jury could have reached based on the proofs of the case was $47,500. Apparently, this increased award was not enough for the plaintiff, who then filed an appeal arguing that the trial court applied the wrong standard for additur. Plaintiffs argued that the trial court should not have made the award calculations based on the lowest value that a reasonable jury could find, but rather that it should have issued an award based on what a reasonable jury would find.

The appellate court determined that the principles that applied to additur included a presumption that the jury verdict was correct and deference should be given to the award. The trial record underlying an additur motion must be viewed in the light most favorable to the defendant and the judge should not sit as a decisive juror and should not overturn a damages award falling within a wide acceptable range. The court’s role in assessing a jury verdict is to assure that compensatory damages awarded to a plaintiff encompasses no more than the amount that will make the plaintiff whole. The appellate court thereby determined that the trial court properly applied the standard of “the lowest verdict that a reasonable jury could have reached based on the proof[s].” The appellate court affirmed the trial court decision.  Thanks to Steve Kim for his contribution to this post.  Please email Brian Gibbons with any questions.

A Bridge Too Far – 1st Department Reverses Labor Law § 241(6) Claim Following Construction Accident on Whitestone Bridge (NY)

In James v Alpha Painting & Constr. Co., Inc, the First Department recently adopted a broad interpretation of section 23-8.2(d)(3) of the Industrial Code, which governs “mobile crane travel.”

The case arose from injuries sustained by plaintiffs Darren James and Balthazar Andrade, who were employed by a subcontractor on a project to renovate and repaint the Bronx-Whitestone Bridge. On the date of the accident, they were dismantling a scaffold and loading the materials onto a boom truck – a flatbed truck with a hoist or “boom” affixed to the back. Once they loaded the boom truck, plaintiffs were directed to board the boom truck while it drove the materials to the other side of the bridge. After driving approximately 700 feet, the raised boom struck an overhead road sign and gantry, causing part of the truck to swing into the air and throwing the plaintiffs from the truck onto the roadway, causing severe injuries. Plaintiffs commenced a lawsuit against, inter alia, Alpha Painting and Construction Co., Inc. (Alpha), the general contractor on the project, and GPI, the construction manager, alleging common-law negligence and violations of Labor Law §§ 200, 240(1), and 241(6).

The trial court granted defendants’ motion for summary judgment dismissing the complaint. On appeal, the First Department upheld the dismissal of plaintiffs’ common-law negligence and Labor Law §§ 200 and 240(1) claims. First, the Court held that even though the accident occurred 700 feet away from the job site, it occurred while the truck was “in the process of driving away.” Accordingly, it should be considered part of the site of the purposes of the Labor Law. Secondly, the Court upheld the dismissal of plaintiffs’ Labor Law § 240(1) claim, as the plaintiffs’ injuries were not caused by an elevation-related risk, but by the motion of the truck after the boom struck the overhead road sign. Lastly, the Court held that Alpha put forth prima facie evidence that it only had general supervisory control over the plaintiffs’ work, which the trial court correctly held was insufficient to establish liability under Labor Law § 200 or the common-law.

In terms of plaintiffs’ Labor Law section 241(6) claim, the Court found that issues of fact warranted reversal of the trial court. Specifically, the Court analyzed section 23-8.2(d)(3) of the Industrial Code, which pertained to “mobile crane travel.” Section 23-8.2(d)(3) provided that “[a] mobile crane, with or without load, shall not travel with the boom so high that it may bounce back over the cab.” The Court recognized that in the case at bar, plaintiffs were not injured by the boom bouncing over the cab, but rather, when the boom hit the road sign. However, the Court looked to cases from other Appellate Divisions that held section 23-8.2(d)(3) was violated when a mobile crane has “the boom so high that it may bounce back over the cab.” Accordingly, the Court remanded plaintiffs’ Labor Law section 241(6) claim to the trial court, so that a jury could resolve outstanding factual questions related to the operation of the worksite and which defendant had control over the injury producing work.

Despite the fact that the First Department upheld the dismissal of most of plaintiffs’ claims, it was clearly reticent to refuse plaintiffs their day in court. Here, the dissenting justices noted that the majority went to great lengths to apply section 23-8.2(d)(3) of the Industrial Code – which dealt exclusively with mobiles cranes – to the case at bar, which dealt with a boom truck. To the dissenters, a mobile crane and a boom truck were clearly distinguishable, so the majority was “unconvincing” in its efforts to find factual issues by relying on a regulation that did not even apply. Overall, the majority opinion clearly demonstrates the high bar movants face when seeking summary judgment.  Thanks to Evan King for his contribution to this post.  Please email Brian Gibbons with any questions.

Mason Found to Fabricate Scaffolding Accident (NY)

The Queens County Supreme Court recently tried a case in which plaintiff alleged he fell off a scaffolding, injuring himself in Klimowicz v. Powell Cove Associates LLC et al.

The plaintiff in Klimowicz was a mason and allegedly injured his right shoulder when, while building a brick wall and standing on an elevated scaffold at a construction site, fell through an opening in the scaffold

Plaintiff sued the premises’ owner and two related entities alleging state labor law violations, believing he fell because two boards had been removed from the scaffold’s platform, and because he was not provided the proper safety equipment as required under the statute.

As a result of the accident plaintiff suffered injuries including two arthroscopic surgeries on his shoulder, several courses of physical therapy, residual arthritic pain in shoulder with weakness and diminished range of motion.   Plaintiff ultimately demanded $1,000,000 for both past and future pain and suffering.

The matter went before a bifurcated jury trial, with the issue of liability being first heard by the jury.  The defense attorneys argued that plaintiff completely fabricated the incident to recover for injuries suffered at an independent incident unrelated to the scaffolding.  Defense Counsel noted that during a workers compensation hearing, plaintiff stated his injuries occurred while he was moving building materials.  Defense counsel also noted that in plaintiff’s medical records, plaintiff indicated the injuries occurred while plaintiff was pulling up a heavy plank.   In addition, plaintiff did not immediately report the incident after it was alleged to have happened but waited over a month.

The underlying workers’ compensation file, and persistence by defense counsel and their claim representative, helped to uncover the inconsistencies in plaintiff’s account. Ultimately, the jury rendered a defense verdict, finding that the defendants were not liable for plaintiff’s accident.   Thanks to Patrick Burns for his contribution to this post. Please email Brian Gibbons with any questions.