Category Archives: Litigation

Insurer Attempts to “Sack” Coverage of Trademark Suit based on “Financial Quarterback” Term (PA)

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Erie Insurance Exchange filed a complaint Monday alleging that it has no duty to defend or indemnify a financial planning company facing claims in federal court for willfully infringing a rival’s marketing slogan trademarks. According to Erie, their policy explicitly precludes coverage for claims of infringement of copyright, patent, trademark or trade secret. Jalinski Advisory Group, Inc. has been marketing itself as “the financial quarterback” since 2009, and it formally registered “financial quarterback” as a trademark in April 2010.

However, Franklin Retirement, Erie’s insured, started to brand itself as “your financial quarterback,” which Jalinski alleges is indirect violation of the trademarks. Erie agreed to represent Franklin under a reservation of its rights; however, Erie ultimately denied coverage.  Now, Erie seeks a Pennsylvania state judge to free it from providing coverage.

With regard to trademark litigation, it’s all about the litigation fees, since defense of trademark infringement is very fact-specific, time-consuming, and expensive.  (Dennis Wade’s “This and That” from January 4, 2019 also focused on trademark litigation, and the ensuing expense.)

Does use of the term “Your Financial Quarterback” constitute copyright infringement?   The only certainty is that the answer to the question will be expensive.   Thanks to Melisa Buchowiec for her contribution to this post.  Please email Brian Gibbons with any questions.

Police Escort in Funeral Procession Does Not Trigger “Emergency Doctrine” Defense (NY)

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In State Farm v. County of Nassau, State Farm sought recovery for property damage as part of a subrogation claim, where its insured driver, Licata was driving when he came to a full stop at a “T” intersection. There was bumper to bumper traffic on both his right and left due to a funeral procession. After looking in both directions he started to make a left hand turn. During his turn, he was struck by a police car. Mr. Licata said that the police car did not have its siren or lights on. The police officer contradicted this account. He stated that he had his lights and sirens on because he was proceeding from the back of the funeral line to the front to help escort the vehicles through the intersection.

The court was presented with the question of whether the negligence or reckless disregard standard applied. The court held that no emergency existed when the police officer was escorting the funeral procession. Therefore, the ordinary negligence standard applied. The court noted that the police officers testimony was extremely credible and that they believed him when he said he had his siren and lights on prior to the impact. Unfortunately, for him it did not matter.

The takeaway from this case is a simple one. Not every time an officer has his or her lights and sirens on will it automatically be considered an emergency situation. It is going to depend on the specific facts and circumstances of the occurrence. Here, the court made it clear, a police officer escorting a funeral procession is not considered an emergency.

This case also has a thorough and interesting analysis pertaining to issues of law (applicability of emergency doctrine) and issues of fact (apportionment of fault.)   Thanks to Marc Schauer for his contribution to this post.  Please email Brian Gibbons with any questions.

NY Investment Firm Entitled to Entity Defense Costs for Lawsuits and SEC Investigations (DE)

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A Delaware Court held that New York Investment Firm AR Capital LLC and Phoenix-based Vereit Inc., were entitled to entity defense costs in connection with lawsuits and U.S. Securities and Exchange Commission investigations.

This litigation, AR Capital v XL,  stems from an agreement between AR Capital LLC and Phoenix-based Vereit, Inc., a real estate operating company, according to Wednesday’s ruling by the Delaware Superior Court in Wilmington.

In 2014, an audit committee began a investigating reporting irregularities, and an SEC investigation followed.  Subsequently, shareholders filed a lawsuit which resulted in a class-action and seven opt-out actions. In turn, AR Capital retained two law firms to defend its interest and approximately 14.5 million in defense costs were incurred.

Primary and Excess insurance coverage through XL insurance was purchased by Vereit and the term was from February 2014 through February 2015. Vereit’s primary insurer, provided $10 million in coverage and seven excess insurers provided another $70 million in coverage. AR capital was an additional insured under the policies.

XL insurance began providing coverage on behalf of 6 of AR Capital’s officers and directors, however, it denied coverage to the corporate entity.  AR Capital ended up filing suit against all the insurers and requested indemnification from Vereit.   AR Capital subsequently settled with XL and Beazley Insurance Co., which insured the first excess layer.

All the parties involved in the litigation came to an agreement that AR Capital may be entitled to partial coverage, however, there were disagreements  as to the entity coverage.

Finally, the court held AR was entitled to entity coverage based on policy language. AR Capital is to be paid for their claims up to the same amount Vereit has already been paid by the excess insurers. Thereafter, AR Capital and Vereit shall be paid defense costs as they are incurred and submitted (first in, first out.) said the ruling.  Some well-reasoned policy interpretation in the attached case.

Thanks to Jon Avolio for his contribution to this post.  Please email Brian Gibbons with any questions.

Cost-Effective ADR — Brought About by a Not-So Cost-Effective Appeal (PA)

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On January 4, 2019, the Superior Court of Pennsylvania vacated a May 23, 2017 ruling in the Court of Common Pleas of Fayette County that overruled the preliminary objections of Golden Gate National Senior Care, LLC.  Those preliminary objections sought to compel arbitration.

At the trial court level, Golden Gate sought to enforce a compulsory ADR agreement signed by Mildred Snyder’s husband, Donald Snyder, upon Mrs. Snyder’s admission to the Golden Gate National Senior Care facility in 2006.  However, the trial court overruled their preliminary objections arguing there was no meeting of the minds as to the ADR agreement, Mr. Snyder lacked the authority to execute the agreement, and the agreement lacked consideration and was unconscionable.

The Superior Court quickly determined that lower court abused its discretion in overruling Golden Gate’s preliminary objections.  However, the Court first had to determine if it had authority to hear appeal of the interlocutory order.  In Pennsylvania, an appeal may be taken from a court order denying an application to compel arbitration made under 42 Pa.C.S.A. 7304.  The Pa. Supreme Court in Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490 (Pa. 2016) heard an appeal regarding the enforceability of an ADR provision similar to the provision in the present case.  Therefore, the Court ruled it could move forward with reviewing the interlocutory order.

Once the court overcame that procedural hurdle, the court quickly disposed of the arguments that the trial court made in declining to enforce the ADR provision as the lower court failed to provide sufficient justification for its actions.

Although Golden Gate prevailed on appeal, their frustration at the added expense of motion and appellate practice would be understandable, in light of the clear binding ADR language in the agreement.  Thanks to Garrett Gitler for his contribution to this post.  Please email Brian Gibbons with any questions.

Howdya Like Them Apples? (NY)

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What’s worse than finding a worm in your apple?  Finding half a worm in your apple.  (Wait for laughter.)

Speaking of apples, apple-picking has become a common autumn activity, when orchards convince people to pick their own apples while taking in the ambiance.  But legal principles still obviously apply to orchard-owners and invitees.

A landowner’s duty to maintain property does not include warning or protecting from “open and obvious” conditions that are not inherently dangerous. In the event that there is a concealed or dangerous condition, the landowner then is required to warn of that condition.

Recently, the First Department extended the scope of open and obvious and inherently dangerous in its decision on Mangiafridda v. Masker Fruit Farms, Inc., App. Division 1st Dept. (Jan. 3, 2019)(not yet reported). In Mangiafridda, plaintiff was apple picking at defendants apple orchard when she tripped and fell due to a sloped and rocky roadway on the premises. The defendant moved for summary judgment arguing that the condition of the roadway was open and obvious, inherent in the nature of an apple orchard and that plaintiff could have reasonably anticipated that the roadway would not be smooth.

The lower Court granted the defendants motion and the Appellate Division affirmed. The Court found that not only was the roadway open and obvious but the defendant also posted warning signs regarding the sloped and rocky roadway. The Court found that the defendants did not have a duty to warn or protect of the condition, but even if they did, they met that duty by posting warning signs.

This decision diverges from the typical caselaw on this topic in that the Court found that the condition was “inherent to an apple orchard” not that it was “not inherently dangerous” which the typical standard is when assessing a property owner’s duty as it pertains to an open and obvious condition. This distinction, while slight, opens the door for defendants to argue that a condition is not dangerous if it is one that is “inherent to the location” of the accident and could have been anticipated to be present by the plaintiff. This distinction could be helpful to defendants where accidents occur due to inherent conditions or in typically dangerous circumstances.

Thanks to Dana Purcaro for her contribution to this post.  Please email Brian Gibbons with any questions.

Eight (Years) is Enough — Plaintiff’s Delinquent Discovery Finally Prompts Dismissal (NY)

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As every litigator is well aware, particularly in New York, the wheels of justice tends to turn slowly.  This concept was never more apparent than in the case of Harris v. Kay.  This 2019 First Department decision has a 2006 index number.  Plaintiff appealed from a 2017 order granting defendant’s motion to strike the complaint.  The Appellate Division found the trial court did not abuse its discretion in striking the complaint given plaintiff’s repeated, willful and contumacious refusals to provide discovery and comply with court orders over EIGHT years.

This decision goes to show the level of leniency courts grant plaintiffs before entertaining the sanction of dismissal.  Plaintiff’s response to defendants’ first set of interrogatories were served SIX years after the initial demands were made and the response failed to show a good-faith effort to address the requests meaningfully.  It is a point of great frustration for defendants when plaintiff’s initiate lawsuits and then fail to prosecute and it takes years of good faith letters and motion practice, only to get an inadequate response.  While this decision gives plaintiffs significant leeway, it is heartening to know there are limits to a court’s generosity.  Let’s hope more judges make the resolution to keep more stringent discovery schedules!

The salient point for defendants is simple — when plaintiffs fail to adhere to discovery orders, document those failures by publishing letters to the plaintiff.  The more failures documented, the more persuasive the eventual dismissal motion will be.  Thanks to Mehreen Hayat for her contribution to this post.  Please email Brian Gibbons with any questions.

Plaintiff’s Slip-and-Fall Claim Put on Ice (NJ)

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During a snowy morning in February, plaintiff, a courier, was making his rounds delivering packages to residents. The previous night, several inches of snow had accumulated on the sidewalks abutting numerous residential properties. In the early morning hours, defendant Louis Gallo removed the snow from the sidewalk in front of his residential property using a shovel and a snow blower. Following this morning errand, Gallo went to work while snow continued to fall.

A couple hours later, plaintiff arrived at defendant Gallo’s property to deliver a package, while it was still snowing, and he slipped on ice that was concealed by snow. Plaintiff remained immobilized for a few minutes, and was subsequently taken to the hospital and diagnosed with a dislocated and fractured patella. Plaintiff filed a lawsuit against Gallo, claiming that his fall was caused by a hidden hazard in the form of ice underneath fresh snow on the sidewalk.

Following discovery, defendants filed for summary judgment. In his opposition, plaintiff argued that defendants created a greater hazard by shoveling the snow into mounds alongside the public sidewalk which then melted and refroze on the sidewalk. The trial court granted defendants motion for summary judgment and plaintiff appealed. The appellate court, citing Foley v. Ulrich, 94 N.J. Super. 410, 424 (App. Div.), held that a residential property owner does not owe a duty to the public where the property owner shovels the snow from the sidewalk, and ice forms on the sidewalk after the shoveled snow melts. The court reasoned that the danger to the safe use of the sidewalk which existed when plaintiff fell was solely caused by natural forces, i.e. the freezing and melting of snow. The court opined that this natural phenomenon would have occurred even if defendants had not shoveled the sidewalk.

Further, the court held that public policy supports shielding residential property owners from this form of liability as there is a societal interest in encouraging people to clear public sidewalks and avoiding the inequity of imposing liability on those who voluntarily choose to do so. Moreover, the undisputed testimony indicated that it continued to snow even after defendant shoveled the snow and additional snow accumulated – leading to the conclusion that defendants did nothing to create a new danger or hazard.  As such, the appellate court affirmed the trial courts holding granting summary judgment in favor of the defendants.

Putting aside the “storm in progress” aspect of this ruling, we expect the outcome may have been different in New York, where “freeze and thaw” conditions often prompt denial of summary judgment.  Thanks to Steve Kim for his contribution to this post.  Please email Brian Gibbons with any questions.

 

Bar Fight Liability: Taking it Outside (NY)

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In Covelli v Silver Fist Ltd., 2018 NY Slip Op 08914 (2nd Dep’t December 26, 2018), the plaintiff, an administrator of a decedent’s estate, commenced an action against an individual, Roll, and bar defendants to recover damages for negligence and wrongful death.  Plaintiff’s decedent died from injuries sustained as a result of an altercation with Roll in the public street outside the bar.

The Second Department ruled that it is uniformly acknowledged that liability may be imposed only for injuries that occurred on defendant’s property, or in an area under defendant’s control, where defendants had the opportunity to supervise intoxicated guests and that a landowner, not being insurers of a visitor’s safety, have no duty to protect visitors against unforeseeable and unexpected assaults.

Here, as the altercation was outside the premises and control of the bar defendants and was a sudden and unforeseeable event, the lower Court’s order granting the bar defendants motions for summary judgment dismissing the complaint was affirmed. There was no comment regarding the irony of the bar’s name.

This case is of particular interest in that it allows the bar defendants off the hook for liability even when the altercation occurred right outside the bar.  However, although a beneficial opinion towards the defense bar, experienced defense attorneys will be cautious when using this case in similar bar fight scenarios as this opinion appears to show no evidence of the altercation brewing inside the bar before stepping outside.  In cases where evidence is present where the altercation starts developing in the bar it may be more difficult to as clearly differentiate when the bar’s duty to prevent the altercation starts.

Thanks to Jonathan Pincus for his contribution to this post.

Defense’s Biomechanical Expert Gets “Fryed” (NY)

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In Imran v. R Barany Monuments Inc, the Appellate Division, Second Department applied the Frye standard in precluding an expert’s trial testimony and set aside a defense verdict.  The Plaintiff was involved in a four-vehicle collision, where she sustained injuries to the cervical and lumbar regions of her spine and both knees. At trial, the defendants presented testimony of a biomechanical engineering expert, who testified regarding the change in velocity of a vehicle during a collision (“delta-v forces”). Relying on photographs of the plaintiff’s vehicle, and a crash test involving the same make and model of vehicle, the expert concluded that the impact of the second front-most vehicle to plaintiff’s vehicle would not have caused the plaintiff’s injuries to the lumbar region of her spine or her knees.

The jury returned a verdict in favor of the defendants on the issue of damages, finding that the plaintiff did not sustain a serious injury under either the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d) as a result of the accident. Subsequently, the plaintiff moved to set aside the jury verdict on the issue of damages in the interest of justice and for a new trial, arguing, inter alia, that the expert’s testimony on causation should have been precluded. The Supreme Court granted the motion, and the defendants appealed.

The Appellate Division, Second Department, relied upon the Frye (293 F 1013, 1014) standard and agreed with the lower court’s decision to grant plaintiff’s motion.   Pursuant to established New York law, an expert’s opinion must be based on facts in the record or personally known to the witness. The accepted techniques, when properly performed, must generate results accepted as reliable within the scientific community generally. Courts will generally admit expert testimony that’s deduced from well-recognized scientific principles or discovery, as long as the thing from which the deduction is sufficiently established to have gained general acceptance in the particular field in which it belongs.  Finding that a proper foundation was lacking for the admission of the expert’s testimony, the court found that the expert should have been precluded from testifying because he did not calculate delta-v forces of all vehicles involved, the crash tests he used differed from the accident, and the simulations used dummies with different weights than plaintiff.  A new trial was ordered.

It is easy to focus on the favorable conclusion proffered by your own expert, but a seasoned litigator will focus not only on the results, but the process.  Having a keen understanding of presentment of the expert at trial can avoid the consequence of calling an expert that reached an unreliable conclusion.

Thanks to Margaret Adamczak for her contribution to this post.

 

Translation Dispute and Hearsay Testimony Precludes a Finding of a Question of Fact in Labor Law Case Resulting in Summary Judgment for Plaintiff (NY)

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In Nava-Juarez v Mosholu Fieldston Realty, LLC, the Appellate Division reversed a Supreme Court decision and granted partial summary judgment to the plaintiff in a Labor Law case, and addressed the issue of hearsay testimony in opposition and translation disputes.

The plaintiff claimed he was injured when the ladder he was working on shifted suddenly.  In support of his summary judgment motion, the plaintiff provided an affidavit of a coworker who witnessed the accident and averred that plaintiff was painting the exterior facade of defendant’s tavern when his ladder shifted, causing plaintiff to fall from his position three-quarters of the way up the ladder.

In opposition, the defendants argued that a workers compensation form contained statements from the plaintiff with a different version of how he was injured.  The plaintiff’s workers compensation form stated the accident happened “while walking I fell down stairs.”

The Supreme Court Bronx County denied the plaintiff’s motion for partial summary judgment under Labor Law § 240(1).  On appeal, the Appellate Division reversed this ruling.  In its opinion, the Appellate Division held that the defendants failed to raise a triable issue of fact because hearsay, standing alone, is insufficient to defeat summary judgment.

Further, the Court noted that the workers compensation form was prepared by plaintiff’s worker’s compensation attorney with the aid of a translator.  Plaintiff testified that he told the translator “Mientras estaba trabajando me cai de una escalera,” and asserts that the statement should have been translated as “While working I fell off a ladder.”  The decision notes that the Spanish word “escalera” may be translated as either “stairs” or “ladder” and in this case, there were no “stairs” to speak of as the premises is a one-story building and did not have an exterior staircase.   The Appellate Division ruled that the plaintiff was incapable of discovering the error in the translation of the description of his accident because he could not read English and correct the statement.

The summary judgment denial was reversed because the defendants were obligated to show that plaintiff was the source of the information recorded in the workers compensation form indicating that he fell from “stairs,” and that the translation was provided by a competent, objective interpreter whose translation was accurate, a fact generally established by calling the translator to the stand at trial.

Special thanks to George Parpas for his contribution to this post.