You Only Plead Twice – Second Department Upholds Right to Amend Complaint to add Wrongful Death Seven Years Later (NY)

In Assevero v Hamilton & Church Props, the Second Department recently allowed plaintiffs to amend their 2008 complaint to include new allegations of wrongful death after the plaintiff passed away in 2015 – seven years after the underlying accident.

The case arose from a 2007 accident in which Hugh Assevero sustained injuries while working at a renovation project at a building owned by the defendants. Assevero alleged that he was descending an unsecured ladder, which shifted suddenly, causing him to fall from the third floor of the building to the basement. He commenced an action in 2008 to recover damages based upon, inter alia alleged violations of Section 240(1) and 241(6) of the Labor Law. Following the completion of depositions, Assevero moved for summary judgment on his 240(1) claim, and the defendants cross-moved for summary judgment dismissing the 240(1) and 241(6) on the basis of the homeowners’ exception. In 2012, the court granted defendants cross motion to dismiss the statutory claims and denied Assevero’s motion. Assevero appealed. Several months after the court partially granted the defendants’ cross-motion – i.e., during the pendency of his appeal –Assevero died. His wife substituted in as administrator of his estate. Approximately three years after Assevero’s death, the Second Department issued a decision on Assevero’s appeal, and denied the defendants’ summary judgment motion, finding that they failed to make a prima facie showing that their home qualified as a two family home.

Then, approximately three months after the Second Department’s original decision, the plaintiff moved the Supreme Court for leave to amend the complaint and add a new cause of action for Assevero’s wrongful death. The plaintiff argued that Assevero died as a result of “complications of treatment for pain resulting from” his fall from the ladder. In support of her motion, she submitted Assevero’s autopsy report, which indicated that the cause of his death was “acute intoxication due to the combined effects of fentanyl, benzodiazepines, lidocaine and cyclobenzaprine,” and that the manner of death was “misuse of prescription medication.” The Supreme Court granted the plaintiff’s motion to amend the complaint, and defendants appealed.

Now before the Second Department for the second time, the justices noted that under the CPLR, “leave to amend a pleading should be freely given when there is no significant prejudice or surprise to the opposing party and where the evidence submitted in support of the motion indicates that the proposed amendment may have merit.” The Court went on to note a movant’s low burden in these situations, explaining, “leave to amend will be granted unless such insufficiency or lack of merit is clear and free from doubt.” In the case at bar, the Second Department held that because Assevero died during his appeal and its prior order reinstated the causes of action alleging violations of §§ 240(1) and 241(6), the defendants failed to demonstrate surprise or prejudice resulting from the delay in asserting the wrongful death cause of action. Further, the Court held that the plaintiff’s the proposed amendment was “neither palpably insufficient nor patently devoid of merit.”

Perhaps what is most striking about this outcome is not the application of the law, but the underlying facts and the significant delay. Of course, this goes to show that even where a new allegation – especially in the case of wrongful death – significantly alters a defendant’s valuation of the case, courts mean it when they say, “leave to amend a complaint should be freely given.”  Thanks to Evan King for his contribution to this post.  Please email Brian Gibbons with any questions.

Insurance Broker’s Fiduciary Duty a “Fact-Specific” Question of Law for the Court

One particularly thorny area of the law with respect to insurance providers and brokers is the scope and breadth of any attendant fiduciary duties owed to an insured.

In Ring v Meeker Sharkey Associates LLC, the New Jersey Superior Court Appellate Division recently upheld the trial court’s decision that the Plaintiffs’ homeowners’ insurance brokers did not owe a duty to advise the insureds of vulnerability in their coverage and a need for excess flood insurance.

Ring is another case developing New Jersey’s insurance law following Hurricane Sandy.  The Plaintiffs owned two beachfront homes along the Jersey Shore.  For more than a decade, they secured both homeowners and flood insurance for the homes through Defendant Meeker Sharkey.   In 2008, Plaintiffs moved their insurance accounts to Willis of New Jersey.  In 2010, Plaintiffs’ moved their homeowners’ coverage back to Meeker Sharkey, but continued to secure flood insurance through Willis.

In 2012, Hurricane Sandy ravaged Plaintiffs’ properties, causing catastrophic – and largely uncovered – losses to both.  The crux of the ensuing litigation was Plaintiffs argument that as part of their transfer of homeowners’ insurance back to Meeker Sharkey in 2010, the firm undertook a review of Plaintiffs’ insurance coverage generally, and therefore owed a duty to alert Plaintiffs to their gap in flood insurance coverage, as well as a duty to affirmatively advise them to obtain excess floor insurance.

The Ring Court decision underscores and reiterates than in New Jersey, the determination of whether a duty exists is a question of law to be determined by the courts, while also noting that there is no bright-line rule and that the inquiry is intensely fact-specific.  Here, the Court found that the homeowners’ insurance broker did not have a duty to provide advice about flood insurance where the Plaintiffs engaged a separate entity, Willis, to secure its flood insurance.  The fact that Meeker Sharkey knew or should have known of the gap in coverage did not create a duty to Plaintiffs under these circumstances.

Ultimately, the Ring court was not called to determine whether Willis had breached the duty it owed.  The question of whether or not that duty was breached is one of fact, for a jury.

Thanks to Vivian Turetsky for her contribution to this post.

Construction Defect Claim Accrues When Any Property Owner Knows of Potential Claim (NJ)

Condominium construction defect cases present thorny issues for contractors caught up in litigation years after the work is completed.  Statute of limitations defenses are often raised with a key issue being whether the trigger is substantial completion of work or whether the statute has been tolled for discovery.

In the recent case of The Palisades at Fort Lee Condominium Association, Inc. v. 100 Old Palisades, LLC, the New Jersey Supreme Court ruled that a construction defect cause of action accrues at the time the building’s original or subsequent owners first knew or, through the exercise of reasonable diligence, should have known of the basis for a claim.

In Palisades, the plaintiff condominium association filed several suits against contractors in 2009 and 2010 after it assumed control of the Board and had its own engineer investigate conditions on the property.  However, the history of the building began years earlier.  The building was constructed beginning in 1999 with substantial completion in 2002.  Initially built as a residential apartment building, the original owner had an engineering evaluation performed in 2004 that found some issues with the construction but generally reported it to be in good condition.  That same year, the property was sold and converted to condominiums.

The public offering for the condominiums included the 2004 engineering report.  By July 2006, 75% of the units had been sold and control of the association turned over to the unit owners.  The association commissioned an engineering inspection by Falcon that found a number of defects identified in a 2007 report.

The defendants moved for summary judgment, arguing that the claim was barred due to the six-year statute of limitations using the 2002 substantial completion date as the trigger for the statute. The trial court agreed with the defendants.  The Appellate Court rejected this and found that the  action had not accrued until the 2007 Falcon report when the unit-owned association learned of the defects.  In doing so, the Appellate Court rejected potential notice of the original owner.

Ultimately,  the New Jersey Supreme Court struck a middle position.  It eschewed a substantial completion of work trigger, but found that the statute of limitations begins to run when either an original or subsequent owner first has a reasonable basis to believe that a cause of action exists.    The Court remanded the case for further findings on when an owner (original or subsequent) knew or should have known of a cause of action.  This case highlights the importance of obtaining specific and targeted discovery concerning the date that a plaintiff became aware of, or should have known of, a construction defect on their property.

Thanks to Heather Aquino Obregon for her contribution.

For more information, contact Denise Fontana Ricci at



Police Report and Settlement Check Inadmissible in Auto Case (NJ)

Police reports are often important evidence in car accident cases, and the admissibility of such a report was a key issue in a recent case in New Jersey, Almonte v. Ulloa Tineo,  The defendant was driving through an intersection with a green light when he was struck by another vehicle on his passenger side, which drove through a red light. The impact caused defendant’s car to strike two other vehicles, including plaintiff’s parked car.

At trial, plaintiff testified that she did not witness the accident. However, she sought to introduce a police report into evidence where the responding police officer attributed fault for the accident to the defendant. The police report’s narrative included information from an unidentified witness. Over defendant’s objection, the trial court admitted the police report into evidence under the business records and public records hearsay exceptions. The trial court also admitted a letter and check sent to plaintiff from defendant’s insurer, which offered the property damage policy limits because it had determined that defendant’s car was responsible for the accident. Relying only on the police report and the insurer’s settlement offer, the trial court entered a judgment in favor of plaintiff.

On appeal, the Appellate Division reversed the trial court’s judgment because the documents were inadmissible to prove defendant’s negligence. Although police reports are typically admissible under the business record and public record hearsay exceptions, the trial court failed to scrutinize the hearsay statements contained within the police  report.  Specifically, the police report narrative was not based on the police officer’s observations but came from an unidentified witness.

In addition, relying on NJRE 408, which provides that settlement offers and negotiations cannot be used to establish liability, the Appellate Division held that the insurer’s settlement offer was inadmissible. Although the settlement check could be considered for the purposes of adjusting damages, it could not be used to determine defendant’s liability.

Thanks to Ken Eng for his contribution to this post and please write to Mike Bono for more information.

Risk Transfer 101 – Contractual Additional Insured Terms (NJ)

Contractual risk transfer terms usually include indemnification and insurance clauses in tandem. A party agrees to indemnify another and, for good measure, agrees name the other in its insurance policy as an additional insured. New Jersey courts have recognized that this type of risk transfer will supersede any potential workers compensation bar to joining an employer in an action for injuries by a worker against a third party.

In Finnegan v. Inductotherm v. Greentree Food Management Inc. v. The Dunhour Insurance Agency, the full gamut of risk transfer issues played out.  The plaintiff cafeteria worker was injured in a slip and fall at work.  Greentree, the plaintiff’s employer, provided cafeteria services to Inductotherm, the building owner.

In addition to her worker’s compensation claim, the plaintiff sued Inductotherm. In turn, Inductothem brought a third-party action for breach of contract against the plaintiff’s employer, Greentree citing insurance terms requiring it to be named an additional insured.  (Curiously, there was no indemnification term.)  Greentree then filed a fourth party action against its insurance broker for professional malpractice for failing to obtain the appropriate coverage for Inductotherm.

At some point, Inductotherm settled with the plaintiff and pursued its defense and indemnification claims against Greentree.  After the trial court dismissed its claims, it turned to the appellate division.

Although the contract did not include an express indemnification term, it indisputably required the plaintiff’s employer to name it as an additional insured on its commercial general liability insurance policy. The parties did not contest that there was no such endorsement in the policy.  Thus, there really was no question as to breach of the contractual term.

Rather, the appellate division framed the question as to whether this breach resulted in damages to Inductotherm, i.e. if it had been named as an additional insured, would the policy have provided coverage for this particular claim. If so, it would have been entitled to defense and indemnification from the insurer. As a breaching party to the contract, the employer would be liable for these damages.

This ultimate question could not be answered on the basis of the record. As the court noted many additional insured endorsements contain terms that define or limit the scope of the coverage.  Without evidence of what sort of endorsement would have been provided, the appellate court could not render an opinion as to whether or what damages might be attributed to the breach of contract.  Given this, the matter was remanded for further development on these issues as well as the revival of what had been a dismissed claim as to the insurance broker.

Thanks to Ann Marie Murzin for her contribution.

For more information, contact Denise Fontana Ricci at


Charitable Immunity Prevails Even Where Non-Profit Rents to For-Profit Organization (NJ)

The New Jersey Charitable Immunity Act (CIA) bars negligence claims against  nonprofit corporations organized exclusively for religious, charitable, or educational purposes.  An entity qualifies for charitable immunity when it is formed for non-profit, educational, religious or charitable purpose, and was promoting such objectives and purposes at the time of the injury to a plaintiff who was a beneficiary of the organization’s works.

In Losado v. Princeton University, the court examined whether Princeton University, a non-profit educational organization, was entitled to Charitable Immunity when the plaintiff was injured on its campus. The key question was whether the University was engaged in its educational objectives when renting a pool on campus to an outside organization.

The plaintiff’s daughter participated in a swim meet hosted by the Princeton Tigers Aquatic Club, an organization not affiliated with the university other than pool rental.  The plaintiff was injured in a fall as she left the swim meet when she stepped into a depression adjacent to a walkway.

Princeton University filed a motion for summary judgment, arguing that they were immune from suit under the CIA.  The motion judge found that the plaintiff was a beneficiary of the University at the time of her injury, and therefore dismissed the claim under the CIA.  On appeal, the plaintiff argued that the Judge erred since the renting of a facility on the campus was not part of the “educational pursuits” that the University was organized to advance. Specifically, the plaintiff argued that youth sports by an outside organization was not an educational objective that Princeton was organized to advance. They further noted that the PTAC was not a charitable organization.

Per statutory requirement, the Appellate Court liberally construed the CIA to afford immunity to a non-profit entity even when renting facilities to members of the general public for social and recreational activities.  So long as the non-profit facility is not dominated by rentals of for-profit entities, the use of the facilities serves important social and recreational needs of the community.

Importantly, this case affirms once again that an organization is entitled to charitable immunity even when renting a portion of its property to a non-charitable organization.  These type of rental agreements are common between organizations, and will not prevent the non-profit entity from asserting and succeeding on a charitable immunity defense.

Thanks to Heather Aquino Obregon for her contribution.

For more information, contact Denise Fontana Ricci at


1st Party Replacement Cost Reimbursement Must Wait For Completion of All Repairs (NJ)

The adjustment of a first party claim for property damage resulted in a curious dispute between the homeowner and its insurer. In Hall v. Cumberland Insurance, the dispute arose out of windstorm damage to plaintiff’s home.  The homeowner submitted a claim to Cumberland, and both retained independent adjusters to estimate the repair costs.  Both adjusters agreed that the roof needed replacement and portions of the home’s interior repaired.

Despite a dispute between the adjusters as to the replacement cost of the repairs, Hall agreed to the value placed by his insurer. Cumberland then deducted from the replacement cost depreciation and deductible.  The plaintiff signed a proof of loss, and his insurer issued a check for the balance.

Trouble came after the plaintiff had his roof repaired. At that point, he sought reimbursement for the replacement cost for just that component of his damages.  Based upon its policy language that would allow for such a payment but only after the actual repairs were complete for the damaged building, Cumberland declined.  Rather than completing all repairs and then seeking replacement cost reimbursement, the plaintiff filed suit.

The Court found that the homeowner’s policy was clear. The insurer was not required to make piecemeal payments each time a component of the home was repaired. Inasmuch as the plaintiff sought payment only for a portion of the adjusted repairs, the insurer had no obligation to make any further payment.

Both the lower court and appellate court took issue with the plaintiff’s lack of diligence in the litigation in general – missing deadlines and even failing to file opposition to Cumberland’s summary judgment motion. Only after the motion was granted did the plaintiff seek reconsideration.  This dilatory attitude after a premature turn to the courts over a dispute that was at best a total of $5,000 likely had an impact on the ultimate outcome of the decision.

Thanks to Sathima Jones for her contribution.

For more information, contact Denise Fontana Ricci at

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.

Residential/Commercial Property Owner Gets By On Sidewalk Liability (NJ)

New Jersey distinguishes between commercial and residential property to determine the responsibility of an owner to those using public sidewalks. A purely residential property owner owes no duty to maintain a sidewalk unless a repair is negligently made.  On the other hand, a commercial property owner has a duty to take reasonable care to prevent foreseeable harm.  The gray area is where a residential property is not owner occupied but is used for commercial purposes.

The Appellate Division recently considered the proof required to establish that a property owner of a three family home was liable for a slip and fall on an uneven sidewalk. In Perez v. Fernandez, the three family home was not owner occupied but the owner’s parents lived in one unit and managed the other two.  In a footnote, the court made an assumption that the property was commercial in nature because it was not owner occupied despite the family member’s occupancy.  Once this assumption was made, the court evaluated the duty under the commercial property standard.

Despite this classification, the court seemed to scrutinize plaintiff’s proofs giving the defense the benefit of the doubt. In part this may be due to the plaintiffs’ development of the case.  The plaintiff, Frictiana Perez fell on the sidewalk near ongoing construction in the street. Initially they took an alternative approach and had two engineering reports prepared. One pointed to the construction activities that may have caused damage to the sidewalk, and the other faulted the abutting property owner.

During discovery, the plaintiffs served the liability expert report identifying the construction contractors the responsible party. After the close of discovery, plaintiff’s counsel said the report had been served by mistake.  Plaintiff then served the second expert report concluding that the displaced sidewalk caused plaintiff’s fall and placed the liability on the defendant homeowner for negligent maintenance.  The Court barred the late served report, granted the defendants’ motion for summary judgment, and then denied plaintiffs’ motion for reconsideration.

In affirming the trial court’s dismissal in favor of the defendants, the Court explained: “[P]laintiffs needed to show that defendants had breached their duty owed to those walking on the sidewalk abutting their property.” It is well established that “commercial property owners would be liable for injuries on the sidewalks abutting their property that are caused by their negligent failure to maintain the sidewalk in reasonably good condition.” In its analysis, the Court held that the Fernandez family’s duty was to prevent “foreseeable harm.”  In other words, plaintiffs must prove that the defendants had actual or constructive notice of the dangerous condition that caused the injury, in this case, the displaced sidewalk.

Without an expert report, the Court ruled that the plaintiffs could not meet this burden. The  defendants denied any awareness of the raised sidewalk slab.  The Court found no evidence that the defendants should have known about the problem with the sidewalk.  “To make such a showing, plaintiffs needed evidence of how the slab was damaged and how long the slab was damaged. In the absence of expert testimony, there was no competent evidence to show defendants were negligent.”

The appellate court held that the trial court properly granted summary judgment to the defendants. Specifically, plaintiffs could not establish negligence as a matter of law without an expert to testify how and when the sidewalk had been damaged.  In a questionable liability case that lacks proof of the defendants’ actual notice of a hazardous or defective condition, the lack of an expert report confirming the defendants’ constructive notice of the condition may be the hook a motion judge needs to dismiss a complaint.

Thanks to Ann Marie Murzin for her contribution.

For more information, contact Denise Fontana Ricci at


Insured’s Word of Cash Payment for Policy Premium Not Good Enough (NJ)

In Wayne Savage v. Progressive Insurance, the plaintiff, Wayne Savage, found out firsthand the value of keeping a receipt. On 12/10/13, Mr. Savage went to Rallye Motors to purchase insurance for his car.  He spoke with a gentleman identified as A.T.  A.T. contacted Progressive, which provided a quote for Mr. Savage in the amount of $2700 to be paid in installments after an initial payment of $593.  Mr. Savage then gave A.T. $593 in cash with the remaining payments to be withdrawn from Mr. Savage’s bank account electronically.  Mr. Savage subsequently received a “welcome package” from Progressive in the mail.  The package contained an application for insurance.  The application stated that the policy term was 12/10/13 to 6/10/14 with a total premium of $2967 to be paid in five installments.  The application also provided that this first payment would be made with funds transferred from Mr. Savage’s bank account.  Mr. Savage read only the first page of the mailing and did not follow through with authorization for the direct funds transfer.

On 1/8/14, Mr. Savage was involved in a car accident.  The police officer that responded to the accident contacted Progressive to ensure that Mr. Savage had coverage.  The officer was informed that Mr. Savage did not have coverage, and the officer subsequently issued Mr. Savage a ticket.  Mr. Savage then filed suit against Progressive under the Consumer Fraud Act based on Progressive’s alleged wrongful rescission of an automobile policy.  Following a bench trial, a verdict was rendered in favor of Progressive.  On appeal Mr. Savage argued that the trial court erred because (1) he made his initial payment to Progressive and (2) Progressive failed to cancel his policy in accordance with N.J.S.A. 17:29C-10.

In regard to his first issue, Mr. Savage argued that his payment to A.T. and his receipt of the “welcome package” was verification that he paid the first installment and had a valid policy.  The court rejected these arguments because Mr. Savage provided no evidence besides his own testimony that he made the payment to A.T as he had not retained his payment receipt.  Second, Mr. Savage admitted that he only read the first page of the “welcome package” and did not read the remaining pages that explicitly stated that the first payment would be transferred from his bank account. On the other hand, Progressive provided testimony that it did not accept cash payments.  Progressive tried to transfer the funds electronically but the transfer was declined by Mr. Savage’s bank.

In turning to Mr. Savage’s last issue, the court held as an initial matter that N.J.S.A. 17:29C-10 did not apply because the issue was one for recession rather than cancellation of a policy.  Thus, the court held that an insurer is within its right to declare a policy void from inception if the initial payment is never received.  However, the court nonetheless stated that had this been a cancellation of a policy, Progressive would have still been incompliance with N.J.S.A. 17:29C-10, which provides in pertinent part that:

“No written notice of cancellation or of intention not to renew sent by an insurer to an insured in accordance with the provisions of an automobile insurance policy shall be effective unless… at the time of the mailing of said notice, by regular mail, the insurer has obtained from the Post Office Department a date stamped proof of mailing showing the name and address of the insured and the insurer has retained a duplicate copy of the mailed notice which is certified to be a true copy.”

Progressive produced evidence that it mailed a recession notice to Mr. Savage on 12/16/13 and that it also retained a duplicate copy. Therefore, it satisfied the requirements of N.J.S.A. 17:29C-10.

Thanks to Marcus Washington for his contribution.

For more information, contact Denise Fontana Ricci at