The expectation of an insured does not lead to coverage where an insurance contract clearly excludes coverage.
In Weiss v. NJ Manufacturers Insurance Company, plaintiffs sought insurance coverage for damage to their property caused by an oil spill from their underground fuel storage tank. Their homeowner’s policy excluded coverage for property damage to property owned by the insureds. Rather, it only covered damage to a third-party. Plaintiffs argued that they had a reasonable expectation that their policy covered the cost of cleaning up an oil leak on their property, even if the damage did not extend to their neighbor’s property. Plaintiff also asserted that the policy was ambiguous, and shoulder be read in their favor.
The New Jersey Appellate Court found that, under its clear terms, the policy did not cover the cost of cleanup performed by or on behalf of an insured on its own property when those costs are incurred to alleviate damage to the insured’s own property and not the property of a third-party.
This decision highlights the importance of reading your policy. Notwithstanding expectations, your policy will not cover damage that is specifically excluded.
Thanks to Heather Aquino for her contribution to this post.
Six months after the signing of the Declaration of Independence, students organized to form the first Greek-letter fraternity. However, it was not until 2015 that the New Jersey Appellate Division issued a reported decision that addressed the scope of duties owed by a fraternity to protect guests from violent conduct at a social event. In Peguero v. Tau Kappa Epsilon, a premises liability case, plaintiff sued the nation’s largest fraternity (“TKE”) seeking damages for personal injuries after being shot while breaking up a fight at a house party. Peguero v. TKE, 439 N.J. Super. 77 (2015).
The case was presented as one based upon premises liability in tort. Traditionally, New Jersey courts have viewed these cases based upon the plaintiff’s relationship to the property, e.g. trespasser, social guest, business invitee. The duty owed depended upon this classification. However, more recently, where “the duty of care is not well settled,” the courts have taken a new approach by looking at four factors: (1) relationship of the parties; (2) the nature of the risk; (3) the opportunity and ability to exercise care; and (4) public policy. See Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 434 (1993)(realtor had duty to warn invitees at a residential open house). This has generally expanded the duty owed.
In Peguero, the court applied this test to the claim against the fraternity and found that no duty was owed to the party attendee. The two driving considerations were foreseeability and public policy. The Court held that plaintiff did not establish foreseeability of harm because this case lacked any evidence of a prior pattern of criminal conduct, any prior altercations or “alarming data.” Although the plaintiff had been to other parties, he had never witnessed any other incidents. The University had not been made aware of any problems at the fraternity. No witness had observed anything to forewarn that someone had a gun at the party. Under these facts, the Court found that public policy interests did not warrant an expansion of the duty of care because it could potentially create confusion and uncertainty in the law.
Given the dearth of evidence that the fraternity had some way to foresee the shooting and an opportunity to exercise care, this court was reluctant to find a duty was owed. However, a different underlying fact pattern may produce a different result. In fact, the Court hinted that a duty might be found in a case of hazing, excessive drinking or sexual assault. In addition, the Court distinguished the case from the duty of care that might exist, for example, if the fraternity allowed a block of ice to melt creating a wet floor. While the injuries in this case were tragic, this decision underscores the importance of a fact-specific defense strategy to counterbalance the factors now considered with respect to the duty of care in premises liability cases.
Thanks to Ann Marie Murzin for her contribution.
For more information, contact Denise Fontana Ricci at .
New Jersey Courts traditionally adhere to the American Rule when it comes to the allocation of attorneys’ fees. Under this rule, litigants generally bear the cost of their own legal representation. However, under Rule 4:42-9(a), fee shifting is authorized in eight specific circumstances. One of these circumstances includes an action upon a liability or indemnity policy of insurance in favor of a “successful claimant”. The stated purpose of this rule is to discourage insurance companies from attempting to avoid contractual obligations, which would force their insureds to expend counsel fees to establish coverage. In Occhifinto v. Olivo Construction Co., the New Jersey Supreme Court recently defined the term “successful claimant” as referenced in Rule 4:42-9(a)(6).
By way of background, plaintiff Occhifinto brought an action for damages against a masonry contractor among others for alleged defective construction of an addition to his manufacturing warehouse. The contractor’s insurance carrier defended it in the liability action under a reservation-of-rights agreement. On the eve of the liability trial, the insurer filed a declaratory judgment action challenging its obligation to provide defense and indemnification to its insured for the liability action. Plaintiff Occhifinto opposed the declaratory judgment action as a third party beneficiary of the insurance contract. The trial court ruled on the declaratory judgment action finding that the insurer was required to defend its insured for the claims and indemnify it for any damages assessed that were covered by the insurance policy.
The liability action then proceeded to trial. Although the jury found that the contractor breached its duty of care, they determined the breach did not proximately cause the damage. After trial, plaintiff moved to collect counsel fees from the contractor’s insurer pursuant to Rule 4:42-9(a)(6) related to its prosecution of the declaratory judgment action. The trial court denied plaintiff’s motion holding that plaintiff was not a “successful claimant” because the insured was not found liable for damages. The appellate court affirmed the trial court’s finding.
On appeal, the New Jersey Supreme Court considered whether a party who prevailed against an insurance carrier in a declaratory judgment action, but did not prevail in a liability action, is considered a “successful claimant” entitled to recover counsel fees under Rule 4:42-9(a)(6). First, the Court confirmed that a successful claimant may include a party who, like plaintiff, is a third-party beneficiary of a liability insurance policy and litigates a coverage question against a defendant’s insurance carrier. The Court next defined a “successful claimant” as a party that succeeds on any significant issue in litigation which achieves some benefit the parties sought in bringing suit.
The Supreme Court held that a party to a declaratory judgment action qualifies as a successful claimant when the insurance carrier’s duty to defend is proven, even if there is no duty to indemnify. Although the insurer argued that it had provided its insured with a defense for the underlying claim, the Court was unmoved noting that had it been successful on the declaratory judgment action, it would have withdrawn this defense. Thus, the Court remanded the case for determination of counsel fees to be awarded.
Thanks to Steve Kim for his contribution.
For more information, contact Denise Fontana Ricci at .
A common, but rarely successful defense in a premises action is that the hazardous condition the plaintiff alleges was “open and obvious.” An open and obvious condition burdens a plaintiff with the exclusive obligation to avoid or use appropriate caution in the face of the condition and bars recovery for any injuries resulting therefrom.
In Jimenez v. Applebee’s, the plaintiff, a patron of the restaurant, ordered steak fajitas. The meal was presented on a sizzling hot plate, as is the Applebee’s way. Before digging in, the plaintiff bowed his head over the plate to pray. As he was praying, he heard the food “sizzle” and “pop,” the latter noise accompanied by grease which burned his face. The plaintiff filed suit, alleging that Applebee’s failed to warn him of the dangers associated with a plate of hot food.
Applebee’s successfully moved for summary judgment, arguing that even if the plate of hot food could be considered hazardous, the open and obvious nature of sizzling fajitas precluded the plaintiff from recovering for his injuries.
On appeal, the Appellate Division pointed out that as soon as the plate was delivered to the plaintiff, Applebee’s lost control over it. At that time, the plaintiff was burdened with the responsibility to protect himself from any danger the sizzling plate posed, finding that the plate and food it contained was open and obvious. Fairness and sound policy warranted affirmation of summary judgment.
Thanks to Emily Kidder for her contribution to this post, and please write to Mike Bono for more information.
The New Jersey rules of evidence state that an expert’s opinion must be based on “facts or data,” or it will be deemed inadmissible as a “net opinion.” The net opinion rule prohibits speculative testimony.
In Faccas v. Young, the plaintiff sued for injuries she sustained in a car accident. The plaintiff’s expert prepared a report concluding that a Jersey Central Power & Light utility pole’s location obstructed the defendant driver’s view, and that the accident may not have occurred if the pole had been moved back twelve inches. However, the expert failed to make a causal connection between the location of the pole and the accident, and he failed to demonstrate how moving the pole twelve inches backwards would eliminate the obstruction. The court concluded that the expert opinion was an inadmissible net opinion.
This case is of interest because it demonstrates that experts must give the why and wherefore of their opinion and must support their conclusions by factual data to be admissible.
Thanks to Heather Aquino for her contribution to this post.
Although experts are allowed to provide opinion testimony to assist a jury in evaluating the evidence, in doing so they are not allowed to simply ignore or refute uncontradicted testimony in the case. We recently posted on the New Jersey Supreme Court’s decision in Townsend v. Pierre that held such an opinion is speculative and not trustworthy. In a case with close parallels to Townsend, the Appellate Division recently adopted whole scale its reasoning to affirm summary judgment in Yankilevich v. Sachakova.
Both cases involved automobile accidents in which a driver pulled from a stopped position onto a roadway causing a collision with a driver who was proceeding with right of way. In Townsend, the decedent estate claimed shrubbery on a contiguous property obstructed the view of the turning driver. In Yankilevich, the plaintiff alleged that flags of a gas station were to blame. In each case, the defendant drivers testified that their viewpoint was not obstructed. Yet, plaintiffs offered expert testimony to dispute this.
In the more recent case, the seventeen year old defendant driver Sachakova pulled her car to the curb line of the driveway exit of an Exxon station located on Route 18, a commercial area highway common in New Jersey. She testified that she stopped one to two seconds to observe oncoming traffic on her left. Seeing no cars coming, she pulled into the highway and was immediately struck by plaintiff’s car. Plaintiff’s vehicle struck with such force that it was overturned in the crash. The responding police officer wrote in his report that “there were several flags posted in the ‘right of way’ along the Rt. 18 side of the Exxon gas station property. Although it was not determined, these flags could have impeded a driver’s view when exiting the gas station onto Rt. 18.”
At deposition, Sachakova testified unequivocally that the flags were not an obstruction for her on the date of the accident. The plaintiff settled with Sachakova and pursued his claim against Exxon Mobil Corporation and its franchisee, defendant Route 18 Mart, Inc. To this end, he offered an accident reconstruction expert who contradicted Sachakova’s testimony with respect to the flags.
The question presented before the appellate court was whether the expert could present a contrary opinion as to whether the flags were an obstruction or, at least, distracting, on the date of the accident. However, given the uncontradicted testimony of Sachakova, and in light of the Supreme Court’s Townsend decision, the appellate court found that the plaintiff failed to establish its prima facie burden of proving the flags were a proximate cause of the accident.
Thanks to Steve Kim for his contribution.
For more information, contact Denise Fontana Ricci at .
In the case of Torre v. Liberty Mutual, et al., the Torres suffered post Superstorm Sandy damage at their home in Mantoloking, NJ. The Torres sought first-party coverage for their removal of storm-generated debris from their land under their Standard Flood Insurance Policy. Liberty denied the claim. The basis for Liberty’s disclaimer was that the SFIP coverage only attached for the “removal of non-owned debris that is on or in insured property” and debris on the land outside of the house was not “on or in” “insured property.” In other words, Liberty took the position that only the house was “insured property” and not the land on which the house was located.
The Third Circuit has now endorsed Liberty’s understanding. In its precedential decision, the Court held that the “term “insured property” clearly and unambiguously means property that is insured under the SFIP, that land is not insured under the SFIP, and that the SFIP thus does not cover costs the Torres incurred in removing debris not owned by them from their land outside their home.”
As this is the first US decision on the scope of debris removal from land under a SFIP policy, we expect the case to be frequently cited in the future. It is obviously of great benefit to insurers as it significantly limits the scope of potential first-party damages that a policy might be exposed to.
If you have any questions about this post, please e-mail Bob.
WCM Partner Bob Cosgrove, the head of WCM’s Privacy, Cybersecurity and E-Discovery practice group, will present a seminar at the International Underwriting Association of London entitled Defending Data and Privacy Breach Claims in the US. The seminar, which will take place on Wednesday, May 13, 2015, will explore the kinds of claims that can result in the US from a data or privacy breach and provide guidance on the strategies needed to successfully defend data and privacy breach litigation in the US. Special attention will be paid to both the regulatory and compliance aspects of a data breach as well as the resulting litigation from individuals whose “personally identifiable information” has been disclosed.
For more information about this seminar, please e-mail Bob, or click here. A videoclip overview of the presentation can also be found at http://re360.co/#/articles/robert-j-cosgrove-on-the-data-privacy-claims-arena/
Issues surrounding expert testimony at trial can be tricky. In some circumstances, the defense attorney can rely on the records of a treating doctor alone, without incurring the cost and expense of calling the physician to the witness stand. Other times, the failure to call the treating doctor can be fatal, leading to the preclusion of evidence on key medical issues.
What happens when a non-testifying radiologist reads an x-ray, MRI or CT scan and authors a favorable report? Can your retained IME doctor review that report and indicate that his opinion is consistent with the non-testifying radiologist’s? Can you cross examine an adverse expert if his opinion of the x-ray, MRI or CT scan is inconsistent with the radiologist’s report contained in the chart of the hospital or another treating doctor?
In James v. Ruiz, the New Jersey Appellate Division announced a bright line that attorneys in a civil case cannot cross. Under Ruiz, attorneys in a civil case must refrain from: (1) asking their own expert witnesses whether their opinions are consistent with a non-testifying physician’s report; (2) asking adverse experts on cross examination whether their opinions are inconsistent with a non-testifying physician’s report; and (3) arguing during closing statements that the non-testifying expert’s report (and opinion) is either consistent with his expert’s opinion or inconsistent with the adverse expert’s opinion.
The James court found the dangers of injecting the opinion of the non-testifying expert’s opinion into the case too great, particularly when the jury never has the chance to observe that expert in court and evaluate her testimony after both direct and cross examination. Akin to a “tie breaker,” the presence of the unseen expert looms too large when one side is constantly referring to the report and the opinions expressed therein but the expert never appears in court to defend its contents.
The rule is now clear in most routine cases in New Jersey. If you want to introduce the opinion of a treating physician about complex and disputed matters, you must call the expert at time of trial.
If you have any questions about this post, please email Paul at .
Important factors in commercial premises cases are the duties of the landowner to discover and eliminate dangerous conditions for those invited onto the business property and to maintain the premises in safe condition. And the business owner also may have a duty to warn its invitees of a hazardous condition on their property. These issues were at the forefront of Arroyave v. Quaker Village Apartments, as the plaintiff alleged that the the owner of the apartment complex in which the plaintiff resided failed to warn her of long wet grass on a path used by the complex’ residents.
The path at issue was created on a hill by residents over time as a shortcut between the parking lot and the residential units. Further, the stairway designated to provide paved access to the parking lot was in disrepair. Although one could argue that any injury sustained as a result of willfully diverting from the designated walkway should bar any recovery, the property owner took steps to maintain the resident-created path – creating the potential for liability.
After the plaintiff slipped and fell on the path, she claimed that the grass was long and wet and that the property owner should have provided a warning of the condition. The trial court disagreed and granted the defendant’s motion for summary judgment.
In affirming the trial court’s decision, the Appellate Division determined that the property owner did not owe plaintiff any duty to plaintiff to warn her to avoid the grass. Although the property owner shoveled the path in the winter, thereby demonstrating awareness that its residents regularly used the path, the Court found that the owner’s regular practice of cutting the grass once weekly – and two days after the plaintiff’s accident – precluded a jury from finding that the length of the grass constituted a dangerous condition or that the defendant breached a duty to maintain the area in a reasonably safe condition.
Quite simply, the Court felt it is common knowledge that grass is slippery when wet, and fairness dictated affirmation of dismissal in favor of the property owner.
Thanks to Emily Kidder for her contribution to this post and please write to Mike Bono for more information.
