Icy Injuries

In Heichel v. Smith, the plaintiff claimed she slipped on ice and fell on the defendant’s parking lot resulting in various injuries.  Following discovery, the defendant moved for summary judgment arguing that the plaintiff had failed to establish that her fall had been caused by icy conditions in the defendant’s parking lot.  The defendant argued that the plaintiff had only produced evidence of the parking lot’s general slippery conditions.  However, the plaintiff failed to produce evidence that ice had accumulated in the specific area in which she fell.  In fact, the plaintiff’s expert report only discussed the general slippery conditions of the parking lot and not the conditions of the area which the plaintiff allegedly fell.  Further, there was no testimony or evidence giving rise to the inference that the slippery conditions in the parking lot had even been caused by the defendant’s negligence.

In response, the plaintiff countered that summary judgment was not appropriate, as the court had failed to properly apply the hills and ridges doctrine.  Under this doctrine, in order for a plaintiff to recover, the plaintiff must show that the ridges or elevations, and not just generally slippery conditions, were the cause the plaintiff’s fall.  The plaintiff contended that there had been sufficient evidence to establish that the defendant’s actions had created a dangerous man-made condition that substantially increased the plaintiff’s risk of injury.

The court disagreed.  Applying basic negligence standards, the court reasoned that there was a lack of evidence showing that the plaintiff’s fall was caused by conditions in the parking lot.  Further, the court noted that, under Pennsylvania law, a party cannot be held liable for general slippery conditions.  In order for liability to attach, a plaintiff would need to adduce evidence demonstrating a party’s negligence.  In this instant matter, summary judgment was properly granted, as there was no evidence to support a finding that the defendant’s negligence caused the plaintiff’s fall.

Thus, this case demonstrates, evidence of general slippery / poor weather conditions, on the day of an accident, will often times be insufficient for a plaintiff to prevail in a slip and fall. Moreover, a lack of evidence regarding the conditions in the specific area which a plaintiff alleges to have fallen may provide a viable basis for a summary judgment motion.

Thanks to Colleen Hayes for her contribution to this post.

 

 

 

Causing a Stink for the Jury: Does Animal Waste Fall Under an Insurance Policy’s Domestic Animal Exclusion?

A Lawrence County Judge has ruled that a jury should make determinations about whether feces and urine, causing nearly $60,000 in damage to a rental property, fall under an insurance policy’s domestic animal exclusion.

David and Marcia Fleeger, held an “all risk” insurance policy from USAA specifically excluding damage caused by a domestic animal. Plaintiffs rented a New Castle, PA property to renters who had a large Doberman Pinscher. Upon the renters’ departure in 2010, plaintiffs discovered urine and feces on the floors, wall, stairs, and heating ducts, causing damages amounting to more than $59,000.

Plaintiffs made a claim for damage caused by animals under their policy; however, USAA contended that the damage was not covered. The plaintiffs later changed their claim to include damage due to vandalism. Upon the USAA’s challenge to the claims, plaintiffs sued, alleging breach of contract, bad faith, and Unfair Trade Practices and Consumer Protection law violations. USAA argued that the insurance policy was void because the plaintiffs had altered and misrepresented their initial claims, and noted that on several occasions Fleeger told the carrier that he believed the dog was confined in the residence while the renters were at work and that the renters knew the damage was happening. A representative for the carrier also testified that the lease between plaintiffs and the renters did not allow a dog in the residence.

The Fleegers argued that questions existed as to the origin of the waste and whether allowing the dog to intentionally cause waste in the property constituted vandalism. Plaintiffs further alleged that based on the doctrine of spoliation, the defendants had a duty to test the waste in order to determine its origin and failed to show that the damage fit the domestic animal exclusion.

The judge ruled that questions of fact existed not only as to the origin of the waste and the renter’s intentions, but also whether the Fleegers misrepresented material facts in the case. Because the court was not presented with any proof to conclusively determine that a dog caused the damage, and there is conflicting evidence concerning whether the plaintiffs misrepresented a material fact, the judge determined that the decision should ultimately be left up to the jury.

Thanks to Chelsea Rendelman for her contribution to this post.

PA Products Liability Law Still Unsettled

As we have previously reported, in Tincher v. Omega Flex, Inc., the Pennsylvania Supreme Court recently overruled the overbearing Azzarello standard that imposed absolute strict liability on manufacturers regardless of reasonableness and foreseeability while affirming the Second Restatement’s place in Pennsylvania common law. By overruling Azzarello and its progeny, the Tincher decision created a void in Pennsylvania product liability case law that will only be filled by the cases to come.

In Cancelleri v. Ford Motor Co., the Lackawanna County Court of Common Pleas is the first trial level court to apply the Tincher decision. The underlying matter was a crashworthiness case that resulted in a $5.9 million verdict for Cancelleri. The jury found that an airbag was defectively designed and did not deploy in Cancelleri’s crash. Ford filed a post-trial motion requesting a judgment notwithstanding the verdict, or in the alternative, a new trial and argued that the court erred by giving jury instructions that included language from the recently overruled Azzarello and precluded industry standards evidence from the Third Restatement.

Judge Gibbons held that the jury instructions were based on design defect standards from Gaudio, a case which has not been overruled, and not Azzarello. Accordingly, Ford was not prejudiced by the instructions. With respect to Ford’s argument that Tincher implies it is wrong to exclude evidence of industry standards found in the Third Restatement, Judge Gibbons held that Tincher declined to adopt the Third Restatement, and accordingly, it is proper to utilize the Second Restatement for industry standards evidence.

Ford already has plans to appeal the decision. While Tincher certainly scaled back the strict liability imposed on manufacturers, it also created a great deal of ambiguity with respect to the proper standards courts are to utilize on a case-by-case basis. If the Ford appeal makes its way all the way up to the Pennsylvania Supreme Court, the Second Restatement v. Third Restatement issue could be revisited.

Thanks to Eric Clendening for his contribution.

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

 

“Gist of Action” No Bar to Tort Action Against Insurer (PA)

The Pennsylvania Supreme Court recently examined the “gist of the action” doctrine in the case captioned Bruno v. Erie Ins. Co.  The “gist of the action” doctrine is used by Pennsylvania courts to differentiate between contract and tort actions, which essentially prohibits a party from bringing a tort action that is actually a breach of contract claim.  In this case, the Supreme Court had to consider the issue of whether a negligence claim brought against an insurer by its insureds was barred by the “gist of the action” doctrine.

In 2007, the Brunos purchased a homeowner’s insurance policy from Erie Insurance Company.  The policy required Erie to pay the Brunos up to $5,000 for property damage caused by mold.  Shortly after purchasing the policy, the Brunos began renovating their basement.  During the renovations, they discovered black mold behind the walls.  The Brunos contacted Erie, and Erie sent an adjustor and an engineer to investigate the mold.  Upon investigation, the adjustor and engineer told the Brunos that the black mold was “harmless” and to continue with the renovation.

By January 2008, the entire Bruno family began experiencing respiratory ailments.  Subsequently, the Brunos decided to have the black mold tested on their own.  The testing revealed that the mold was “toxic in nature and hazardous to human health.”  After learning of the results, the Brunos demanded that Erie pay the $5,000 under the policy, and payment was made in April 2008.  However, when Angela Bruno was diagnosed with throat and esophageal cancers attributed to exposure to black mold, the Brunos filed a complaint against Erie in August 2010 alleging negligence.

Erie filed preliminary objections on the basis of a demurrer, arguing that the Brunos’ negligence claims against Erie were barred by the “gist of the action” doctrine.  The crux of Erie’s argument was that an insurer does not owe a duty of care to its insureds in investigating and handling insurance claims; therefore, there can be no breach of a duty in tort.  Moreover, Erie asserted that the duties it owed to the Brunos arose out of the contract itself, thus, the proper cause of action is one for breach of contract.  The Brunos contended that their cause of action was not based on Erie’s breach of its contractual duties since the policy did not require Erie to determine the mold’s toxicity or to give advice regarding the continuation of renovations.  However, once Erie undertook to do so, the Brunos contend it did so negligently.   Thus, the action was predicated on the statements made by Erie’s adjustor and engineer about the harmlessness of the mold.  The trial court sustained Erie’s preliminary objections, and Superior Court affirmed, dismissing the Brunos’ negligence claims.

The Supreme Court, however, reversed and remanded the case.  To begin, the Supreme Court noted that “merely because a cause of action between two parties to a contract is based on the action of the defendant undertaken while performing his contractual duties, this fact, alone, does not automatically characterize the action as one for breach of contract.”  Rather, the proper inquiry is the nature of the duty.  Accordingly, actions that arise directly from contractual duty are contract causes of action and a breach of a “contracting party’s separate collateral duty to perform a contractual obligation with skill and diligence” are tort causes of action.

Upon application of the “gist of the action” doctrine to the facts of the present case, the Pennsylvania Supreme Court found that while Erie had contractual obligations to investigate for mold and to pay for property damage caused by the mold, the complaint does not allege that Erie failed to meet these obligations.  Conversely, the Brunos allege that while Erie was in the process of fulfilling these contractual obligations, Erie acted in a negligent manner.  Accordingly, the Supreme Court found that the  complaint alleges Erie breached a social duty, not a contractual duty, and, thus, the “gist of the action” doctrine did not bar the Brunos’ claims for negligence.

Thanks to Erin Connolly for her contribution.

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

 

Pennsylvania Examines the Bounds of the Medical Treatment Hearsay Exception

 

When Officer Robert Barth was dispatched to the Brookhaven Swim Club on November 12, 2012, he found a man lying face down in a gravel parking lot. Officer Barth asked the surrounding crowd for information on the man (later identified as Joshua Anthony Belknap) and began to check vital signs. Two members of the crowd, who later identified themselves as Belknap’s friends, stated that they believed Belknap had overdosed on heroin. Officer Barth administered a sternum rub to Belknap’s chest as a means of resuscitation. When that failed, Officer Barth proceeded to look for identification in Belknap’s pockets. Officer Barth found a needle with an orange cap in Belknap’s right pocket. Belknap was subsequently arrested and charged with one count of possession of drug paraphernalia.

At trial, the prosecution used Officer Barth’s testimony to convict Belknap. Although Belknap’s counsel objected to Officer Barth’s testimony as hearsay (meaning an out-of-court statement offered in evidence to prove the truth of the matter asserted), the trial court judge overruled the objection. The trial court concluded that Officer Barth’s testimony was admissible under the medical treatment exception to the hearsay rule (Pa.R.E. 803(4)). This exception permits the admission of an out-of-court statement made for the purpose of obtaining medical treatment.

On appeal, Belknap argued that the medical treatment exception is limited to out-of-court statements made to physicians and nurses. He argued that the statements made to Officer Barth “had little impact on the course of action he took when he arrived on location.” Appellant’s Brief, 16.

However, the Superior Court of Pennsylvania disagreed. The court ruled that Officer Barth’s testimony fell squarely within the bounds of the exception. First, the statements determined how Office Barth would proceed with his resuscitation attempts. Officer Barth was a veteran police officer and was trained in the practice of resuscitating victims, including victims suffering from drug overdoses. The statements of Belknap’s friends were made for the sole purpose of obtaining medical treatment or diagnosis, as it required by the Pennsylvania Rules of Evidence.

Similarly, the statements were intrinsically reliable. The medical treatment exception to the hearsay rule is based in the fact that a declarant will be motivated to tell the truth when he knows his statements are being used for the purposes of medical diagnosis and treatment. In this case, Belknap’s friends were likely eager to provide Officer Barth with the information necessary to facilitate proper resuscitation protocol.

The court noted that nothing in the medical treatment exception language limited the exception to statements made to licensed medical professions, such as physicians or nurses. In fact, the court interpreted the exception broadly, stating that the exception also encompassed statements about causation.

Although the medical treatment hearsay exception is well-established in Pennsylvania case law, this recent opinion delineates its boundaries. Now, we know that the exception applies to: (1) statements made to parties other than physicians and nurses; and (2) statements made by a person other than the patient, himself.  Thanks to Erica Woebse for her contribution to this post, and please email Brian Gibbons with any questions.

PA Court Takes a Narrow View of Household Exclusion in Theft Case

Insurance practitioners know that courts often interpret the phrase “household members” in a way to find coverage for a party, particularly in an Uninsured Motorist context, but a Pennsylvania court recently took a narrow view in order to avoid the application of an exclusion.

In Ripley v. Brethren Mutual Ins. Co., a case venued in the Eastern District of Pennsylvania, Michael Ripley, along with two acquaintances, stole antiques with a value greater than $50,000 from his grandparents’ home while Ripley was living with them. Ripley’s grandparents filed a claim with their insurance company, Brethren Mutual Insurance Company who investigated the claim and learned that the Ripley had stolen the antiques. They subsequently denied coverage on the basis of the household exception, since the antiques were stolen by a member of the household.

Plaintiff brought suit, and the parties cross-moved for summary judgment. Plaintiffs demonstrated in their motion that Ripley paid for his room in the house with his own money, did not have access to all parts of the house and was not permitted to use his grandparents’ car. He also ate his own food separately from his grandparents. Finally, he was not permitted to bring visitors to the residence. Brethren Mutual failed to provide any information to contradict the plaintiffs’ assertions. and the court found that the policy exclusion did not apply.

Thanks to Thalia Staikos for her contribution to this post and please write to Mike Bono for more information.

 

Economic Loss Doctrine Could Bar Claim Under Pennsylvania Unfair Trade Practices and Consumer Protection Law

In Vaughan v. State Farm Fire and Cas. Co., the homeowner insurer denied coverage for water damage, determining that the damage occurred due to a frozen pipe caused by the failure to maintain heat in the home.  He homeowner sued alleging breach of contract, bad faith and a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law.  The court dismissed the Unfair Trade claim based on the Economic Loss Doctrine.  Under this doctrine, a plaintiff is prohibited from recovering purely economic losses in tort, if the plaintiff would only be entitled to those losses based on a breach of a contract.

In dismissing the claim, the court reasoned that the plaintiff’s allegations in connection to her Unfair Trade claim were based on breach of the insurance policy.  As such, since the Unfair Trade claim was interwoven with her breach of contract claim, and the economic loss doctrine barred the Unfair Trade claim.

As such, if an insured’s claim based on Unfair Trade is so interwoven in a breach of contract claim, there may be a basis to dismiss based on the economic loss doctrine.

Thanks to Colleen Hayes for her contribution to this post.

 

Pennsylvania Supreme Court Issues Another Big Decision — Insureds May Assign Bad Faith Claims to Injured Third Parties in PA (PA)

In Pennsylvania, tort claims are generally not assignable. In Brown v. Candelora, the Pennsylvania Superior Court held that bad faith claims brought under Pennsylvania’s Bad Faith Statute §8371 can be assignable to injured third parties, but not all Pennsylvania courts have followed Brown. Accordingly, when the Third Circuit was presented with the issue of whether a §8371 bad faith claim may be assigned to an injured third party, it certified the question to the Pennsylvania Supreme Court.

In Allstate Property and Casualty Insurance v. Wolfe, the Pennsylvania Supreme Court held that insureds may assign a §8371 bad faith claim against their carrier to injured third parties. The underlying case involved an automobile accident between an alleged drunk driver, Karl Zierle (“Zierle”) and Jared Wolfe (“Wolfe”). Zierle was insured with Allstate and had a policy limit of $50,000. Wolfe demanded $25,000 to settle the matter, and Allstate only ever offered $1,200 in return. At trial, the verdict awarded Wolfe $15,000 in compensatory damage and $50,000 in punitive damages. Zierle subsequently assigned his right to pursue a bad faith claim to Wolfe who filed suit in state court, and the insurer removed the lawsuit to the United States Middle District of Pennsylvania.

Allstate argued that Pennsylvania has a long history of opposing the assignment of tort claims. Additionally, Allstate contended that allowing such an assignment would create overzealous plaintiffs who could pursue inflated settlement demands in addition to bad faith claims that would normally not be proper. Wolfe countered that bad faith claims brought under §8371 have been held to be assignable to injured third parties by the Pennsylvania Superior Court. Furthermore, Wolfe contended that allowing such an assignment would further public policy by encouraging good faith settlement negotiations and efficient management of claims.

In a 5-1 vote, the Pennsylvania Supreme Court held that assignment of bad faith claims to injured third parties should be allowed. In reaching this decision, the PA Supreme Court relied on the legislative intent of the bad faith statute.

We expect to see much hand-wringing in the new year over the impact of this decision. To our mind, however, the formal allowance of the assignment of a bad faith claim to the underlying plaintiff simply puts Pennsylvania into the US jurisprudential norm. So long as carriers continue to avoid being slow, sinister or stupid in their claims handling decisions, there really isn’t much to fear here. While bad faith litigation can be quite expensive, the mere fear of it cannot supersede good claims handling practices.

Special thanks to Eric Clendening for his contributions to this post. For more information, please contact Bob Cosgrove at rcosgrove@wcmlaw.com

Coverage ‘til the Cows Come Home…Or Not: PA Supreme Court Declines to Extend “Multiple Trigger” Theory of Liability to Cases Involving Property Damage (PA)

Although there’s been more than a bit of turmoil over the last few months, Pennsylvania’s Supreme Court has been busy over the past month issuing significant precedential decisions (see, e.g. the Tincher decision). The run continues with Pennsylvania Nat. Mut. Cas. Ins. Co. v. St. John in which the Supreme Court ruled on whether the “continuous or multiple trigger” is exclusive to asbestos cases or also applies to other types of cases. Under the “multiple trigger” theory of liability, insurance coverage is triggered under any policy in effect from the moment of initial exposure to the dangerous condition until the date of manifestation of the actual injury.

In Pennsylvania Nat. Mut. Cas. Ins. Co. v. St. John, the appellants owned a dairy farm and hired a plumber to install a new plumbing system. The work was completed in July 2003. The plumbing system, however, was defectively installed. Consequently, the appellant’s cows were exposed to contaminated drinking water, and, as a result, suffered from, among other things, reduced milk production, salmonella poisoning, and birth defects. Although the appellants sought help from veterinarians and nutritionists, the appellants did not learn that the cow’s health problems were caused by a defect in the plumbing system until March 2006.

The appellants subsequently sued the plumber for negligent installation of the plumbing system in 2007 and were awarded $3.5 million in damages. The plumber had four relevant commercial general liability (“CGL”) policies with effective dates beginning on July 1, 2003 and continuing until July 1, 2006. The plumber’s insurer, however, only agreed to pay $1.2 million of the verdict, which was the liability limit under the plumber’s 2003/2004 CGL policy. More specifically, the insurer only agreed to pay under the policy during which the appellant’s injuries first manifested. The plumber, however, argued that because the diseases in the cows were “gradual and progressive” from 2004 to 2006, there were multiple occurrences, triggering all four of the plumber’s CGL policies.

The Pennsylvania Supreme Court, however, was unsympathetic to the appellants, and declined to extend the “multiple trigger” theory of liability beyond asbestos to cases involving property damage, and instead, adhered to the rule of “first manifestation.” Under the “first manifestation” rule, coverage is triggered when the property damage becomes “reasonably apparent.” The court explicitly held that the “first manifestation” rule was the “appropriate test for determining when an occurrence happens pursuant to a policy of commercial general liability insurance.”

Obviously, and especially since the plaintiffs’ bar has been attempting to expand the scope of the “continuous trigger” theory (particularly in the construction defect context), this is a particularly significant decision. Asbestos claims remain “special” but all other types of claims are subject to the first manifestation rule. The number of potentially triggered policies decreases accordingly.

Special thanks to Erin Connolly for her contributions to this post. For more information, please contact Bob Cosgrove at rcosgrove@wcmlaw.com

It Might Come as a Shock — Pennsylvania Business Owners Need Not Provide AED’s for Invitees

The Pennsylvania Court of Common Pleas for Philadelphia County recently clarified the duty owed by business owners to invitees who suffer catastrophic medical emergencies on their properties.

In the case of Kronfeld v. SugarHouse HSP Gaming, L.P., the estate of a former gaming patron of Sugar House Casino sued the local cardroom following an August 2013 incident wherein the decedent and his wife’s night of gambling was unfortunately interrupted by the former’s sudden collapse and death.  Specifically, the decedent’s son sued Sugar House, arguing that Casino employees failed to timely perform resuscitation and use an AED device to help his father.  Sugar House moved to dismiss these allegations, contending that Pennsylvania law merely requires business owners to promptly summon medical attention for those invitees who are injured or become ill on their property.

In considering these arguments during the lawsuit’s nascence, Judge Frederica Massiah-Jackson explained that the duty owed by business owners to injured or ill invitees tracks the Restatement (Second) of Torts § 314A, and generally obliges the same to “give first aid . . . and care for [the injured] until they can be cared for by other.”  Seizing upon the language calling for business owners to “care for” invitees, the plaintiffs contended that the Restatement should be read in conjunction with Pennsylvania’s EMS Act and AED Good Samaritan Act as requiring defendants to affirmatively perform lifesaving first aid in conjunction with a defibrillator.  Ultimately, however, Judge Massiah-Jackson believed that such an interpretation of Pennsylvania’s approach to the Restatement goes too far, and instead sided with precedent from the Commonwealth holding that timely summoning first responders satisfies the business owner’s duty to its invitees.

Although Kronfeld is simply a trial court opinion, the reasoning Judge Massiah-Jackson employed evidences Pennsylvania’s increasing temperance with respect to the duty owed by possessors of land and business owners.  Specifically, the facially broad phrase “care for” in this context would seemingly tip the scale in favor of the plaintiff when coupled with other state laws encouraging third-parties to act on behalf of the sick and injured. Kronfeld, however, reminds us that, as a matter of tort law in Pennsylvania, there has to be a difference between behavior we might aspire to versus that which is legally expected of us.

Thanks to Adam Gomez for his contribution to this post.