No Coverage Owed for Junk Faxes (PA)

Junk faxes have now been overtaken by spam email, but a number of statutes were passed to protect the public from harassment by fax, including the Telephone Consumer Protection Act.  A recent federal court case dealt with whether insurance coverage was owed for claims brought under the TCPA.

In Auto Owners Ins. Co. v. Stevens & Ricci, Inc., Stevens & Ricci was a debt collection firm accused of sending junk faxes in violation of the TCPA. While the underlying litigation was pending, the insurer Auto-Owners Ins. Co. commenced a declaratory judgment action against the firm and the class representative. Auto-Owners moved for summary judgment, arguing that the terms of the insurance policy did not obligate it to indemnify or defend Stevens & Ricci in the class action. The class representative cross-moved, claiming that Auto-Owners was obligated to satisfy the judgment entered against Stevens & Ricci, which was for $2 million dollars.

The District Court found that the sending of unsolicited faxes in violation of the TCPA did not fall within the terms of the policy, and granted the insurer’s motion for summary judgment. The class members appealed. The Third Circuit affirmed the denial of coverage, and found that the alleged injuries resulting from the receipt of junk faxes (loss of ink, toner and time) did not qualify as property damage because they were not the result of an “accident.”

The Third Circuit also found that the alleged harm did not qualify as an advertising injury, as the policy’s definition of advertising injury covered only violations of the privacy interests of secrecy, not a violation of privacy if a message is received without permission.

Thanks to Jorgelina Foglietta for her contribution to this post and please write to Mike Bono for more information.

Subway: Eat Fresh, Stay Alert – Subway wins design defect claim on summary judgment (PA)

On July 14, 2016, the Philadelphia Court of Common Pleas granted the defendant’s, Bhagvati Krupa, Inc. t/a Subway (“Subway”), motion for summary judgment against the plaintiff’s claims based on a defective design argument in Santangini v. Bhagvatic Krupa, Inc t/a Subway.  Specifically, on September 20, 2013, the plaintiff, Geraldine Santangini, was a customer in a Subway store located in Center City Philadelphia.  After purchasing her food, the plaintiff went to the self-serve soda fountain to fill her drink.  Thereafter, the plaintiff turned towards the door to leave the store, took a step and fell down two steps that led to the exit.  The plaintiff alleged certain injuries as a result of the fall.

The plaintiff filed suit against Subway for her injuries, alleging that the Subway restaurant was defectively designed.  Notably, the plaintiff alleged, inter alia, that the Subway restaurant was defectively designed because there was an unguarded ledge directly next to the self-service soda machine and the design caused an overcrowded condition in certain areas.  After discovery was completed, Subway filed a motion for summary judgment on the basis that the plaintiff failed to establish a prima facie case of negligence because the plaintiff did not obtain an expert to establish that the Subway was in fact defectively designed.

In deciding the motion for summary judgment, the trial looked at whether the issue of negligence could be determined by a layperson or whether it required a special skill or knowledge.  If the former was true, no expert would be needed; however, the latter would require an expert.  Here, looking at the issue of whether the Subway store was defectively designed, the trial court found that expert testimony was “indispensable” for the plaintiff’s claims against Subway.  Specifically, the trial court stated that there were too many variables to take into consideration for a layperson to make a sound and reasoned decision, such as whether designing a restaurant with a step drop off instead of a ramp or gradual incline was negligent.  Accordingly, Subway’s motion for summary judgment was granted and the trial court urged the Pennsylvania Superior Court to uphold their decision on appeal.

Thanks to Erin Connolly for her contribution.

For more information, contact Denise Fontana Ricci at

Property Owner Gets By With a Little Help From His Friends (PA)

On July 13, 2016, a Luzerne County jury found for the defendant in a sidewalk slip-and-fall on ice case due to the ability of the defense to present solid witness testimony from non-party witnesses.

In Donald Pachucki v. James Farrell and Michael Farrell, the plaintiff allegedly fell on a patch of ice on sidewalk in front of residential rental property.  A municipal worker, he had been in the course of his employment collecting debris when he fell.  He alleged that the property owner had failed to clear the sidewalk and produced photographs he claimed had been taken hours after the incident to prove his claim.  Pachucki sued the property owner/landlord of the property where he fell on the theory that they were negligent in maintaining the property.

At trial, the defendants were firm that the sidewalk was clear on the day of Pachucki’s fall.  The property owner had an agreement with one of the tenants to remove snow and ice on the property.  That tenant testified that he and his eight children regularly shoveled and applied salt and that they had done so that day prior to the incident.  Another neighbor boosted this testimony, describing the efforts the owner took driving by the property up to three times a day to verify that it was properly maintained.  He described the defendants as meticulous in their maintenance of the property and confirmed that the sidewalk was certainly clear on the day of Pachucki’s fall.

The defendants questioned the plaintiff’s photographs suggesting that snow on the sidewalk could have accumulated due to activity of children walking from a neighboring school.

The jury was persuaded by the testimonials and found in favor of the defendants.

Thanks to Melanie Brother for her contribution.

For more information contact Denise Fontana Ricci at


No Coverage? No Whey! (PA)

Former executives of a whey protein supplier accused by Land O’Lakes of selling product tainted with urine byproduct received a favorable judgment that also saw a declaration of no coverage for the supplier’s insurers.

In November 2014, Land O’Lakes filed suit in the U.S. District Court for the Eastern District of Wisconsin, alleging that Packerland Whey Products Inc. secretly spiked its whey with urea, a nitrogen-heavy compound found in urine, in order to boost the protein content of the whey.  Land O’Lakes purchased the whey fur use in its animal feed.   Land O’Lakes claimed it paid more than $15 million from 2006 through 2012 for the whey.  The dairy manufacturer averred that it had a variety of problems related to the whey concentrate over the years, but that Packerland’s executives deliberately concealed the urea scheme until December 2012.

In September 2015, the four insurers of the Packerland executives, First Mercury Insurance Co., Rural Mutual Insurance Co., Indian Harbor Insurance Co., and Regent Insurance Co, filed motions for summary judgment, requesting a declaration of no coverage and relieving them of their duty to defend the executives under insurance policies issued for various coverage periods between 2005 and 2013.  The insurers each claimed that no coverage existed because the alleged use of urea was not an accidental “occurrence”, nor did the use of urea result in “property damage”, as defined by the policies.

The Court agreed with both coverage arguments, ruling that no coverage was owed.  The Court reasoned that the Land O’Lakes’ complaint against the executives clearly alleged that they intentionally made false representations to the whey buyer with the hope of trying to sell more product, thus precluding coverage.  Moreover, even if the executives were correct that Land O’Lakes’ complaint alleged a negligent misrepresentation claim, it would still not trigger a duty to defend because under Wisconsin law, negligent misrepresentation does not constitute a covered occurrence.  With respect to the issue of property damage, the Court found that use of urea did not result in “property damage”, and if any damage occurred, it was to Land O’Lakes final animal feed product to which the allegedly tainted whey was added, not the whey product itself.

The Court also agreed with Packerland’s argument that Land O’Lakes lacked standing for its fraud or Racketeer Influenced and Corrupt Organizations Act claims because the company itself acknowledged that it wasn’t seeking damages based on lost or diminished profits, and held that showing of an an actual injury was necessary for Land O’Lakes to sustain those claims.

Thanks to Hillary Ladov for her contribution.  Please email Brian Gibbons with any questions.


Absentee Landlord and Absentee Defendant (PA)

On July 27, 2016, a judge in the Philadelphia Court of Common Pleas recently found against a landlord in a premises liability case for $225,203.  The case arises out of an incident that occurred on December 22, 2014 when the plaintiff, Janet McHugh, was trying to take her trash out to the alley through the building’s unfinished basement.

When McHugh opened the basement door toward, it became caught on wires hanging from the basement’s ceiling.  The wires caught on the drywall and a 30-lb electrical box, tearing both off the wall.  The drywall fell on McHugh’s head and neck and the electrical box landed on her upper-body.

McHugh alleged that the landlord, Philip Carter Jr., was making the repairs himself and had allowed the dangerous conditions to exist.  To prove this, McHugh presented an engineering expert asserting numerous building code and safety regulation violations.  These included no drywall ceiling in the basement, exposed framing and wiring, drywall not being properly affixed, hanging wires, and inadequate anchoring.

The plaintiff complained of pain in her neck and weakness in her left arm and hand.  A subsequent CT scan and MRI confirmed disc instability and she was diagnosed with a cervical strain and sprain.  She underwent surgery on December 24, 2014 on some of her discs and then had physical therapy for two months thereafter.  McHugh also presented a medical expert who stated that her injuries were related to the accident and that she suffered a permanent injury.  The expert also stated that she will require lifelong epidural injections and that her discs are at risk of a breakdown.

Carter did not answer the complaint and a default judgment was entered against him.  The case proceeded to a bench trial on damages at which Carter represented himself pro se, presented no experts of his own, and simply maintained that McHugh sustained no injury in the incident.

This case emphasizes the simple fact of how necessary it is to actually present a defense.  When a defendant either does not have insurance or chooses not to cooperate with their defense, the end result can be a personal judgment, which can be nearly impossible to escape in the future.  Thanks to Peter Cardwell for his contribution to this post.  Please email Brian Gibbons with any questions.

Pennsylvania Court Holds Employer Need Not Force Employee to Seek Immediate Medical Attention

A Pennsylvania affirmed a jury’s defense verdict that an employer-defendant was not negligent when it did not force an employee to seek medical attention for a heart attack.

In Jackson v Conrail, plaintiff described feeling “something” in his chest, so his Conrail co-workers drove him back to headquarters. The plaintiff declined numerous offers to be taken to a medical facility and instead asked to be taken home. He independently sought medical attention, underwent surgery, and never returned to work. The plaintiff sued his employer two years later for negligence. The matter went to trial and the jury rendered a defense verdict.

On appeal, the plaintiff argued the finding that Conrail was not negligent was against the weight of the evidence. Upon review, the Court reiterated that: “The issue of negligence is one for juries to determine according to their finding of whether an employer’s conduct measures up to what a reasonable and prudent person would have done under the same circumstances.” The Court reasoned that certain evidence the jury heard regarding the plaintiff’s conduct and Conrail’s conduct justified the jury’s finding that Conrail acted reasonably. Specifically, the Court cited evidence that the plaintiff clearly verbalized that he thought he pulled a muscle or was getting sick, and believed he would be fine – he did not verbalize any belief that he was having a heart attack. Conrail employees provided the plaintiff aspirin and repeatedly asked if he wanted to be taken to a hospital or have an ambulance called. The plaintiff refused these repeated offers and clearly communicated that he wanted to go home. The Court also cited the absence of any evidence that would have indicated to Conrail employees that the plaintiff was, in fact, having a heart attack.

This decision suggests that a clear record establishing an employer’s positive conduct and good behavior can yield large payoffs throughout litigation, and especially at trial.

Thanks to Rachel Freedman for her contribution to this post.

Pennsylvania Out-Of-Possession Landlord Has No Duty Absent Exceptions

The general rule in Pennsylvania is that an out of possession landlord does not owe a duty to business invitees when it leases premises to another.  There are some exceptions.

In Vasilik v Voipoch, LLC, plaintiff slipped and fell in a stairwell with no handrails.  After discovery, defendant moved for summary judgment arguing that as an out-of-possession landlord it owed no duty to plaintiff.  In opposition, plaintiff argued that defendant was responsible for any defect that existed at the time a lease was signed.  The court noted that generally, out-of-possession landlords are not liable for defective conditions that prior to the inception a lease.  However, there were exceptions to the rule.  For example, if the landlord retained control over the premises or negligently made repairs.  In analyzing the potential exceptions, the court found that the entire property was leased to the tenant, including the stairwell, thus the landlord did not retain control over the stairwell. As to repairs, though the landlord had made repairs to other parts of the building, it never performed repairs in the stairwell.  As such, there was no exception to the general rule, and the out-of-possession landlord was not liable for the defective conditions in this matter.

This case illustrates the importance of conducting discovery to develop sufficient evidence to enable a party to carry its burden of proof and prevail on a motion (or to successfully defeat an opponent’s motion for its lack of evidence).

Thanks to Collen Hayes for her contribution to this post.

From Food Trucks to Demo Trucks (PA)

In the ongoing saga of the Philadelphia Salvation Army building collapse, a pair of summary judgment motions (Berkley 1 and Berkley 2) was filed this week urging the court to void coverage for an amateur demolition contractor.  On June 5, 2013, a building undergoing demolition collapsed onto the neighboring Salvation Army Thrift Store in Center City, Philadelphia.  The store was open at the time of the collapse.  As a result, seven people died and thirteen were injured.

Since then, nearly one dozen lawsuits have been filed in relation to the collapse.  In the matter of Berkley Assurance Co. v. Campbell, et al. docket no. 130800129, Philadelphia Court of Commpn Pleas, Berkley unsuccessfully attempted to void insurance coverage for its insured – the demolition contractor – on the basis that the policy had been cancelled prior to the disaster due to nonpayment by Campbell.  The Philadelphia Court of Common Pleas rejected this argument.

Now, Berkley is trying again to void coverage, this time arguing that Campbell obtained the policy through fraud.  More specifically, Campbell covered up a lack of major construction experience by painting a picture of a stable, long-standing, large demolition company with significant experience in contracting for and conducting demolition activities.  In reality, Campbell only had a few men working for him and had virtually no experience or expertise in commercial demolition work.  In fact, Campbell’s last job was operating a food truck.  In addition, Berkley is renewing its motion that the policy was cancelled due to Campbell’s failure to pay the first premium installment.

How the court rules on these summary judgment motions will be instructive.  Presently, for an insurer to carry burden of proving misrepresentation in Pennsylvania, it must show that the representation was false, that subject matter was material to risk, and that the applicant knew it to be false and made representation in bad faith.  See AG Allebach Inc v Hurley, 540 A.2d 289 (Pa. Super. 1988).  Should the insurer establish a material misrepresentation, the remedy is rescission of the policy.  Such a harsh penalty should deter insurance fraud; however, as many insurers know, fraudulent answers and material misrepresentations are an all too common occurrence these days.   Thanks to Hillary Ladov for her contribution to this post.  Please email Brian Gibbons with any questions.

Coverage Issues Further Complicate Penn State Scandal

Pennsylvania Manufacturer’s Association Insurance  Co. (“PMA”) filed a motion recently in the Philadelphia Court of Common Pleas seeking to bar Penn State University from introducing evidence on why it settled allegedly time-barred claims.  The motion stems from a declaratory action PMA filed against Penn State seeking a judgment on whether it had to provide coverage on a $90 million settlement the school paid to abuse victims in the recent Jerry Sandusky scandal.  PMA is alleging that the potential time-barred claims are blocked by the statute of limitations as it applies to abuse claims.  These claims make up $4 million of the settlement.

PMA argues that it did not consent to the settlements entered into by Penn State and that in order to carry its burden, the school must show that the un-consented to settlements were reasonable.  PMA then stated that during depositions, school officials refused to discuss or elaborate on specifics, making it impossible for its lawyers to determine whether the school sought to toss out or validate time-barred claims.  Because Penn State refused to provide discovery on these claims, PMA is requesting that the school be preclude from introducing any evidence on the subject at trial.

This case highlights the already complicated realm of coverage can become even more so when mixed with multi-million dollar high-publicity cases like the Penn State abuse scandal.  It also stresses the importance of monitoring statutes of limitation, as they can both hurt and help one’s case.  Finally, this case also brings up the important issue of providing adequate discovery and cooperating with the other side so as to avoid adverse motions in the future, as Penn State is now facing.  As if the Sandusky situation at Penn State required further complication…. Thanks to Peter Cardwell for his contribution to this post.  Please email Brian Gibbons with any questions.

Governmental Standards Not Necessarily A Safe Haven For Products Liability Claim (PA)

Is evidence of a product’s adherence to governmental standards admissible in strict liability cases in Pennsylvania?  Short answer, maybe.

The Pennsylvania Superior Court was faced with this issue in Webb v. Volvo Cars of North America.  In Webb, a tangled logic examined whether such evidence, which might be admissible with respect to a negligence claim, should be permitted in an action based in solely in strict liability.  Seemingly at odds were  the Supreme Court decision of Tichner  v. Omega Flex, Inc. that Volvo argued would permit such evidence and plaintiff’s reliance upon Lewis v.  Coffing Heist Division and Gaudio v. Ford Motor Co. that would prohibit it.

In Webb, the trial court allowed evidence that the defendant’s product design adhered to governmental standards.  The jury returned a defense verdict, and the plaintiff appealed.  The Pennsylvania Superior Court concluded that the trial court erred by not instructing the jury to disregard the governmental standards evidence and granted the plaintiff a new trial.

So does this ruling mean that the introduction of the evidence was improper?  It would seem that the Court addressed that issue, right?  Well not exactly.  The issue was whether or not the Pennsylvania Supreme Court overruled Lewis and Gaudio, the cases that prohibited the admission of governmental standards evidence, with its decision in Tincher v. Omega Flex.  The Webb Court left the “admission” question on the table.  That said, until the issue reaches the Pennsylvania Supreme Court it seems that defendants should continue to inform juries of how their products were produced in accord with those standards created by the state and federal government.

Thanks to Marcus Washington for his contribution.

For more information, contact Denise Fontana Ricci at