Court of Common Pleas Calls a Foul on Secondary Liability Claims Over Collapsing Soccer Dome (PA)

The Court of Common Pleas of Pennsylvania dismissed contribution and indemnity cross-claims against a co-defendant, focusing on the lack of a basis for secondary liability claims against the co-defendant.

Plaintiff, Turkey Run Properties, LP initiated a lawsuit following the collapse of a soccer dome on property the company owns. Turkey Run leased the dome from Soccer Dome, LLC and used the agent Gleason Agency, Inc. to purchase insurance from Seneca Specialty Insurance Company to cover the dome. After the dome collapsed, Turkey Run filed a claim with Seneca, who subsequently denied to cover Turkey Claims after investigating the incident. Turkey Run then initiated suit against Seneca, claiming that Seneca breached their contract by failing to pay the claim, against Gleason for negligence in completing the insurance application, and against Soccer Dome for negligent maintenance of the dome itself. Upon answering Turkey Run’s complaint, all three defendants filed cross-claims against all the other defendants. While almost all of the claims settled, Gleason’s contribution and indemnity cross-claims against Soccer Dome remained unsettled. Seeking to have Gleason’s cross-claims dismissed, Soccer Dome filed a Motion for Discontinuance.

The Court of Common Pleas treated Soccer Dome’s motion as a Motion for Summary Judgment, and ultimately dismissed the contribution and indemnity cross-claims due to the lack of a legal relationship between the two parties and Gleason’s erroneous allegations of Soccer Dome’s secondary liability.

Gleason argued that it was in no way responsible for the accident as Soccer Dome was “actually responsible for the collapse.” Gleason further maintained that at most, it was secondarily liable, as it did not contribute to causing the dome to collapse as Soccer Dome did. But, the court dismissed Gleason’s argument as an incorrect understanding of primary and secondary liability, describing it as based on “some sort of ‘which negligence was worse’ analysis.”

Moreover, the court explained that Gleason’s focus on the cause of the collapse ignored the fact that the allegations against Gleason were grounded in the delayed insurance payment that Turkey Run linked to Gleason’s negligence in obtaining the policy. Turkey Run argued that such negligence on Gleason’s part resulted in additional mildew and mold damages while the parties argued over coverage. In light of the negligence allegations against Gleason, there was thus no basis to shift blame to Soccer Dome.

The court referred to the Pennsylvania Supreme Court’s explanation that “[t]he difference between primary and secondary liability is not based on a difference in degrees of negligence” as evidence of Gleason’s misunderstanding of secondary liability.

Thanks to Nicole Pedi for her contribution to this post. If you have any questions, please email Paul at pclark@wcmlaw.com.

Safety First: Pennsylvania Schools May Be Responsible for Students’ Criminal Acts

Recently, the Pennsylvania Superior Court held that a private college cannot escape civil liability for injuries caused by the criminal acts of its students where the institution voluntary assumed a “program of safety” that the community came to rely upon.

Specifically, in the case of Murray v. Albright College, student Patrick Murray was assaulted in the doorway of his dorm room after an authorized search of his floor mates’ dorm room revealed a loaded handgun, approximately one pound of marijuana, and surveillance equipment. Shortly after the search, which was conducted by Albright public safety officers, Murray began to receive threats from unknown individuals who suggested that he had “snitched” on his fellow students. The threats quickly turned to action when two unauthorized males were granted access to Patrick’s dorm by his floor mates, and brutally beat Murray.

In the lawsuit that followed against Albright, Murray and his parents contended that the college was liable for the criminal acts of its students to the extent that it failed to warn or prevent his attack. The trial court, however, disagreed with the Murrays’ contentions, and granted summary judgment to Albright on the basis that it could not reasonably foresee the criminal acts of its students.

On appeal, however, the Superior Court compared Murray’s residence on Albright’s campus to that of the relationship between landlord and tenant. Specifically, the Superior Court explained that, under Pennsylvania law, a landlord is not required to protect a tenant from criminal activity unless the landlord provides a “program of safety.” According to the Court, once a “program of safety” is deemed to exist, a landlord has voluntary assumed the duty to protect its tenant and is therefore exposed to liability for the criminal acts of third parties. Applied in the context of Murray’s attack, the Superior Court concluded that Albright’s student handbook required the college to report criminal violations such as the possession of marijuana to local authorities for prosecution. Given that Albright failed to adhere to this policy and did not involve the local authorities, the Court ultimately reversed, citing that a genuine issue of material fact existed as to whether the college’s omissions may have allowed the attacks to occur.

All told, the opinion in Murray speaks to the liability of landlords, generally, and educators, specifically, in respect of the criminal acts of third parties. As a result, both groups should remain mindful that, at least in Pennsylvania, the provision of additional safety measures may serve to increase, rather than detract from, a party’s ultimate exposure. As the saying goes, “no good deed goes unpunished.”

Thanks to Adam Gomez for his contribution to this post. If you have any questions, please email Paul at pclark@wcmlaw.com.

PA Court Interprets Notice Requirement

Citizens Insurance Company brought a declaratory judgment action against its insured Gerald Ung seeking a declaration that it was not obligated to defend and indemnify Ung’s son under the issued homeowner’s policy for an underlying civil action in which the plaintiff claimed injuries after Ung’s son shot him.  Citizens argued that there was no coverage under the policy because of Ung’s untimely notice of the complaint; the claims did not constitute an occurrence; and the intended or expected exclusion was a bar to coverage.

In response to Citizen’s notice argument, the court concluded that performance of the notice provision only required Ung to substantial comply and any failure to notify needed to be substantial and material.  The court ultimately determined that Ung’s son was not aware that his parents had a homeowner’s policy or that the policy would cover him.  Despite this, the court determined that Citizen was not prejudiced by the delay as it had failed to sufficiently plead how it was prejudiced or how the delay had deprived it of an opportunity for appellate review if an adverse decision was reached in the underlying action.

Additionally, with respect to Citizen’s lack of occurrence/intended or expected exclusion arguments, the court determined that summary judgment could not be granted on this basis as the underlying complaint alleged negligence as well as intentional acts.  Thus, Ung’s son’s negligent acts may have been covered by the policy, thereby triggering Citizen’s obligation to defend.

Special thanks to Colleen Hayes for her contribution to this post.  For more information, please contact Nicole Y. Brown at nbrown@wcmlaw.com.

Does a ROR Allow an Insured to Settle the Case and Then Pass the Bill to the Insurer? (PA)

The Pennsylvania Supreme Court has agreed to hear arguments on a $95 million radiation injury coverage appeal. The Supreme Court will decide if an insured’s settlement of an underlying and covered claim without the insurer’s consent results in a forfeiture of coverage when the insurer is defending under a reservation of rights, the insurer has not offered any amount in settlement, and the settlement is deemed to be fair and reasonable.

In Babcock & Wilcox Co. et al. v. American Nuclear Insurers, which was decided this past summer, the Superior Court panel vacated a $95 million judgment against ANI and remanded the case for a new trial. The Superior Court held that the trial court applied the wrong standard when determining if Babcock & Wilcox were entitled to reimbursement. The trial court examined whether the settlement was fair and reasonable. The Superior Court held that the focus should have been whether Babcock & Wilcox rejected ANI’s defense of the claim, and furthermore, whether ANI’s failure to participate in settlement negotiations was an act of bad faith.

The original suit was filed by the parents of a woman who allegedly died from exposure to radiation near Babcock & Wilcox’s nuclear fuels plant. Babcock & Wilcox agreed to settle for $80 million and then filed suit against ANI to compel reimbursement. ANI argued that Babcock & Wilcox forfeited its right to coverage when it unilaterally settled the underlying suit against the advice of ANI. The Superior Court, in a break from PA precedent, ruled in favor of Babcock Wilcox.

Now, the Pennsylvania Supreme Court will determine the legal ramifications for an insured who unilaterally agrees to a fair and reasonable settlement against the wishes of the insurer, when there is no evidence of bad faith. The decision could greatly affect the balance of power between insurer and insured in settlement negotiations moving forward.

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

A Not-so-Common Enemy: PA Commonwealth Court Finds Exception to Stormwater Rule.

In the case of Bretz v. Central Bucks Sch. Dist., plaintiff Mary Bretz filed a complaint in equity against the Central Bucks School District for water damage the school district’s adjacent property caused to her downstream property. The school district’s land contains a middle school and high school, both of which expanded between 1997 and 1999. Bretz claimed that the school district’s expansion, which included the construction of a detection basin and 36-inch drainage pipe running onto her property, increased the amount and duration of stormwater discharged onto her property, leading to soil erosion, damage to trees and land and threats to septic fields and electrical transformers. Specifically, Bretz requested an injunction, requiring the school district to redesign their stormwater management system.

The trial court did not attribute any damage to Bretz’s property to school district’s negligence. Rather, the trial court pointed to the common enemy rule, that generally treats surface water as a common enemy and requires property owners to fight to get rid of it in any way they can. Further, the trial court held that the school district complied with SALDO provisions during construction, and noted that improvements to the stormwater system that the school district initiated in the course of the court proceedings would improve the impact on Bretz’s property.

On appeal, the Commonwealth court ruled that the school district’s construction qualified as an exception to the common enemy rule as the detection basin had actually increased water volume and duration on Bretz’s property. Additionally, the court overruled the trial court’s denial of Bretz’s request for an injunction.

The lesson to take from all of this is that while stormwater cases can be defended, construction work can create an exception. So plan accordingly and make sure your contractors have insurance!

Special thanks to Nicole Pedi for her contributions to this post. If you have any questions about it, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.

Get the Gist? PA Superior Court Clarifies Coverage for Faulty Workmanship Claims.

It is well-settled in Pennsylvania that an insurer may properly disclaim coverage where a third-party complaint alleges faulty workmanship in the insured’s own work. Still, it appears that some policyholder law firms have recently latched on to the Pennsylvania Superior Court’s decision in Indalex, Inc. v. National Union Fire Insurance Co. to claim that Pennsylvania’s courts are “opening the door” to coverage of faulty workmanship claims. Convinced as they may be, however, we find that a careful reading of Indalex suggests the Court’s affirmation of the general rule that claims of faulty workmanship do not constitute “occurrences” under Pennsylvania law.

In Indalex, the insured manufacturer of certain watertight doors and windows brought suit against National Union Fire Insurance Co. for, amongst other things, failure to provide insurance coverage under a commercial umbrella policy. Specifically, the insured took exception to National Union’s disclaimer of coverage in several out-of-state suits wherein homeowners alleged strict products liability, negligence, breach of warranties, and breach of contract. Although National Union prevailed on summary judgment by arguing that the claims for breach of warranty and breach of contract barred coverage entirely under Pennsylvania law, the insured appealed to the Superior Court that the trial judge had improperly applied Pennsylvania’s “gist of the action” doctrine to decide an insurance coverage dispute.

On appeal, the three-judge panel of the Superior Court expressly found that the subject umbrella policy unambiguously disclaimed coverage for “property damage in [the insured’s] product” or work. Nevertheless, the Panel noted that the underlying complaints sounded in distinct product-based torts in addition to claims of faulty workmanship in the watertight doors and windows. The trial court it held, therefore, erred as a matter of law when it applied Pennsylvania’s “gist of the action” doctrine to conclude that each of the underlying lawsuits were, taken as a whole, a recasting of uncovered claims of faulty workmanship. Bearing in mind the axiom that the duty to defend is triggered if but a single claim in a multi-claim lawsuit is potentially covered under the policy, the Superior Court ultimately declined to find that the underlying suits were beyond the scope of coverage where they included allegations of damage to persons or property other than the insured’s own work.

Rather than upending Pennsylvania jurisprudence with respect to the insurance coverage of faulty workmanship claims, we believe that the Superior Court’s decision in Indalex merely reaffirms the scope of the duty to defend in multi-claim cases alleging defective workmanship. Consequently, it is our opinion that Indalex far from serves as a polestar for insureds seeking coverage of faulty workmanship claims, and instead reaffirms the fact that damage to the insured’s work does not constitute an “occurrence” under Pennsylvania law.

Special thanks to Adam Gomez for his contributions to this post. If you have any questions about it, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.

It’s Not Over Until It’s Over After a PA Trial

A three-judge panel of the Superior Court recently affirmed the grant of a new trial to a plaintiff whom the jury found to be at fault in the case.  The plaintiff, Gerald Remmert, was injured in a motor vehicle accident when defendant William J. Diaz’s pickup truck collided with his vehicle in the Port Richmond section of Philadelphia. The jury’s finding that Remmert was 51 percent negligent for the incident and Diaz 49 percent negligent barred Remmert from all recovery. Remmert untimely appealed the decision and requested, among other things, a new trial. His request was granted and ultimately upheld by the Superior Court.

In affirming the Philadelphia Court of Common Pleas decision to grant the plaintiff’s request for a new trial, the Superior Court rejected Diaz’s argument that the jury’s verdict was sufficiently supported by the evidence. The Superior Court reasoned that the testimony provided by the parties, as well as expert witness and accident reconstructionist Michael Berkovitz, did not support a finding that Remmert acted more negligently than Diaz.

The Superior Court was also willing to overlook the fact that Remmert’s request for a new trial was entered after the 30 day time limit specified in Rule 227.4 of the Pennsylvania Rules of Civil Procedure.  Despite the lack of a written agreement between the parties, the Superior Court permitted Remmert’s untimely request for a new trial based on an off-the-record sidebar discussion in which the parties agreed to extend the 30 day filing deadline.

Thanks to Sheri Flannery for her contribution to this post.  Please write to Mike Bono for more information.

Continuous Trigger Theory Remains Coverage Norm in PA Asbestos Cases.

While only a non-binding trial court decision, the much publicized case of North River Insurance v. Mine Safety Appliances, et al., GD-10-7432, Allegheny County, PA, Hon. S. Wettick, is a detailed discussion of whether, in asbestos cases, the continuous-trigger coverage theory in Pennsylvania, first adopted in JH France v. Allstate, 534 pa. 29 (1993), remains good law. Specifically, in North River, Judge Wettick was asked to decide whether, since science no longer supports the idea that mesothelioma begins at first exposure to asbestos, insurance coverage should continue to attach at that first exposure and continue until disease manifestation. Judge Wettick ruled that the answer is “yes” and that, notwithstanding increased scientific understanding of mesothelioma, JH France remains good law.

In reaching this decision, Judge Wettick first discussed the four possible schools of thought as to when coverage attaches in mesothelioma cases. He described the four schools thusly:

Construction 1: Only the policies in effect on the date the claimant’s disease first manifests itself provide coverage.

Construction 2: Every policy in effect at any time the claimant was exposed to asbestos provides coverage; there is no coverage after the claimant was no longer exposed to asbestos.

Construction 3: Every policy that provides coverage at any time from the date of the initial exposure to the date of manifestation covers the entire claim

Construction 4: Same as Constructions 2 and 3 with the following modification: Each insurer is required to pay only a pro rata share of the insured’s liability to be determined by the duration of a claimant’s exposure to the insured’s products during the policy periods in relation to the entire duration of the claimant’s exposure to the insured’s product.

Consistent with JH France, Judge Wettick adopted “Construction 3” and ruled that the policy period for asbestos-related cancer extends from the date of initial exposure to manifestation of the disease. Thus, every insurer which was on the risk at any time during the development of a claimant’s asbestos-related disease has an obligation to indemnify. Judge Wettick ruled that this construction was most consistent with the insured’s reasonable expectations.

For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com.

Delay Damages Awarded In Connection With Future Medical Expenses (PA)

In Roth v. Ross, the Pennsylvania Superior Court addressed the issue of whether delay damages could be awarded in connection with future medical expenses.  If requested in a civil case, delay damages can be added to a compensatory damages award, the effect of which is to encourage early settlement and to compensate the plaintiff for any delay in receiving a monetary award.

Roth sought monetary relief for damages sustained following a motor vehicle accident and commenced suit against the opposing driver and the driver’s insurer seeking damages that included past and future medical expenses, lost wages, lost earning capacity and emotional distress.  The court ultimately awarded Roth damages for past pain and suffering and future medical expenses.

Following the verdict, Roth filed a motion for the inclusion of delay damages pursuant to Pa. R.C.P. 238.  The trial court granted the motion with respect to past pain and suffering, but denied delay damages for future medical expenses reasoning that Roth had failed to provide sufficient case law that future medical expenses fell within the definition of bodily injury under Rule 238.

Roth appealed arguing that a plain reading of Rule 238 established that she was entitled to delay damages for future medical expenses.  On appeal, the Pennsylvania Superior Court agreed and specifically rejected the lower court’s basis for denial of the delay damages.  The Superior Court stated that the correct inquiry in determining if delay damages should be awarded is whether future medical expenses constitute monetary relief for bodily injury.  The court held that future medical expenses did, in fact, constitute such relief, and thus, Roth plaintiff was entitled to delay damages for these expenses.

Special thanks to Colleen Hayes for her contribution to this post.  For more information, please contact Nicole Y. Brown at nbrown@wcmlaw.com.

Court Finds that Rules Are Meant to Be Broken (PA)

Recently, a three-judge panel of the Superior Court reaffirmed the notion that Pennsylvania judges should accommodate the plaintiff’s procedural misgivings when doing so would promote fairness and justice.

In the case of Jones v. Mercy Suburban Hospital, the plaintiff commenced suit as administratrix of her mother’s estate for wrongful death and survival as a result of medical malpractice.  Following years of protracted discovery and motion practice, trial in the matter was ultimately delayed due to an illness affecting plaintiff’s counsel.  Less than a month later, the plaintiff again moved the trial court to delay the proceeding, citing her own inability to appear due to illness.  The trial court, however, denied plaintiff’s motion to adjourn, and instead dismissed the case in its entirety for failure to prepare for trial.

Recognizing that the trial court’s sua sponte decision completely disposed the case, plaintiff’s counsel took direct appeal to the Pennsylvania Superior Court.  Arguing before the three-judge panel, plaintiff’s counsel contended that trial court abused its discretion in coarsely denying the petition for continuance and dismissing the case.  Unsurprisingly, the Superior Court agreed, and reaffirmed the accepted belief that Pennsylvania’s procedural rules must be interpreted to promote adjudication on the merits.  More specifically,  the  Superior Court announced unambiguously that Pennsylvania judges may disregard any error or defect in procedure provided the same does not result in substantial prejudice to the other parties.  Further, the appellate panel strongly condemned the trial court’s decision to dismiss the case as an improper exercise of the courts’ most severe sanction, and reminded judges throughout the Commonwealth that their decisions must be guided towards a “fair and just” disposition of the matter.

While Jones is a run-of-the-mill procedural appeal, the Superior Court’s approach reinforces the concept that Pennsylvania’s procedural rules are not intended to act as technicalities that undermine the merits of the case.  In fact, the opinion in Jones tells quite a different tale that is well known to most Pennsylvania lawyers: there is an exception to every rule, especially for the plaintiff. Let’s hope that the courts demonstrate the same magnanimous leniency and sense of justice when a defense lawyer becomes ill.

Thanks to Adam Gomez for his contribution to this post.  If you have any questions, please contact Paul at pclark@wcmlaw.com.