In Credit Suisse First Boston v. Lehman, et al, the plaintiff’s had sought in excess of $5.5 million in damages from an insurance broker represented by WCM partner, Robert Ball, and a wholesaler. Plaintiffs alleged that the insurance broker and wholesaler failed to procure the appropriate insurance policies to cover a New Orleans hotel owned by Credit Suisse which was the subject of multiple mold claims.

After a 6 week trial, the jury found the insurance broker negligent , but that the negligence did not proximately cause any alleged damages. On appeal , the New Jersey Appellate Division affirmed the verdict finding no error in the jury charge, ” little question” that the insurance policies procured required the carrier to defend and indemnify Credit Suisse, and that Credit Suisse’s decision to settle the underlying claims without suing the insurance carrier ” highly questionable”. The latter point had been the basis of WCM’s lack of proximate cause argument to the jury.

If you have any questions regarding this trial or appeal , please contact Robert Ball in our New Jersey office.

http://www.judiciary.state.nj.us/opinions/a2031-08.pdf

In County of Bergen Employee Benefit Plan v. Horizon Blue Cross and Blue Shield Of New Jersey, the Apellate Division held that under the Collateral Source Rule, a county with a self insured benefits plan for its employees is not entitled to pursue a subrogation action to recover medical expenses the plan paid to its insured. The insured was a county employee who brought personal injury/ medical malpractice claims against third party tortfasors. In Perreira v. Rediger, the Court held that the collateral source rule, N.J.S.A. 2A:15-97, barred the plaintiff’s healthcare carrier from recovering medical expenses by reimbursement or subrogation, with limited exception. The found that nothing in Perreira suggested that there was a statutory exception for a self insured municipality.

Please contact our New Jersey office with any collateral source rule questions.

http://www.judiciary.state.nj.us/opinions/a0616-09.pdf

In Kent Motor Cars, Inc. v. Reynolds and Reynolds, the New Jersey Appellate Division held that the trial court erred in dismissing a successive action since the defendant failed to establish that it was substantially prejudiced by the plaintiff’s failure to comply with its Rule 4:5-1 ( b) notice obligations.
Rule 4:5-1 (b) requires that a party provide notice it its first pleading of the names of other potentially liable parties. The failure to comply with this notice can result in dismissal if the failure to provide notice was inexcusable and the undisclosed parties right to defend the succesive action was substantially prejudiced.
The Court found that the undisclosed defendant was not in a worse position defending the successive claim than it would have been in defending the first action.

www.judiciary.state.nj.us/opinions/a5246-07.pdf

In Mabry v. West Windsor Township, the township appealed from a trial court order granting the plaintiff leave to file a late notice of claim pursuant to the New Jersey Tort Claims Act. The Appellate Division reversed finding that the plaintiff had failed to present sufficient reasons constituting extraordinary circumstances for failing to timely file her notice of claim. Plaintiff had argued confusion over whether the ambulance involved in the accident was privately or township owned. The court found that any confusion should have been cleared up by the plaintiff acquiring the police report in a timely manner and that , neither the plaintiff, nor her attorney could have detrimentally relied on the information the town posted on its web site.

http://www.judiciary.state.nj.us/opinions/a4625-08.pdf

The Third Circuit Court of Appeals in Pennsylvania held that an individual’s inebriated state did not render his attempted shooting of a woman accidental, and therefore did not trigger coverage under either his homeowner’s policy or his personal umbrella liability policy.
On March 25, 2005, Dr. Thomas Mehlman spent the afternoon drinking excessive amounts of alcohol at a restaurant. Afterwards, he was involved in a confrontation with Maria Iacono. In a drunken rage, he shot at her three times , and then killed himself. Iacono filed suit against Mehlman’s estate, which sought coverage under his policies. Both policies excluded coverage for bodily injury caused by “willful and malicious acts of the insured”.
The court held that Mehlman’s intoxication did not negate the intent on his part to harm Iacono. Mehlman’s repeated attempts to shoot Iacono revealed unmistakable intent on his behalf, therefore, the insurer did not have a duty to defend or indemnify Mehlman’s estate in the action.

http://www.claimsjournal.com/news/east/2009/12/22/106109.htm

Thanks to Heather Aquino for her contribution to this post.

Traverso v. Guthaim, et al, was an insurance coverage case involving a dispute between, Charles Heidt , Inc, an insurance agency, and Encompass Insurance Company. Pursuant to the terms of an Agency Agreement , Encompass authorized Heidt to bind certain kinds of insurance contracts issued by Encompass, but subject to various limitations and underwriting quidelines. The trial court granted Encompass’ Motion for a directed verdict finding that Heidt’s authority to bind coverage was clearly and unambiguously limited by the Agency Agreement and the underwriting guidelines issued by Encompass, and that Heidt exceeded its authority when it attempted to add a three-family house to the insured’s existing homeowner’s policy. The Appellate Division affirmed .

http://www.judiciary.state.nj.us/opinions/a1562-07.pdf

Marilus Rodriquez suffered personal injuries in a motor vehicle accident with medical bills for treatment totaling $623,677. The Allstate policy providing PIP benefits to her had $250,000 per accident limits. After Allstate paid $250,000, another unpaid provider, Endo Surgical sought additional benefits over the Allstate policy limits. It argued that while its demand for arbitration was pending, Allstate had a duty to notify it that the insured’s PIP benefits were going to be exhausted. The appellate division rejected this argument and affirmed , finding that, absent bad faith, an insurer may settle with one claimant, notwithstanding that the settlement may exhaust the policy limits available for other claimants.

http://www.judiciary.state.nj.us/opinions/a2146-08.pdf

In Acri v. Hilton, the Appellate Division reversed summary judgment to several defendants who had served alcohol to the underage plaintiff. The trial court had found that the evidence would not support a finding of proximate cause between plaintiff’s intoxication and her accident when she fell off the back of an ATV. On appeal , plaintiff argued that she would not have hopped on the back of the ATV at age 16 unless she was drunk. As proof, she admitted that she had done so on several earlier occaisions, but never when she was sober. The Appellate Division found that the proximate cause issue was a question for the jury.

http://www.judiciary.state.nj.us/opinions/a1969-08.pdf

In Parkside Cab Corp. v. Medley, plaintiff, Parkside Cab appealed from the denial of its motion for leave to file a late notice of claim pursuant to the New Jersey Tort Claims Act. The claim arose out of an accident wherein defendant, Medley , was operating a vehicle owned by defendant, New Jersey Department of Treasury, which collided with plaintiff’s vehicle. In its motion, plaintiff asserted that it assumed that the accident involved the United States Department of Treasury rather than the State. The Appellate Division affirmed the denial of leave to file late notice finding that even the most cursory of inquiry would have revealed that the vehicle, registered in New Jersey , with New Jersey license plates, was state owned rather than federally owned.

http://www.judiciary.state.nj.us/opinions/a2268-08.pdf

In Butterfield v. Lucas Electric, the appellate division affirmed the dismissal of plaintiff’s claim for emotional distress arising out of her observing her 16 month old son falling into a 10 foot deep hole dug by the defendant. The boy was extricated from the hole 12 minutes later and was determined to have superficial abrasions and contusions only. The Court agreed that plaintiff had failed to prove ” the death or serious physical injury of another” to establish a claim for negligent infliction of emotional distress. Further, plaintiff failed to prove a “reasonable fear of her owm immediate personal injury ” to establish a claim for bystander emotional distress.

http://www.judiciary.state.nj.us/opinions/a1568-08.pdf