Category Archives: Auto

Untimely Expert Report Leads to Dismissal (NJ)

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In New Jersey, the verbal threshold limits plaintiffs from bringing a lawsuit for injuries sustained in an automobile accident.  Specifically, this limitation requires a permanent injury or one that results in a whole or partial loss of a body member or function in order to file suit. Plaintiffs must produce expert reports or documents that support a finding of some level of permanent injury in order to vault the limitation-on-lawsuit threshold as soft-tissue injuries are not sufficient.

In Resua v. Hachkian, plaintiffs were rear-ended by a vehicle operated by an intoxicated defendant. The principal issue was plaintiffs’ damages, as both plaintiffs alleged various soft-tissue injuries that were not sufficient to vault the limitation-on-lawsuit threshold without an expert report supporting a finding of permanent injuries.

During the lawsuit, plaintiffs’ attorney had a relapse on an illness that caused delays in discovery. As such, he failed to produce expert reports within the discovery deadline. After an unsuccessful arbitration, defendants filed a motion for summary judgment. Plaintiffs produced expert reports in late August and additionally filed a cross-motion seeking an extension of the discovery end date.

The trial court denied plaintiff’s motion and granted defendant’s motion for summary judgment, opining that plaintiffs’ attorney’s illness did not constitute an exceptional circumstance warranting an extension of discovery, and finding that plaintiff’s medical records without the support of expert opinion did not suffice to establish permanent injuries.  On appeal, the appellate court agreed that that plaintiffs’ attorney failed to show how his illness impacted his ability to function in the months leading up to the latest discovery end date when his expert reports were due.  As such, the plaintiffs’ expert reports were to be disregarded and without expert reports, plaintiffs failed to show permanent injury.  Thanks to Steve Kim for his contribution to this post.  Please email Brian Gibbons with any questions.

NJ Court Dismisses Complaint against LoJack and Enforces Arbitration Clause

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Plaintiff Tracey Perez disregarded a clear arbitration provision in a contract with defendant Leonard Automotive Enterprises, to his own eventual detriment. In Perez v. Leonard Automotive Enterprises, plaintiff purchased a vehicle with a LoJack Stolen Vehicle System from Toyota. As part of the purchase, plaintiff signed a Retail Installment Sales Contract which contained a privision, to wit, disputes between the parties would be resolved through arbitration.

Sometime after the purchase, the vehicle was stolen and totaled after being involved in a fire. Plaintiff filed a complaint against defendant alleging that it failed to install and activate the LoJack Stolen Vehicle System. Defendant filed a motion to dismiss the complaint seeking to enforce the binding arbitration provision within the contract. Plaintiff opposed the motion with allegations that the arbitration provision was invalid.

The Court determined that the arbitration provision was enforceable and will “pass muster when phrased in plain language that is understandable to the reasonable consumer.” The court pointed out that the arbitration provision was immediately above the signature block on the first page of the contract and would be impossible to miss. Additionally, the court found that the arbitration provision was prefaced with a large warning in bold, capital letters that stated: PLEASE REVIEW – IMPORTANT – AFFECTS YOUR LEGAL RIGHTS.

The arbitration provision was not buried within an obscure document, but clearly and conspicuously set apart from the rest of the contract on its own page with specific directions right above the signature page.  The court found that the consumer should have read the full provision carefully before signing the document. As such, the court dismissed plaintiff’s complaint with prejudice and granted defendant’s motion to compel arbitration. Thanks to Steve Kim for his contribution to this post.  Please email Brian Gibbons with any questions.

 

Emergency Doctrine Saves Defendant In Head On Collision Suit (NY)

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In Graci v Kingsley the plaintiff was operating a motor vehicle on a two way road when her vehicle crossed over the double yellow line into oncoming traffic and collided with the defendant’s vehicle.  Rather than focusing a factual defense on comparative fault, the defendant sought protection under New York’s “emergency doctrine.”

The plaintiff testified that she lost control of her vehicle when it began to hydroplane after she drove over a “wet spot” on the roadway, causing her to slide across the double yellow line into oncoming traffic.  An eyewitness to the accident testified that the plaintiff’s vehicle suddenly swerved left into oncoming traffic and collided with the defendants’ vehicle.  The defendant testified that he had no time to apply his brakes prior to impact with the plaintiff’s vehicle.

The plaintiff filed suit in Nassau County Supreme Court and the defendant moved for summary judgment arguing he was not negligent pursuant to the emergency doctrine; the trial court agreed, granted the motion and dismissed the case.

On appeal, the Appellate Division affirmed the decision, pointing out that the emergency doctrine provides:

when an actor is faced with a sudden and unexpected circumstance which leaves little or no time for thought, deliberation or consideration or causes the actor to be reasonably so disturbed that the actor must make a speedy decision without weighing alternative courses of conduct, the actor may not be negligent if the actions taken are reasonable and prudent in the emergency context

Further, prior case law held that “a driver is not obligated to anticipate that a vehicle traveling in the opposite direction will cross over into oncoming traffic.  As such, the Appellate Division ruled that this was the classic example of the emergency doctrine, and the defendant could not be found negligent.

Thanks to George Parpas for his contribution to this post and please write to Michael Bono if you are interested in additional information.

Pennsylvania Court Finds Underinsured Motorist Rejection Void

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In John Bielec v. American Int’l Group Inc., et al., the Pennsylvania Court of Common Pleas, Philadelphia County, addressed the validity of an insurer’s rejection of underinsured motorist (“UIM”) coverage.  In brief, the plaintiff was an employee of Verizon Communications, Inc. (“Verizon”), who was involved in an automobile accident during the course of his employment.  At all times relevant, Verizon was insured by National Union Fire Ins. Co. (“National Union”).  Following the accident, the plaintiff attempted to claim UIM coverage under Verizon’s National Union policy.  National Union rejected the plaintiff’s UIM claim contending there was no UIM coverage provided under its policy.  The plaintiff commenced the instant declaratory judgment action seeking UIM coverage under the National Union policy.

In determining whether the plaintiff was entitled to UIM coverage, the court first looked to the requirements of the relevant Pennsylvania statute, i.e. the Motor Vehicle Financial Responsibility Law (“MVFRL”).   Under the MVFRL, Verizon was required to insure its fleet of commercial vehicles under a commercial insurance policy.  However, before obtaining such a policy, its insurer needed to provide Verizon the option of obtaining UIM coverage.  Upon receipt of this offer, Verizon was required to either accept or decline such coverage.  Under the MVFRL, the rejection of such coverage required specific steps to be taken or else the rejection would be deemed void.  Ultimately, Verizon opted to reject UIM coverage.  However, although Verizon opted to reject such coverage, the Verizon representative did not sign and date the UIM Rejection Form in the space immediately below the UIM rejection language.  Conversely, the representative placed a signature and date and the very bottom of the document leaving multiple paragraphs of text in between the UIM rejection language and her signature.

Ultimately, the court concluded that the UIM Rejection Form was void.  Looking to the specific facts of this case, the court noted that although the Rejection Form was signed, the form allowed for at least three paragraphs to intervene between the specific UIM rejection language and Verizon’s signature and date.  Specifically, the court noted that one of the intervening paragraphs allowed for the rejection of stacked limits of UIM coverage, which the court stated voided the validity of Verizon’s attempt to reject UIM coverage.  Moreover, notwithstanding the foregoing, the court also reasoned that Verizon’s failure to notify its employees that it was rejecting UIM coverage also gave rise to a public policy argument as to why Verizon’s rejection was void.  Thus, the court concluded that Verizon’s rejection of UIM coverage was void and not a basis to deny the plaintiff’s claim for coverage.

Consequently, this case illustrates that courts will strictly interpret Pennsylvania statute when it comes to rejecting UIM coverage.  Thus, an insurer needs to be cognizant of the statute’s requirements or else it may find itself providing coverage where it did not intend to do so.

Thanks to Colleen Hayes for her contribution to this post.

 

 

NY Insured Motorist May be Considered “Uninsured” For Failing to Have NJ Automobile Insurance Policy

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Generally, New Jersey state law requires an owner of an automobile “registered or principally garaged” in New Jersey to maintain automobile liability insurance based in New Jersey.  In addition, New Jersey bars owners of uninsured vehicles from suing tortfeasors who injure them in New Jersey.

In Latonya Dean v. C&D Disposal Services, et al., a truck rear ended plaintiff’s car as she slowed down for a yellow traffic light in New Jersey. Plaintiff sued for injuries she sustained.  Plaintiff’s car was insured under a New York GEICO insurance policy with New York coverage.  The defendant moved for summary judgment seeking to dismiss the lawsuit on the basis that plaintiff’s vehicle was “uninsured” in New Jersey (notwithstanding the New York policy).

The trial court concluded that plaintiff’s automobile was “principally garaged” in New Jersey at the time of the accident, and was thus required to have an automobile insurance based in New Jersey, rather than in New York.  The Appellate Division subsequently constructed the statutory term, “principally garaged” to mean “the physical location where the automobile is primarily or chiefly kept or where it is kept most of the time.”  Further, “the physical location where the automobile is primarily kept” is the determining factor as to where the automobile is principally garaged.  Since plaintiff spent several days a week caring for her mother in Ithaca; attended school in New York, and interned in New York City, the Appellate Division remanded the matter for an evidentiary hearing.

This case illustrates that under New Jersey law, a plaintiff can be completely barred from recovering from a negligent defendant if the plaintiff fails to maintain an insurance policy properly based in New Jersey.  Defense counsel should investigate whether a plaintiff’s automobile is properly registered and properly insured in the appropriate state for a potential summary judgment motion.

Thanks to Ken Eng for his contribution to this post.

 

 

Phantom Driver … Fictitious Party… But Still Liable (NJ)

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Should a jury be allowed to allocate fault to an unidentified person named as a fictitious party as a joint tortfeasor?  Certainly a plaintiff who is unable to collect any award from an unknown party does not think so.  However, in the interest of justice, shouldn’t the respective fault of all tortfeasors be considered when a jury weighs each party’s fault?  In Krzykalski v. Tindall , the Appellate Division considered these issues and concluded that a jury should consider the fault of all potential tortfeasors when allocating fault.

The issue arose in the context of litigation for personal injuries from a motor vehicle accident. Therein, the plaintiff and the named defendant, Tindall, were traveling in the same lane on Route 130. They slowed for an emergency vehicle when a phantom driver, who had been in the right lane, cut off the plaintiff’s vehicle.  Although the plaintiff was able to stop in time, Tindall was not and rear-ended the plaintiff’s vehicle.

In his complaint, the plaintiff alleged he was injured as a result of the negligent operation of both cars.  However, in response to plaintiff’s pre-verdict motion, the judge rejected his request that “John Doe’s” negligence be kept from jury consideration. The jury apportioned liability between defendant Tindall (3%) and defendant John Doe (97%).

The Court found that the law is best served when the factfinder is allowed to evaluate the liability of all those potentially responsible.  For example, pursuant to the Comparative Negligence Act, a non-settling defendant has a right to have a jury apportion the liability of a settling defendant – once it has been proven at trial that the settling defendant was, in fact, negligent. Likewise, the comparative negligence of a phantom driver should also be considered by a jury in a trial brought by an injured party against another tortfeasor. See Cockerline v. Menendez, 411 N.J. Super. 596, 618-19 (App. Div. 2010), cert. denied, 201 N.J. 499 (2010).

Plaintiff argued that this case differs from the allocation made in the uninsured motorist context of Cockerline supra, where the UM carrier settled with the plaintiff prior to trial.  However, the Court did not find this distinction significant.  Rather, the court found that to preclude defendants from seeking an apportionment of liability against a phantom driver would frustrate the purpose of the joint tortfeasor and comparative fault law. In a concurring opinion, Judge Leone wrote, “Assessing the negligence of the fictitious driver prevents plaintiffs from strategically waiting to proceed against UM insurance, allocates fault based on actual negligence of the various drivers, and avoids double recovery by plaintiffs.”

Of course in order for any allocation to come into play, there must be sufficient evidence adduced at trial to allow the jury to consider the negligence of any party – fictitious or otherwise.  Thus, in order to seek allocation, defense counsel must be sure to introduce sufficient evidence to vault plaintiff’s argument against allocation.

Thanks to Ann Marie Murzin for her contribution.

For more information, contact Denise Fontana Ricci at .

 

“Hyper-technical” Deviations in Waiver Language are Negligible in PA UIM Case

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The Superior Court of Pennsylvania recently affirmed the decision of the Erie County Court of Common Pleas in an underinsured motorist (“UIM”) case on December 14.  The case of Petty v. Federated Mutual Insurance arises out of a car accident that occurred on September 1, 2012.  The plaintiffs were passengers in a car owned by McQuillen Chevrolet-Buick-Pontiac-GMC Truck, Inc. (“McQuillen”) when they were hit by another vehicle driven by Kelley Cooley (“Cooley”).  Cooley was insured by State Farm and settled the resulting suit for the limit of her policy.

The plaintiffs then sought UIM coverage from McQuillen’s auto policy which Federated Mutual Insurance (“Federated”) denied.  Federated asserted that McQuillen had rejected UIM coverage by signing a waiver form.  The plaintiffs then filed a declaratory judgment action against Federated asserting that the waiver form language did not comply with the statutory requirements of 75 Pa.C.S. § 1731(c).  Federated moved for judgment on the pleadings and prevailed.

75 Pa.C.S. § 1731 of Pennsylvania’s Motor Vehicle Financial Responsibility Law requires that any UIM coverage rejection form must state:

REJECTION OF UNDERINSURED MOTORIST PROTECTION

By signing this waiver I am rejecting underinsured motorist coverage under this policy, for myself and all relatives residing in my household. Underinsured coverage protects me and relatives living in my household for losses and damages suffered if injury is caused by the negligence of a driver who does not have enough insurance to pay for all losses and damages. I knowingly and voluntarily reject this coverage.

 

(c.1) Form of waiver.–Insurers shall print the rejection forms required by subsections (b) and (c) on separate sheets in prominent type and location. The forms must be signed by the first named insured and dated to be valid. The signatures on the forms may be witnessed by an insurance agent or broker. Any rejection form that does not specifically comply [emphasis added] with this section is void. If the insurer fails to produce a valid rejection form, uninsured or underinsured coverage, or both, as the case may be, under that policy shall be equal to the bodily injury liability limits. On policies in which either uninsured or underinsured coverage has been rejected, the policy renewals must contain notice in prominent type that the policy does not provide protection against damages caused by uninsured or underinsured motorists. Any person who executes a waiver under subsection (b) or (c) shall be precluded from claiming liability of any person based upon inadequate information.       

Federated’s form was identical to the statute, except the heading was slightly different:

Option 2. Rejection of Underinsured Motorists Coverage

On appeal, the plaintiffs raised whether Federated’s waiver form complied with statutory requirements when it added the phrase “Option 2”, replaced the term “protection” with “coverage”, added an “s” to the end of “motorist”, and boxed a portion of the form.  In addition, they raised whether the court erred in holding that “specific compliance” allowed Federated to deviate from the statutory form, whether the court erred in conducting a substantive analysis of the deviations, and did it err when it considered contract principles.

Thankfully, the Superior Court found that the Federated waiver’s language was a verbatim recitation of the statute.  They also agreed with the lower court’s evaluation that any differences in the heading were “hyper-technical” and do not cause any confusion or an uninformed waiver.  In other words, nice try plaintiffs, but no dice.

This case demonstrates the importance of policy and contractual language when interpreted by a court.  It shows that some courts allow flexibility when interpreting a policy.  That said, underwriters would be well served by adhering to specific statute language to the greatest degree possible.  Thanks to Peter Cardwell for his contribution to this post.  Please email Brian Gibbons with any question.

NJ PIP Fee Schedule Does Not Limit Plaintiff’s Recovery Above PIP Limits

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In Viruet v. Maoine, plaintiff was injured in a motor vehicle accident, and alleged that he incurred medical bills in the amount of $56,321.93.  The defendant, who was insured by GEICO with limited PIP medical coverage benefits of $15,000, argued that plaintiff’s claim for medical expenses (which obviously exceeded his limited PIP coverage benefits) were subject to the NJ Medical Fee Schedule under statute.

Defendant further argued that the boardable medical expenses to be considered by the jury were limited to the Fee Schedule amounts for the medical services provided to plaintiff. The NJ Fee Schedule limits medical costs and is a comprehensive listing of fee maximums used to reimburse physicians on a fee-for-service basis.

The court found that payment is due and owed from the plaintiff with respect to medical expenses exceeding coverage limits. Because the PIP carrier is not paying the medical expenses above the coverage limit, the Fee Schedule does not apply to the expenses outside the coverage and the medical provider may bill the patient for the full cost of treatment. The patient is personally responsible for the amount billed, including the portion in excess of the fee schedule.

As such, the court disagreed with the defendant, holding that a plaintiff who is awarded a verdict is entitled to payment for medical expenses which were reasonably required for the examination, treatment and care of injuries proximately caused by the defendant’s negligence. Further, plaintiff may recover the “fair and reasonable value of such medical expenses.” The court opined that under these circumstances, plaintiff would only be recovering his actual loss, not a windfall, as the medical expenses reflect the amount owed to the medical providers.  Thanks to Steve Kim for his contribution to this post.  Please email Brian Gibbons with any questions.

 

Minor Concession by UIM Insurer Prompts Opening for New Trial (PA)

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A U.S. Magistrate judge for the Middle District of Pennsylvania recently granted a new trial, albeit on a very narrow issue, to two plaintiffs who lost their federal lawsuit against the Cincinnati Insurance Co.  In  Angino v. Cincinnati Insurance Co., Richard Angino, a lawyer from Harrisburg, Pennsylvania, and his wife sued their insurance company for compensation from injuries in an underinsured motorist context.  Angino alleged permanent neck and back pain that affected his ability to work as an attorney, and sought compensation for lost wages as a result of his alleged permanent disability.

The insurance company argued that Angino’s permanent neck and back pain were not the result of the car accident, but rather were caused by the 75-year old’s advanced age.  However, the insurance company conceded that Angino did indeed suffer from temporary back pain caused by the accident.  A federal jury determined that Angino’s permanent neck and back pain were not caused by the car crash and thus found for the insurance company.

However, U.S. Chief Magistrate Judge Martin C. Carlson of the Middle District of Pennsylvania granted permission for Angino to pursue a narrow avenue of post-verdict relief in the form of a new trial on the sole issue of his temporary back pain.  Because the insurance company conceded that Angino’s temporary back pain was factually caused by the car accident, Judge Carlson granted Angino the opportunity to pursue a new trial where the only claim at issue would be damages related to Angino’s temporary back pain.  In his ruling, Judge Carlson affirmed the portion of the jury’s verdict that sided with the insurance company concerning Angino’s permanent disability claims; and found that Angino’s permanent back and neck injuries were the result of his advanced age as opposed to the car accident.  Judge Carlson noted that this conclusion was confirmed by Angino’s own medical records, as well as his treatment and physical therapy history that were inconsistent with a claim of permanent disabling pain caused by the accident.

Courts often express frustration with attorneys who are reluctant to make even minor concessions during discovery.  This case illustrates the pitfalls of such a concession. The insurer’s concession that plaintiff’s back injury was related to this accident has resulted in a new trial, which could bear significant exposure before a sympathetic jury.  Thanks to Greg Herrold for his contribution to this post.  Please email Brian Gibbons with any questions.

PA Statute Prevails Over Policy Language

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A Pennsylvania Federal Court recently dealt with the competing interests of the Pennsylvania No Fault statutes and policy language in respect of an insurers ability to compel IME.  Scott v. Travelers Commercial Insurance Co., arose from a motor vehicle accident in which Scott was injured and subsequently submitted a claim for first-party medical benefits. The policy has a provision that requires Scott, as often as reasonably required by Travelers, to submit to physical examinations by physicians and cooperate with the settlement, investigation, or defense of any suit.

Travelers subsequently scheduled Scott for an IME. Scott responded, through counsel, that he would be willing to consider an IME, in the absence of a court order, if they sent him the name of three proposed doctors. Travelers did not do so and Scott did not attend. Subsequently, Travelers notified Scott’s counsel that they were relying on the policy language and scheduled another IME. Counsel for Scott responded that Scott would not attend unless a panel of three doctors were chosen and then parties could mutually choose one. After Scott did not attend the second schedule IME, Travelers stopped paying benefits, which gave rise to the bad faith and breach of contract actions in this case.

The bad faith claim was booted as the statute of limitations had already tolled. But Scott prevailed on the breach of contract action, with the court holding that Travelers breached the contract by failing to continue to pay medical benefits, notwithstanding Scott’s refusal to attend an IME outside of his chosen procedure. The court relied upon § 796 of the Motor Vehicle Financial Responsibility Law, which requires insurance carriers to obtain a court order, with a showing of good cause, in order to compel an insured to submit to any mental or physical evaluation for any medical, income, or loss claim. The court held that the statute trumped the policy language and because Traveler’s failed to obtain a court order to compel Scott’s attendance to the IME, Traveler’s non-payment of claims was a breach of the insurance policy.

Thanks to Matt Care for his contribution to this post and please write to Mike Bono for more information.