Business owners in New Jersey owe a duty of reasonable care to invitees on their property. The area to which the duty applies extends to the premises’ parking lot. A New Jersey Appellate Court considered whether that duty of care extends to the removal of snow in the parking lot during an active snowstorm.
In Oyebola v. Wal-Mart and Tree Fellas, the plaintiff sued Wal-Mart and their snow removal contractor Tree Fellas, LLC, for injuries she sustained when slipping on snow and ice near her car in the parking lot. It was undisputed between the parties that it was actively snowing at all times that the plaintiff was present at the store. Additionally, it was undisputed that the snow removal contractor was actively removing snow at the time of the incident.
The trial court dismissed the plaintiff’s claim, finding that no rational jury could find the defendants negligent, because plaintiff fell during an ongoing snowstorm, and Tree Fellas was already engaged in snow removal efforts at the time of her fall. The plaintiffs appealed, relying on a report prepared by their liability expert, stating that the snow removal contractor should have cleared the lot in a sequential manner.
The Appellate Court upheld the dismissal, noting that, even if we accept the opinion of the plaintiff’s expert, it was still snowing at all times that the plaintiff was present at Wal-Mart. Thus, even if the snow was removed sequentially, it still would have continued to fall next to the plaintiff’s car. The Appellate Court confirmed that the defendants’ duty to remove the snow did not arise until a reasonable passage of time after the snowstorm.
This case is important because it highlights the importance of determining the timing of snowfall in any case involving a slip and fall on snow/ice, since a business owner does not have a duty to remove the snow during an active storm.
Thanks to Heather Aquino for her contribution to this post.
Don’t forget about John Doe when appealing trial court orders holds Pennsylvania Superior Court. In William Massaro v. Tincher Contracting, LLC, Kenneth E. Tincher II, & John Does 1-10, William Massaro (“Massaro”) sued Kenneth Tincher and his contracting company, Tincher Contracting, LLC (together, “Tincher”) for breach of contract, breach of implied warranties, and unfair trade practices relative to the build of Massaro’s home. Tincher successfully moved for summary judgment on all counts at the close of discovery, and an order was entered dismissing Tincher, but not the John Doe defendants, from the case. Massaro appealed the trial court’s order.
However, the Pennsylvania Superior Court quashed the appeal. In reaching its conclusion, the Court held that Pennsylvania’s appellate courts have jurisdiction over only final orders. It is established in the Commonwealth that final orders are those judgments that dispose of all claims and all parties. If any claim remains unresolved even after a judgment, then the order is not final, and it cannot be appealed. Here, the grant of summary judgment, the Court concluded, did not resolve the case as between Massaro and the John Doe defendants and, thus, was not final.
Thus, while John Doe defendants are easy to overlook, this case shows that they should not be whenever an attorney is assessing appellate court jurisdiction.
Thanks to Robert Turchick for his contribution to this post. Please email ">Colleen Hayes with any questions.
In this case, the plaintiff was injured while tripping on an allegedly defective sidewalk outside of Business 21 Publishing LLC, a tenant of Stoney Creek Center. The plaintiff, an employee of Business 21, ultimately sued Stoney Creek Center and received a confidential settlement. Stoney Creek Center’s insurer sought reimbursement from Business 21’s insurer for costs associated with defense and settlement of the suit, believing it was an additional insured under its policy.
Business 21 held a liability policy that extended additional insured status to companies that owned and operated the shopping center for claims of bodily injury involving premises owned or used by Business 21. Stoney Creek Center believed it was an additional insured under Business 21’s policy, taking the position that “premises” included both internal offices and outside common areas.
In deciding whether additional Stoney Creek Center is owed insured status, the court turned its focus on the meaning of the word “premises” as used in the additional insured endorsement of Business 21’s policy. The judge decided that Business 21’s lease agreement with Stoney Creek Center defines the word “premises” and not the policy. The judge ruled that the terms of the lease agreement make a clear distinction between Business 21’s internal office space and its right to use the outside common areas, demonstrating that Business 21 intended for “premises” to solely mean its internal offices and not outside common areas such as the walkways and parking lot, thus determining that there was no additional insured coverage owed.
Thanks to Chelsea Rendelman for her contribution to this post.
A contractor providing insurance to an owner that includes a provision that the policy will be primary may think he has already prevented exposure from any indemnification clause in their contract with the owner as the owner has already been made whole from future liability. However, the underlying contract language may include additional clauses that render the procuring of liability insurance as a separate and unrelated obligation from the obligation to indemnify and hold harmless. Thus, owners, even with procured insurance from a contractor, may still seek indemnification, even from the party that provided the original insurance.
In North Star Painting, Inc., a contractor to the State of New York Department of Transportation agreed to indemnify and hold harmless the State of New York from claims resulting from the work stated in the contract. However, the contract further required the contractor to procure an owners and contractors protective liability (OPCL) policy to insure the State of New York. Within the policy procured by the contractor, the coverage under the OCPL policy was to be primary and, further, the insurer would not seek contribution from other insurance available to plaintiff. As the policy provides primary coverage, one would think that the procuring of insurance has already fulfilled the indemnification obligations of the contractor.
However, such a policy does not prevent an owner from still seeking indemnification when the underlying contract specifically exempts the procuring of insurance from fulfilling or discharging the indemnification requirement. In North Star Painting, Inc., the underlying contract included a clause that the indemnification and hold harmless clauses shall not “be deemed limited or discharged by the enumeration or procurement of any insurance for liability for damages imposed by law” upon the contractor.
When complete, clear and unambiguous, a contract must be enforced according to its plain meaning. The Court determined that the clause prevented the procurement of insurance by the contractor as a means to have already fulfilled or discharged their obligation to indemnify the owner. As such, the Court found that NYSDOT was entitled to the conditional order of contractual and common-law indemnification against the contractor.
As this case demonstrates, there is nuance between the procurement of insurance and indemnification. Even when one procures insurance for the other party in the contract, and even as per the contract, one may still be potentially separately obligated for indemnification. Therefore, experienced counsel should be consulted regarding how to diminish or prevent an entity’s additional exposure through indemnification even when an insurance policy has already been procured for the other contracting party.
Thanks to Jonathan J. Pincus for his contribution to this post.
Recently, in an unpublished opinion, a New Jersey appellate court in the case of Beauty Plus Trading Co. Inc. v. National Union Fire Insurance Co. of Pittsburgh, considered whether an insurance policy’s “loading and unloading” provision precluded coverage to an insured for damages arising out of a theft of a shipment of human hair weaves.
The insured received its goods on a Friday evening, but decided not to unload the container of goods until the following Monday. Instead of unloading, the insured’s staff Beauty Plus Trading Co. Inc. v. National Union Fire Insurance Co. of Pittsburghcut the container’s seal and left it on the loading bay outside of the warehouse. The following night, an individual stole the container housing over $283,000 worth of human hair weaves.
The policy contained a “loading and unloading” section which provided coverage for the insured’s goods for 24-hours after the company received a shipment. In this case, the insured received a shipment at 5:00 p.m. on a Friday evening and the theft took place at 9:00 p.m. the following Saturday night. According to the policy, the goods were insured until 5:00 p.m. on Saturday.
The insured tried to argue that coverage under the loading and unloading provision should have been extended through the following Monday under the so-called “business day” rule. This rule states that where a party’s time to perform its obligations under an insurance policy expires on a weekend or holiday, it is entitled to push the deadline to fulfill those obligations to the next business day. Here, the policyholder argued that the rule should have applied because it did not receive the goods for unloading until the end of the day on Friday. The judge, however, found that the rule was inapplicable. The loading and unloading provision did not require the insured to unload the goods or perform any obligation during the 24-hours of coverage and the insured could leave the goods in the container as it chose to do. The court found that the plain terms of the policy precluded coverage for this loss.
Thanks to Chelsea Rendelman for her contribution to this post
InDiscover Bank v. Ryan, the defendant filed an emergency motion to enforce a post-trial settlement agreement, claiming that the parties had entered into an agreement to resolve the case for if the defendant withdrew her appeal.
Upon receipt of the settlement agreement, which had been prepared by the plaintiff, the defendant requested three modifications, which included changing her name designation, adding two account numbers and making certain paragraphs of the agreement apply to both plaintiff and defendant.The plaintiff agreed to one of the requested changes, but refused to comply with the other two requested modifications.Plaintiff informed defendant that if they did not receive the signed settlement agreement by a certain date, the plaintiff would withdraw the offer of settlement.Defendant argued in her emergency motion that the plaintiff did not have the right to withdraw the settlement offer that the defendant had previously accepted, because the requested modifications did not prejudice the plaintiff.
The court denied the motion, finding that the defendant never accepted the plaintiff’s initial offer.The court found that a reply to an offer which purports to accept the offer but instead changes the terms is not an acceptance, but rather, a counteroffer, which had the effect of terminating the original offer.Under Pennsylvania law, an acceptance must be unconditional and absolute.As the defendant never unconditionally accepted the plaintiff’s offer, it was terminated, and therefore thedefendant’s emergency motion was denied.
Thanks to Alexandra Perry for her contribution to this post and please write to Mike Bono for more information.
A plaintiff in Philadelphia recently prevailed in a business dispute with his former real estate partner. In Bravo v. 2536-38 North Broad Street Associates, C.P. Philadelphia No. 141101464, the defendant was ordered to pay his former business partner over $782,000 as a result of a breach of their partnership agreement by failing to pay the plaintiff money owed under the terms of the limited liability partnership.
According to the judge’s opinion following a bench trial, the parties formed a real estate partnership in 2010. The plaintiff initially joined as a limited partner and purchased a 10% ownership stake in the business, for which he was to receive a 10% cash flow payment from the partnership. A few months later, the plaintiff invested additional funds in exchange for a 51% ownership stake of the business. However, subsequently, the plaintiff did not receive his proportion of cash flow payments from the partnership, and the defendant also failed to inform him that there was a lien on one of the partnership’s properties, and that the property was listed for foreclosure sale.
During the time period in which the plaintiff did not receive his proportional disbursements, the judge also found that the defendant had transferred hundreds of thousands of dollars from the partnership to other business entities under the defendant’s control; and that the defendant had paid himself a salary from the partnership. The defendant claimed that the money was diverted from the partnership in order to maintain his ability to secure a mortgage loan for the partnership, however the judge determined that such diversion of partnership funds was not contained in the partnership agreement between the plaintiff and the defendant. The judge was similarly un-receptive to the defendant’s claim the plaintiff was not issued cash flow payments because the partnership was unable to obtain a mortgage loan.
Ultimately, the judge determined that the corporate veil should be pierced, since the defendant essentially ignored corporate formalities. Morover, by failing to pay the plaintiff his proportional share of the partnership’s cash flow, the defendant had breached the partnership agreement. We surmise that the judge’s findings relied heavily on financial data supporting the plaintiff’s claims of, essentially, theft, which supported the plaintiff’s version of events. Thanks to Greg Herrold for his contribution to this post. Please email Brian Gibbons with any questions.
Some consider insurance coverage law as exciting as watching paint dry on a basement wall. Others approach the subject matter with enthusiasm, akin to delving into a spirited philosophical argument about the nature of truth, beauty, or excellence.
The understanding of the term “occurrence” in an insurance policy sometimes feels more like philosophy than law. The subject may involve the exploration of temporal and spatial relationships, the unfortunate event test, and intervening agents and factors.
In Selective Ins Co of America v Rensselaer (COA), the New York’s Court of Appeals recently examined the definition and application of the term “occurrence” used in a police professional liability policy issued to the County of Rensselaer by Selective Insurance Company. The Policy defined “occurrence” as “an event, including continuous or repeated exposure to substantially the same general harmful conditions, which results in …’personal injury’… by any person or organization arising out of the insured’s law enforcement duties.” The policy went on to cite four specific examples that were “agreed to constitute one ‘occurrence’.” Of significance, the Policy also contained a deductible of $10,000 per occurrence, inclusive of legal fees and expenses.
In Selective, the County was faced with a class action involving about 800 class members arising out of the County’s policy of strip searching all people entering its jail regardless of the nature of the crimes alleged to have been committed. The problem was the 2nd Circuit previously declared such policies unconstitutional. Faced with such bad law, the County and its insurer Selective elected to settle the action for $1,000 per class member and $5,000 for the class representative.
After the settlement funds were paid by Selective, it demanded payment of the Policy’s deductible from the County and argued that the search of each class member was a separate occurrence. Thus, according to Selective, the County was responsible for the entire indemnity payment of about $800,000 plus associated legal fees. In response, the County countered that the entire action constituted a single occurrence and refused to pay more than a single $10,000 deductible.
The Court held that the claim of each separate class member constituted a single occurrence. It emphasized that unambiguous provisions in an insurance policy should be given their plain and ordinary meaning and noted that “a court is not free to alter the contract to reflect its personal notions of fairness and equity.” A good omen for Selective.
The Court of Appeals enforced what it considered the “plain language” of the Selective policy: the improper strip searches of arrestees over a four-year period constituted separate occurrences under the policy language. The definition of an “occurrence” in the Policy covered personal injuries to an individual as a result of harmful conditions. It did not permit the grouping of individuals unless that group was part of an organization. Each strip search performed over a multi-year period harmed a specific arrestee as an individual and constituted a single occurrence.
The Selective case confirms New York’s reputation as a “pro-insurer” state. The Selective Court’s language should temper a lower court’s urge to re-write a plainly written policy provision. The Selective decision also highlights the necessity of hammering out before a settlement is reached whether a civil suit involves one or multiple “occurrences,” particularly when a significant policy deductible applies.
If you have any questions, please contact Paul at .
In a move that is sure to shakeup insurance underwriting, the Oregon Supreme Court, in West Hills Development Co. v. Chartis Claims, Inc., recently expanded the scope of coverage afforded by an Ongoing Operations AI Endorsement. What makes this case particularly interesting—or concerning, from an insurer’s standpoint—is that the underlying complaint clearly alleged damage based on the completed work of the contractors. Yet, the Oregon Supreme Court nevertheless read the complaint to trigger coverage for ongoing operations. The state’s highest court affirmed an appellate court decision, effectively requiring an insurer to provide completed operations coverage, where none was obtained by the insured.
As in many faulty workmanship cases surrounding CGL policies, the underlying action involved defective work in the construction of a residential development. When the new homeowners of Arbor Terrace took up residence in their brand-new townhomes, they quickly discovered shoddy construction was causing significant water intrusion. The Arbor Terrace homeowners then sued the general contractor, West Hills Development Co, alleging negligent construction based on faulty workmanship.
West Hills then tendered the Arbor Terrace suit to its subcontractor, L&T Enterprises, and the sub’s insurer, Oregon Automobile Insurance Company. Oregon Auto denied coverage, among other reasons, because its policy only provided coverage to additional insureds for property damage occurring in the course of L&T’s ongoing operations performed for West Hills. As there were no allegations of damage to townhomes while L&T was actually working on the project, and L&T did not purchase Completed Operations coverage for additional insureds, West Hills did not qualify for coverage under the Oregon Auto policy.
After settling the Arbor Terrace action with the homeowners, West Hills commenced a DJ against Oregon Auto to recover defense costs incurred. West Hills argued that the Arbor Terrace complaint triggered Oregon Auto’s duty to defend because the allegations sufficed to create the possibility that West Hills would have been subject to liability for L&T’s ongoing operations. West Hills also argued that the Ongoing Ops endorsement applied to damages arising out of L&T’s ongoing operations, and this covered consequential damages that resulted from L&T’s work. Oregon Auto argued the underlying complaint did not allege any negligence on the part of its insured, only that West Hills was negligent. As the Oregon Auto policy did not cover West Hills for its own negligence, no coverage was owed. Further, Oregon Auto claimed coverage was only afforded if there were allegations of damages occurring while L&T was working on the Arbor Terrace project. Because no allegations were made, West Hills was not entitled to coverage under the policy’s ongoing operations endorsement. The trial court and court of appeals agreed with West Hills, and Oregon Auto appealed to the Supreme Court of Oregon.
Unsurprisingly, the potential that the state’s highest court would rule in favor of West Hills encouraged a plethora of amicus briefs, including ones from the Property Casualty Insurers Association of American, the National Association of Mutual Insurance Companies, and the Oregon Trial Lawyers Association. There were many issues on appeal, but the crux of the matter boiled down to whether the 4-corners of the complaint could be read to allege property damage caused by L&T’s ongoing operations performed for West Hills, despite the clear evidence the work on the Arbor Hills development was complete by the time the suit was filed.
Both the court of appeals and the Supreme Court of Oregon found one particular allegation by Arbor Terrace to be dispositive: the homeowners alleged the property damage occurred by the time they purchased their townhomes. Taking a broad interpretation of this allegation, the Court held it was possible the damages occurred earlier, and thus it did not rule out the possibility that damage occurred before L&T finished its operations. The Oregon Supreme Court performed some legal gymnastics in a strained reading of the Arbor Terrace complaint to find coverage was potentially triggered under the ongoing operations endorsement. As a result, although there were no allegations that damage arose before work was completed, the Court nevertheless found coverage because the complaint could be reasonably interpreted to allege damage to the Arbor Terrace properties before the homeowners purchased their townhomes.
Ignoring the syntax and grammar of the allegations (all in the past-tense and referring to prior work), the court concluded one allegation was sufficient to grant the insured more coverage than that which it bargained for (i.e., converting Ongoing Operations into Completed Operations coverage). This speculation on what could be meant by a party’s allegations exceeds the traditional scope of the 4-corners rule. Normally, an insurer compares the 4-corners of the complaint with the policy to determine whether anything alleged falls within the scope of coverage. If the allegations fail to plead facts that could trigger coverage under the policy, the insurer is relieved of its coverage obligations. Now (at least in Oregon), so long as the complaint does not expressly state facts ruling out coverage (e.g., no “occurrence,” injury/damage occurred before inception of policy, etc.) there would be a duty to defend. Undoubtedly, attorneys will use this to their benefit by making their allegations as ambiguously broad as possible, as a way to trigger coverage.
Thanks to Dan Beatty for his contribution to this post. If you have any questions about this post, please call or email Dennis Wade at for additional information.
The First and Second Circuits find themselves in potential conflict as a result of a suit for defense costs relating to environmental cleanup costs. The central issue is whether the discharge of pollutants fell within the policy’s pollution exclusion. When interpreting whether an event falls within a pollution exclusion, the threshold question is whether the event was “sudden and accidental.” If so, the event falls outside a policy’s relevant pollution exclusion and an insurer likely owes coverage.
In The Narragansett Electric Co. v. Century Indemnity Co., a cache of long buried waste was discovered, triggering a release of hazardous chemicals. Applying Massachusetts law, the district court found coverage was triggered and the event was “sudden and accidental,” which caused it to fall outside the policy’s relevant pollution exclusion. On appeal, the Second Circuit panel reversed, stating simply “any property damage alleged in this case plainly arose out of the NEC’s intentional disposal of wastes on the Mendon Road site.” The Narragansett Elec. Co., Plaintiff–Appellee–Cross–Appellant, v. Century Indem. Co., Defendant–Appellant–Cross–Appellee., No. 15-1137 -CV(L), 2016 WL 3450187, at *1 (2d Cir. June 23, 2016). Narraganset (“NEC”) claims the Second Circuit created a standard in which a policyholder will never be entitled to coverage once waste is disposed of on the subject property, no matter what may have triggered the dispersal of the dormant pollutants.
In response to the ruling, NEC filed a motion to reargue, claiming the Second Circuit failed to consider controlling law. To support their contention, they cite to the First Circuit’s decision in Millipore v. Travelers Indemnity Co. In Millipore, pollutants were released following attempts to douse a raging chemical fire at one of the covered properties. The First Circuit found the explosion was sudden and accidental as defined in the policy, and the remediation efforts were directly related to that event. Applying Massachusetts law, the First Circuit found the event qualified as “sudden and accidental” and was outside the pollution exclusion.
According to NEC, the facts in both cases are so similar the Second Circuit should have taken Millipore into account. NEC contends it was improper for the Second Circuit to distinguish the remediation efforts in Millipore with the accidental discovery of waste that had been buried for fifty years. In each case, Narragansett claims, the actions of a third party caused a separate, unexpected release that was potentially sudden and accidental.
In our view, Narragansett’s allegations fail on two grounds. First, they misconstrue the meaning and reasoning behind the Second Circuit’s ruling. The Second Circuit’s ruling was based almost entirely on the allegations in the complaint. The allegation in the underlying complaint in Narraganset stated “Maurice C. Brunelle uncovered blue sludge that was contaminated with chemical substances [from NEC’s waste]. … [and thereby] caused hazardous chemicals to be released to the environment.” The Narragansett Elec. Co., Plaintiff–Appellee–Cross–Appellant, v. Century Indem. Co., Defendant–Appellant–Cross–Appellee., No. 15-1137 -CV(L), 2016 WL 3450187, at *1 (2d Cir. June 23, 2016). The Second Circuit could find nothing in those allegations supporting a finding the release was “sudden and accidental.” As the Court wrote, “[T]he Commonwealth’s complaint, by contrast, ‘cannot reasonably be read’ to describe a ‘sudden and accidental’ release of pollutants separate from the NEC’s intentional release of pollutants into the environment over the course of decades.” Id at 1. On that basis, the Second Circuit found the Pollution Exclusion applied to bar coverage and thus no duty to defend. In contrast to the claims put forth by Narraganset, no precedent setting standard was created.
Second, the facts in Millipore and Narraganset are not as similar as NEC contends. In Millipore, an unanticipated fire and the ensuing remediation efforts were the direct causes of the hazardous release of pollutants. The insured was able to show the release was sudden and accidental. In Narraganset, the third party “uncovered blue sludge” which apparently spawned the release of dormant chemicals. NEC was unable to demonstrate the third party’s actions caused the spread of the pollutants or that the phenomenon was sudden and accidental. As such, the mere allegation of uncovering a pollutant did not present a scenario similar enough to implicate the ruling in Millipore.
In our view, Millipore and Narraganset are distinct enough to exist in harmony with one another.
Thanks to Joshua Gornitsky for his contribution to this post. For more information, please email Dennis M. Wade at .