The Customer is Always Right (NY)

Retailers should be weary of holiday shoppers this season, particularly in light of the Second Department’s recent decision siding with a customer who tripped and fell on a low table in a Hollister Co. store.

Defendant moved for summary judgment on the basis that the placement of the table was open and obvious, and further that plaintiff walked in an area not meant for ingress/egress. In support of its motion, defendant submitted plaintiff’s deposition transcript, where plaintiff testified that he did not see the table before falling because the store was dark, and the low table was obscured by a taller, larger table placed near it.

The Second Department overruled the lower court’s dismissal, finding that defendant failed to establish, prima facie, that the condition created by the subject table was open and obvious in light of the surrounding circumstances despite defendants submitting evidence as to the lighting conditions and presence of other customers in that area.

The Court also noted that the testimony of defendant’s employees further demonstrated that the area traversed by plaintiff was an “egress,” which made a possible accident more foreseeable.  Thanks to Theresa Dinh for her contribution to this post.  Please email Brian Gibbons with any questions.

Self-Destructive Selfies (NY)

Defense attorneys have increasingly turned to social media  to defend against exaggerated claims of personal injuries. In Smith v. Brown, 2018 NY Slip Op 28299, the plaintiff commenced an action in Supreme Court, Bronx County, to recover for personal injuries allegedly sustained in a motor vehicle accident.

At the discovery stage, one of the defendants served plaintiff with a notice to admit, seeking to admit: (1) whether plaintiff owns and maintains an Instagram account with a specific “handle”; (2) whether the account associated with that handle was changed from a public to private account setting after a specific date; (3) whether plaintiff was depicted in a number of specified photographs obtained from the Instagram account — and whether those photographs were taken after the accident. Defendant served copies of each of the 33 photographs for which admissions were sought along with the notice. The photographs appeared to depict a young woman (presumably the plaintiff), engaged in different activities, such as riding in a car, climbing a rock, and walking on a boardwalk.

Plaintiff filed a motion seeking a protective order to vacate or strike the notice to admit arguing that defendant was attempting, impermissibly, to use the notice to admit in lieu of other disclosure devices, such as a deposition. Plaintiff also argued that the notice to admit was improper because it sought admissions on material issues in the litigation. Defendant opposed the motion, arguing that the admissions sought in the notice to admit were relevant to the issue of the extent of plaintiff’s damages, and not to any ultimate questions of fact or any legal conclusions.

The Court agreed with defendant, and plaintiff’s motion was denied. The Court ultimately held that the notice did not seek admissions as to any ultimate conclusions (such as which driver or drivers were negligent) or information of a technical, detailed or scientific nature. Therefore, those matters on which defendant sought admissions could be explored at a deposition and were thus within the proper scope of a notice to admit.

Social Media is now, much like post-deposition surveillance, a valuable tool in gauging a plaintiff’s credibility, and also, mitigating a future pain and suffering claim.   Thanks to Tyler Rossworn for his contribution to this post.  Please email Brian Gibbons with any questions.

Second Department Limits Assumption of Risk Doctrine in Football Injury (NY)

In M.P. v. Mineola Union Free School District, the Second Department reversed a lower court decision granting summary judgment to the defendant. Plaintiff was a nine year old student who was playing touch football at recess and was injured when, going for a catch, he crashed into playground equipment.

The defendants argued that the infant plaintiff assumed the risk of playing football on a field adjacent to the playground equipment and that any negligent supervision was not the proximate cause of his injuries.  Defendant cited to plaintiff’s testimony that he plays in the area all the time at recess despite warnings to stay away from the school recess monitors.

The Second Department overturned the dismissal of the suit, because the school district failed to meet its burden in proving inherent risk, and failed to establish, prima facie, that its alleged negligent supervision in permitting the students to play football near the playground did not “create[ ] a dangerous condition over and above the usual dangers that are inherent in the sport.”

The Second Department ruled despite testimony from the plaintiff that he and his friends routinely disregarded the boundaries set by school employees for the playing area, and would play outside the designated boundaries on a portion of the field that was on the edge of an adjacent playground.

The Second Department also noted that plaintiff’s age (9 years old) was too young to “appreciate the risks involved” in playing  touch football.   We suspect there were recess monitors in the schoolyard — possibly volunteers — who “let it slide” when they saw the children playing football near the equipment.

If we might editorialize for a moment, this seems to us like a case where the “call on the field” was correct, and the appellate court opted to hold the school district to an unreasonably high standard.  Thanks to Paul Vitale for his contribution to this post.  Please email Brian Gibbons with any questions.

Decedent’s Statements to His Wife Admissible as Hearsay Exception, Defeating Estate’s MSJ (NY)

In Caminiti v Extell West 57th Street LLC, 2018 WL 5914129, 2018 N.Y. Slip Op. 07667 (1st Dep’t 2018), the decedent in a wrongful death Labor Law suit made a statement to his wife in the ER after an accident that he “should have known better” than to use a ladder as he did.  He later died.  Plaintiff, the administratix of the deceased’s estate, sued under Labor Law §240(1) and Labor Law §241(6) against defendants, the owner, developer, and general contractor of the project.

Plaintiff made a motion for partial summary judgment on Labor Law §240(1) and the defendants made a motion for summary judgment to dismiss the complaint.  Judge Arlene Bluth in New York Supreme, granted plaintiff’s motion and denied the defendants.  Upon appeal, the First Department modified the order to also deny the plaintiff’s motion and granting defendants’ motions as to the Labor Law §241(6) claims based on several Industrial Code sections.

The First Department ruled that the lower court properly ruled that the now-deceased husband’s statement regarding his accident was admissible as a declaration against interest in order to establish his wife, as an adminstratix of the deceased husband’s estate’s, prima facie case under Labor Law §240(1).  The statements showed, as a matter of law ,that the ladder started to move while he was working on it, and when he tried to stabilize the ladder, it tipped and struck him in the chest.  The First Department ruled that plaintiff was not required to present further evidence that the ladder was defective.

However, the defendants raised triable issues of facts as accident reports showed that while he was on the ladder, he felt chest pains and his legs became “unsteady” or “wobbly.”  Furthermore, his co-workers saw the ladder in an upright position about 10 feet away from the decedent when he expressed that he was suffering chest pains.  As such, plaintiff’s partial motion for summary judgment on Labor Law §240(1) was dismissed.

Furthermore, the First Department ruled that since plaintiff failed to specifcy any particular subsection or subdivisions of the provisions Industrial Code sections, the Labor Law §241(6) claim as to those provisions were considered abandoned. As such, Defendant’s motions for summary judgment to dismiss the complaint was granted as to those provisions.

The fact that hearsay evidence from the deceased was admitted through the administratix’s testimony shows the value in a plaintiff administrator’s testimony, not just to damages, but potentially to liability.  Proactive defense counsel should be wary of such testimony while taking depositions and be ready to cross-examine the administrating witness attempting to bring in any hearsay evidence from the deceased.

Thanks to Jonathan Pincus for his contribution to this post.  Please email Brian Gibbons with any questions.

Plaintiff’s Claim Dismissed After Counsel Ignores Court Order (NY)

In Soto v Chelsea W26, LLC (2018 NY Slip Op 08170), the Appellate Division sent a message that cursory excuses for disregarding Court Orders or opposing motions will not be tolerated.

The plaintiff, Missael Soto, filed a lawsuit alleging violations of Labor Law §§ 240(1), 241(6), and 200, and common-law negligence. In April 2015, the defendants served an Answer and initial discovery demands.  In November 2015, a preliminary conference was held in Queens County Supreme Court, with an Order issued, directing the plaintiff to serve a Bill of Particulars within 30 days.  The plaintiff did not comply, and six months later, in May 2016, two separate Court Orders required the plaintiff to serve a Bill of Particulars and responses to the initial discovery demands on the defendants.

In June 2016, the defendants moved pursuant to CPLR 3126(3) to strike the complaint based upon the plaintiff’s failure to produce a Bill of Particulars and responses to the combined discovery demands. The plaintiff did not file any opposition to this motion.  As such, by Order entered November 7, 2016, the Supreme Court granted the defendants’ unopposed motion pursuant to CPLR 3126(3) to strike the Complaint.

Then, the plaintiff moved pursuant to CPLR 5015(a)(1) to vacate the Order striking the Complaint, arguing that a law office failure resulted in the per diem attorney hired to cover the motion appearance, failing to appear in Court. But the Supreme Court denied this motion, resulting in the plaintiff appealing this decision to the Appellate Division, Second Department.

The Appellate Division affirmed the denial.  To vacate an order, the plaintiff must 1) demonstrate both a reasonable excuse for the default and 2) a potentially meritorious opposition to the motion. The Appellate Division took issue with the first prong of this standard, the reasonable excuse.   Regardless of whether the firm’s per diem attorney appeared on the return date, the evidence submitted by the plaintiff in support of his motion demonstrates that the plaintiff’s attorney made a conscious decision to send a per diem attorney on the motion’s return date to attempt to resolve the motion by stipulation rather than file and serve any papers in opposition.  Plaintiff’s attorney’s decision not to oppose the motion constituted a strategy, not law office failure, and thus was not a reasonable excuse.  The Appellate Division affirmed the Supreme Court’s denial of plaintiff’s motion to vacate the Order striking the Complaint.  Thanks to George Parpas for his contribution to this post.  Please email Brian Gibbons with any questions.

Second Department Affirms Labor Law SJ Denial Due to Conflicting Accident Accounts (NY)

In Giannas v 100 3rd Ave Corp, Plaintiff was repairing fencing on the fourth floor of a building when he noticed what appeared to be a metal stud nailed across an open window. Plaintiff crawled onto the scaffolding outside the building  to knock the stud into the building by hitting it with his hammer. However, the scaffolding moved toward the street, causing him to lose his balance and fall through the window, into the building.

Plaintiff alleged violations of Labor Law §§ 200, 240(1) and 241(6), and moved for summary judgment on Labor Law §240(1) cause of action but the Court denied the motion. In addition, the Court granted the construction manager’s motion for summary judgment dismissing the complaint as asserted against it. Finally, the Court granted the subcontractor scaffolding company’s motion for summary judgment dismissing the Labor Law §§ 200, 240(1), and 241(6) causes of action, and denied that branch of its motion which was for summary judgment dismissing the common-law negligence cause of action. Plaintiff and the scaffolding supply and installation company appealed the Court’s decision.

On appeal, the Second Department affirmed the lower court’s order granting the construction manager summary judgment on Labor Law §240(1) reasoning that the construction manager had no control of the means and methods of work under the contract and did not control the work or supervise safety.  The Appellate Court further affirmed the lower court’s denial of plaintiff’s motion for summary judgment on Labor Law §240(1)because there were conflicting accounts of how plaintiff fell, including whether he had ever mentioned that the scaffold moved causing him to fall.  Finally, the subcontractor’s motion for summary judgment on common-law negligence was denied because of question of subcontractor’s affirmative negligence for launching an instrumentality of harm under Espinal, which also required denial of subcontractor’s motion on contractual indemnity.

Thanks to Meg Adamczuk for her contribution to this post.  Please email Brian Gibbons with any questions.


First Department Rules Insurer Must Defend Asbestos Claims (NY)

The First Department recently upheld a trial court decision requiring American Home Assurance Co. (“American Home”) to defend the Port Authority in several underlying asbestos claims in American Home Assur. Co. v Port Auth. of N.Y. & N.J.  In 1966, American Home issued a liability policy to the Port Authority relating to the construction World Trade Center complex, then known as the WTC Hudson Tubes Project.  The policy covered the Port Authority, as well as the site’s contractors and subcontractors, for liability that “arises out of … all operations … during the policy period in connection with the construction of the project.”  In 1975, American Home sent the Port Authority a notice of cancellation, effective February 1976.

Mirroring a nationwide trend, the Port Authority began experiencing a deluge of asbestos-related claims in the 1980s.  American Home defended the Port Authority and several contractors, in thousands of underlying asbestos cases, incurring more than $30 million worth in costs and settlements.  The present litigation began in 2012, when American Home filed a declaratory judgment action contending that the pending asbestos claims did not occur during the policy period. Specifically, they argued that for coverage to be triggered, a diagnosable disease needed to exist during the policy period, which was not the case in the underlying actions.

The trial judge ruled against American Home, holding that “during the policy period” modified the actual project operations, regardless of when the injuries began.  The judge further held that American Home could not rely on a $10 million per occurrence limit for “spray on fireproofing” because the alleged exposures occurred in a variety of ways.  Lastly, the court held that the defense costs were not subject to the policy limit, holding that the policy provided “litigation insurance” which survived the exhaustion of the policy limit.

On appeal, the First Department affirmed the majority of the trial court’s ruling.  The court held that the “plain language” of the policy “means that the policy covers injuries that result from operations that occurred during the policy period.”  Therefore, the policy provided coverage regardless of when the injury was diagnosed.  Further, the court held that the “spray on fireproofing” limit was not applicable because the claims did not arise from a single occurrence under the policy.  Notably, the court held the trial court erred in finding that the duty to defend survives exhaustion of the policy’s liability limit, as “[t]he policy explicitly provides that defense costs are subject to that limit.”  American Home could take solace in the First Department’s final ruling, as the defense costs for the pending asbestos claims could amount to further millions in costs.

Thanks to Doug Giombarrese for his contribution to this post.


Close Only Counts in Horseshoes, Hand Grenades, and the Duty to Defend (NY)

In New York, it is well-settled an insurer’s duty to defend arises whenever the allegations in a complaint are even potentially within the language of the insurance policy. The duty to indemnify is narrower, as even where there is a duty to defend, there may still be an issue of fact as to whether the underlying occurrence was within the scope of coverage. The Second Department recently reiterated how broadly Courts will interpret the scope of these obligations.

In One Reason Rd., LLC v. Seneca Ins. Co., Inc., a landlord sought coverage from Seneca as an additional insured under a tenant’s policy for an underlying personal injury action. Seneca argued the policy did not cover the claim because the alleged accident did not occur on the portion of the property which had been leased to the tenant and the policy only applied to liability arising out of ownership, maintenance or use of “that part of the premises.”

However, the Court held Seneca owed the landlord both a duty to defend and indemnification. Although the alleged injury was a slip and fall on snow and ice in the parking lot, the Court observed the tenant had leased a portion of the warehouse and parking lot and “any necessary easements, privileges or rights of way over the adjoining premises.” Taken together with the tenant’s obligations to contribute to the maintenance of common areas and the extremely broad interpretation of the phrase “arising out of,” the Court held the accident occurred on a portion of the property which was part of the tenant’s lease.

The ruling is a salutary reminder that courts can be creative in finding coverage even when an insurer believes they have limited the coverage grant in their policies.

Thanks to Nicholas Schaefer for his contribution to this post. Please email Vito A. Pinto with any questions.

Estopped from Disclaiming (NY)

In a recent decision, the Second Department reminded defense attorneys and insurers that coverage analysis is a continuing obligation, not merely a binary yes or no decision at the time a claim is made.

The plaintiff in Mazl Bldg., LLC v. Greenwich Ins. Co. was added as an additional insured on a policy purchased from the defendant by a third party. Accordingly, when plaintiff was sued for personal injury, the defendant accepted plaintiff’s tender, agreeing to defend and indemnify plaintiff.

One year later, the defendant learned plaintiff had previously assigned its indemnification rights to a third party. Although this would be a basis to disclaim coverage and withdraw, the defendant continued to defend the case. In fact, defendant did not attempt to disclaim until almost four years after learning about plaintiff’s assignment, after jury selection had already been completed. Plaintiff was forced to settle the case out of pocket and pursue the defendant for reimbursement.

The Second Department affirmed plaintiff’s summary judgment motion in its resulting declaratory judgment action, ruling the defendant was estopped from disclaimer. The Court highlighted defendant’s failure to, at the very least, serve a Reservation of Rights promptly when it learned of a potential basis upon which to disclaim coverage.

While this decision does not posit a bright line rule or specific time period wherein an insurer should disclaim coverage when it learns of facts vitiating the policy, defense counsel and insurers should take note. Just because coverage may appear to exist at the outset of a case, new facts may arise which permit disclaimer at a later date. And should those facts arise, counsel and insurers must act promptly, or they may waive an opportunity to get out of a case. At a minimum, when in doubt, a reservation of rights could go a long way as a failsafe measure.

Thanks to Nicholas Schaefer for his contribution to this post. Please email Vito A. Pinto with any questions.

Attorney-Client Privilege Potentially Under Siege (NY)

The Appellate Division, Fourth Department, recently issued a decision that will have severe ramifications on insurance carriers. In Rickard v. New York Cent. Mut. Fire Ins. Co., a supplementary UIM claim, the injured party served a notice to produce for New York Central Mutual’s entire claim file, including the portions of the file that were generated after the action was filed. New York Central Mutual, claiming that the material from after the action was filed is protected, moved for a protective order, or in the alternative, for an in-camera review of the materials. The trial court denied New York Central Mutual’s motion and granted Rickard’s cross-motion to compel the entire claim file. As a result of the trial court’s decision, New York Central Mutual appealed to the Appellate Division, Fourth Department.

The Fourth Department discussed how New York Central Mutual’s objection in response to Plaintiff’s notice to produce was overly broad, in that NYMC should have identified which specific document requests were “palpably improper” instead of asserting that all materials in the claim file generated after the commencement of this action were protected. In the end, the court held that New York Central Mutual failed to meet its burden to secure the protection they requested because of the breadth of the objection. The court said, deciding what parts of a claim file are protected is a fact-specific determination. They added that this will most likely result in an in-camera review.

This case goes against the prior holding of Lalka v. ACA Ins. Co., a 2015 Fourth Department case, where the court held that all documents in the claim file created after an action has commenced are protected from disclosure.

The concern going forward is that the courts will continue to chip away at the attorney-client privilege between insurance carriers and their attorneys. For now, when objecting to demands by citing attorney-client privilege, insurers and their attorneys would be well advised to note specific bases for their objections, rather than issue blunderbuss objections to all such demands.   Thanks to Marc Schauer for his contribution to this post.  Please email Brian Gibbons with any questions.