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News New Jersey Supreme Court Provides Clarity On Insurance Exclusion Clauses August 11, 2022 < Back Share to: The New Jersey Supreme Court recently held in Norman International, Inc. v Admiral Insurance Company, that an insured cannot claim an exclusionary clause does not apply because their product was sold to the parent company in a non-excluded zone but directed for delivery to a site in an excluded area. The Court emphasized that they must analyze the precise wording of the policy and consider the actions of the insured within the excluded zone. When considering the wording, the courts looked at the policy terms that stated, “This insurance does not apply to “bodily injury”, “property damage” or “personal and advertising injury”, including costs or expenses, actually or allegedly arising out of, related to, caused by, contributed to by, or in any way connected with. . . Any operations or activities performed by or on behalf of any insured in the Counties shown in the Schedule above [which contained the county where the injury occurred].” The court defined and focused on the phrase “in any way connected with” and determined it was to be applied broadly and to mean that it would apply to an injury that is connected in any fashion regardless of its remoteness. With the broad interpretation of the policy, the Court then considered the actions of the insured to determine whether the injury was in any way connected with the insured. The Court held that the fact that the insured provided the machine that resulted in the injury was enough to trigger the exclusion. The court reasoned that the injury could not have occurred without the machine being provided by the insured and, therefore, the injury was connected with the insured performing an activity within the excluded zone. The court also emphasized that the insured providing training and servicing further supported the connection. The takeaway from this decision is that, in consideration of exclusionary clauses, the courts will be inclined to closely examine the wording of the policy. While ambiguity will be considered in favor of the non-drafting party, the courts will consider the words and phrases for their precise definitions. Thanks to Ryan Dame for his contribution to this article. Should you have any questions, contact Andrew Gibbs. Previous Next Contact

News It’s Just Part of the Game: Plaintiff Assumes Risk with Collision at Third (NY) April 23, 2021 < Back Share to: In Infant v. Loisaida Inc, plaintiff, a thirteen-year-old, was injured when, as he was fielding at third base in a baseball game, a baserunner slid into the base and collided with his left shin. Infant plaintiff brought suit alleging negligence of the league for his injuries. Defendants argued that the plaintiff assumed the risk, as he had played baseball for seven years. The lower court dismissed the case against the defendants and plaintiff appealed. The Appellate Division, First Department affirmed the lower Court’s decision under the doctrine of assumption of risk, as knew the inherent risks of the game. He was injured in a common play in baseball. The Court rejected plaintiffs' argument that the baserunner's metal cleats created an enhanced or concealed risk that was not assumed. The little league rules that defendant was required to follow permitted the wearing of such cleats, and both the 13–year–old infant plaintiff and his father testified that they observed the baserunner wearing metal cleats. Plaintiffs have not shown that defendant failed to provide safety equipment that would have prevented the inherent risks. Since recovery is precluded by the fact that he assumed the risks inherent in playing baseball, plaintiffs may not recover under a theory of negligent supervision Thanks to Paul Vitale for his contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News New York Re-Opens the Doors for New Lawsuits May 21, 2020 < Back Share to: Following Gov. Cuomo's Executive Order back in March -- which feels like ages ago - new lawsuits were barred in New York on non-essential matters. But as per J. Marks newly issued order on May 20, 2020, starting after Memorial Day, new lawsuits on "non-essential matters" may be filed again. We have been privy to many discussions among attorneys in recent weeks, to wit, the longer the Courts delay the re-opening of E-filing, the bigger the deluge of new lawsuits will eventually become. The Court system has apparently been having similar discussions internally, and has opted to re-open e-filing starting May 26, 2020. Therefore, as of this coming week, E-filing of new pleadings and motion practice on existing claims, may proceed as per "usual." Filing deadlines are still stayed, per Gov. Cuomo's executive order, until June 7, 2020. There is no word yet on whether that date will be extended again, since J. Marks' order only applies to E-filed cases. We will keep tabs on any updates from Gov. Cuomo. Realistically, we do not envision in-person jury trials taking place in New York City for the remainder of 2020. Some creative, outside-the-box thinking may be in order. In early March, the idea of remote depositions, examinations under oath, and mediations seemed like foreign concepts. Since that time, many of us have become more comfortable with remote practice, which we expect will continue at least in the short term. Who knows what other remote, fact-finding tools may become useful? Please email Brian Gibbons with any questions. Previous Next Contact

News Vandalism May Not Be What You Think It Is(NY) November 13, 2013 < Back Share to: For the first time, the Court of Appeals in Georgitsi Realty, LLC v. Penn-Star Insurance Company weighed in how broadly the term “vandalism” should be interpreted when used in a property insurance policy. It appears that the Court’s broad interpretation of “vandalism” may expose property insurers to claims for damages allegedly caused by construction on neighboring properties. The insured in Georgitsi owned a four-story brownstone in Park Slope, Brooklyn. The insured procured a “named perils” property insurance policy from Penn-Star covering “direct physical loss or damage . . . caused by or resulting from" numerous perils, including “vandalism.” The policy defines vandalism as “meaning willful and malicious damage to, or destruction of, the described property." The insured’s neighbor, Armory Plaza, Inc., began construction of an underground parking garage that began causing substantial damage to the foundation of the insured’s building. The New York City Department of Buildings issued violations and “stop work” orders against Armory, and the insured obtained a temporary restraining order from the Supreme Court "to cease all construction and/or excavation work." Armory ignored all of them. Penn-Star rejected the insured’s claim so it sued its insurer, and the district court found in favor of Penn-Star, holding that Armory’s alleged conduct did not constitute “vandalism” under the policy. The insured appealed to the Second Circuit, which certified the following two questions to the Court of Appeals: 1) "For purposes of construing a property insurance policy covering acts of vandalism, may malicious damage be found to result from an act not directed specifically at the covered property?"2) "If so, what state of mind is required?" In answering the first question in the affirmative, the Court held that there is no reason to limit the scope of the term vandalism to acts directed specifically at covered property. The Court compared Armory’s “conscious disregard of likely damage to the building next door” to that of an “irresponsible youth who might dig a hole on the same property… whether in search of buried treasure or just for fun.” Nevertheless, the Court ruled that a “malicious” state of mind in this context requires the same showing as that for punitive damages; the actor must demonstrate “such a conscious and deliberate disregard of the interests of others that [it] may be called willful or wanton" (citations omitted). The Court reasoned that the term “malicious” distinguishes vandalism from ordinary tortious conduct, and thus prevents the insured from gaining more than he bargained for in the insurance contract. The Second Circuit will now apply this ruling to the facts in the underlying case. We will continue to follow the case to see what transpires, but it seems that a finding of vandalism is likely. Thanks to Steve Kaye for his contribution to this post. Previous Next Contact

News Email Scam Not Necessarily Covered As “Computer Fraud” August 8, 2017 < Back Share to: While it may seem counter-intuitive, wire fraud induced by email does not constitute a loss directly caused by the use of a computer, and for good reason. The Eastern District of Michigan recently encountered this scenario in American Tooling Center, Inc. v. Travelers Casualty and Surety Co. of America. The insured received what appeared to be an email requesting payment from a vendor. To accomplish the ruse, the impostor artfully changed an “m” in the domain name of the vendor with “rn,” and further responded to requests for proof of milestones made by the insured. After receiving such proof, the insured wired payment to the designated bank only to realize later it had been duped. The insured submitted a claim for computer fraud to Travelers Casualty and Surety Company of America. The Travelers Policy covered “computer crime,” defined as any “direct loss of, or direct loss from damage to, Money, Securities and Other Property directly caused by Computer Fraud.” The Travelers Policy further defined “Computer Fraud” as, in pertinent part, “[t]he use of any computer to fraudulently cause a transfer of Money….” The Court held the email scam did not constitute a loss directly arising from the use of a computer. Instead, the Court observed the insured responded to the fraudulent emails by taking verification steps prior to authorizing the transfer of funds. As a result, and unlike a hacking case, the transfer itself did not directly arise from the use of a computer. In so holding, the Court emphasized “direct” in this context meant “immediate.” Though the email was part of the scheme, the email was incidental to the occurrence of the authorized transfer of money. “To interpret the computer-fraud provision as reaching any fraudulent scheme in which an email communication was part of the process would…convert the computer-fraud provision to one for general fraud.” Coverage often turns on a strict interpretation of causation, and it is no different when the means or mode of loss is through the internet. While an email may start the causal chain of loss, intervening acts can disrupt the chain of causation for coverage purposes. Thanks to Chris Soverow for his contribution to this post. Previous Next Contact

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News Logical Can Still Be Deemed Speculative In Slip And Fall (NY) August 25, 2023 < Back Share to: In the matter of Cashwell v. Stop & Shop Supermarket Co., LLC, 2023 NY Slip Op 04358, (August 23, 2023) plaintiff brought action against the supermarket when she slipped and fell on a puddle of liquid inside the store. Defendants moved for summary judgment, and despite the fact that they were the property owner, the Court held in their favor. The argument between the parties revolved around the creation of the condition that caused plaintiff’s fall. The location of the incident was in the freezer isle of the store. Plaintiff contended that she fell on a puddle of water. As such, and as can be logically inferred, plaintiff argued that a nearby box of frozen food had leaked and caused the puddle. However, the Second Department found this argument to be unavailing. Ultimately, Stop & Shop argued that it was mere speculation by the plaintiff, and thus, she was unable to sufficiently establish the causation as to the condition. The Second Department agreed, and affirmed the lower court's judgment, granting Stop & Shop summary judgment on liability. It is important to remember that while something may make sense logically, absent sufficient grounds to support a conclusion, it is merely an inference. Inferences cannot be grounds to impose liability. Thanks to Chris Palmieri for his assistance with this article. Should you have any questions, please contact Tom Bracken. Previous Next Contact

News Court Allows Insurer to Recover Damages Due to Misrepresentation (NY). January 11, 2012 < Back Share to: Typically, when an insurer relies on material misrepresentations made by the insured upon application for coverage, the appropriate remedy is rescission of the policy. But there may be circumstances where rescission is impractical or inappropriate, as recently occurred in Syncora Guarantee Inc. v. Countrywide Home Loans, Inc. As has been well documented, Countrywide has been under fire for various lending practices that were exposed when the housing bubble burst. Here, Countrywide sold or conveyed Mortgage Loans to trusts. The trusts, in turn, issued notes backed by the Mortgage Loans to investors. The investors were promised a return of principal with interest. Syncora, in essence, insured that payments received from the Mortgage Loans would be sufficient to cover the payments due to the investors. If the mortgages were not paid, the policies issued by Syncora would cover the shortfall. Syncora eventually filed suit against Countrywide, alleging that Countrywide misrepresented the terms of the underlying Mortgage Loans, and claims that if it had known the true details of the loans, it may have either declined to issue its financial guaranty insurance policies or issued the policies on different terms. Syncora made claims for fraud, breach of contract, and for “rescissory damages.” The insurer argued that it was entitled to rescissory damages because rescission of the policy would be unfair to the investors, was prohibited by the underlying investment contracts, and it also appears the Syncora had already paid out indemnity under the policies. The Court pointed out that, “rescissory damages, while not often used in New York, are far from an unknown form of relief. … Rescissory damages are designed to be the economic equivalent of rescission in a circumstance in which rescission is warranted, but not practicable. A solid body of case law so holds.” Countrywide argued that several courts applying New York law have held that rescissory damages are not available in New York, but the Court found that, although the cited cases did not grant rescissory damages, the cases did not hold against their availability. The Court found that, under the circumstances of this case, rescission was warranted but impractical. As such, the Court held that if Syncora can prove its case, it is entitled to rescissory damages, less premium collected. If you would like more information about this post, please write to mbono@wcmlaw.com     Previous Next Contact

News Family Not So Fun Day (NJ) June 25, 2021 < Back Share to: In New Jersey, a plaintiff sought to recover worker’s compensation benefits after she fell in a pothole at a recreational event that was organized by the non-profit organization she worked for. Employees of the non-profit were asked to volunteer to work the event, but were not penalized if they opted out. The plaintiff in Goulding v. NJ Friendship House, Inc., worked as a chef/cook for NJ Friendship House, and was preparing lunch for the event when she stepped in a pothole and fell, injuring her ankle. Goulding filed a claim for worker’s compensation and benefits. Friendship House maintained she was not entitled to relief because she was not working for the organization when the injury occurred. Under New Jersey’s Worker’s Compensation Act, if an employee is injured during a social event, they generally cannot recover compensation for those injuries unless they meet a two-part exception. The two-prong test to the Act provides: expressly permits compensation “when such recreational or social activities [(1)] are a regular incident of employment and [(2)] produce a benefit to the employer beyond improvement in employee health and morale.” See N.J.S.A 34:15-7. The worker’s compensation court, and subsequently the Appellate Division, both ruled that the Family Fun Day was a social/recreational event and not within the scope of plaintiff’s employment with the organization. After granting certification, the New Jersey Supreme Court ruled that plaintiff did in fact meet the exception of the two-prong test, because she worked in the same capacity for the organization as she did at the event, and but for the fact that she was asked to be a volunteer because she was an employee of the organization, she would not have been injured. The court also determined that because the Family Fun Day was designed as a “community outreach event”, the employer’s clients were benefitted, and therefore it could not be deemed a recreational event. The court subsequently reversed and remanded the case to the worker’s compensation court. This matter serves as a cautionary tale for employers to ensure that if your organization plans a social or recreational event, it may end up costing you. Thanks to Haley Matthes for her contribution to this post. Please contact Heather Aquino with any questions. Previous Next Contact

News The Boy Who Cried Wolf? February 21, 2011 < Back Share to: We're all familiar with the story of the boy who cried wolf. It sometimes seems that talking about mold, the "next" asbestos, in the context of New York is like crying wolf. But, if recent news articles are to be believed, mold may really be about to be a problem in NY -- http://nyti.ms/ePGzbl. Maybe this time, there really is a wolf. For more information, about this post please contact Bob Cosgrove at rcosgrove@wcmlaw.com Previous Next Contact

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