Wade Clark Mulcahy LLP

News Bald Assertions Insufficient to Hold Insurance Professionals Personally Liable for Claims-Handling Practices (TX) May 3, 2018 < Back Share to: While we do not ordinarily report on Texas litigation, occasionally we learn of decisions of particular import to insurance claim professionals. In coverage litigation, insureds often attempt to recover more than damages for simple breach of contract. Most often, this comes in the form of a bald assertion of bad faith. At other times, however, insureds rely on state statutes that impose personal liability on insurance professionals. Fortunately, as they often do in bad faith cases, courts typically require something more than bald assertions to impose extra-contractual liability. One example is the recent decision from the United States District Court for the Northern District of Texas. In Caruth v. Chubb Lloyd’s Co of Texas et al.., the insureds submitted an insurance claim for property damage. Chubb's assigned adjuster retained a roofing company to investigate the loss and that company determined that the property damage was not the result of wind or hail. The insureds claimed that the adjuster’s handling of the claim led to an underpayment and a wrongful partial denial of coverage. In the ensuing coverage action, the insureds relied on a Texas statute under which an individual adjuster may be held personally liable for how it adjusts a claim. According to the plaintiffs, personal liability was appropriate because the adjuster “failed to perform a proper and complete investigation of the claim;” represented that certain damages would be covered then failed to pay for such damage,” and retained the roofing company “because it was known that it would issue a report on which the claim for benefits would be denied.” On these allegations, the court granted the insurer’s motion to dismiss. In doing so, the court reasoned that despite the allegations, the insureds failed to adequately describe the cause of their loss or specifically allege how the adjuster’s investigation was inadequate. According to the court, these conclusory statements were insufficient to state a cause of action for personal liability. All insurance professionals should be cognizant of the possibility of a bad faith claim or even the imposition of personal liability. But the Caruth decision should provide some reassurance that bald assertions, without specific allegations of bad faith claim handling, fall short of the high burden necessary to impose extra-contractual remedies. Thanks to Michael Gauvin for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Snipes Swipes Taxes From IRS? January 14, 2008 < Back Share to: In Ocala, Florida, Major League star, Wesley Snipes stands accused of conspiracy to defraud the government, filing a false claim for a $7 million refund and failing to file tax returns for 6 years, starting in 1999. Mr. Snipes, along with his two tax advisor co-defendants assert that pursuant to section 861 of the Federal Tax Code, "compensation for services" are taxable, but wages are not. http://www.nytimes.com/2008/01/14/business/14tax.html Previous Next Contact

News Failure to Perform Autopsy Not Spoliation (NY) April 23, 2019 < Back Share to: In Fishon-v-Richmond-Univ-Med-Ctr, plaintiff, as administrator of the decedent's estate, commenced an action to recover damages for medical malpractice, wrongful death, and violation of the common-law right of sepulcher following the decedent's death. Sepulcher is the right to choose and control the burial, cremation, or other final disposition of a human body. During jury selection, the plaintiff made an oral application to the Court requesting that the Court strike defendant's answer and for judgment as a matter of law on the issue of liability on the grounds that the defendant allegedly destroyed evidence and failed to perform an autopsy on the decedent. In opposition, the defendant argued, among other things, that the Supreme Court had previously denied that branch of a prior motion by the plaintiff which was to strike the defendant's answer based on the defendant's alleged spoliation of evidence. In the order appealed from, the court granted the plaintiff's oral application, in effect, to strike the defendant's answer and for judgment as a matter of law on the issue of liability. The defendant appealed. The Appellate court granted permission for the appeal since the orders were granted on an oral application and only an order resulting from a motion on notice is appealable as of right. The Appellate Division, Second Department, ultimately reversed the lower court’s decision on the grounds that the lower court violated the doctrine of law of the case (i.e. where rulings made by a trial court and not challenged on appeal become the law of the case) in that it disregarded the prior order denying that branch of plaintiff’s earlier motion seeking to strike the defendant’s answer based upon the same evidentiary issues. Thanks to Margaret Adamczak for her contribution to this post. Please email Vincent Terrasi with any questions. Previous Next Contact

News NJ Deemer Statute Requires Application of Verbal/Tort Threshold January 16, 2009 < Back Share to: Like many states, New Jersey enacted a legislative scheme aimed at reducing automobile insurance by limiting an injured party's ability to sue for injuries sustained in an automobile accident. Unlike New York, a policyholder elects whether to be subject to the "verbal" threshold, which was designed to weed out soft tissue injuries from the legal system in return for a reduced premium. A policyholder pays an increased premium if he selects the unlimited tort option. In contrast, New York's scheme is mandatory and requires a plaintifff to establish "serious injury" as a condition to maintaining a lawsuit for injuries sustained in an auto accident. What happens if an out of state resident has an auto accident in New Jersey and subsequently files suit in the Garden State? Is the plaintiff subject to the verbal threshold even if the other state has no analogous scheme? The simple answer is "yes" to both questions if the plaintiff is insured by an admitted New Jersey insurer. Pursuant to its deemer statute, New Jersey "deems" any policy issued by an insurer authorized to underwrite insurance in its state to contain the verbal threshold or limited tort option. As a result, a Pennyslvania resident who is injured in New Jersey in an automobile accident must vault the verbal threshold as a condition to recovery where his insurer is admitted to underwrite insurance in New Jersey. http://lawlibrary.rutgers.edu/courts/appellate/a3850-07.opn.html Previous Next Contact

News Can it be Hearsay if Nothing is Actually Said? November 15, 2019 < Back Share to: Hearsay is a part of evidence class in law school, but given all the exceptions, exemptions, and frankly, statements that simply are not hearsay, professors could spend an entire semester examining hearsay alone. Hearsay is an out of court statement introduced into evidence by a litigant to prove the truth of the matter asserted by the statement’s declarant. What about signage though? Signs say things. When, if ever, is a sign hearsay? Consider two hypothetical cases where pictures of signs are the only factual bases for the claims against the impleaded parties. In the first case, a picture of a truck’s signage was attached to a third party summons and complaint. The truck in the picture, with a company name on the side, was at a slip-and-fall accident scene, and a defendant used the picture of the truck to implead the truck owner. Assuming the picture is properly identified by the person who took it, the picture itself is probably not hearsay. The litigant who introduces this picture into evidence is not introducing it to prove the truth of the matter asserted by the sign, which is just that the truck is owned by the insured. Therefore, the sign on the side of the truck probably isn't hearsay at all, and is admissible. Moreover, the litigant is likely trying to prove that the insured was present and doing work at the accident scene on the day of the accident. If the litigant were trying to introduce the sign with the limited purpose proving that the insured owned the vehicle, it would be hearsay, but admissible hearsay under rule Rule 801(d)(2)(D) as an inscription, sign, tag or label affixed in the course of business and indicating ownership. We think the sign on the truck is admissible, based on these facts. In the second case, there is a dashboard placard, with nothing on it but the insured’s name. Specifically, a for-hire driver his holding up a sign to the plaintiff’s camera with the insured car service’s name on it. The for-hire driver, by holding up the placard for the passenger is attempting to communicate something beyond what the sign says. specifically, that “I am driving for this company right now.” This, surely, is “nonverbal conduct of a person intended by that person as an assertion.” Rule 801(a). It would not qualify as admissible hearsay under rule 801(d)(2)(D) since the driver’s expressive conduct means to assert something beyond what the sign says. Without that driver’s testimony—and indeed, he is nowhere to be found— the picture could be excluded, and prompt a dismissal of the car service from the suit. Signs, signs, everywhere signs.....Thanks to Jon O'Brien for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Avoiding Liability in Rear-End Collisions May 17, 2016 < Back Share to: Generally, a rear-end collision with a stopped vehicle creates a prima facie showing of negligence on the part of the rear driver. Defendants can rebut the presumption of negligence where the rear end collision was the result of a sudden emergency. The “emergency doctrine” recognizes that where a defendant driver rear-ends another vehicle because of a sudden and unavoidable emergency, the defendant driver may not be negligent if his actions are reasonable and prudent in the context of an emergency. In Maisonet v. Roman, plaintiff sustained personal injuries when defendant’s vehicle struck the rear of his vehicle. After defendants served their answer, the plaintiff moved for partial summary judgment on liability, arguing that because he was hit in the rear, he was entitled to judgment against the defendants as a matter of law. In opposition, defendants argued that they had a valid emergency doctrine defense. The defendant driver submitted an affidavit explaining that to avoid a head on collision with another vehicle that had cut him off, he was forced to swerve to his left, causing him to strike the back of the plaintiff’s vehicle. The lower court granted plaintiff’s motion, and on appeal, the First Department reversed and denied plaintiff summary judgment. The Court opined that the facts viewed in a light most favorable to defendants were sufficient to raise triable issues of fact “as to the existence of an emergency and the reasonableness of defendant driver’s response to that emergency.” The Court further explained that the emergency doctrine may protect a driver from liability where the driver, through no fault of his or her own, is required to take immediate action in order to avoid being suddenly cut off. In defending rear-end motor vehicle accidents, defendants should be cognizant of the emergency doctrine defense. If the defendant driver faced any type of emergency immediately prior to the collision, this could constitute an emergency and a viable defense. At the very least, defense counsel should consider the emergency doctrine as a defense to a plaintiff’s summary judgment motion on liability. Thanks to Jeremy Seeman for his contribution to this post.   Previous Next Contact

News PIP Subrogation Rights Changed in New Jersey. February 2, 2011 < Back Share to: < ![CDATA[PIP Subrogation Rights Changed in New Jersey.]]> Previous Next Contact

News Authenticity and Provenance Questions in the NY Art World. February 27, 2012 < Back Share to: The recent collapse of the Knoedler gallery has been well-documented. Today's NYT had an interesting long form article on the collapse and the resulting litigation arising out of questions as to the provenance and authenticity of various pieces sold by the gallery. For more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Chatty Juror Creates Trial Havoc (NJ) January 7, 2016 < Back Share to: Every trial begins with an admonition that members of the jury should have no contact with the parties, the attorneys, or the witnesses. The instruction is given to ensure that the jury verdict is based on evidence admitted by the court and not by other outside, potentially prejudicial influences. What happens when a juror ignores the court’s instruction and has a brief interaction with an expert witness? Should a mistrial be automatically granted and the trial started anew? According to a recent New Jersey Appellate Division in Lukenda v. Grunberg, the trial court should determine whether the interaction improperly influenced the juror involved in event and whether the jury as a whole has been tainted. If not, the trial goes on. Lukenda begins with two young adults who got together for some Christmas cheer in the young woman’s family home. According to the defendant, her male guest had too much to drink and was injured when the defendant attempted to wrestle the car keys away from her suitor. In contrast, the plaintiff denied that he was intoxicated and claimed he was injured when the defendant delivered a “blindsided kick” to his knee, causing devastating injuries. Clearly, the Christmas get together was hardly a holy or peaceful night for the young love birds. Plaintiff’s expert orthopedist testified at trial, explaining in detail the lateral force necessary to inflict plaintiff’s injuries. During a break in the expert’s testimony, juror number two approached the doctor and quipped that “he thought the doctor was a great teacher and smiled.” Once defense counsel learned of the interaction, he moved for an immediate mistrial. The court questioned both juror number two and the expert witness about the contact between them. After juror number two assured the court that it would not affect his ability to be fair and impartial, the court admonished the juror to avoid any further discussions about the case until the start of deliberations and denied the motion. The Appellate Division ruled that “a new trial is not necessary in every instance where it appears that an individual juror has been exposed to outside influence.” Under those circumstances, the court’s inquiry should focus on the specific nature of the interaction, whether the juror imparted the outside information to other jurors, and whether the jury, as a whole, has been tainted by the information. Of note, the defendant never requested that the court question the other jurors to determine whether they observed or overheard any part of the interaction between the chatty juror and plaintiff’s expert witness. In Lukenda, the jury ultimately gave plaintiff a gift befitting the holiday season: it found the defendant liable and gave plaintiff a substantial award. If you have any questions, please email Paul at pclark@wcmlaw.com . Previous Next Contact

News Stockpiled Materials Cemented Defendants’ Dismissal (NY) August 3, 2018 < Back Share to: In Kusayev v. Sussex Apts. Assoc., LLC the Appellate Division, Second Department, ruled that a delivery truck driver who fell while using a hand truck loaded with boxes of tile and quick cement, causing the material to land on him, was not entitled to strict liability recovery under Labor Law 240(1) and 241(6) against the building owner because he was neither engaged in construction work nor working in a construction area within the meaning of the statutes. Plaintiff alleged that he was injured while delivering construction materials to an apartment building owned by defendant Sussex Apartments after pulling the hand truck he had loaded high with tile and quick cement up a single step to the entrance of the property. Plaintiff lost his balance, falling to the ground with the items on the hand truck landing on top of him. He commenced an action pursuant to Labor Law 200, 240(1) and 241(6) against Sussex as property owner. Sussex moved for summary judgment, which was granted by the lower court. With respect to Labor Law 240(1) and 241(6), Sussex was entitled to dismissal because plaintiff was not engaged in construction work within the meaning of 240(1) and was not working in a construction area within the meaning of 241(6) since the building materials on the hand truck were not being “readied for immediate use” but rather were being “stockpiled for future use”. The Labor Law 200 claims were also dismissed because Sussex demonstrated that it did not create or have actual or constructive notice of the alleged condition which caused the plaintiff's injury, and that it did not supervise or control the means and methods of the plaintiff's work. As the alleged accident involved defects in both the premises and the equipment at the work site, Sussex was obligated to submit sufficient proof to satisfy both liability standards, which the Court determined it did. The Court therefore affirmed the lower court’s dismissal of plaintiff’s complaint against the property owner. Thanks to Lauren Tarangelo for her contribution to this post. Please email Vito A. Pinto with any questions. Previous Next Contact

News Defendant’s Motion To Amend Its Answer To Admit Averments It Previously Denied Two Years Previously Includes A Novel Attempt To Avoid Punitive Damages At Trial (PA) November 19, 2021 < Back Share to: A Lackawanna County judge has granted a defendant’s motion to amend his answer to admit averments that he had previously denied when filing the answer more than two years earlier. In Bellersen v. Gill, Plaintiff, Gina Bellersen, was injured in a rear- end, chain collision motor vehicle accident in October 2018. Defendant Gill was the last vehicle in the chain, and upon filing his initial answer in October 2019, Gill admitted the accident, but specifically denied that he “operated his vehicle in a negligent, careless, and reckless manner.” Two years later, Gill moved to amend his answer paragraphs 17, 18, 31, and 320 of the Complaint “to admit that his failure to use due care while driving his vehicle … caused him to rear-end the vehicle in front of him, which in turn caused that vehicle to rear-end the vehicle [Bellersen] was driving, and further caused the front of [her] vehicle to hit the vehicle in front of her.” Gill also requested that the Order granting his motion to amend expressly state that his admissions to paragraphs 17, 18, 31, and 32 “shall not be used as an admission of any type of conduct which could serve as a basis for imposition of punitive or exemplary damages.” Apparently, given that Gill had started a chain-reaction collision, he hoped that conceding negligence might preclude the need for raising that issue a trial and thereby avoid the potential for punitive or exemplary damages. Plaintiff opposed the motion to amend as untimely and objected to the inclusion of “unnecessary and prejudicial language” in the proposed Order. Judge Terrence R. Nealon rejected the untimeliness argument, noting that Rule 1033 imposed no time limit on amendments of a pleading. The prejudice sufficient to deny amendment of the pleadings must be more than an mere detriment to the other party. A delay of two years in seeking to amend a pleading, without more, does not furnish a sufficient basis for denying a motion to amend. Although Judge Nealon granted Gill’s motion to amend, he held that the request that Plaintiff be foreclosed from making any evidentiary use of those admissions in support of her punitive damages claim was not an appropriate consideration in seeking leave to amend under Rule 1033. Instead, the preclusion of evidence at trial is a proper subject for a motion in limine addressed to the trial judge. Interestingly, although Judge Nealon refused to add the language requested by Defendant Gill, he did append a footnote to clarify that only factual admissions are treated as binding judicial admissions on a party. Factual admissions by Gill that he failed “to brake his vehicle,” “keep his eye on the roadway,” “inspect the vehicle,” “record his duty status,” and “stop for traffic ahead” and that he was speeding, texting, “using a cellular phone without a Bluetooth or hands-free device,” and fell “asleep while driving,” would constitute judicial admissions.. However, legal conclusions, such as his alleged negligence, carelessness, and recklessness, would not qualify as judicial admissions. The import of this case is that a party may amended its pleadings at nearly any time during the pleadings with the consent of the other party or leave of court. The right to amend should be freely granted absent an error of law or resulting prejudice. The “resulting prejudice . . . must be something more than a detriment to the other party since any amendment almost certainly will be designed to strengthen the legal position of the amending party and correspondingly to weaken the position of the adverse party.” Thanks to Jim Scott for his contribution to this article. Should you have any questions concerning this case, please contact Thomas Bracken. 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