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News Liability Waivers in the Wake of the OceanGate Submersible Tragedy ​ < Back Share to: ​ In June, our country was captivated by the tragedy involving OceanGate, the owner of the Titan submersible that imploded during a dive to the Titanic wreck killing all five passengers on board. As a result, there has been discussion about the OceanGate waiver signed by the passengers and whether liability waivers including assumption of risk provisions can effectively bar lawsuits. Although the waiver at issue contains a choice of law clause providing that any disputes related to or arising from the expedition or release shall be governed by the laws of The Bahamas, the following discussion addresses how New York law may treat the waiver’s provisions. Liability waivers operate to protect a business or service provider from being sued by a customer or participant in the event of injury or damage. The customer or participant is informed of the risks associated with an activity that has a known risk or injury and agrees to assume responsibility for any injuries or damage. Business Insider published the full OceanGate waiver and release signed by a would-be passenger. The release provided that the “experimental submersible vessel has not been approved or certified by any regulatory body and is constructed of materials that have not been widely used for manned submersibles.” The release also provided that the “experimental submersible vessel has conducted fewer than 90 dives, and 13 of those dives reached the depth of the Titanic,” followed by an acknowledgment. In New York, liability waivers can be challenged as unenforceable and invalid if they are not clear about the rights and risks that are being waived, such as through a catchall provision, boilerplate language, or being too broad. In tort cases specifically, waivers or releases from liability are disfavored. Additionally, a party can waive ordinary negligence; they cannot waive acts of gross negligence, reckless conduct, willful/wanton conduct, or intentional acts. Kalisch-Jarcho v. City of New York , 58 N.Y.2d 377 (1983). Applying New York jurisprudence to the provisions, one could argue that the language is too broad as the nature of the materials were not disclosed (only that it was constructed of materials that have not been widely used). Further, the lack of clarity surrounding whether OceanGate used the materials for the types of depths to be reached by the Titan and whether humans occupied them, raises the issue of whether the risks were properly disclosed to the deceased participants. It is also presently unclear if any evidence exists demonstrating gross negligence or recklessness on the part of OceanGate or its employees (i.e., a prior report containing warnings or safety lapses in the subject submersible). It remains to be seen whether the families of the deceased will attempt to challenge the waiver’s enforceability. Nevertheless, this event will continue to spark conversations not only within the experimental submersible industry, but for companies seeking to protect their businesses from lawsuits through liability waivers. Specifically, companies may reconsider drafting techniques for issues involving the concealment of design defects and the proper disclosure of specific risks. Previous Next Sydney Kockler Sydney Kockler Associate +1 267 279 9951 skockler@wcmlaw.com Contact

News Settlement with Insurer Not a Basis for Dismissal of Claims Against Brokers March 22, 2018 < Back Share to: In Prime Alliance Group Ltd v Affiliated FM Insurance Company, the insured, was the owner of a mixed use condominium and retail property in Manhattan. The Property suffered significant flood damage during Superstorm Sandy in October 2012, and a claim (for upwards of $30M) was made to Affiliated. Following Affiliated disclaimer of coverage for the property damage (the bulk of the claim), Prime Alliance sued alleging claims of breach of contract, bad faith and estoppel as against Affiliated, and claims of negligence and breach of contract against their retail insurance broker, Praxis, and claims of negligence against HUB, the wholesale insurance broker. The claims asserted against HUB and Praxis were premised on the brokers’ alleged failure to procure adequate and requested insurance coverage. Praxis and HUB moved to dismiss on the basis that a settlement reached between Prime Alliance and Affiliated mooted the separate claims against the broker defendants. The lower court granted the motion since the insurer that settled with the Plaintiff and was no longer a party to the action, “and Affiliated is the only party which could (or would) raise a defense that the contract did not provide the flood coverage at issue, there can be no finding in this case contrary to plaintiff’s claim that the disputed coverage did in fact exist. Thus, there can be no finding that Praxis [or HUB] was responsible for a lack of coverage.” The Appellate Court disagreed, finding that Affiliated’s settlement with plaintiff left the question of the validity of its disclaimer entirely undecided, and provided no basis for the motions to dismiss and for summary judgment filed by the broker defendants. Putting a fine point on the matter, the Appellate Division specifically stated that the decisions granting both the Praxis and HUB motions were based “on the incorrect premise that the plaintiffs’ settlement with Affiliated precluded the plaintiffs from pursuing their causes of action to recover damages for failure to procure insurance.” The matter was to be reinstated in the New York Supreme Court for adjudication. In the short term, this decision provides a sound argument to rebut an argument that a plaintiff’s settlement with their insurer effectively moots any claims for negligence asserted against brokers. Thanks to Vivian Turetsky for her contribution to this post.   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

News First Two New Food Safety Modernization Act Rules Released. May 13, 2011 < Back Share to: The FDA has just released the first two FSMA rules. The rules go into effect on July 3, 2011. The first rule allows the FDA to detain food it believes has been produced under insanitary or unsafe conditions – and not just when the FDA has evidence that the food product was contaminated or mislabeled so as to present a risk of adverse health consequences or death. The second rule requires anyone importing food into the US to advise the FDA if any other country previously refused entry to the same product. Both regulations should be factored into the underwriting decisions made by product recall insurers as both regulations expand the scope of products that will never make it to the end consumer. For more information about this post, or WCM’s product recall practice, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Insurer Seeks To Inject Itself Into Urban Outfitters Trademark Infringement Suit March 18, 2016 < Back Share to: When an insurer agrees to provide a defense under a reservation of rights, or is faced with claims of potentially uncovered damages, it can end up in a very difficult position in determining its indemnity obligations at the end of the case. Many times when there is a possibility of covered and uncovered damages, the insurer is held responsible for the entire indemnity because it is not possible to distinguish between the covered and uncovered portion of damages in the judgment. This dilemma is especially acute in infringement cases where coverage is triggered under Advertising Injury Coverage. It is apparently for this reason that Lamorak Insurance Co. recently sought to intervene in the case of Navajo Nation v. Urban Outfitters, Inc., Docket No. 1:12-cv-00195-BB-LAM, a dispute currently pending in the United States District Court for the District of New Mexico over claims of tribal trademark infringement. According to the motion papers, Lamorak is looking for the ability to have jurors answer special interrogatories “if and only if” Urban Outfitters is actually held liable for damages. The insurance carrier wants to have the jurors be asked specifically which products, and in what years, sold by the defendants Urban Outfitters, Anthropologie and Free People, infringed on the Navajo Nation’s trademarked name and tribal pattern. Lamorak argues that this would allow it to allocate any damages awarded to the Navajo Nation and determine to what extent those damages are or are not covered under its insurance policy. According to the motion papers, Lamorak contacted counsel for Urban Outfitters and the Navajo Nation and both of them are opposed to Lamorak’s intervention. In support of its motion to intervene, Lamorak argues that its request for intervention does not introduce any new issues into the litigation or seek a coverage determination. Lamorak also notes that it would not even need to be present at trial or be heard by a jury for its request to be entertained. This latest development in this case, which has had a very long history, illustrates how the interests of independent or even insurance-appointed counsel can diverge from the interests of the insurance company who may be seeking to determine which, if any, of the awarded damages actually fall within coverage. It is not difficult to see how, if the request is denied, and Urban Outfitters is ultimately held liable, the insurance company could be significantly prejudiced in any subsequent coverage action. It appears opposition papers have not yet been filed, but it will be interesting to see what arguments are raised by the parties to the lawsuit in opposition to the motion and where the Court ultimately comes down on the request to intervene. Thanks to Maria Jorgelina Foglietta for her contribution to this post. For more information, please email Dennis Wade at dwade@wcmlaw.com . Previous Next Contact

News WCM Is Pleased to Welcome Two New Counsel March 9, 2023 < Back Share to: WCM is pleased to welcome Craig Briggs and Maurice Waller, both to the rank of counsel in our Pennsylvania office. Craig is an experienced trial attorney with expertise in personal injury defense of high-profile clientele, construction litigation, and commercial litigation in both the state and federal courts. His practice focuses on complex, large exposure cases. Maurice is a skilled litigator with over two decades of experience in insurance defense and complex litigation that included a judicial clerkship with a Chief Justice of the Supreme Court of Pennsylvania. His practice focuses on defense of complex general liability claims and premises liability claims. Craig and Maurice present a strong addition and significant trial experience to WCM’s defense practice. Previous Next Contact

News Court Rules that Reasonableness Under Insurance Law 3420 Can Be a Question of Law for the Court. May 17, 2018 < Back Share to: On May 10, 2018, the Eastern District of New York handed down a total victory to Northfield Insurance Company on the insurer’s motion for summary judgment, in Northfield Insurance Company v Queens Palace Inc., issuer of a commercial general liability policy to Queen’s Palace, a nightclub, initiated the federal declaratory judgment action seeking a ruling that it had no coverage obligations to its insured or any other party in connection with the underlying wrongful death action brought by the estate of a Queen’s Palace patron tragically murdered outside of the nightclub by several of its patrons. Northfield issued a total disclaimer of coverage premised only upon the policy’s Assault and Battery Exclusion barring coverage for bodily injury arising out of any act of assault or batter “committed by any person.” The Court easily agreed with the substance of the disclaimer, even in light of the stringency of the duty to defend imposed upon insurer’s under New York law, where even a “reasonable possibility” of coverage is sufficient to trigger the duty, and the burden on an insurer relying on an exclusion to disclaim coverage to show there is only one reasonable interpretation of the allegations: that the exclusion applied. Thus, the insured and other defendants were left with one other argument: that Northfield’s disclaimer was too late, pursuant to N.Y. Ins. Law § 3420. Section 3420 imposes a duty on any insurer, in any matter involving bodily injury or death, to provide any disclaimer or denial of coverage “as soon as is reasonably possible.” Defendants argued they did not receive written notice, and submitted “return to sender” envelopes as evidence that Northfield was aware its disclaimer was not received. The Court ruled that the envelopes were not admissible evidence, and therefore could not impact the summary judgment motion. In favor of Northfield, the Court did consider the testimony submitted via affidavit from the Northfield adjuster about the dates she mailed out the disclaimers. But, as the Court noted, “the question of whether a disclaimer has been issued with reasonable promptness is in most cases a question of fact.” A question of fact would preclude granting the motion for summary judgment. The disclaimer was mailed out 19 days following Northfield’s receipt of notice of the claim. So – and significantly – the Court ruled that 19 days could be deemed reasonable as a matter of law, thus rendering Northfield’s disclaimer proper as a matter of law. The question of what constitutes “as soon as is reasonably possible” is understandably vexing to insurers, particularly in matters necessitating more complicated investigation and analysis than was necessary for Northfield here. The Northfield Court’s ruling is a helpful example of the Court’s applying a reasoned and practical approach to deciding what is “reasonable,” and represents excellent precedent on summary judgment motions where defendant’s attempt to argue the “reasonableness” question of fact alone is sufficient to preclude such a motion. Thanks to Vivian Turetsky for her contribution to this post.                   Previous Next Contact

News PA Supreme Court Affirms Prejudice Requirement for Late Notice Disclaimer. July 9, 2010 < Back Share to: In the case of Vanderhoff v. Harleysville Insurance, Harleysville disclaimed coverage to its insured on the basis of the insured's failure to provide timely notice. After working its way through the system, the Supreme Court was confronted with the issue of what the insurer needed to prove to deny coverage. The Supreme Court held that a late notice disclaimer requires a carrier to demonstrate prejudice (even in the case of an uninsured motorist claim involving a phantom vehicle). http://www.pacourts.us/OpPosting/Supreme/out/J-43-2008mo.pdf http://www.pacourts.us/OpPosting/Supreme/out/J-43-2008do.pdf If you would like more information about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News The Fox Guarding the Hen House? October 22, 2010 < Back Share to: As we have often reported, food safety in the US is an issue of grave concern. If newspaper accounts are to be believed -- http://www.washingtonpost.com/wp-dyn/content/article/2010/10/21/AR2010102106900.html?hpid=topnews, one of the greatest causes of concern should be the US’s voluntary safety/quality control system. Under this system, the “safety” and “quality” of the US system is checked not by an independent agency, but rather by auditors paid by the food companies themselves. The pressure on these auditors to inflate the grades given their clients is obvious and draws eerie parallels to the problems the ratings agencies played in the current financial crisis -- http://rru.worldbank.org/documents/CrisisResponse/Note8.pdf The accuracy of the ratings is thus suspect. This only stands to reason since a fox guarding the hen house can never be a good thing. The problem is – in this age of bloated deficits and the call for government cutbacks, is there a better option? A question certain to cause many sleepless nights not only for insurers, but also consumers. If you have any questions about this post, please contact Bob Cosgrove at rcosgrove@wcmlaw.com . Previous Next Contact

News Not So Slippery Slope: NJ Supreme Court Rules On Slip And Fall Snow / Ice Cases (NJ) June 10, 2021 < Back Share to: We previously reported a decision by the New Jersey Appellate Division in Pareja v. Princeton International Properties, which held that commercial landowners have a duty to prevent or remediate snow and ice conditions on their sidewalks even when precipitation is falling. The New Jersey Supreme Court, in a landmark decision, has reversed the Appellate Division and has held that the commercial landowner owes no duty to the public to prevent or remediate snow and ice conditions while precipitation is falling. The Supreme Court stated that the Appellate Division’s holding did not consider the size, resources and the ability of commercial landowners or recognize that what may be reasonable for larger commercial landowners may not be reasonable – or even possible, for smaller ones. The Court stated that it did not wish to submit every commercial landowner to litigation when it was not feasible to provide uniform, clear guidance as to what would be reasonable. The Court declined to impose a duty that could not be adhered to by all commercial landowners. The premises of the ongoing storm rule is that it is categorically inexpedient and impracticable to remove or reduce hazards from snow and ice while precipitation is ongoing. The Court stated that the duty is triggered within a reasonable time after the storm. However, the Court set forth two exceptions to the rule. A commercial landowner may still be liable if its actions increase the risk to pedestrians and invitees on its property by creating “unusual circumstances” where the defendant’s conduct exacerbates and increases the risk of injury to plaintiff. Second, a commercial landowner may be liable where there was a pre-existing risk on the premises before the storm. One Justice dissented arguing that a landowner can simply apply salt to its premises during an ongoing storm. The majority stated that this argument ignores the diversity of storms a landlord may confront and that measures like spreading salt in a heavy snowstorm or ice storm can be ineffective or even enhance the danger, thus imposing an untenable duty of care on landlords. It is rare to see New Jersey courts put a stop to the ever growing and expanding tort liability that commercial owners and tenants face in this state. However, this is an important change in a defendant’s duty in connection with slip and fall cases. Thanks to Mike Noblett for his contribution to this post. If you have any questions or comments, please contact Colleen Hayes. Previous Next Contact

News Driver Who Drank a Bottle of Scotch not Agent of Car Owner (NJ) March 4, 2016 < Back Share to: When a plaintiff involved in a motor vehicle accident seeks to hold the owner of the offending vehicle liable for the actions of the driver, the plaintiff must prove that the driver was acting as the owner’s agent at the time of the accident. Although agency generally turns on a relatively simple question -- whether the driver operating the owner’s vehicle at the request or for the benefit of the owner at the time of the accident -- a recent New Jersey case, Vaidyanathan v. Martinez, highlights how nuanced the answer to the relatively simple question can be. At the time of the accident, the defendant had given authority to the driver to use her vehicle to transport her daughter from Hillside to Newark. Unbeknownst to the defendant, the driver had already drank a pina colada prior to getting behind the wheel of the defendant’s car. That fact alone may not have defeated the agency relationship between the defendant and the driver. However, also unknown to the defendant, the driver detoured from his route to stop at a liquor store, and drank enough scotch such that his blood alcohol level rose to .31%, well above New Jersey’s legal limit of .08%. The plaintiff claimed that the driver was acting as the defendant’s agent when the driver rear-ended the plaintiff’s vehicle, because he was ostensibly running an errand for the defendant. However, the court found that the driver’s act of stopping at a liquor store and drinking a significant amount of alcohol exceeded the scope of the authority the defendant had granted the driver (driving from Hillside to Newark to retrieve her daughter) to use her vehicle for her benefit. On these grounds, the defendant’s motion for summary judgment was granted. Thanks to Emily Kidder for her contribution to this post and please write to Mike Bono for more information. Previous Next Contact