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News EDPA Holds Plaintiff’s Conclusory Allegations of Insurer Bad Faith Insufficient (PA) August 7, 2020 < Back Share to: In Harris v. Allstate, the plaintiff brought an action against her insurer, alleging the insurer breached the terms of the policy and engaged in bad faith conduct. By way of brief background, it was alleged that Allstate issued a policy to plaintiff. It was further alleged that a covered “peril” occurred, which caused “direct physical damage” to the plaintiff’s property. Plaintiff alleged that although she promptly notified Allstate of the loss, Allstate refused to pay for the damage. Allstate filed a motion to dismiss in respect of plaintiff’s bad faith claim, arguing that plaintiff failed to allege sufficient facts to plausibly demonstrate Allstate committed bad faith in handling the claim. The Eastern District of Pennsylvania focused its analysis on the section of the complaint where plaintiff alleged the basis for the bad faith claim. In her complaint, plaintiff averred, inter alia, Allstate sent “correspondence falsely representing that Plaintiff’s loss [was not] caused by a peril insured against under the Policy”, failed to “objectively and fairly evaluate plaintiff’s claim”, failed to “fairly negotiate the amount of the loss”, and failed to “complete a prompt and thorough investigation” before denying coverage. The court found these averments to be “conclusory statements unsupported by facts”, as the plaintiff failed to provide adequate explanations for the averments. Accordingly, the court granted Allstate’s motion to dismiss, holding that the complaint’s “bald assertions and conclusory legal statements” were insufficient to state a claim for which relief could be granted. This case offers support that a bad faith claim may not survive, in federal court, if the plaintiff fails to allege sufficient factual detail of the alleged bad faith. As such, insurers should keep a watchful eye towards a complaint’s allegations to see if this is a basis to dismiss any bad faith claims. Thanks to Rachel Thompson for her contribution to this post. If you have any questions or comments, please contact Colleen Hayes. Previous Next Contact

News Premature Appeals Quashed Because SJ Order was not "Final" (PA) March 7, 2018 < Back Share to: Without delving too deeply into the underlying facts, which are largely irrelevant to this issue, on February 24, 2016, In Casey v. Presbyterian Hospital et al., plaintiffs commenced suit against Presbyterian Medical Center alleging negligence and negligent infliction of emotional distress. Presbyterian then joined Aramark Management Services who in turn then joined Allied Barton Security Services. Presbyterian then filed cross-claims for contribution, common law indemnity, and contractual indemnity against Aramark and Allied Barton. Following discovery, Presbyterian, Aramark, and Allied Barton all filed respective motions for summary judgment. The trial court then issued an order which granted Presbyterian’s motion in full and dismissed all claims against it and then granted Aramark’s and Allied Barton’s motions, dismissing all claims against them except Presbyterian’s contractual indemnity claims. The plaintiffs and all three defendants then filed appeals, and on March 5, 2018, the Superior Court of Pennsylvania quashed them all. In Pennsylvania, an appeal may only be taken from a final order, certain interlocutory orders as of right, an interlocutory order by permission of the court, or a collateral order. The parties appealed on one basis that the trial court’s decision was a final order since it extinguished the plaintiffs’ claims against Presbyterian, thus killing off any remaining claims. In Pennsylvania, a final order is one that disposes of all claims and/or parties; or one that disposes fewer than all the parties/claims but is entered as a final order by the court. The Superior Court disagreed with the parties’ position and found that the trial court’s order was not final in that Presbyterian could still seek costs, expenses, and attorneys’ fees under its cross-claims, regardless of the outcome of its motion for summary judgment. Thus, the case still continued. Presbyterian also contended that the trial court’s order was appealable as a collateral order. A collateral order is one that is separable from and collateral to the main cause of action where the right involved is too important to be denied review and is such that if review is postponed, the claim would be irreparably lost. Courts usually disfavor collateral order appeals since they want to avoid “piecemeal determinations” in litigation - and the the Superior Court declined to address Presbyterian’s argument here. Since the underlying order was neither final nor collateral, the parties’ appeals were premature and improper . In other states, such as New York, the appeal and cross-appeal would have been proper... but not in Pennsylvania. This case demonstrates the intricacies of appellate practice -- according to the Court, Presbyterian would have been better off simply waiting for a final determination before taking any affirmative appellate action, provided its rights were preserved. In essence, the Court ruled that Presbyterian's appeal is premature, and therefore a waste everyone’s time and money. Thanks to Peter Cardwell for his contribution to this post. Please email Brian Gibbons with any questions. Previous Next Contact

News Conclusory Expert's Opinion Insufficient To Stave Off Summary Judgment In Escalator Case January 25, 2008 < Back Share to: In Parris v. Port of New York Authority and Otis Elevator, 2008 NY Slip Op 00197, AD and New York Co. Index 121678/03, plaintiff claims to have suffered injuries when the escalator at the Port Authority Bus Terminal he was riding suddenly "jerked" and "pulled" causing him to fall backwards and hit his head. Defendants moved for summary judgment arguing that even if a mechanical defect existed, there were no records of prior complaints and service maintenance records equally reflected no problems. Plaintiff opposed this motion by submitting an affidavit of an expert engineer. This expert, who never conducted an on-scene inspection, averred that plaintiff's accident could have been due to warn parts. While the trial court denied summary judgment, finding a question of fact was raised by this expert, the Appellate Division - First Department disagreed, finding the expert's findings to be factually unsupported and too speculative. On an awkward note, the trial judge, Justice Rolando T. Acosta, was recently promoted to the Appellate Divison - First Department and now sits with the very judges that reversed him. http://www.nycourts.gov/reporter/3dseries/2008/2008_00197.htm Previous Next Contact

News McDonald’s Summary Judgment Denied: Would You Like Discovery With That? June 25, 2019 < Back Share to: Pre-discovery motions for summary judgment are extraordinarily difficult to succeed on. Opposition to such a motion essentially writes itself. "Counsel's argument is premature, as further discovery is likely to reveal unknown information, and discovery has not even commenced yet, et cetera, et cetera... And while McDonald’s pulled off a "Mcflurry" by succeeding on its motion at the state level, the Appellate Court hamburgled its victory, reversed, and remanded for further proceedings. In Peoples v. McDonalds, the Court of Appeals of Indiana found that McDonald’s could not avoid discovery obligations and simultaneously move for summary judgment. In Peoples, a ten-year old patron was injured when he tried to get off a stool and it lifted off the floor and broke, causing him to fall. A complaint was filed against McDonald’s and was later amended to add Indiana McDonald’s LLC, Randy Shields, and Toucan, Inc. Plaintiff served discovery demands on April 6, 2018. McDonald’s sought two extensions of time to respond which were granted and time extended to July 31, 2018. On July 10, McDonald’s moved for summary judgment, without responding to discovery, based solely on an affidavit from Shields as franchisee absolving McDonald’s from any responsibility for the bar stools. A franchise agreement was not attached to the motion. The grounds for summary judgment were similar to New York’s out-of-possession landowner statute, but due to its specificity, is rarely invoked until after completion of depositions. In this case the Court was clearly perturbed that despite multiple requests for extension of time to serve discovery responses, the motion was made in advance of a single document exchange. As a general rule, summary judgment is improper while pending discovery is directly relevant to matters at issue such as the legal relationship between McDonald’s, Shields, and Toucan here. The discovery demands were not seeking overly broad of "proprietary" information, such as, for example, Special Sauce ingredients. (We're pretty sure it's just Thousand Island dressing, but that's a topic for another post.) Even more offensive to the court was McDonald’s argument that plaintiffs failed to diligently pursue discovery. The Court found that as McDonald’s moved for summary judgment 3 weeks before the discovery deadline ended, there was nothing more plaintiffs could affirmatively do to preserve their claims and, “To hold otherwise would be to sanction the type of “gotcha” litigation that this Court so abhors.” Thanks to Mehreen Hayat for her contribution to this post. Please contact Brian Gibbons with any questions. Previous Next Contact

News Semicolon Brings Victory to Insurer at World Trade Center February 29, 2008 < Back Share to: The Port Authority of NY and NJ owns the land at Ground Zero. Some of that land was under lease to Larry Silverstein when the planes struck on September 11. The Port Authority had a policy at that time with Lloyd's. Exclusion "f" in the Lloyd's policy provided that the policy "does not cover" loss or damage to any property in respect of which any third party "has in force at the time of the loss, pursuant to a lease or other written agreement, valid and collectible insurance in favor of the insured or has otherwise indemnified the Insured against such loss or damage; except that if any person, firm or corporation is required pursuant to a lease or other written agreement to insure any property which would otherwise be covered by this Policy, and for whatever reason such property is not fully insured, then such property will be insured property under this Policy." Fact: Larry Silverstein had procured insurance in favor of The Port Authority but it was insufficient to cover the loss. Fact: Silverstein had agreed in a written lease to indemnify the Port Authority. Based upon the existence of the indemnity agreement, Lloyd's moved for a declaration that Exclusion "f" was triggered and that the loss or damage to the property leased to Silverstein was not covered under the Lloyd's policy. The Port Authority disagreed and pointed to the exception within Exclusion "f" and said that because the Silverstein property was "not fully insured," the Port Authority property was "insured property under this Policy." The court ruled in favor of Lloyd's and held that the exclusion was triggered because Silverstein had agreed to indemnify The Port Authority. The court rejected The Port Authority's argument that because the exception was set off by a semicolon, it must be read to modify both the preceding indemnity clause as well as the preceding insurance procurement clause. The court ruled that "as a matter of law, Exclusion f as set forth in the Port Authority Policy removed the Silverstein property from coverage under the Port Authority Insurance as the Port Authority was indemnified with respect to the Silverstein property at the time of the loss..." Certain Underwriters at Lloyd's v. The Port Authority of New York and New Jersey. SDNY 05 Civ 5239. Decided 2/22/08. Previous Next Contact

News Has the Gold Standard of Product Recalls Lost Its Luster? January 19, 2010 < Back Share to: Johnson and Johnson's response to the 1980s Tylenol contamination scare has long been considered the gold standard in product recalls. Indeed, it was this recall that effectively launched product recall insurance and created the idea of crisis management response teams. However, it now appears that J&J failed to follow its own historical lessons. A J&J subsidiary, McNeil Consumer Healthcare, produces, among other things, Tylenol Arthritis Pain 100. It appears that this (and perhaps other) products were contaminated with 2,4,6-tribromoanisole (TBA), a chemical that apparently can cause sickness, or bodily injury. Based upon early news reports, the contamination appears to have originated more than 20 months ago, yet the recall was only initiated within the past several weeks. Predictably, a public relations nightmare and government investigations have resulted. Unfortunately, Santayana was probably right -- "Those who cannot remember the past are condemned to repeat it" http://www.nytimes.com/2010/01/18/business/18drug.html?ref=business http://www.fda.gov/Safety/Recalls/ucm197746.htm http://jnjbtw.com/ Previous Next Contact

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News Court Rejects Jeweler's Fragile Argument Against Brinks February 8, 2012 < Back Share to: Anyone dealing in the world of jewelry, fine art, or specie is all too aware of the limitation of liability clauses that appear in shipping contracts. That issue was front and center in a recent appellate court decision in New York, Maxine v. Brinks. Plaintiff, a jewelry retailer, used Brinks to ship 157 “ornate pieces of handmade jewelry” from plaintiff's New York City facility to a department store in Virginia. The items were contained in a soft-sided rolling suitcase, and the airbill listed a declared value of $2 million. The retail value, according to invoices, was more than $6,000,000, with a wholesale value about half that amount. While in transport, the shipment was damaged, and plaintiff’s claim was over $600,000. In the trial court, Brinks was awarded summary judgment and the complaint was dismissed. The airbill contained a provision limiting Brink’s liability to lost shipments, unless specific items were identified and their values declared – which would have required plaintiff to pay additional charges for the shipment. On appeal, plaintiff claimed that the limitation of liability was ambiguous, because it required identification of a “fragile” item -- a term not defined anywhere in the Brink’s airbill. But in its decision, the appellate court pointed out that plaintiff was unable to overcome the other provision in the airbill that excluded breakage for jewelry. Specifically, the provision excluded “BREAKAGE of statuary, marble, glassware, bric-a-brac,' porcelain, decorative items including jewelry and similar fragile articles…” Plaintiff tried to claim that provision was buried in small print and was also ambiguous because it lumped together a number of items in an unclear manner, and appeared to only apply to breakage of “fragile jewelry” or certain decorative items. But the Court rejected plaintiff’s claims, finding that the list clearly excluded the enumerated items, including jewelry, and that a definition for fragile only needed to be applied if an item was not specifically listed. Thus, the trial court’s decision to dismiss the complaint was upheld. If you would like more information about this case, please write to mbono@wcmlaw.com .     Previous Next Contact

News WCM Awarded Summary Judgment in Hunterdon County, New Jersey Sports Liability Lawsuit. July 8, 2013 < Back Share to: Mountainside, NJ Partner, Denise Fontana Ricci, obtained summary judgment in Deska v. Wildcat Wrestling Club, a personal injury lawsuit in which a spectator at a wrestling match allegedly fell due to water on a gym floor from melted snow. The central issue in the case was whether the New Jersey Charitable Immunity Act precluded the plaintiff ’s claim as the Wildcat Wrestling Club fell under the Act’s protections and all negligence claims were barred. In a creative attempt to escape this immunity, the plaintiff argued that the Club had been grossly negligent in holding the match on a night when it snowed – as gross negligence would overcome the statutory immunity. In opposition, we argued that although the plaintiff asserted that the snowstorm on the night of the match was a nor’easter or blizzard, historical data dispelled this account. We therefore argued that under the facts presented, there simply was no evidence to support a claim of gross negligence based upon a failure to cancel the match for mere snow. The trial court agreed and granted our motion. 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

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News Bus Driver Or Security Guard…Court Says Act Like Both (NJ) July 19, 2019 < Back Share to: In Maison v. NJ Transit Corp., the plaintiff was accosted by a group of unruly teenagers while riding on the bus. While aware of the situation, the New Jersey Transit bus driver failed to intervene, believing that the plaintiff had the situation under control. As plaintiff exited the bus, one of the teenagers struck her the head with a glass bottle, causing severe injuries. A jury found defendant New Jersey Transit responsible and awarded the plaintiff 1.8 million dollars. Unhappy with the verdict, defendant New Jersey Transit filed an appeal, claiming numerous errors made by the trial court. One basis of the defendant’s appeal was the trial court’s denial of defendant’s motion to dismiss plaintiff’s claims for failing to provide an expert report or testimony regarding the standard of care owed by the defendant. On appeal, the court noted that a plaintiff is not always required to present expert testimony, and the necessity of expert testimony is within the discretion of the trial judge. The facts of this particular case fell within the “common knowledge exception,” which essentially means that expert testimony is only required when a matter is so esoteric that jurors of common knowledge and experience cannot form a valid judgment. In this case, jurors without any advanced knowledge could have concluded that the bus driver should have done something to assist the plaintiff. Accordingly, the Appellate Court upheld the trial court’s determination that the plaintiff was not required to provide expert testimony for this particular case. Thanks to Heather Aquino for her contribution to this post. Please contact Georgia Coats with any questions. Previous Next Contact