FEDERAL CASE SUMMARIES
Bull v. United Parcel Service, Inc.
No. 10-4339 (3rd Cir., decided 1/4/12)
Federal Court finds that “spoliation” of evidence can include producing only copies of writings because the original could contain critical information for the judge or the jury.
Background:
Laureen Bull worked for United Parcel Service, Inc. (“UPS”), and suffered a work related injury. After seeking medical treatment, she returned to work, but was told that her medical restrictions related to lifting made it impossible for UPS to continue assigning her work—and UPS told her to seek permanent disability.
There was a disagreement between UPS’ doctor and Bull’s doctor about the extent of Bull’s ability to lift. Bull had faxed two doctor’s notes to UPS regarding her restrictions, but UPS claimed the faxed notes were blurry and illegible. UPS requested the original doctor’s notes from Bull’s union representative, which Bull did not provide prior to litigation.
Bull filed suit for disability discrimination under New Jersey law in April 2007. During discovery, UPS generally requested documents, and Bull produced new copies of the doctor’s notes at issue. Five days before trial, UPS, by email, requested the original doctor’s notes, which it had not specifically sought in discovery.
During the March 2010 jury trial, UPS challenged the authenticity of the two doctor’s notes, and sought to block admission of the faxed copies. Bull’s attorney advised the Court that the original doctor’s notes no longer existed, but when questioned by the Court, Bull stated that the original was at her home, and that she had not searched for it previously.
The District Court declared a mistrial. Bull produced the original doctor’s notes five days later, however, the District Court dismissed the case as a sanction for Bull’s conduct, which it determined was spoliation of evidence. This appeal followed.
Discussion:
The Third Circuit held that producing only copies in discovery could amount to spoliation because the original documents could contain critical information for the judge or the jury. The Third Circuit considered whether Bull had a foreseeable duty to preserve and turn over the original doctor’s notes. The Third Circuit agreed with the District Court that Bull had a foreseeable duty, however, they did note that the record lacked evidence that either attorney made appreciable efforts to request that Bull find and produce the original doctor’s notes. The Third Circuit found that prejudice to UPS was not sufficient to justify the District Court’s decision to dismiss Bull’s case with prejudice, and was an abuse of discretion.
Any questions regarding this case can be directed to Lauren Clein at (215) 564-2928 or lclein@tthlaw.com.
Hill v. Best Medical International, Inc.
2011 U.S. Dist. LEXIS 147853 (W.D. Pa. 2011)
Decided: December 22, 2011
The Western District adopts a California test in allowing attorneys fees under the Pennsylvania Uniform Trade Secrets Act.
Background:
Hill filed suit alleging breach of contract arising from Best Medical's refusal to pay severance benefits to which he believed he was entitled after leaving his employment. Best Medical asserted a counterclaim that Hill had violated the Pennsylvania Uniform Trade Secrets Act, 12 Pa. C.S. § 5301 et seq. ("PUTSA"), by misappropriating confidential and trade secret information belonging to Best Medical when he left its employ The court ultimately granted summary judgment against Best Medical. A motion for attorneys’ fees was then made.
Decision:
The Pennsylvania Uniform Trade Secrets Act, which closely follows the model Uniform Trade Secrets Act ("UTSA") allows a court to award reasonable attorney fees, expenses and costs to the prevailing party: (1) if a claim of misappropriation is made in bad faith; (2) a motion to terminate an injunction is made or resisted in bad faith; or (3) willful and malicious misappropriation exists. 12 Pa. C.S. § 5305. The Court concluded at summary judgment that Best Medical had failed to establish the critical element of the existence of a trade secret, and the UTSA misappropriation claims were dismissed.
As there are no reported Pennsylvania decisions, the court follows decisions interpreting the California Uniform Trade Secrets Act ("CUTSA") which contains language almost identical to that of § 5305 of the PUTSA. See Cal. Civ. Code § 3426. In addressing the issue of what constitutes bad faith of the type and degree sufficient to support an award of attorneys' fees, the California Court of Appeal held that establishing bad faith under the CUTSA requires proof of two elements: (1) "objective speciousness of the plaintiff's claim," and (2) "subjective bad faith in bringing or maintaining the claim."
The court finds that objective and subjective misconduct existed as Best Medical knew or should have known that its misappropriation claims did not have merit as soon as its computer forensic examiner provided information taken from the computers so it could be compared to Best Medical's own trade secrets. At that point, Best Medical's persistence in maintaining this litigation became an exercise in bad faith.
Any questions regarding this case can be directed to Paul Walker at 717-441-7061 (pwalker@tthlaw.com).
PENNSYLVANIA CASE SUMMARIES
Toney v. Chester County Hospital, et al.
60 MAP 2009 (Pa. 2011)
Decided: December 22, 2011
The Pennsylvania Supreme Court finds that a “special relationship” may include a duty not to inflict emotional distress and that no physical impact is required to establish a negligent infliction of emotional distress claim
Background:
Defendants performed a pelvic ultrasound study on Plaintiff and her unborn child, and reported the results to Plaintiff as normal. When Plaintiff gave birth to her son she learned for the first time that he had profound physical abnormalities. Plaintiff alleges that Defendants' negligent misinterpretation of the ultrasound prevented her from preparing herself for the shock of witnessing her son's conditions at birth leading to negligent infliction of emotional distress.
Plaintiff contends that Defendants breached their duty because they did not provide her with the opportunity to brace herself for the shock of witnessing her child's birth with profound abnormalities, without the benefit of seeking psychiatric, religious, or social counseling, and without the benefit of making appropriate arrangements prior to her child's birth. Plaintiff states that she suffered emotional distress due to the shock, which manifested in nausea, headaches, insomnia, depression, nightmares, flashbacks, repeated hysterical attacks, stress and anxiety. Plaintiff sought remuneration solely for the emotional distress.
The trial court sustained Defendants' preliminary objections arguing that Plaintiff had failed to state a claim for negligent infliction of emotional distress and the trial court dismissed Plaintiff's Complaint. The Superior Court reversed.
Holding:
The Pennsylvania Supreme Court affirmed the holding of the Superior Court that it is appropriate to extend liability for the infliction of emotional distress where there exists a special relationship and it is foreseeable that a breach of the relevant duty would result in emotional harm so extreme that a reasonable person should not be expected to endure the resulting distress. Further, the Court held that recovery for negligent infliction of emotional distress claims does not require a physical impact. The Court determined that Defendants did owe Plaintiff an implied duty to care for her emotional well-being, and that it was foreseeable that a breach of this duty could result in severe emotional disturbances to Plaintiff.
Any questions regarding this case can be directed to Jeff Truitt at (412) 926-1422 or jtruitt@tthlaw.com.
Jones v. Nationwide Property and Casualty Insurance Company
2011 Pa. LEXIS 3088
Decided December 21, 2011
PennsylvaniaSupreme Court approves practice of reimbursing deductibles on a pro rata basis from subrogation proceeds in the context of collision coverage policies.
Background:
Plaintiff’s vehicle was damaged in an accident with a third party, and Nationwide paid for all property damage above the $500.00 deductible. Nationwide recovered 90% of this amount in a subrogation action against the third party and paid Plaintiff $450.00 as a pro rata share of the deductible. Plaintiff filed a class action alleging breach of contract and bad faith, on the basis that this practice, and an Insurance Department regulation providing for pro rata deductible recoveries, violated the “made whole” doctrine. The Trial Court sustained preliminary objections and the Superior Court affirmed.
Holding:
The “made whole” doctrine provides that where an insured is entitled to recovery from more than one source, an insurer does not acquire subrogation rights until the insured has been fully compensated. The legislature has not expressly spoken to the doctrine’s application to collision coverage deductibles, however, the MVFRL sets forth requirements regarding deductibles generally, including that policies must contain deductibles of at least $100.00 so that insureds share the risk of loss, and that premiums must be based on the deductible amounts insureds chose. Insureds under these policies accept the risk of loss up to the deductible, and pay the insurer to assume risk above that amount up to the fair market value of the vehicle. Under other first party coverage policies insurers accept “first dollar” coverage up to but not exceeding the policy limits. The application of the “made whole” doctrine to collision coverage policies would create a “non-deductible policy in the limited circumstances of subrogation recoveries” contrary to the MVFRL. The doctrine does not apply in cases involving collision coverage policies, and therefore Nationwide’s practice does not violate the doctrine.
Any questions regarding this case can be directed to Tom Merrick at (412) 926-1424 or tmerrick@tthlaw.com.
Price v. Leibfried, et al.,
2011 PA Super 274
Decided December 22, 2011
The Superior Court holds that an owner of a vehicle may be vicariously liable for her own injuries where those injuries were caused by a driver she permitted to operate her vehicle.
Background:
Ms. Price was injured as a passenger in an automobile accident. That accident involved another driver, Mr. Leibfried, who drove Ms. Price’s vehicle into the rear of a tractor-trailer. At the time, Leibfried was unlicensed and apparently intoxicated.
Price brought suit against Leibfried. Within that suit, Leibfried argued that Price was vicariously liable for her own injuries under 75 Pa.C.S.A. §1574 in that she permitted him, an unauthorized driver, to operate her vehicle. The trial court agreed, yet noted that the jury would ultimately make an apportionment of liability without knowing the imputation of liability to Price. Price filed a Notice of Appeal.
Holding:
The Superior Court affirmed the lower court and held that under 75 Pa.C.S.A. §1574, a person who permits a person, who is unauthorized or not licensed, to operate a vehicle owned or controlled by them is vicariously liable with the unauthorized or unlicensed driver for any damages they cause.
The court found compelling Ms. Price’s own testimony to the effect that she knew, prior to the accident, that Leibfried was unlicensed and that she knew he had been drinking beer and “hard liquor” on the night of the accident. Further, she had previously given her car keys to Leibfried “without reservation”, aware that he did not have a license. Accordingly, the Court affirmed the lower court.
Any questions regarding this case can be directed to Ryan Blazure at 570-820-0240 or at rblazure@tthlaw.com
Richmondv. McHale Inc.
2012 Pa. Super. 1 (Pa. Super. 2012)
Decided: January 4, 2012
Superior Court holds that a complaint for defamation was properly dismissed as the conduct alleged constitutes statements made in a judicial proceeding which are absolutely privileged.
Background:
An attorney sued opposing counsel in the Court of Common Pleas of Philadelphia County for defamation. The trial court sustained opposing counsel's preliminary objections and dismissed the complaint with prejudice. The attorney appealed.
Decision:
The attorney had requested a physical examination of opposing counsel's client, which opposing counsel refused, accusing the attorney of using the examination to extort money from opposing counsel's client. The appellate court held the attorney waived his appellate claim that the trial court abused its discretion by making factual determinations without a Pa.R.C.P. No. 1030(a) pleading because the issue was not raised in the trial court.
The court found that it has long been the law of Pennsylvania that statements made by judges, attorneys, witnesses and parties in the course of or pertinent to any stage of judicial proceedings are absolutely privileged and, therefore, cannot form the basis for liability for defamation. Opposing counsel's preliminary objections were properly sustained because the alleged defamatory statement was absolutely privileged, as it was made in connection with opposing counsel's representation of his client in a judicial proceeding, following the attorney's discovery request in the ongoing proceeding and in furtherance of opposing counsel's client's interests.
Any questions regarding this case can be directed to Paul Walker at 717-441-7061 (pwalker@tthlaw.com).
MARYLAND CASE SUMMARIES
My National Tax & Insurance Services, Inc. v. H&R Block Tax Services, Inc.
United States District Court for the District of Maryland Southern Division
Case No.: 8:10-cv-02411-AW
Filed: Jan. 11, 2012
In Maryland, there is no claim for fraud or misrepresentation where a party overlooks express contractual terms.
Background:
My National wanted to become a franchisee of H&R Block. The franchisee contract provided that My National would receive two payments of $225,000. The contract provided that the second payment was contingent on My National completing 4,105 returns. After the contract was executed, My National sued H&R Block for fraud and misrepresentation. My National alleged that H&R Block knew that My National could not reach the performance target, and that H&R Block indicated that My National would not have to meet the performance target.
Holding:
The federal court dismissed the count. To sustain a cause of action for fraud and misrepresentation, a party must prove: (1) the defendant made a false representation to the plaintiff; (2) the falsity was known to the defendant or made with reckless indifference to its truth; (3) the misrepresentation was made of the purpose of defrauding the plaintiff; (4) the plaintiff relied on the misrepresentation and had the right to rely on it; and (5) the plaintiff suffered compensable injury from the misrepresentation. The court explained that a plaintiff has no right to rely on an alleged misrepresentation that directly contradicts the terms of a contract to which the person is a signatory. In this case, the alleged misrepresentation expressly contradicted the terms of the contract. Thus, the plaintiff could not sustain a cause of action for fraud and misrepresentation.
Any questions regarding this case can be directed to Ben Peoples at (410) 653-0460 or cpeoples@tthlaw.com.
Markevicz v. Garcia
United States District Court for the District of Maryland Southern Division
Case No.: 8:08-cv-02877-AW
Filed: Dec. 29, 2011
The operator of an emergency response vehicle is immune unless acting grossly negligent.
Background:
The defendant struck the plaintiffs vehicle while operating a Prince George’s County Fire Department rescue vehicle. The plaintiffs alleged that the defendant was grossly negligent because he traveled in the wrong direction on the beltway, dangerously jockeyed for position in an attempt to pass through a gap in the median that was too small for his vehicle, drove against the flow of traffic, positioned his vehicle perpendicularly across a three lane highway while moving back and forth, and failed to have a spotter.
Holding:
The federal court dismissed the complaint. In Maryland, the personnel of a fire company or rescue company are immune from civil liability for any act or omission in the course of performing their duties except for any willful or grossly negligent act. Gross negligence is the wanton and reckless disregard for others. The court found that the defendant’s actions were not grossly negligent, even though the evidence indicated that he drove aggressively. The court noted that the vehicle’s lights and sirens were activated at the time of the collision. Although the defendant failed to use a spotter, the plaintiff failed to identify a law regulation or procedure requiring emergency vehicle operators to use a spotter.
Any questions regarding this case can be directed to Ben Peoples at (410) 653-0460 or cpeoples@tthlaw.com.
NEW JERSEY CASE SUMMARIES
Cambriav. Two JFK Blvd, LLC, et al.
Superior Court of New Jersey, Appellate Division
2011 N.J. Super. LEXIS 1
Decided: Jan. 5, 2012
The obligation to care for the common areas of the property remain with the owner of the property absent an unambiguous and clear declaration to the contrary in the lease.
Background:
Plaintiff Cambria was injured when he slipped and fell on ice in the parking lot of a strip mall. The owner of the strip mall and its real estate manager, Rubin, sought coverage under an insurance policy issued by a tenant’s insurer. The lease required the tenant to obtain a liability insurance policy naming the landlord as an additional insured. Cross motions for summary judgment were filed regarding the obligations of its tenant and insurer.
Discussion:
The Appellate Court found that neither the landlord nor Rubin could be considered to be the tenant’s real estate manager with respect to the common areas of the strip mall, in part because the leased premises did not include any part of the parking lot. Further, the landlord retained full responsibility for maintaining the parking lot and as a result, Rubin only acted as the landlord’s real estate manager with regard to snow removal from that area and not the tenant’s real estate manager. Absent a clear and unambiguous provision in the lease, which was not present here, the obligation to care for the common areas remains with the owner of the property.
Any questions regarding this case can be directed to Lisa Trembly at 610-332-7029 or ltrembly@tthlaw.com.
A&MFarm & Garden Centerv. American Sprinkler Mechanical, LLC
Superior Court of New Jersey - Appellate Division
A-2921-10T1;
Decided: January 17, 2012
Prior to ordering dismissal with prejudice, courts are required to take “some action” to ensure that the underlying parties have received the protections afforded to them
Background:
Rule 4:23-5 imposes two obligations on a party who is delinquent with discovery, and who faces a motion for dismissal with prejudice for failure to make discovery. When an order is initially entered dismissing the case without prejudice, the first obligation stems from Rule 4:23-5(a)(1) which requires the attorney for the delinquent party to “forthwith serve a copy of the order on the client by certified and regular mail, return receipt requested, accompanied by a notice in the form prescribed by Appendix II-A of these rules, specifically explaining the consequences of failure to comply with the discovery obligation, and to file and serve a timely motion to restore.” Second, if the case proceeds to the second step, namely, a motion to dismiss with prejudice, the attorney must then certify that the client was notified as above, or that the client could not be found and, therefore, was not notified. Thereafter, the attorney must appear in person for oral argument on the return date pursuant to Rule 4:23-5(a)(2).
In this case, the attorney for plaintiff, the delinquent party, failed to comply with either of these two obligations. As a result, the trial court granted dismissal with prejudice. Shortly thereafter, plaintiff provided the missing discovery and moved to reinstate the case. Plaintiff explained that the motion to dismiss was received in its attorney’s office, but that the papers were never forwarded directly to the attorney, thereby causing a delay in responding to the discovery. The trial court found that this was an insufficient basis to restore the case. Plaintiff appealed.
Holding:
On appeal, the Appellate Division reversed, and held that it was an abuse of discretion for the trial court to dismiss with prejudice. The court explained that, under Rule 4:23-5(a)(3), the lower court was required to proceed by order to show cause or take such other appropriate action as may be necessary to obtain compliance with the requirements of this rule, unless exceptional circumstances are demonstrated. However, the court determined that the trial court did not take any action to inform itself as to whether plaintiff’s attorney had complied with the requirements. Thus, the trial court had no way of knowing that plaintiff had received the protections afforded by the rule and, therefore, could not make an informed decision to dismiss the complaint with prejudice. When a court has no informed basis to know whether the litigant’s rights have been protected, the court must take “some action” to ensure such protection. That action may be as simple as having a law clerk call the office of counsel for the delinquent party, or as involved as issuing an order to show cause.
Any questions regarding this case can be directed to Oliver M. Bather at 610-332-7006 or (obather@tthlaw.com).
Repossession Specialists v. GEICO Insurance Co.
Superior Court of New Jersey – Appellate Division
A-2712-10T1
Decided Jan. 12, 2012
Coverage was not afford to a repossessor under an owner’s personal automobile policy because a repossessor is not a user “with permission.”
Background:
An automobile owner filed suit over injuries sustained when she fell off of a repossessor’s tow truck as she attempted to get personal belongings out of her vehicle. The owner filed suit against the repossessor, the tow truck driver and the lender (collectively, “the repossessors”), claiming they were permitted users of the owner’s automobile. The Camden County trial court granted Summary judgment in favor of GEICO finding that the repossessors were not entitled to coverage because they were not permissive users. The repossessors appealed.
Holding:
On appeal, the Appellate Division affirmed the granting of summary judgment. In a matter of contract interpretation, the court held that an entity that repossesses a policy holder’s vehicle after the policy holder defaulted under a secured loan was not a user “with permission” under the policy and therefore was not entitled to coverage. The court reasoned that the repossessor’s use of the vehicle was not permissive because the use was as of right under both the installment credit agreement and the Uniform Commercial Code, and the owner lacked the power to revoke the right to use.
Any questions regarding this case can be directed to Christopher J. Dos Santos at 610-332-7017 or (cdossantos@tthlaw.com).
Selective Insurance Company of America v. Arthur C. Rothman, M.D.
Supreme Court of New Jersey
2012 N.J. Super. LEXIS 10
Decided: Jan. 18, 2012
New JerseySupreme Court affirms the Appellate Division’s decision holding that a licensed Physician Assistant (“PA”) does not have the authority to perform needle electromyography (“EMG”) and vacated an arbitration award in favor of the medical provider.
Background:
In three related disputes, Dr. Rothman submitted PIP claims to Plaintiff for EMG tests that had been performed by Dr. Rothman’s PA to auto accident victims. The Plaintiff insurer denied the claims and Dr. Rothman filed PIP arbitrations and prevailed. Defendant sought confirmation of the arbitration awards and a declaration the PAs are authorized to perform EMGS. In a consolidated opinion, the trial court confirmed the arbitration award and ruled that PAs are authorized to perform EMGs. The Appellate Division reversed the trial court and the Supreme Court affirmed that reversal.
Holding:
The Supreme Court found that the plain language of the statute, N.J.S.A. §45:9-5.2(a), limits the performance of EMGs to individuals that are licensed to “practice medicine and surgery in this State.” PAs do not qualify for a plenary license to practice medicine and thus cannot perform EMGs. Further, although the Board of Medical Examiners approved the minutes of the PA Advisory Committee that referred to the performance of EMGs by PAs, the Board did not thereby adopt any regulations or act with sufficient clarity to overcome the statutory limitations on the performance of such procedures.
Any questions regarding this case can be directed to Lisa Trembly at 610-332-7029 or ltrembly@tthlaw.com.
Polzo v. County of Essex, et al.
A-74/75, September Term ,2010 - 066910
Decided: January 18, 2012
County was not liable for a bicyclist's accident in the absence of county’s notice of a "dangerous condition" on the shoulder of a roadway
Background:
Mathi Kahn-Polzo and other experienced bicyclists were riding on the shoulder of Parsonage Hill Road, which was owned and maintained by Essex County. She rode over a depression on the shoulder, fell, suffered a catastrophic head injury despite wearing a helmet, and died twenty-six days later. Her husband sued the county, claiming it knew about the 1 ½-inch-deep, 2-foot-wide depression, and failed to repair it. Specifically, Mr. Polzo argued that the county breached a duty of care by failing to detect and repair the depression in the roadway that caused his wife to lose control of her bike. The trial court granted summary judgment in favor of the county on the ground that it didn’t have notice of the dangerous condition. The New Jersey Appellate Division reversed the trial court’s decision, concluding that a jury issue existed as to whether the county should have had a proactive program in place to inspect its roadways for the type of roadway defect that caused the death of Mathi Kahn-Polzo. The County appealed.
Holding:
On appeal to the NJ Supreme Court, the issue was whether the County could be held liable under the New Jersey Tort Claims Act (TCA). Under the New Jersey Tort Claims Act, a local government is subject to liability “only when a pothole or depression on a roadway constitutes a dangerous condition; the public entity either causes the condition or is on actual or constructive notice of it; and, if so, the public entity’s failure to protect against the roadway defect is palpably unreasonable.” The high court rejected the lower court’s conclusion that the county “created” the dangerous condition by failing to have a routine road inspection program in place. The court stated that “a public entity does not create a dangerous condition merely because it should have discovered and repaired it within a reasonable time before an accident.” With respect to the issue of whether the county had notice of the depression for purposes of the state tort claims law, the court explained that the generally intended purpose of a roadway is for vehicular use, and the generally intended purpose of the shoulder is for emergency use, such that plaintiff failed to show that the shoulder depression “was of such an obvious nature that the public entity, in the exercise of due care, should have discovered the condition and its dangerous character.” Thus, the court concluded that the depression was not so obvious that it could reasonably be concluded that the county had actual or constructive notice of that defect.
Any questions regarding this case can be directed to Oliver M. Bather at 610-332-7006 or (obather@tthlaw.com).