Significant Case Digests
PENNSYLVANIA CASE DIGEST
Ross v. Foremost Insurance Co., Sentry Services, Inc.
2010 PA Super 107 (June 11, 2010)
Superior Court holds the express terms of a Release must be enforced where a Release expressly preserves claims against an agent.
Background
Plaintiff purchased a travel trailer in 2001. He contacted Sentry Services, Inc., an insurance agent for Foremost Insurance Company, to obtain insurance coverage for the trailer. Sentry sent Plaintiff a Mobile Home Insurance Worksheet, which he completed, disclosing the trailer was within 1500 feet of a creek. Plaintiff received a copy of the Foremost insurance declarations and policy, which he glanced at, but did not read. The policy specifically excluded loss caused by flood and referred Plaintiff to the National Flood Insurance Program. On September 17, 2004, the creek flooded, causing damage to Plaintiff's trailer. Plaintiff submitted a claim to Foremost for the damage to his trailer, which was denied because the policy did not cover flood loss.
Holding
Plaintiff filed suit against Foremost and Sentry alleging negligence and violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL). After suit was filed, Plaintiff entered into a settlement agreement and release with Foremost. The release included the following language: "It is expressly understood that [Plaintiff] does not release from liability, but expressly reserves the right to make claim against any and every other person and/or entity, specifically SENTRY INSURANCE SERVICES, who is also named as a Defendant in the above-referenced action." Shortly thereafter, Sentry was granted summary judgment on the basis that the release of Foremost as principal operated as a release of Sentry as its agent. Plaintiff appealed.
The Superior Court followed the decision by the Pennsylvania Supreme Court in the matter of Maloney v. Valley Med. Facilities, Inc., 984 A.2d 478 (Pa. 2009), which was issued after the trial court's decision in this matter. In Maloney, the Court held, "In the scenario entailing a plaintiff's surrender of vicarious liability claims only and express preservation of claims against an agent, we hold that the parties to a settlement should be afforded latitude to effectuate their express intentions." Id. at 487. The Superior Count found the release in this case was similar to that of the Maloney case, as the Plaintiff expressly reserved his rights against Sentry. Therefore, Sentry was not entitled to summary judgment under the terms of the release, as Plaintiff reserved his rights against Sentry even though Sentry may have been acting as an agent for Foremost.
Any questions on this case can be directed to Lauren Clein at 215-564-2928 x8502 (
lclein@tthlaw.com)
Vanderhoff v. Harleysville Ins. Co.
2010 Pa LEXIS 1419 (July 6, 2010)
The Pennsylvania Supreme Court holds an insurer is required to prove prejudice arising from insured’s late notice of a vehicle accident involving a “phantom” vehicle to deny benefits.
Background
Vanderhoff was injured in an accident when he rear-ended a vehicle. Eight months later, Vanderhoff made an uninsured motorists claim under his own policy with Harleysville, claiming that the accident was caused by a phantom vehicle, which the other driver denied. The phantom vehicle was not mentioned in a workers compensation claim with Harleysville, to the police, or in a hospital account after the accident. However, Vanderhoff did not receive the police report until 7 months after the accident, when he first noticed the omission of a phantom vehicle, and he then contacted the police. The trial court found the existence of a phantom vehicle credible and found that Vanderhoff had provided verbal notice to the police and to Harleysville. On appeal, the Superior Court reversed the finding of proper notice to Harleysville and concluded the notice provided was insufficient. Harleysville did not have to demonstrate prejudice in order to deny benefits due to late notice.
Holding
The Supreme Court considered whether an insurer should be required to prove prejudice relative to late reporting of an accident involving an unidentified vehicle when such accident was timely reported to law enforcement. In State Farm Mut. Auto. Ins. Co. v. Foster, 889 A.2d 78 (Pa. 2005), the Supreme Court held that prejudice need not be shown for an insurer to deny a claim based on the failure to notice policy under section 1702 of the Motor Vehicle Financial Responsibility Law (MVFRL). However, rather than being controlled by Foster, the Supreme Court held that Brakeman v. Potomac Ins. Co., 371 A.2d 193 (Pa. 1977) controls. Prior to the MVFRL, an insurer had to demonstrate prejudice resulting from late notice under Brakeman. The purpose of a notice provision is to protect an insurer from being placed in a substantially less favorable position to pay a claim it did not have an opportunity to defend. Section 1702 was enacted after Brakeman, and its silence as to prejudice does not alter the requirement set forth in Brakeman. An insurer must demonstrate prejudice resulting from late notice prior to denying benefits.
Any questions regarding this case can be directed to Paul Walker at 717-441-7061 (
pwalker@tthlaw.com).
Rue v. Washington Township Volunteer Fire Company, et. al.
2010 Pa. Commw. LEXIS 332 (June 29, 2010) Unreported opinion
The Pennsylvania Commonwealth Court holds a fire department is not entitled to governmental immunity where it fails to provide evidence it was the township’s official fire department.
Background
Plaintiff was attending a Bingo game at the Washington Township Volunteer Fire Company when she fell allegedly as the result of being tripped by an unnamed agent/employee of the Fire Company. The Fire Company averred it was immune from liability under Pennsylvania’s Political Subdivision Tort Claims Act (the “Act”) and filed a motion for summary judgment. The motion for summary judgment was granted, finding the Fire Company was a local agency under the Act and entitled to governmental immunity.
Holding
The Commonwealth Court reversed summary judgment finding the evidence was insufficient to establish the Fire Company was officially recognized by the township, and thus a “local agency” entitled to governmental immunity from Plaintiff’s claims under the Act. The Fire Company failed to produce an ordinance or resolution designating it as the township’s official fire department, or other documentation or testimony to support such a designation. Counsel’s oral representations at argument regarding the township’s financial support of the fire department, without evidence of record, were insufficient to establish the department’s status as the township’s officially recognized fire department.
Any questions regarding this case can be directed to Suzanne Merrick at 412-697-7403 x8235 (
smerrick@tthlaw.com)
Chepkevich v. Hidden Valley Resort, L.P., 2010 Pa. LEXIS 1311 (June 21, 2010)
The Pennsylvania Supreme Court holds assumption of the risk is a complete defense for a ski resort where a skier asserts a negligence claim and damages after falling from a chair lift.
Background
Plaintiffs’ six-year old nephewsustained injuries when he fell off of a chair lift. A chair lift operator allegedly had agreed to stop the lift so the boy could board it, but failed to do so, causing him to fall. The resort argued Plaintiffs’ suit was barred by assumption of the risk and a Release the skier had signed exempting the resort from liability for its employees’ negligence. The trial court granted the ski resort’s motion for summary judgment on the basis of the Release. On appeal, the Pennsylvania Superior Court reversed and remanded finding the Release did not define “negligence” and was a contract of adhesion. The Pennsylvania Supreme Court granted allocatur to address the issue of whether a skier may maintain a negligence action against a ski resort for injuries sustained falling from a chair lift.
Holding
The Pennsylvania Supreme Court reversed the order of the Superior Court and reinstated the trial court’s order granting summary judgment in favor of the ski resort. The Court stated that while the doctrine of assumption of the risk was largely eliminated by the Comparative Negligence Act, 42 Pa.C.S. § 7102(a)-(b), the Skier’s Responsibility Act preserved the doctrine of assumption of the risk in actions arising out of downhill skiing. The Skier's Responsibility Act recognized “there are inherent risks in the sport of downhill skiing.” Here, the Court held “boarding and riding a ski lift are…inherently dangerous activities, the most obvious danger of which -- a risk that is common, frequent and expected -- is undoubtedly falling from the lift.” As to the Release, the Court determined it was not a contract of adhesion because Plaintiff was free to choose whether to participate in the inherently dangerous activities. Furthermore, the language of the Release sufficiently identified the risks of skiing. Any questions regarding this case can be directed to Randy Metz at 215-564-2928 (rmetz@tthlaw.com).
NEW JERSEY CASE DIGEST
Luchejko v. City of Hoboken et al., 2010 N.J. Super. LEXIS 127 (July 12, 2010)
The Appellate Division holds a nonprofit condominium association and its management company are immune from suit when the condominiums are purely residential without retail space.
Background
Plaintiff sustained injuries when he slipped and fell on what he described as black ice on a public sidewalk adjacent to a condominium complex located in the City of Hoboken. Snow clearing activities left mounds of snow, which melted and refroze. The condominiums were governed by defendant Skyline Condominium Association and were devoted solely to residential use and contained no commercial or retail space. Skyline hired defendant CM3 Management Company to manage the property. CM3, in turn, hired defendant D&D Snow Plowing Company to clear snow. Plaintiff filed suit, seeking damages from Skyline, CM3, D&D, and the City of Hoboken. Skyline and CM3 moved for summary judgment, arguing the commercial exception to landowners’ immunity for snow removal did not apply. The City also filed a motion for summary judgment, contending no exception to governmental immunity existed on the present facts. The trial court granted the motions and, after settling with D&D, plaintiff appealed.
Holding
On appeal, the Appellate Division affirmed. The panel relied on the seminal case of Stewart v. 104 Wallace St., Inc., 87 N.J. 146 (1981) and its progeny in noting the factors considered to determine whether a property should be viewed as commercial and thus subject to suit for negligence in the removal of snow from public sidewalks abutting the property. Observing it is the nature of ownership that controls, the Court focused on the fact the condominium complex consisted of privately owned residential units without retail or other commercial space. Thus, Skyline and CM3 were immune from suit because they could not be considered commercial entities and did not fall within the exception to landowner immunity for snow removal. Further, the Appellate Court also upheld summary judgment in favor of the City of Hoboken finding that no enumerated exception to immunity in the Tort Claims Act applied. Any questions regarding this case can be directed to Gregory Kunkle at 610-332-7009 (gkunkle@tthlaw.com).
MARYLAND CASE DIGEST
Dickerson v. LongoriaCourt of Appeals, Case No. 74 September Term, 2009 (Decided: May 24, 2010)
An estate of the deceased cannot be compelled to arbitrate its medical malpractice claims where the agent of the deceased did not have actual or apparent authority to bind the deceased to an arbitration agreement.
Background
Carter Bradley suffered from numerous medical issues. He lived with Carman Dickerson, who frequently represented she was Bradley’s power of attorney and made all necessary medical decisions. Bradley eventually was admitted to a facility owned by Heritage Care, Inc. The admittance papers included a Resident and Facility Arbitration Agreement, which Dickerson signed on behalf of Bradley. The Agreement required any disputes between a resident and the facility would be arbitrated. After Bradley’s death, Bradley’s Estate filed medical malpractice claims against Heritage. Heritage sought to compel the Estate to arbitrate the claims. The trial court supported Heritage’s position, and the Estate was required to arbitrate its claims. The Estate appealed. While the case was before the Court of Special Appeals, the Court of Appeals granted certiorari and reversed.
Holding
The Court held the Arbitration Agreement was not binding because Dickerson did not have authority to sign the Agreement. Under the Maryland Health Care Decisions Act (HCDA), an individual may appoint someone to be an agent for purposes of making “health care decisions.” The HCDA did not apply here because the decision to sign a free-standing arbitration agreement is not a health care decision if the patient may receive health care without signing the agreement. Here, the Agreement was a freestanding contract, separate from the documents to admit Bradley to Heritage’s facility. The Agreement explicitly stated the execution of the Agreement was not a precondition to the furnishing of services. Moreover, even if the decision to sign the Arbitration Agreement were a health care decision, the HCDA would not have applied because Dickerson did not have actual or apparent authority to sign the Agreement.
Agency Insurance Co. v. State Farm Mutual Automobile Insurance Co. Court of Special Appeals, Case No. 595 September Term, 2009 (Decided: July 8, 2010)
Denying Coverage where a Driver did not have permission to operate an Automobile
Background
A State Farm insured purchased and maintained a car, which was titled in her name only. The insured’s daughter used the car with permission on occasion. In December 2005, insured allowed her daughter to drive the car to her boyfriend’s house. Without insured’s knowledge, the daughter allowed her boyfriend to drive the car. While the boyfriend was operating the car, an accident occurred, killing the daughter and the driver of another car. The daughter’s boyfriend was an Allstate insured. The driver of the other car was an insured of Agency Insurance Company, with a $50,000 uninsured motorist provision. Agency filed a declaratory judgment action to determine the contractual responsibilities of the parties. The trial court determined neither State Farm nor Allstate were required to defend or indemnify the boyfriend.
Holding
Maryland’s intermediate appellate court affirmed the trial court’s judgment. The Court first considered whether State Farm, the mother’s insurer, had a duty to defend the boyfriend. The Court interpretted an omnibus clause in the State Farm policy that extended coverage to “any other person or organization liable for the use of such a car by one of the above insureds.” The Court held this clause only covered individuals liable for the use of a car by an insured. Here, the policy did not cover individuals like the boyfriend because he was not being held liable for the use of the car by an insured, such as the daughter. He was being held liable for his own use of the car. Second, the Court considered whether Allstate had a duty to defend its own insured, the boyfriend. The Allstate policy only covered “insured persons” driving “insured automobiles.” The boyfriend was an insured person because he lived with his parents, and the policy defined insured persons as “any resident relative using a four wheel private passenger auto or utility auto.” However, the car was not an “insured automobile” because the boyfriend was not driving the automobile with the “owner’s permission,” as mother-insured had only given permission to her daughter to drive her car.
Any questions regarding this case can be directed to Ben Peoples at 410-752-0075 (bpeoples@tthlaw.com.)