FEDERAL COURT CASE SUMMARIES
Ortiz v Jordan
131 S. Ct. 884 (2011)
The United States Supreme Court clarified the procedural steps necessary to appeal the denial of a summary judgment motion raising the defense of qualified immunity to liability for the violation of an individual’s constitutional rights
Background
Ortiz, an inmate at the Ohio Reformatory for Women, was sexually assaulted by a correctional officer on two consecutive nights. Ortiz filed claims based upon violations of her 8th and 14th Amendment rights to protection while incarcerated based upon her case manager’s failure to protect her after Ortiz reported the first assault and the prison investigator’s alleged retaliation.
The case manager and investigator moved for summary judgment on the grounds of qualified immunity. The district court denied the motion because it concluded factual disputes existed. The defendants did not file an interlocutory appeal from the denial of their motion. The case then proceeded to trial and the jury found in favor of Ortiz. On appeal, the defendants contended the district court committed error by not granting summary judgment in their favor. The Sixth Circuit Court of Appeals reversed the verdict and held both defendants were protected from liability on qualified immunity grounds.
Holding
The Supreme Court reversed. Because the defendants failed to renew their motion for judgment as a matter of law under Rule 50(b) or request a new trial under Rule 59(a) on the qualified immunity defense after the trial, the defendants failed to preserve their right to appeal that determination.
Normally, appellate courts will not review the denial of a summary judgment motion after a full trial on the merits. Here, the Circuit Court concluded the denial of such a motion based on qualified immunity was an exception to the general rule. However, the Supreme Court rejected that reasoning.
Any questions regarding this cases may be directed to Dave Schwalm at 717-255-7643 or dschwalm@tthlaw.com.
Thompson v. North American Stainless, LP
131 S. Ct. 863 (2011)
The U.S. Supreme Court holds Title VII of the Civil Rights Act protects third-party retaliation claims
Background
Eric Thompson and his fiancée, Miriam Regalado, were employees at North American Stainless. Regalado filed a charge of sex discrimination against North American, and three weeks later, North American fired Thompson. Thompson brought suit in the District Court, contending North American fired him in retaliation against Regalado for filing her charge of sex discrimination. The District Court granted summary judgment in favor of North American Stainless, holding Title VII did not permit third-party retaliation claims. The Sixth Circuit affirmed, and Thompson appealed to the United States Supreme Court.
Holding
The U.S. Supreme Court determined Title VII’s anti-retaliation provision prohibits employers from taking action that might dissuade a reasonable worker from either making or supporting a charge of discrimination. The Court found a reasonable worker may be dissuaded from supporting a charge of discrimination if she knew her fiancé ultimately would be fired. The Court refused to categorize those relationships entitled to protection, however, but recognized that the firing of a close family member will almost always qualify for protection, while the firing of a mere acquaintance will not. Instead, whether retaliation of a close associate is actionable will depend on the particular circumstances of each individual case.
Any questions regarding this decision may be directed to Lindsey E. Fund at 717-441-3959 or lfund@tthlaw.com.
Vilches v. Travelers Companies, Inc., et al.
2011 U.S. App. Lexis 2551 (3d Cir. Feb. 9, 2011)
The Third Circuit Appellate Court holds an arbitrator must decide class status of overtime-pay claims
Background
Jose Ivan Vilches, Francis X Sheehan, Jr., and Jack Costeira (collectively “Vilches”) filed a class and collective action in New Jersey state court against The Travelers Companies, Inc. to recover unpaid wages and overtime-pay allegedly withheld in violation of the Fair Labor Standards Act and the New Jersey Wage and Hour Law. When beginning employment with Travelers, Vilches entered into an employment agreement making arbitration the required and exclusive forum for the resolution of all employment disputes. In April 2005, Travelers electronically published a revised Arbitration Policy prohibiting class arbitration.
Travelers filed a motion for summary judgment seeking the dismissal of the complaint and an order compelling arbitration on Vilches’ individual wage and hour claims. The District Court granted Travelers’s motion for summary judgment, holding Vilches agreed to waive the right to proceed by way of class arbitration through the revised Arbitration Policy. Vilches appealed to the Third Circuit Court of Appeals.
Holding
The Third Circuit reversed the District Court’s decision, holding the District Court’s role was limited to deciding whether the revised Arbitration Policy governed this dispute. The Court stated that whether an employee is bound by a disputed amendment to employment provisions fell within the expansive scope of the agreement to arbitrate. The question of whether class arbitration was permissible, therefore, was an issue that an arbitrator, and not the court, must decide.
Any questions regarding this decision may be directed to Lindsey E. Fund at 717-441-3959 or lfund@tthlaw.com.
PENNSYLVANIA CASE SUMMARIES
Gillard v. AIG Insurance Company
2011 Pa LEXIS 393 (2011)
The Supreme Court holds the attorney-client privilege in Pennsylvania operates as a "two-way street"
Background
William Gillard brought a bad faith action against AIG in its handling of Gillard’s uninsured motorist claim. Gillard requested certain documents during discovery, and AIG withheld and redacted documents based upon the attorney-client privilege. When challenged by Gillard, the trial court determined the attorney-client privilege was a one-way street; i.e., the privilege only applies to communication made by the client to the attorney. On appeal, the Superior Court held that communications from an attorney to a client are protected, but only to the extent that they reveal confidential communications previously made by the client to counsel for the purpose of obtaining legal advice. A Petition For Allocator was granted by the Supreme Court.
Holding
The Supreme Court held the attorney-client privilege operates in a two-way fashion to protect client-to-attorney and attorney-to-client communications made for the purpose of obtaining or providing professional legal advice, a broader protection than the Superior Court had found.
Any questions regarding this case may be directed to Francis DiSalle at 412-434-8596 or
Reeser v. NGK North American, Inc., et al.
2011 Pa. Super. 17 (Jan. 2011)
The Superior Court holds an independent consultant, hired to conduct testing and report the results to an owner of a manufacturing facility, has no duty to report the results to the public, even if there is a need for remedial relief
Background
Plaintiff suffered alleged injuries from beryllium exposure from a nearby beryllium plant and filed suit against an engineering firm (“EF”) retained by the plant owner to conduct testing at the plant, including the amount of beryllium particulate being discharged into the air. The testing showed emissions significantly exceeding the allowable limit. The results were reported only to the plant owner, not nearby residents.
In cross summary judgment motions, Plaintiff argued Section 324A of the Restatement (Second) of Torts imposes liability where one provides services which are recognized as necessary for the protection of a third person and there is a failure to exercise reasonable care. Plaintiff argued EF breached a duty owed to the public as it knew the testing was to investigate compliance with regulatory emission standards designed to protect public health. EF argued it must expressly undertake a duty to protect the public, and it did not. The trial court granted EF’s motion for summary judgment.
Holding
On appeal, the Superior Court affirmed the trial court. The court agreed that one must specifically assume to perform the undertaking, for without the actual assumption of the undertaking, there can be no correlative legal duty to perform carefully. Section 324A does not give rise to an “implicit” or “derivative” duty. Here, EF undertook no duty with respect to performing remedial action to enhance safety at the plant. Rather, EF undertook the duty to test the emissions and report correctly the results to the owner of the plant.
Any questions regarding this case may be directed to Paul Walker at 717-441-7061 or pwalker@tthlaw.com.
Schmidt, et ex. v. Boardman Co., et al.
2011 Pa. LEXIS 149 (Pa. Jan. 24, 2011)
A divided Pennsylvania Supreme Court affirms the "product-line exception" to the general rule of no strict-liability for successor corporations and allows recovery for infliction of emotional distress in a strict products liability action
Background
A hose from a fire engine in transit accidentally deployed and struck two children, causing the death of one child and severely injuring the other. A strict products liability action was brought against the fire truck manufacturer. Family-member witnesses also sought emotional distress damages in the strict liability action. The trial court instructed the jury on both the product-line exception and emotional distress claim, and the jury returned a substantial verdict in favor of Plaintiffs. Defendant/manufacturer appealed, and the Superior Court affirmed.
As a general rule, there is no strict-liability for successor corporations. However, the “product line exception” permits a plaintiff to proceed in strict-liability where a defendant corporation has acquired all or substantially all the manufacturing assets of another corporation and undertook essentially the same manufacturing operation as the selling corporation, even if the product was previously manufactured and distributed by the selling corporation or its predecessor.
Further, prior to Boardman, there had been no specific cause of action for bystander emotional distress in the context of a strict liability claim.
Holding
The Supreme Court (1) affirmed that an instruction on the product-line exception was proper and (2) affirmed, by operation of law, that the families could recover for infliction of emotional distress in a strict products liability action because the Supreme Court was evenly divided on the issue, 3-3 (former Justice Greenspan did not take part in the decision). However, a plaintiff's recovery for emotional distress is limited to that which is proximately caused by contemporaneous physical impact.
Any questions regarding this case may be directed to Jason Giurintano at 717-237-7157 or jgiurintano@tthlaw.com.
Lesko v. Frankford Hospital-Bucks County, et al.
2011 Pa. LEXIS 100 (2011)
The PA Supreme Court holds the remainder of an annuity did not have to be paid to Plaintiff estate of decedent because the settlement agreement did not require payments to continue after death
Background
Plaintiff's decedent, Ms. Bernath, brought a claim for medical malpractice against Defendants, which was ultimately settled. A written settlement agreement was executed providing Ms. Bernath with $6.3 million in "total compensation," in two lump sums of $400,000 and $4,239,890, together with a monthly payment to Ms. Bernath of $20,000 for the remainder of her life. Defendants chose to reduce this monthly payment to an annuity through New York Life. While the annuity was funded, the contract documents were not executed when Ms. Bernath died. Defendants sought to eliminate this final portion of the settlement. Plaintiff opposed, arguing the total consideration of the settlement called for the annuity's funding to be paid into Ms. Bernath's Estate. The trial court and Superior Court, on appeal, both agreed with Plaintiff.
Holding
The Supreme Court reversed, holding Ms. Bernath's Estate was not entitled to the annuity. The Court reasoned its holding by noting that had Defendants chosen to simply pay the monthly amount to Ms. Bernath, the Estate would have no claim to the annuity since the periodic payments would have ended upon Ms. Bernath's death. Should Ms. Bernath have desired the remainder of the periodic payments to continue beyond her death, she could have made such arrangements in the settlement agreement.
Any questions regarding this case may be directed to Ryan C. Blazure at 570-820-0240 or rblazure@tthlaw.com.
Haun v. Community Health Systems, Inc.
2011 Pa. Super. 15 (Jan. 2011)
Superior Court holds that, in the employment context, a cause of action for tortious interference with performance of a contract is not viable with respect to a presently existing at-will employment relationship
Background
Plaintiff, the CFO of the defendant hospital, filed a medical malpractice action against the hospital in relation to injuries sustained by his newborn son. Five days after the hospital was served with the writ of summons, hospital executives began discussing the possibility of terminating plaintiff’s employment. Plaintiff was thereafter informed that he was being fired because he was “an adversary of the company and it’s too much risk.” Plaintiff filed suit against the hospital, asserting claims including (1) wrongful termination in violation of public policy and (2) tortious interference with contract. The lower court denied the defendant’s preliminary objections seeking dismissal of both claims.
Holding
On appeal, the Superior Court affirmed the denial of the preliminary objections to the wrongful termination claim, and reversed as to the tortious interference claim. The court explained in the employment context, a cause of action for tortious interference with a contract has been recognized only in relation to interference with a prospective employment relationship, whether at-will or not. However, no such cause of action arises where an employee claims interference with a presently existing at-will employment relationship. Because the plaintiff’s allegations failed to establish that he was not an at-will employee of the hospital, the defendant’s preliminary objection to the tortious interference claim should have been granted.
Any questions regarding this case may be directed to Karin Romano Galbraith at 412-926-1426 or kgalbraith@tthlaw.com.
Eley v. State Farm Insurance
10-CV-5564 (January, 2011)
U.S. District Court of Eastern Pa. dismisses Plaintiffs’ statutory bad faith count that contains only conclusory averments and no factual basis
Background
Plaintiff Ms. Eley was involved in an automobile accident with an underinsured driver on June 4, 2009. As a result, the Eleys made a claim for underinsured motorist benefits against their owner carrier, Defendant State Farm. Plaintiffs first presented their claim on August 20, 2010 and then, on August 22, 2010, demanded $195,000. The policy provided UIM coverage limits of $200,000. State Farm declined the demand. Plaintiffs then filed a two count complaint on October 21, 2010, alleging breach of contract and bad faith.
In their bad faith count, Plaintiffs alleged that Defendant acted in bad faith by 1) failing to negotiate Plaintiffs’ UIM claim in good faith, 2) failing to properly investigate and evaluate Plaintiffs’ claim, and 3) other such acts that would be shown through discovery. Defendant filed a Motion to Dismiss the bad faith count on the basis that the Plaintiffs had failed to allege sufficient facts to support such a claim.
Holding
The Court granted State Farm’s Motion and dismissed the bad faith count with prejudice. In so holding, the court noted under the motion to dismiss standard, it must accept as true the facts pled in the Complaint. However, the Court pointed out that conclusory averments may be disregarded. Applying that standard, the Court concluded Plaintiffs’ conclusory and “bare bone” allegations were devoid of the factual specificity necessary to support their bad faith claim.
Any questions regarding this case may be directed to Darren Powell at 717-237-7154 or dpowell@tthlaw.com.
Stout v. Deleo
No. 970 Civ. 2007 (Monroe County Ct. Com. Pl. Feb. 2, 2011)
Monroe County Court of Common Pleas determines Plaintiff’s injuries do not constitute a serious impairment of a body function
Background
Plaintiff filed suit following a rear-end motor vehicle accident. The Plaintiff, a police officer, had an automobile insurance policy providing limited tort coverage. The matter before the Court was a Motion for Summary Judgment seeking to preclude the recovery of any non-economic damages based on Plaintiff’s limited tort status. The sole issue before the Court was whether the Plaintiff suffered a serious impairment of a body function. The Court recognized that such a determination was for the jury except in the clearest of cases, where reasonable minds could not differ on the issue.
Holding
The Court entered summary judgment in favor of Defendants, precluding the Plaintiff from recovering any non-economic damages. The Court emphasized Plaintiff’s continued ability to work, noting Plaintiff missed only three days of work, modification to his police cruiser was unnecessary, and his job responsibilities were not modified. In addition, the Court noted no doctor had placed any restriction on Plaintiff’s physical or work activity and that the Plaintiff did not require assistance in maintaining his home.
Any questions regarding this case may be directed to Bernard T. Kwitowski at 610-332-7018 or bkwitowski@tthlaw.com.
MARYLAND CASE SUMMARIES
Napata v. University of Maryland Medical Systems Corp.
Court of Appeals, September Term, 2010
Case No. 5, Filed: January 24, 2011
Court of Appeals holds the University of Maryland Medical Systems is not subject to the Public Information Act
Background
Napata sought access to University of Maryland Medical Systems Corp.’s (“UMMS”) records under Maryland’s Public Information Act (“PIA”). UMMS denied his request.
Holding
Maryland’s highest court held UMMS correctly denied Napata’s request. Maryland’s PIA generally applies to instrumentalities of the state. The Act provides in pertinent part, “Except as otherwise provided by law, a custodian shall permit a person or governmental unit to inspect any public record at any reasonable time.” Although UMMS was an instrumentality of the State, the Court explained it was not subject to the PIA because UMMS’s enacting statute exempted it from laws “affecting only governmental or public entities.” Thus, UMMS is not subject to the PIA.
Any questions regarding this case may be directed to Ben Peoples at 410-653-0460 or cpeoples@tthlaw.com.
Cappel v. Riaso, LLC
Court of Special Appeals, September Term, 2009
Case No. 2727, Filed: February 7, 2011
Court of Special Appeals holds ownership of unimproved real property in Maryland unrelated to the cause of action is alone insufficient to confer personal jurisdiction over an out-of-state defendant
Background
Riaso filed a complaint for a confessed judgment against the Cappels. The Cappels were located out of state. The Cappels’ only connection to Maryland was ownership in a piece of unimproved real property in Maryland. The property was unrelated to the confessed judgment.
Holding
Maryland’s intermediate appellate Court held ownership of unimproved real property in Maryland unrelated to the cause of action alone is insufficient to confer personal jurisdiction over an out-of-state defendant. The Court explained such ownership was insufficient to confer jurisdiction under Maryland’s long arm statute or to satisfy the minimum contacts requirements of Due Process.
Any questions regarding this case may be directed to Ben Peoples at 410-653-0460 or cpeoples@tthlaw.com.
Muti v. University of Maryland Medical Systems Corp.
Court of Special Appeals, September Term 2009
Case No. 1991, Filed: February 4, 2011
The Court of Special Appeals holds the trial court erred when it dismissed a wrongful death claim for failing to name all necessary parties
Background
Elliot Muti’s survivors filed a wrongful death claim. During discovery, it was revealed that Muti had an adopted son. No one knew the whereabouts of the adopted son or how to contact him. The adopted son was not named as a plaintiff in the suit. The defendant moved to dismiss the plaintiffs’ wrongful death claims for failure to join a necessary party. Under Maryland statute, all persons who are or may be entitled to damages must be named as plaintiffs in a wrongful death claim. The trial court granted the motion without providing the plaintiffs with an opportunity to amend the complaint.
Holding
Maryland’s intermediate appellate Court observed the plaintiffs failed to comply with the law when they failed to name the adopted son as a plaintiff. However, the Court held that the trial court should not have dismissed the plaintiffs’ complaint. The Maryland Rules require the court to consider whether the adopted son would be prejudiced by the dismissal before dismissing the case. The trial court in this case explicitly stated that it did not consider this issue. Thus, the appellate Court held the trial court erred in when it dismissed the complaint.
Any questions regarding this case may be directed to Ben Peoples at 410-653-0460 or cpeoples@tthlaw.com.
NEW JERSEY CASE SUMMARIES
Allstate New Jersey Insurance Co. v. Neurology Pain Associates
A-3104-09 (January 31, 2011)
Interim Actions taken by the National Arbitration Forum during an ongoing proceeding relating to the payment of PIP benefits are not subject to judicial review
Background
Plaintiff insurance company got into a dispute with its insured’s medical provider. The dispute was arbitrated, and an award was entered in favor of Plaintiff. Defendant filed an internal appeal, and an award was entered in favor of Defendant. Plaintiff filed an action in the trial court, alleging the arbitrator misapplied procedural rules during the internal appeal. The trial court entered an order containing directions to the arbitration panel concerning the procedural issue. The arbitrator appealed from the trial court's order which, inter alia, overruled the arbitrator's decision.
Holding
In reversing the trial court, the Appellate Division held the rules and regulations governing PIP dispute resolution proceedings do not authorize judicial review of an interlocutory order or other interim action taken by the arbitrator during an ongoing proceeding relating to the payment of PIP benefits. The court reasoned a premature entanglement of the judiciary in PIP arbitrations would run at cross-purposes with the legislative goal of achieving prompt reparation to accident victims, cost containment of automobile insurance, availability of insurance, and easing of the judicial caseload.
Any questions regarding this case may be directed to Eric J. Appelbaum at 215-564-2928 or eappelbaum@tthlaw.com.
Sklodowsky v. Lushis, Jr., Esq., et al.
A-3918-09T3 (App. Div. Feb. 2011) - Unpublished
The Appellate Division holds the entire controversy doctrine is not applicable in legal malpractice actions
Background
Plaintiff retained Defendant Attorney Lushis to represent him regarding the sale of real property on which he and his wife were residing. Plaintiff asserted he was the sole record owner of the property, and he wanted to transfer title to the property without the consent of his wife with whom he was having marital difficulties. Plaintiff alleged Attorney Lushis advised him that he could transfer title without his wife’s consent, but that she would have an interest in the proceeds of the sale.
Plaintiff filed a legal malpractice action against Defendant Lushis and his law firm alleging they erroneously advised him to enter into the sales agreement despite the requirements of N.J.S.A. 3B:28-3, which states that a married individual is entitled during his or her life to joint possession of any real property occupied as the principal marital residence. In response, Defendants asserted that Plaintiff’s claim of legal malpractice was barred by the entire controversy doctrine, which would have required Plaintiff to assert his legal malpractice action in a previously filed action involving Plaintiff and the buyers of the property. The trial court found the entire controversy doctrine did apply in this case, and rendered judgment in favor of Defendants Lushis and his law firm.
Holding
The Appellate Division reversed and ruled that the entire controversy doctrine was not applicable to legal malpractice cases. The Court reasoned application of the doctrine in this case would have required Plaintiff to bring his legal malpractice action against Defendants Lushis and his law firm in the prior action against the buyer, which would have resulted in a “chilling effect” of the attorney-client relations between Plaintiff and Defendants who had a continuing professional relationship at the time.
Any questions regarding this case may be directed to Oliver M. Bather at 610-332-7006 or obather@tthlaw.com.
G.D. v. Kenny, et al.
A-85-09 (Supreme Ct. January 31, 2011)
NJ Supreme Court holds the defense of truth to a defamation action is not barred by the existence of an expungement order
Background
Plaintiff G.D. worked as a part-time aide to a New Jersey state senate democratic nominee. During the campaign, Defendants hired an advertising firm who learned of G.D.’s 1993 drug conviction. Defendants composed two campaign flyers disparaging the candidate for his association with G.D., who was maintained to be “a DRUG DEALER who went to JAIL for FIVE YEARS for selling coke near a public school.”
G.D. filed suit against Defendants alleging torts of libel, casting G.D. in a false light, misappropriating his name and image, improper publication of private facts, invasion of privacy, intentional and negligent infliction of emotional distress, and civil conspiracy. G. D. argued his expunged conviction, as a matter of law, rendered the conviction a “non-event” such that it should be “deemed not to have occurred,” thereby preventing Defendants from asserting truth as a defense. The Appellate Division entered summary judgment in favor of Defendants, reasoning the truth of the information in the flyers could not be extinguished by the expungement order.
Holding
The New Jersey Supreme Court held the N.J. expungement statute specifically empowers a court to give defendants access to expunged records to establish truth of their assertions in a defamation action. Thus, if a court can provide access to expunged records to defendants claiming truth in a defamation action, then it follows the traditionally recognized defense of truth is not lost simply because of the existence of an expungement order.
Any questions regarding this case may be directed to Oliver M. Bather at 610-332-7006 or obather@tthlaw.com.
Simmons v Loose
A-6382-08T3 (App. Div. 2011)
NJ Appellate Division holds the destruction of private property is not a compensable damage to the property owner under the Tort Claims Act, Section 1983, or the takings clauses of the US Constitution and/or the NJ Constitution
Background
The NJ State Police executed a no-knock search warrant by using a ramming device and flash-bang device at a dwelling owned by Plaintiffs. The parties stipulated that the execution of the warrant caused $4,312.16 in property damages. Plaintiffs brought claims against the State Police, local police, and other government entities to recover for the property damage and for other alleged constitutional rights violations. The trial court granted summary judgment in favor of defendants as to all claims except for the claim for property damage, which was awarded based upon the takings clause. Appeal was filed.
Holding
The Appellate Division upheld the trial court's rulings on all issues except for the award of property damages in favor of Plaintiffs. The Appellate Division reversed the trial court stating that the execution of the search warrant was not a taking, but rather a trespass. The government did not put Plaintiffs' property to any productive use and therefore, no taking took place. Award of property damages in favor of Plaintiffs, reversed.
Any questions regarding this case may be directed to Winifred E. Campbell at 610-332-7006 or wcampbell@tthlaw.com.