General Liability eNotes


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TT&H eNotes: Liability: September 2017


TT&H LAWYERS IN COURT

Attorney Lou Long prevails on appeal, as the Pennsylvania Superior Court affirms the entry of declaratory judgment on a professional services exclusion.

The Superior Court of Pennsylvania affirmed a grant of declaratory judgment at the trial court level.  The declaratory judgment established that the professional services exclusion negated coverage under a business owners’ policy for claims brought by a massage customer for burns allegedly caused by a footbath machine.  The machine was to improve circulation in the feet for customers with diabetic neuropathy.  The massage therapy was performed at a day spa by a licensed cosmetologist. 

The Court ruled that the exclusion was not ambiguous and that it applied to massage therapy, because the state regulated the spa services and licensed the cosmetologist.  The service involved specialized knowledge and skill, and the machine was an integral part of the service performed.  The spa permitted only licensed cosmetologists to provide the footbath to customers.  The Court did, however, reject the insurer’s arguments that there was no insurable interest to support the policy which was issued to the spa manager, rather than her daughter, who actually owned the spa. The daughter operated the spa under a fictitious name, which was also referenced in the policy.  The Court explained that both the manager, as the lessor of the premises, and as an employee of the spa, and her daughter, as the spa owner, had expectations that their economic interests in the spa would be protected by the insurance policy, which was paid for from the spa’s checking account. 

The insurance company was represented at trial and on the appeal by Lou Long, Chair of TT&H’s Appellate Practice Group.  Lou can be contacted at (412) 926-1424 or at llong@tthaw.com.


TT&H Attorney Shayne McGrady wins summary judgment in Pike County premises liability action.

The Court of Common Pleas of Pike County granted a Motion for Summary Judgment filed by Attorney Shayne McGrady.  The action arose from a trip and fall at night while Plaintiff was walking on her driveway, looking for her pet.  The Plaintiff tripped due to an uneven area where the surface of the driveway meets the parking pad.  She filed suit against her landlords, and the landlord joined the co-tenant that constructed the parking pad.

In the motion, Attorney McGrady argued that the co-tenant did not owe the Plaintiff a duty of care, as both were possessors of land.  Further, Plaintiff was aware of the unevenness of the parking pad and driveway, and for five months was able to use it without issue.   Attorney McGrady also noted that Plaintiff was walking at night, with insufficient lighting.  Finding that the co-tenant did not owe a duty to the Plaintiff under the circumstances, the Court entered summary judgment.
 
Questions about this case can be directed to Shayne McGrady, at (570) 820-0240 ext. 8605 or smgrady@tthlaw.com.


SIGNIFICANT CASE SUMMARIES

FEDERAL CASE SUMMARY

Bristol-Myers Squibb Co. v. Superior Court of California

United States Supreme Court

137 S. Ct. 1773

Decided: June 19, 2017

Supreme Court’s holding narrows state’s exercise of specific jurisdiction when claimants are not residents of the forum state, and there is insufficient connection between the forum and the specific claims at issue.

Background

Six hundred (600) Plaintiffs brought a products liability action in California against Bristol-Myers Squibb (BMS), the prescription drug manufacturer Plavix. Most of the Plaintiffs were not residents of California. BMS has five research and laboratory facilities, sales representatives, and an advocacy office in California, employing over 400 employees there. However, BMS is incorporated in Delaware, is headquartered in New York, and 50% of its workforce is employed in New York and New Jersey.

Holding

Judge Alito, writing for the majority in an 8-1 decision, focused on the nonresidents of California. The nonresidents were not prescribed, did not buy, and did not take Plavix in California. They also were not injured in California. Since specific jurisdiction is limited to adjudicating controversies deriving from, or connected with, the controversy that establishes jurisdiction, pursuant to the Fourteenth Amendment’s due process clause, the nonresidents’ claims did not arise out of, or relate to, BMS’s contacts with California. In reaching this result, Judge Alito opined that for specific jurisdiction, “‘[a] corporation’s continuous activity of some sort within a state . . . is not enough to support a demand that the corporation be amenable to suits unrelated to that activity.’”

Judge Alito indicated that the 600 may still join together and bring a class action suit, under general jurisdiction principles, also known as all-purpose jurisdiction, against BMS where BMS is incorporated or headquartered. Plaintiffs also may bring a class action suit against BMS where Plaintiffs reside.

Questions about this case can be directed to Joe Holko, at (610) 332-7005 or jholko@tthlaw.com.


SIGNIFICANT CASE SUMMARIES

PENNSYLVANIA   |    MD    |    NEW JERSEY    |     VA

PENNSYLVANIA CASE SUMMARIES

Metro. Edison Co. v. City of Reading

Pennsylvania Supreme Court

162 A.3d 414

Decided: June 20, 2017

The public utility exception to governmental immunity applies to dangerous conditions within a city’s right-of-way when the city has knowledge of the condition and fails to remediate it, regardless of the original cause of the dangerous condition.

Background

City of Reading employees undertook construction work to repair sewer lines, which required them to excavate in the area of electrical lines owned by Metropolitan Edison. The electrical lines were encased in conduit and were located in the city’s right-of-way, near where other utility lines were buried, including the subject sewer line. In July, 2009, excavation work resulted in damage to the electrical conduit. Metropolitan Edison hired contractors to repair the conduit.

While completing the repair of the conduit, the contractor noticed, and advised city employees, that the excavation site was not properly shored, which could result in dirt under the electrical conduit eroding and/or collapsing. City employees continued to excavate without shoring the excavation site. Over the following weekend, heavy rain eroded the dirt under the electrical conduit, causing the conduit to collapse and cause damage to the electrical lines.

Metropolitan Edison brought a negligence action against the City, which resulted in a favorable verdict following a non-jury trial. The City of Reading appealed to the Commonwealth Court, which reversed the Trial Court and held that the public utility exception to governmental immunity did not apply, since the underlying negligent act was alleged negligent excavation, which is not an exception to immunity.

Holding

The Supreme Court reversed and held that the Trial Court properly entered judgment in favor of the electrical utility provider. The Court explained that the Commonwealth Court erred in determining the application of governmental immunity by focusing on the cause of the dangerous condition (negligent excavation), rather than the cause of the injury itself. Under the Political Subdivision Tort Claims Act, local government entities are immune from suit unless a specific exception applies, such as the public utility exception. Analyzing that provision, the Court found that local government entities are not immune from liability when: (1) injury results from a dangerous condition of a utility service facility owned by the local agency and located in its right-of-way; (2) the dangerous condition created a foreseeable risk of injury of the kind that occurred; (3) the local agency had notice of the dangerous condition or could be charged with notice; (4) despite said notice, the local agency failed to take appropriate remedial measures to cure the condition; and (5) the failure to remediate the condition was the cause of the injury.

Under the facts of the case, where the City had clear notice of the dangerous condition it created in its public utility right-of-way, the City of Reading could be held liable for negligence based on its failure to remediate the dangerous condition.

Questions about this case can be directed to Matthew Clayberger, at (717) 237-7150 or mclayberger@tthlaw.com.

 

Reed v. Brown

Pennsylvania Commonwealth Court

No. 670 C.D. 2016

Decided: July 13, 2017

Commonwealth Court holds that in action for defamation, the “transaction or occurrence” giving rise to the cause of action occurs in the county where publication of the defamatory statement is made.

Background

Reed, a police officer, was employed by the Borough of Colwyn (in Delaware County) for four years. During an open meeting before the Borough Council, he resigned. His resignation was accepted and he was “wished well.” The following year, Reed applied for a position with the City of Philadelphia. On his application, he listed his employment with the Borough, and he indicated that he had voluntarily resigned. However, when the City’s agent contacted the Borough to confirm, the Borough (through Defendant Brown) advised the City that Reed had been terminated due to misconduct and was not eligible for rehire.

Reed filed an action in Philadelphia County alleging, among other things, that this inaccurate statement was defamatory. The Borough and Brown filed preliminary objections to the Complaint, arguing that venue in Philadelphia was improper under Pa.R.C.P. No. 1028(a)(1) and that the matter should be transferred to Delaware County. The Philadelphia County Court of Common Pleas granted the preliminary objections, noting that the claim was based on the allegedly false reporting of why Reed left his job, and that the reporting had all occurred in Delaware County. The Court held that “[a]lthough relevant conduct in this case also occurred in Philadelphia County, the cause of action arose in Delaware County and the transactions upon which the cause of action arise, (i.e. the conduct of Defendant Brown) also occurred in Delaware County.”

Holding

The Commonwealth Court reversed, holding the venue in Philadelphia County was proper. In an action for defamation, an essential element of the cause of action is publication of the defamatory statement. Here, the publication to City officials, had occurred in Philadelphia. The Court reversed and remanded the matter back to Philadelphia County.

Questions about this case can be directed to Lindsey Cook, at (717) 237-7111 or lcook@tthlaw.com.

 

Nicolas v. Zolner

Pennsylvania Superior Court

No. 1261 MDA 2016

Decided: August 15, 2017

Service of original process upon the insurer rather than the insured will not withstand Preliminary Objection to improper service of process.

Background

On August 28, 2011, a tree on Defendant Zolner’s property was uprooted during a storm and fell on Plaintiff Nicolas’ 1979 Pontiac Trans Am. Plaintiff filed a Writ of Summons against the Defendant on August 19, 2013; however, the Writ was not served upon the Defendant. Without ever obtaining service of the Writ, Plaintiff filed a Complaint on July 7, 2015. Like the Writ, the Complaint was not served. Plaintiff provided the Writ and Complaint to Erie Insurance, the applicable insurance provider for the Defendant, in an attempt to resolve the claim without furthering litigation expenses.

On February 24, 2016, Defendant filed Preliminary Objections, seeking dismissal of the Complaint due to improper service of the Writ of Summons and Complaint. In response, Plaintiff filed a Praecipe to reinstate the Complaint and served the Complaint via the Sheriff on February 29, 2016. In opposing the Preliminary Objections, Plaintiff argued that the Defendant had actual notice of the suit, despite never being served. Furthermore, the Plaintiff argued the Complaint should not be dismissed solely for lack of service. Defendant’s Preliminary Objections were sustained, and the Complaint dismissed.

Holding

Plaintiff’s appeal to the Superior Court failed. The Superior Court noted that the Plaintiff failed to serve both the Writ of Summons and Complaint within thirty (30) days, as required by the Pennsylvania Rules of Civil Procedure. Further, Plaintiff failed to make even a good faith effort to complete service. Although Plaintiff served the pleadings upon the insurer, this does not suffice as “actual notice” upon the Defendant.

Questions about this case can be directed to Shayne McGrady, at (570) 820-0240 ext. 8605 or smgrady@tthlaw.com.

 

Castaldi v. Light Acadia 11-89, LLC

Pennsylvania Superior Court

2017 Pa. Super. 216

Decided: July 24, 2017

Superior Court upholds Trial Court’s grant of summary judgment based on the hills and ridges and landlord out of possession doctrines.

Background

Plaintiff was walking across a parking lot at a shopping center owned by Defendant Light Arcadia when she slipped on ice and fell. Plaintiff brought suit against Light Arcadia as well as Defendant Grass Works who supplied snow and ice removal for the shopping center. Grass Works filed a Motion for Summary Judgment which was granted in favor of both Grass Works and Light Arcadia. The Trial Court found that the hills and ridges doctrine protected both Defendants while Light Arcadia additionally was a landlord out of possession.

Holding

Superior Court affirms. The hills and ridges doctrine protects landowners from having to ensure their property is continuously free of snow and ice, which is an impossible burden. In order to recover for a fall on an ice or snow covered surface, a plaintiff is required to prove: that snow and ice had accumulated on the pavement in ridges and elevations of such size as to unreasonably obstruct travel and constitute a danger to pedestrians; that the property owner had notice, either actual or constructive, of the existence of such condition; and that it was the dangerous accumulation of snow and ice which cause the plaintiff to fall. With regard to Light Arcadia, the Court found Plaintiff failed to set out a factual scenario to meet these three elements. The Court further found that Light Arcadia was protected by the landlord out of possession doctrine which states that a landlord out of possession is not liable for injuries to third parties as it has no duty to such persons.

With regard to Grass Works, the Court found that there was an ongoing winter event and Grass Works was actively salting the parking lot when Plaintiff fell. Accordingly, Grass Works was protected by the hills and ridges doctrine as well.

Questions about this case can be directed to Joseph Shields, at (570) 820-0240 or jshields@tthlaw.com.


MARYLAND CASE SUMMARIES

White Pine Ins. Co. v. Taylor

Maryland Court of Appeals

No. 493, September Term, 2016

Decided: July 27, 2017

Insurance companies have the burden to prove policy claim exclusions apply. A court may not reward the Plaintiff an amount greater than requested in the complaint’s ad damnum clause.

Background

Defendant Taylor opened the door to exit the West End Pub when he was shot in the leg. No suspect was apprehended, and there is no evidence in the record of who shot the gun or why. West End Pub was insured by White Pine Insurance Company; White Pine denied the Pub’s request to provide a defense to Taylor’s negligence claim. West End Pub and Taylor reached a consent judgment in which the Pub admitted negligence, agreed to a settlement of $100,000, and assigned its claims against White Pine for denying indemnity coverage to Taylor. Thereafter, Taylor filed a breach of contract claim against White Pine for $74,999.99. White Pine claimed that its policy excluded claims for bodily injury that resulted from “Assault,” “Battery,” or “Assault and Battery” committed by a person, and the fact that Taylor was shot by a gun is enough to prove battery. After a bench trial, the court awarded Taylor $100,000 against White Pine.

Holding

The Court of Special Appeals held that White Pine had the burden to prove that the policy exclusion applied. Because the definitions of what constituted an “assault,” “battery,” or “assault and battery” were ambiguous, the definition was construed against the insurance company. Therefore, because Taylor was shot in the leg, the policy exclusion is narrowly interpreted to bar coverage for bodily injuries that arise out of a “battery.” Under Maryland law, “battery” requires an intentional act. There was no evidence regarding the intent of the alleged shooter; thus, there was insufficient evidence to determine whether a battery occurred. Because White Pines had the burden of proving that the battery exclusion applied and it could not prove intent, it failed to carry its burden. Finally, in the absence of an amendment to the ad damnum clause, the Trial Court commits reversible error by not reducing the judgment to the amount of the ad damnum clause. Therefore, the case was remanded to the circuit court for entry of judgment in favor of Taylor and against White Pine in the amount of $74,999.99.

Questions about this case can be directed to Renita Collins, at (410) 653-0460 or rcollins@tthlaw.com.

 

Basso v. Campos

Maryland Court of Special Appeals

No. 364, September Term, 2016

Decided: July 27, 2017

“An expert witnesses’ opinion must be sufficiently definite and certain to be admissible.”

Background

Plaintiff Basso purchased a home from Defendants Szuchman and Jose Rodriguez. Szuchman and Rodriguez were agents for Defendant Juan Campos, d/b/a Compos & Associates Realty Campos, a real estate broker. Basso, Szuchman and Rodriguez entered into a contract for the purchase of a home. When the home inspection was completed the inspector did not note that there was evidence of flooding or water seepage in the basement, but only stated that the exterior basement stairwell drain should be kept free of all debris to prevent water from entering the basement. The Sale closed and Basso moved into the home. Over the next few years, Basso experienced flooding in the basement every time there was a substantial rainstorm.

Basso’s suit against Szuchman, Rodriguez, and Campos alleged that they had actual knowledge of repeated flooding in the basement and that they attempted to conceal the defect by removing bushes that lined the side of the home and replacing them with poured concrete. At trial, Basso attempted to offer the testimony of his home inspector expert that, based on the severity of the flooding to his home after he moved in and based on the number of rain storms that were documented by the weather center to have occurred while Szuchman and Rodriguez owned the home, it was likely that the property would have had “flooding issues” while Szuchman and Rodriguez owned the home. The Trial Court excluded this testimony. At the close of Basso’s case, the Trial Court granted judgment for Defendants because Basso failed to meet the burden to show that the Defendants had knowledge that flooding conditions were present while they owned the property.

Holding

The Court of Special Appeals considered the sole question whether the Trial Court erred by precluding the testimony of the home inspector expert on the likelihood that the basement would have flooded while Szuchman and Rodriguez owned the home. The Court concluded that because the home was inspected by the expert less than two years after Szuchman and Rodriguez renovated it and observed grading problems that would cause water to pool in the basement, the expert’s opinion was sufficiently definite and certain to be admissible. The Court held that the preclusion of the opinion to this effect was prejudicial to Basso’s case and, as such, the case was remanded to admit the opinion.

Questions about this case can be directed to Salvatore Cardile, at (410) 653-0460 or scardile@tthlaw.com.


NEW JERSEY CASE SUMMARIES

Ferreira v. Quezada

New Jersey Superior Court, Appellate Division

No. A-1541-15T4

Decided: August 7, 2017

No respondeat superior claim against employer where tortfeasor employee caused accident during normal commute.

Background

This matter arose from a fatal accident in which Defendant driver, on his way to work, struck and killed a pedestrian. At the time, Defendant driver was commuting to his job as a maintenance man at an apartment building. The Plaintiff, decedent’s estate, brought a claim against the Defendant driver’s employer, amongst others. Plaintiff argued the employer was responsible for the Defendant driver’s negligence under the doctrine of respondeat superior. The employer moved for summary judgment, which was granted. The Trial Court ruled that Defendant driver was not acting within the scope of his employment when the accident occurred.

Holding

The Appellate Division considered the details of the employer’s connection to and control over the Defendant driver’s commute at the time of the accident. The Court noted that the vehicle was owned by the Defendant driver’s wife and contained tools and materials for use at Defendant driver’s job. Some of the tools and materials were owned by Defendant driver while others were owned by his employer. However, the employer did not require the Defendant driver to carry any of these materials or tools to and from the job site. The Court further observed that the Defendant driver was not paid for his time spent commuting or even reimbursed for mileage. Analyzing these facts under the “going and coming rule,” the Court cited Mannes v. Healey, 306 N.J. Super. 351, 353-55 (App. Div. 1997), with approval: “The fact that [the employee] was on [his] way to the office to perform some work-related duty is not sufficient in and of itself to constitute a mission undertaken on [the employer's] behalf.” The Appellate Division concluded that the Trial Court properly applied this rule and that there was no evidence to suggest that the “special mission” exception to the rule was applicable in this case.

Questions about this case can be directed to Daniel Seger, at (908) 574-0513 or dseger@tthlaw.com.

 

Lloyd v. Underpass Enters., Inc.

New Jersey Superior Court, Appellate Division

No. A-5228-15T2

Decided: August 4, 2017

Superior Court holds Gentleman’s Club owed no legal duty to patron injured in altercation outside the premises.

Background

Plaintiff Lloyd appealed from the Trial Court’s order dismissing his personal injury claim against the Harem, a gentlemen’s club.

The underlying litigation stems from an altercation that occurred outside the Harem. On the night in question, Lloyd and a fellow co-worker, Cecil George, attended the Harem, along with Meg James, a friend of George. A fight broke out between George and James inside the Harem. Bouncers broke up the fight and escorted George and James outside. Lloyd followed voluntarily. While standing in the parking lot, Lloyd saw James rushing toward George. Lloyd stepped in between James and George to act as a barrier and protect George. Lloyd sustained head injuries as a result.

Holding

The Superior Court affirmed the dismissal of the claim, holding that the Harem did not have a legal duty to Lloyd because the incident was not foreseeable. The Court found that it was not foreseeable that Lloyd, not in any way involved in the fight inside, would voluntarily leave the Harem and put himself between two formerly fighting patrons. The Court noted it was simply not foreseeable that Lloyd would have been in any kind of danger outside. Lloyd voluntarily placed himself in harm’s way. There was no duty on the part of the Harem to protect Lloyd.

Questions about this case can be directed to Michael Bishop, at (610) 332-7009 or mbishop@tthlaw.com.


VIRGINIA CASE SUMMARY

Allison v. Brown

Virginia Supreme Court

239 Va. 617

Decided: July 27, 2017

Plaintiff failed to plead battery in complaint and failed to establish informed consent claim.

Background

Plaintiff Brown, a breast cancer survivor, was originally scheduled to undergo bilateral breast revision surgery performed by Defendant Dr. Allison. Plaintiff alleged that she later changed her mind and decided to have surgery on the right side only, an allegation Defendant denied. Following the surgery, in which Defendant Allison operated on both breasts, complications developed in the left breast. Plaintiff brought suit against Defendant Allison and his practice, alleging a count of negligence against each. The initial Complaint made no mention of the word “battery,” but did allege surgery on the wrong breast. She later filed an Amended Complaint, adding a count of battery against Defendant Allison. The battery count was ultimately dismissed as untimely based on a finding that Plaintiff had failed to diligently pursue the claim.

The first trial of this matter resulted in a hung jury. At the second trial, Defendants moved to strike any evidence of informed consent, since the battery count had been struck. Defendants also challenged the lack of informed consent claim because Plaintiff’s expert designation expressed opinions only on the absence of consent, not lack of informed consent. Defendants ultimately objected to both the battery instruction and informed consent instruction. The Trial Court overruled both objections and gave battery, informed consent, and negligence instructions. The jury returned a verdict for Plaintiff.

Holding

Giving the jury instruction on battery was reversible error because the initial Complaint did not allege a claim for battery and the battery count contained in the Amended Complaint was struck. Therefore, Defendant was not put on notice of the battery claim. Moreover, to succeed on a lack of informed consent theory, a patient must prove that, had the physician made the proper disclosure, the patient would not have agreed to the treatment or procedure. Here, Plaintiff proved only that she did not give consent for surgery on her left breast not, as required, that she would not have elected to have the surgery on the left side in the face of the proper disclosures. Therefore, Plaintiff failed to establish proximate cause, and her informed consent claim failed as a matter of law. Judgment reversed and remanded for a new trial on the negligence theory only.

Questions about this case can be directed to Lacey Conn, at (202) 945-9502 or lconn@tthlaw.com.