eNotes: Liability – August 2020
August 01, 2020
PENNSYLVANIA CLIENT ADVISORY
Oberdorf, et al. v. Amazon.com, Inc.
Pennsylvania Supreme Court
No. 41 EM 2020
Decided: July 21, 2020
Pennsylvania Supreme Court grants Petition from Third Circuit to decide if Amazon.com is a “seller” for purposes of the Restatement (Second) of Torts § 402A for third-party sales on the company’s e-commerce platform.
Last summer, in Oberdorf v. Amazon.com, Inc., 930 F.3d 136, 142 (3d Cir.), vacated and reh’g en banc granted, 936 F.3d 182 (3d Cir. 2019), a three judge panel in the Third Circuit held that Amazon is a “seller” for purposes of § 402A of the Second Restatement of Torts and thus subject to the Pennsylvania strict products liability law in a case involving dog leash sold on Amazon from a third-party vendor. The Third Circuit re-heard the case en banc, and on June 2, 2020 certified a question of law to the Pennsylvania Supreme Court. See Oberdorf v. Amazon.com Inc., No. 18-1041, 2020 U.S. App. LEXIS 17974 (3d Cir. June 2, 2020).
In the case, Plaintiff Heather Oberdorf was permanently blinded in one eye when a retractable dog leash broke from her dog’s collar and recoiled into her face. She had purchased the dog leash on Amazon from a third-party vendor. Plaintiff sued Amazon for strict liability and negligence, for failure to warn and design defect. Summary Judgement was granted to Amazon in part on the basis that it did not sell the dog leash, and only facilitated the purchase from another party on its website.
The Third Circuit panel reversed the District Court, and found that the degree of control Amazon retained over the entire process third-party for vendors to sell products on its website warranted finding that it was a “seller” under § 402A. Amazon was the only member of the marketing chain available to the Plaintiff for redress, the company was fully capable of removing unsafe products from its site, and Amazon was in a better position to police the conduct of its the third-party vendors due to an on-going relationship.
The Pennsylvania Supreme Court granted the Third Circuit’s Petition for Certification of Question of Law, on the following issue:
Under Pennsylvania law, is an e-commerce business, like Amazon, strictly liable for a defective product that was purchased on its platform from a third-party vendor, which product was neither possessed nor owned by the e-commerce business?
The final resolution of this question by the Court likely will have major implications not only for Amazon, but for all e-commerce conducted in Pennsylvania.
Thomas Thomas & Hafer is pleased to announce the election of attorneys to positions on the Board of Directors of the Pennsylvania Defense Institute (PDI). The PDI annual conference was held July 15–17, 2020, at the Omni Bedford Springs Resort. PDI is one of the largest organizations of its kind in the country. It is relentlessly dedicated to the defense of civil claims through advocacy and education. We are proud of our attorneys and commend them for this recent accomplishment.
Executive Committee – President Monica O’Neill (Philadelphia)
North Region – Vice-President Ryan Blazure (Wilkes-Barre)
West Region – Director Rebecca Sember-Izsak (Pittsburgh)
At-Large – Director Joe Holko (Allentown)
For additional information, please contact Monica O’Neill, at (267) 861-7581 or firstname.lastname@example.org.
SIGNIFICANT CASE SUMMARIES
PENNSYLVANIA CASE SUMMARIES
Erie Ins. Exch. v. Moore
Pennsylvania Supreme Court
No. 20 WAP 2018
Decided: April 22, 2020
Supreme Court finds a duty to defend is triggered by the “four corners of the complaint” which alleges an accidental shooting during a murder-suicide attempt.
Harold McCutcheon, Jr. broke into the home of his ex-wife, Terry McCutcheon, to shoot and kill her, and then kill himself. McCutcheon succeeded in his plan to kill Terry, but before he killed himself, Terry’s boyfriend, Richard Carly, arrived at the home. When Terry did not answer the door, Carly placed his hand on the doorknob and the door “suddenly” pulled inward and McCutcheon grabbed Carly and the two engaged in a struggle. During that struggle, Carly alleged that McCutcheon was “knocking things around, and in the process [he] negligently, carelessly, and recklessly caused the weapon to be fired which struck [Carly] in the face.” McCutcheon then killed himself. Carly sued McCutcheon’s estate, which sought coverage for the lawsuit under two insurance policies (a homeowner’s policy and a personal catastrophe policy) issued by Erie.
Erie filed a declaratory judgment action on the basis that the two policies defined a covered “occurrence,” in relevant part, as an “accident,” but excluded coverage for “bodily injury . . . expected or intended by anyone we protect.” Based on the exclusion, Erie concluded it owed no coverage because Carly’s injuries were not caused by an accidental “occurrence,” but rather were “expected or intended” by McCutcheon. The Trial Court agreed, reasoning that the shooting resulted from human agency and that the prospect of injury from a gun fired during a physical struggle was reasonably anticipated, and that use of the terms “negligently, carelessly, and recklessly” in the complaint did not result in a duty to defend when there was no evidence the shooting was accidental or negligent; rather, the Court concluded McCutcheon “intended to cause serious harm to Carly.” The Superior Court reversed, recognizing that the complaint’s “legal terminology” of negligence and carelessness “cannot control the outcome,” but nevertheless determined that the allegations “fairly portray a situation in which injury may have been inflicted unintentionally.”
In a 4-3 decision, the Supreme Court affirmed the Superior Court, stating that an “insurer’s duty to defend is broader than its duty to indemnify, and the duty to defend is triggered ‘if the factual allegations of the complaint on its face encompass an injury that is actually or potentially within the scope of the policy.’” To the extent there are undetermined facts that might impact coverage, the insurer must defend until the claim “is narrowed to one patently outside the policy coverage.” Here, the Court held that the “four corners of the complaint” – when taken as true and liberally construed in favor of the insured – make out an accidental shooting for which Erie has a duty to defend. The Court added that the policies did not contain exclusions for incidents involving firearms or the commission of a crime, which if they had, might have led to a different result.
Questions about this case can be directed to Julia Morrison, at (717) 441-7056 or email@example.com.
Griffis v. Workers’ Comp. Appeal Bd.
Pennsylvania Commonwealth Court
No. 273 C.D. 2019
Decided: July 15, 2020
The Commonwealth Court upheld the Board’s Resolution which allowed Employer to recover a lump sum payment from Claimant to reimburse it for the amounts paid in indemnity benefits between the date of her third party recovery in 2013 and the 2017 WCJ Decision. Employer was entitled to assert its subrogation rights after the date of the Claimant’s third party recovery because the subrogation limitations of Section 508 of MCARE were no longer applicable as the indemnity constituted an advance payment of her “future installments of compensation.”
In April of 2009, Claimant sustained a work-related injury to her neck and, during her initial treatment, Claimant’s injury was not properly diagnosed and/or treated. As a result, Claimant underwent emergency surgery which left her with ongoing neurological dysfunctions. Claimant then filed a medical malpractice action against the provider who initially treated her. The medical malpractice action was submitted to arbitration and Claimant was awarded $2.5 million and her husband was awarded $375,000. Pursuant to a high-low agreement entered into by the parties, the total award was capped at $2.4 million with Claimant receiving $2.088 million.
After the arbitration in the third party case, the Employer filed modification petitions seeking to subrogate Claimant’s third-party recover under Section 319. The Board affirmed a Workers’ Compensation Judge’s (WCJ) decision to grant Employer’s Modification and Suspension Petition, directing Claimant to pay a lump sum from her third-party recovery to the Employer and suspended benefits until the Employer was reimbursed. The matter was eventually appealed to the Commonwealth Court with the Claimant arguing that the principles set for in Section 508 of the MCARE Act and Section 319 of the WC Act only authorized the Employer to subrogate Claimant’s future indemnity benefits; however, this entitlement, at least in the medical malpractice context, did not arise until the 2017 WCJ decision that officially recognized the subrogation interest. Moreover, there was no accrued “lien” that Claimant had to pay Employer because its entitlement to recover did not begin until Employer proved its case on its modification petition. Absent that determination, there was no “overpayment” for which Claimant had to immediately repay Employer in a lump sum.
The Commonwealth Court held that Protz, though Section 319, expressly allows for the recovery of payments that an employer makes on a claimant’s behalf following the resolution of the claimant’s third-party action. Benefits paid prior to the date of the third-party recovery are not subject to subrogation per Section 508(a) and (c) of the MCARE Act as they should not be included in calculating a claimant’s damages. In this case, because four years had elapsed between the date of Claimant’s third-party recovery and approval of Employer’s request for subrogation, Employer paid four years’ worth of benefits that are considered “future” benefits (occurring after the third-party arbitration decision). The date subrogation is approved is not the relevant date in this inquiry; it is the date of the Claimant’s third-party recovery that is determinative.
Questions about this case can be directed to John Lucy, at (717) 441-7067 or firstname.lastname@example.org.
Charlton v. Troy
Pennsylvania Superior Court
N0. 2937 EDA 2018, 2020 Pa Super. 170
Decided: July 16, 2020
Forty million dollar medical malpractice judgment vacated and remanded when improper hearsay from textbook taints trial.
Plaintiffs filed a medical malpractice action against an obstetrician-gynecologist and hospital arising from a “footing breech” delivery of the second of twin girls. The second baby was born with a spinal cord injury and permanent disabilities to her upper and lower extremities. Plaintiffs’ experts testified at trial that Dr. Troy caused the injuries by delivering the baby with a malpositioned head or exerting too much traction on the head. In addition, they testified that Dr. Troy’s treatment fell below the appropriate standard of care because he failed to monitor the baby’s head position with pre-delivery and ongoing ultra sounds, failed to perform a C-section, and applied too much pressure on the baby resulting in a “snapping” or “popping” of the baby’s spinal cord. Defendants’ experts vigorously disagreed and asserted that Dr. Troy complied with all appropriate standards of care, used the Mauriceau maneuver to confirm that the baby’s head was in the proper flexed position. They further asserted that the spinal cord injury occurred in utero since there was one placenta, but each baby had her own sac. Moreover, Defendants’ experts opined that the snapping or popping sound did not come from the baby and nothing Dr. Troy did caused the sound.
During trial, one of Plaintiffs’ experts referenced the textbook Neurology of the Newborn, which discusses the association of a snapping or popping sound during delivery with the tearing of the dura of the baby’s spinal cord. Over Dr. Troy’s attorney’s repeated objections whenever the textbook was mentioned, Plaintiffs’ expert buttressed his opinion by referencing the textbook as a classic textbook that represented decades of child neurology wisdom about newborns and that the popping or snapping sound was the tearing of the spinal cord in this instance. However, Plaintiff’s’ expert did not testify that the textbook was authoritative or reliable. Complicating matters, Plaintiffs’ attorney cross-examined Dr. Troy with the same textbook and had him read the author’s qualifications out loud to the jury. Plaintiffs’ attorney then read from the textbook during closing arguments. The jury returned a verdict in favor of Plaintiffs and against Dr. Troy and the hospital in the amount of $40,258,000. The Court then added delay damages to that amount. Defendants’ post trial motions were denied and Defendants appealed to the Superior Court.
While the Defendants’ raised several issues on appeal, the Court focused on the harmful effect of introducing the textbook as substantive evidence through Plaintiffs’ expert, using it to cross examine Dr. Troy, and then reading from it during closing argument. However, Plaintiffs’ attorney did not lay a proper foundation for its use at trial, i.e., none of the experts testified that the textbook was authoritative or reliable, nor did Dr. Troy’s testimony open the door for its use, such that referring to it and reading from it was hearsay. The Court stated: “in sum, because the error in the admission of this evidence was ‘of such consequence that, like a dash of ink in a can of milk, it cannot be strained out, the only remedy, so justice may not ingest a tainted fare, is a new trial.’” Accordingly, the Court vacated the judgment and remanded the case for a new trial.
Questions about this case can be directed to Joe Holko, at (610) 332-7005 or email@example.com.
Krapf v. Redner’s Mkts., Inc.
Pennsylvania Superior Court
No. 2838 EDA 2019
Decided: July 1, 2020
Summary Judgment for grocery store affirmed where Plaintiff failed to establish breach of any duty owed customer.
Plaintiff, a 100 year-old woman, fell while walking on a linoleum floor in a hallway leading to a restroom in a grocery store. Plaintiff sued alleging a defect in one of the tiles on the floor. Although Plaintiff testified at deposition that her foot got stuck on a spot she identified in a photo, she did not know what caused her to fall and could not recall whether the spot had anything to do with her fall. Plaintiff told her adult granddaughter who found her on the floor that “she just went down.” A day later, the granddaughter saw a chip in a tile near where Plaintiff had fallen. A Redner’s employee testified that Plaintiff told him that she felt dizzy and fainted. An EMT who transported Plaintiff to the hospital similarly testified that Plaintiff reported that she became dizzy and fell. The Trial Court granted summary judgment in favor of Redner’s because Plaintiff did not establish a defective or dangerous condition.
On appeal to the Superior Court, Plaintiff argued that her testimony that her foot got stuck in the area where there was a chip in the tile created a genuine issue of material fact to thwart summary judgment. The Court noted that Plaintiff’s deposition testimony made clear that she was unable to determine what caused her fall so she could not establish the element of causation. There was no evidence that the spot constituted a dangerous or defective condition and no evidence as to how long the condition existed. The Court further dismissed Plaintiff’s argument that res ipsa loquitur applied because Plaintiff could not explain what caused her fall, there was no evidence that the chip in the tile was dangerous or how long it existed, and the record supported an alternate theory of causation; that the Plaintiff became dizzy and fell or fainted.
In affirming the judgment of the Trial Court, the Superior Court held that the Trial Court did not err because without evidence to establish that the tile was defective or dangerous, and since another possible cause for the fall existed, res ipsa loquitur was inapplicable. Further, even considering the elevated duty of care owed to invitees, Plaintiff produced no evidence that Redner’s violated an established standard in not repairing the chip in order to establish a breach of duty.
Questions about this case can be directed to James Swartz, III, at (610) 332-7028 or firstname.lastname@example.org.
Wallace v. State Farm Mut. Ins. Co.
Pennsylvania Superior Court
No. 1428 EDA 2019
Decided: June 30, 2020
Award of sanctions for attorneys’ fees and costs against attorney for filing frivolous appeal awarded sua sponte by Superior Court and amount of award affirmed upon subsequent appeal.
Wallace was an insured under a UIM policy issued by State Farm that contained an arbitration clause requiring all disputes as to coverage be submitted to arbitration, with each party choosing an arbitrator and the chosen arbitrators choosing a neutral. In 2002, Wallace was involved in an automobile accident with an underinsured motorist. In 2008, after believing that State Farm failed to pay to her all the proceeds to which she was entitled to under the UIM policy, Wallace filed a petition for a neutral arbitrator with the Court. After numerous delays and the replacement of the original neutral arbitrator, the UIM hearing was set for 11/24/2014. Thereafter, Wallace’s new attorney, Elliot Tolan, requested a new hearing date and announced his intent to withdraw as counsel. The hearing was rescheduled to 1/19/2015; however, Attorney Tolan never withdrew as counsel for Wallace.
A week before the hearing, Wallace and Allen Feingold, Wallace’s prior attorney before he was suspended in 2006 and disbarred in 2008, filed a Complaint against State Farm and it’s UIM arbitrator, for numerous causes of action related to the UIM matter and a third party tort matter. Wallace, Attorney Tolan, and her purported appointed arbitrator all failed to appear for the UIM hearing. The sitting arbitrators refused to recuse themselves in the matter and entered an award in favor of State Farm, noting that Wallace had failed to appear. Wallace petitioned the trial court to set aside the arbitration award. Initially, the Court granted the request, but after a timely motion for reconsideration, briefing and a rule to show cause hearing, the Court vacated its previous order and entered an order confirming the award in favor of State Farm. This Order was appealed to the Superior Court.
The Superior Court determined that Wallace had waived all issues for appeal based on her failure to comply with the rules of civil procedure and her failure to preserve her objection to the participation of the court appointed neutral arbitrator. The Superior Court, sua sponte further imposed sanctions on Attorney Tolan pursuant to Pa.R.A.P. 2744 finding that Attorney Tolan knew that the appeal was frivolous because Wallace had not preserved her objection at the arbitration. The Superior Court remanded the matter to the Trial Court to consider the issue of attorneys’ fees and costs. A motion to reconsider and a Petition for Allowance of appeal to the Pennsylvania Supreme Court were both denied.
The Trial Court, on remand, awarded fees and costs in the amount of $6,158 and Wallace filed an appeal to that order questioning whether the Superior Court was permitted to sua sponte grant attorneys’ fees pursuant to Pa. R.C.P. 2744 in the initial appeal and whether the award of the Trial Court was proper without an evidentiary hearing.
The Superior Court determined that Wallace could not re-visit the sua sponte award of attorney fees as all appeals as to that issue had been exhausted and the ruling was “the law of the case.” The Superior Court noted it had addressed the issue of attorneys’ fees, found them warranted and all appeals of that ruling were exhausted. The law of the case doctrine prevented the re-opening of questions already decided by the court upon a second appeal in the same action. The Superior Court also held that no evidentiary hearing was necessary as to the issue of the fee award. The Superior Court noted that it had already determined that sanctions were proper during the initial appeal based on Attorney Tolan’s obdurate and vexatious prosecution of the frivolous appeal. Thus, there was no basis for the Trial Court to conduct an evidentiary hearing on the issue. Further, State Farms’ Petition for fees and costs was accompanied by detailed billing records and an affidavit of counsel that the fees and hours were fair, reasonable and customary and Wallace had opportunity to respond. The Trial Court reviewed the evidence of record and struck entries that it did not believe to be related to the appeal. Based on this record, the Superior Court determined that there was no abuse of discretion in awarding the fees without an evidentiary hearing.
Questions about this case can be directed to Rebecca Sember Izsak, at (412) 926-1446 or email@example.com.
Murray v. Am. Lafrance, LLC
Pennsylvania Superior Court
2020 PA Super. 149
Decided: June 25, 20220
Defendant’s failure to affix notice to plead to preliminary objections raising issues of fact did not excuse Plaintiff from raising appealed issue.
Plaintiffs were comprised of several individuals from Massachusetts, New York, and Florida who sued Defendants for injuries alleged to have occurred in New York as a result of excessive sound exposure from fire engine sirens that were designed and manufactured by Defendants in Illinois. Defendants filed preliminary objections to the Plaintiffs’ complaints for lack of personal jurisdiction and supported same with an affidavit describing Defendants’ limited activity in Pennsylvania. Given that Defendants were bringing preliminary objections based on lack of jurisdiction, they were required to endorse the preliminary objections with a notice to plead. Although Defendants did not affix a notice to plead to their preliminary objections, Plaintiffs filed a response and memorandum of law asserting that there was personal jurisdiction based on Defendants alleged continuous and systematic contacts with Pennsylvania. Plaintiffs did not argue that Defendants were subject to personal jurisdiction based on their registration of foreign businesses with the Commonwealth of Pennsylvania. The Trial Court sustained Defendants’ Preliminary Objections, concluding that Defendants alleged contacts with Pennsylvania did not satisfy the due process standard such that they were subject personal jurisdiction in Pennsylvania. Plaintiffs appealed and argued for the first time that Defendants were subject to personal jurisdiction based on their registration as foreign corporations in Pennsylvania. Plaintiffs argued that they did not waive this issue because they were not technically required to respond to Defendants’ Preliminary Objections because the Preliminary Objections did not contain a notice to plead.
The Superior Court noted that the burden of proving personal jurisdiction shifted to the Plaintiffs once Defendants supported their jurisdiction challenge to personal jurisdiction with evidence and that Plaintiffs waived their argument that personal jurisdiction was appropriate based on Defendants’ registration as foreign corporations with Pennsylvania. Accordingly, the Superior Court did not address the merits of Plaintiffs’ foreign registration argument. The Superior Court also noted that Defendants’ failure to affix a notice to plead to their Preliminary Objections did not matter because: (1) Plaintiffs responded anyway, and (2) had Plaintiffs not responded because of the lack of a notice to plead the effect would have been that Defendants’ factual averments would have been deemed denied. However, even if deemed denied, the affidavit evidence presented by Defendants would not have been undermined. Moreover, it would not have relieved Plaintiffs’ of their burden of demonstrating personal jurisdiction.
Questions about this case can be directed to Brook Dirlam, at (412) 926-1438 or firstname.lastname@example.org.
Brandt v. Master Force Constr.
Pennsylvania Superior Court
Nos. 1081 MDA 2019 and 1080 MDA 2019
Decided: April 21, 2020
In two related non-precedential opinions, the Superior Court affirms a non-jury trial judgment against a roofing contractor and subcontractor for violations of Home Improvement Consumer Protection Act (“HICPA”), 73 P.S. §§ 517.1 et seq., and the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 P.S. §§ 201-1 et seq.
These two appeals arise from the same non-jury trial held in October 2018. Plaintiffs John P. Brandt, O.D. and Karen Brandt were homeowners who had contracted with Defendant Master Force Construction Corp. for the replacement of their roof with a new metal roof. Master Force, without ever informing the homeowners, subcontracted the work to Defendant Keith Wilton. The metal roof was the both the wrong type of roof and improperly installed by Wilton and had to be replaced within a year following numerous damaging leaks in the roof. Plaintiffs brought claims against Master Force, Wilton, and related corporate entities, for violations of the HICPA and the UTPCPL, as well as breach of contract, breach of warranty, and negligence. Following a two day bench trial, the Judge found that the Defendants “acted in concert and conspired to deceive and defraud [homeowners] by intentional actions and inactions which included the purposeful manipulation of the many [d]efendants to obscure who was the actual party to the contract, the actual party doing the work[,] and the actual party responsible for any warranty.” The Judge found Defendants liable violating the HICPA because they charge Plaintiffs an extra $2,000 to perform a service already included in the Contract, and offered or advertised to perform work it had no intention of performing. These violations of HICPA were also violations of the UTPCL. The Plaintiffs were awarded actual damages of $74,216.05, which the court trebled, and attorney’s fees and costs of $195,159.20.
On appeal, the Superior Court found that the vast majority of the appellants’ issues on appeal were either waived, or properly supported by the evidence at trial. The Trial Judge was within his discretion to award treble damages and attorney’s fees. The Court had concluded that “[w]ith all [of] the deceit, trickery, chicanery[,] and underhandedness that Defendants utilized in this home improvement project[,] treble damages are warranted[,]” and the Superior Court found that conclusion supported by the evidence. The Superior Court also affirmed the judgment against all Defendants based on the finding they had intentionally acted in concert.
The Superior Court affirmed the Trial Court’s verdict and the full award against the Defendants, including the award of treble damages and attorney’s fees for violations of both the HICPA and UTPCPL.
Questions about this case can be directed to Rick Murphy, at (412) 926-1443 or email@example.com.
MARYLAND CASE SUMMARY
Darlene Barclay v. Castruccio
Maryland Court of Appeals
No. 30, September Term, 2019
Decided: June 30, 2020
Maryland will recognize the tort of intentional interference with an inheritance or gift.
Darlene Barclay, the residuary beneficiary of the Estate of Dr. Peter A. Castruccio, filed suit against Dr. Castruccio’s widow, Sadie Castruccio, alleging Ms. Castruccio maliciously depleted Ms. Barclay’s inheritance by filing countless groundless suits. By way of example, litigation surrounding Dr. Castruccio’s estate had been before the Court of Special Appeals eleven times. After countless actions filed subsequent to Dr. Castruccio’s death and years of litigation, Ms. Barclay filed a Complaint alleging intentional interference with expectancy, malicious use of process, and abuse of process. Ms. Castruccio filed a Motion to dismiss which was granted finding the tort of interference with inheritance or gift is not recognized as a tort in Maryland.
Ms. Barclay argued that Maryland should recognize the tort of intentional interference with inheritance or gift as set forth in Section 19 of the Restatement of Torts. This tort is an extension of intentional interference with economic contractual relations. The new tort recognizes a defendant is subject to liability for interference with an inheritance or gift if: (1) the plaintiff had a reasonable expectation of receiving an inheritance or gift; (2) the defendant committed an intentional and independent legal wrong; (3) the defendant’s purpose was to interfere with the plaintiff’s expectancy; (4) the defendant’s conduct caused the expectancy to fail; and (5) the plaintiff suffered an injury.
Maryland will recognize the tort of intentional interference with a prospective gift or inheritance. The Court saw no reason to deny liability for this tort when Maryland courts have recognized other instances of wrongful interference with economic expectancy. In this matter, Ms. Barclay’s Complaint was properly dismissed because the litigation against the Estate and Ms. Barclay occurred after the death of Dr. Castruccio. Ms. Barclay could put forth no evidence that Ms. Castruccio interfered with Dr. Castruccio’s designation of the beneficiaries of his estate. The tort requires the alleged interference to be interference with the ongoing relationship during the decedent’s lifetime.
Questions about this case can be directed to Lauren Upton, at (443) 641-0572 or firstname.lastname@example.org.
DC CASE SUMMARY
Jin v. Parsons Corp.
United States Court of Appeals for the District of Columbia Circuit
Decided: July 24, 2020
Court of Appeals for the D.C. Circuit finds error in Trial Court’s failure to hold summary trial to determine arbitrability of claim under Federal Arbitration Act and provides guidance to district courts for procedures when arbitrability in dispute.
Jin O. Jin (“Jin”) was a longtime employee of Parsons Corporation (“Parsons”), who sued Parsons for employment discrimination in the U.S. District Court for the District of Columbia. Parsons moved to stay the proceedings and to compel arbitration. Parsons argued that it had instituted an Employee Dispute Resolution (“EDR”) program in 1998 that included an agreement to arbitrate disputes with employees (“Agreement”). Parsons further argued that in October 2012, it updated the program and emailed all employees to notify them of the change in the EDR program and asked employees to sign a certification that they had received the Agreement. The email stated that if employees did not sign the Agreement, their continued employment would constitute acceptance of the Agreement. Parsons contended that Jin had agreed to arbitrate his claims by virtue of remaining a Parsons employee.
In support of its Motion to compel arbitration, Parsons produced a declaration from a Human Resources Director stating that Parsons emailed Jin four times about the Agreement in 2012 and that although Jin never signed the Agreement, he continued to work for Parsons for several years thereafter. Jin responded with a declaration that he did not recall the initial 1998 EDR program or the Agreement, that he did not recall receiving any of the 2012 emails, and that he never reviewed or signed the Agreement. Based upon the parties’ briefing and competing declarations, the District Court denied Parsons’ Motion and concluded that the issue of whether Jin intended to be bound presented a genuine dispute of material fact. After denying Parsons’ Motion, the District Court ordered Parsons to answer Jin’s Complaint and directed the parties to proceed with discovery. Parsons timely appealed under 9 U.S.C. § 16(a).
The Court of Appeals for the D.C. Circuit found that the Trial Court erred in denying Parsons’ Motion to compel arbitration. The Court held that Section 4 of the Federal Arbitration Act mandates a summary trial on the issue of arbitrability where such a genuine dispute of material facts exists. The Court further observed that there may be times when the issue of arbitrability is properly decided as a matter of law, but that disputed facts do not provide a basis to deny a Motion to compel arbitration. Finally, the D.C. Circuit reviewed the various procedural approaches followed by district court judges in ruling on Motions to compel arbitration. The Court held that the proper procedure is for the trial judge to hold the Motion to compel arbitration in abeyance pending a trial on the issue of arbitrability. This approach allows the Motion to remain pending until arbitrability is decided and then allows for an appal of the final decision on arbitrability.
Questions about this case can be directed to Peter Biberstein, at (202) 945-9506 or email@example.com.
VA CASE SUMMARY
VACORP v. Young
Virginia Supreme Court
840 S.E.2d 334
Decided: April 9, 2020
School boards and other self-insured entities may contract for more UM/UIM coverage than the minimum set by statute.
Plaintiff was injured while riding as a passenger in a City of Richmond school bus. Plaintiff filed suit against the bus driver, driver of car, and the City of Richmond School Board (the “School Board”). Plaintiff sought damages of $499,000, later increasing that to $1.2 million. The School Board had coverage of its vehicles through a self-insurance risk pool managed by the Virginia Association of Counties Group Self-Insurance Risk Pool (VACORP). The contract between the School Board and VACORP provided UM/UIM coverage to anyone injured while “occupying” a school bus, among other vehicles. The contract provided UM/UIM limits of $1,000,000.
At trial, Plaintiff filed a declaratory judgment action seeking resolution of the scope of the coverage with respect to the School Board’s UM/UIM coverage. Plaintiff argued that the School Board’s UM/UIM coverage was $1 million, based on the contract that the School Board had with VACORP. Further, Plaintiff argued that the legislature had imposed a floor, not a cap, on UM/UIM coverage for entities that self-insure, like the School Board. VACORP argued that, due to several statutes, UM/UIM coverage for self-insured entities is capped at $50,000. The Trial Court granted Plaintiff’s Motion for summary judgment, finding that the applicable statutes did not limit the amount of UM/UIM coverage the School Board could contract for, and VACORP appealed.
The Supreme Court found that, since the statutes did not expressly limit self-insured entities to $50,000 in UM/UIM coverage, such entities were free to contract for more. Specifically, “the remedial construction afforded to UM/UIM statutes, the default principle affording broad freedom of contract, and our prior interpretation of the phrase ‘valid and collectible insurance,’ lead us to conclude that the $1 million in UM/UIM coverage the School Board contracted for is the amount of available UM/UIM coverage.” The Supreme Court affirmed the judgment of the Trial Court.
Questions about this case can be directed to Lacey Conn, at (571) 464-0433 or firstname.lastname@example.org.