eNotes: Liability – May 2019
April 30, 2019
TT&H LAWYERS IN COURT
Attorney Jillian Denicola wins appeal from the entry of summary judgment in wrongful death slip and fall case.
The Pennsylvania Superior Court has affirmed the entry of summary judgment in favor of a grocery store represented by TT&H Attorney Jillian Denicola. The claim against the grocery store was for wrongful death allegedly arising from a slip and fall which occurred in the store’s produce department. The Trial Court’s entry of summary judgment was previously addressed in the July 2018 Liability eNotes. See https://www.tthlaw.com/tth-enotes-liability-july-2018. In affirming the entry of summary judgment, the Superior Court agreed that Plaintiff had failed to prove a dangerous condition with either direct or circumstantial evidence.
Questions about this case can be directed to Jillian Denicola, at (570) 820-0240 ext. 8608 or email@example.com.
Attorney Joshua Bovender wins dismissal of UTPCPL claims against roofing contractor.
After four days of trial, Attorney Bovender obtained dismissal of claims brought under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”). Plaintiffs alleged that Josh’s client, a well-known regional slate roofing contractor, colluded with Plaintiffs’ homeowners’ insurance company to deceitfully undervalue the nature and extent of snow and ice damage to Plaintiffs’ slate roof. Plaintiffs sought attorney’s fees and treble damages on the basis that the slate roofer had done prior poor work on the home, and that their homeowners’ carrier nevertheless hired the same roofing company to inspect the roof as part of the claim investigation. In a case of first impression, Judge Dowling of the Dauphin County Court of Pleas granted the motion for non-suit, finding that the homeowners lacked standing under the UTPCPL’s private cause of action provisions.
Questions about this case can be directed to Joshua Bovender, at (717) 237-7153 or firstname.lastname@example.org.
Attorneys Scott McCarroll and Julia Morrison win summary judgment in Cumberland County trip and fall incident.
Attorneys McCarroll and Morrison of TT&H’s Harrisburg office won summary judgment in connection with a fall incident on the premises of a Cumberland County nonprofit organization. Plaintiff fell off of the side of the nonprofit’s loading dock and claimed that she fell because the loading dock was inadequately sized and unguarded. During her deposition, Plaintiff admitted she did not look where she was going and that, had she looked, she would have seen the edge of the dock. The Court found that the condition of the loading dock was open and obvious.
MARYLAND CLIENT ADVISORY
Effective October 1, 2019, for all torts involving bodily injury or death, an insurer must provide, upon request, documentation of the applicable limits of liability coverage in any insurance agreement under which the insurer may be liable to (1) satisfy all or part of the claim, or (2) indemnify or reimburse for payments made to satisfy the claim.
On April 8, 2019, the House and Senate of the Maryland General Assembly passed MD SB 101. Previous to MD SB 101, when a claimant filed a written tort claim concerning an automobile accident and provided specified documentation to the insurer, the insurer was required to provide documentation of the applicable limits of liability coverage in an insurance agreement where the insurer may be liable to (1) satisfy all or part of the claim, or (2) indemnify or reimburse for payments made to satisfy the claim. The insurer was required to provide such documentation within 30 days after receipt of the written request. The written documentation required of the claimant included: (1) the date of the vehicle accident; (2) the name and last known address of the alleged tortfeasor; (3) a copy of the vehicle accident report, if available; and (4) the insurer’s claim number.
MD SB 101, effective October 1, 2019
With the passage of MD SB 101, effective October 1, 2019, an insurer must provide upon request, documentation of the applicable limits of liability coverage in any insurance agreement under which the insurer may be liable to (1) satisfy all or part of the claim, or (2) indemnify or reimburse for payments made to satisfy the claim, extends to claims involving other torts involving bodily injury or death. Such pre-litigation discovery applies to the applicable limits of coverage in any automobile, homeowner’s, or renter’s insurance policy. The bill expands the documentation that a claimant must submit to receive said policy information by requiring a claimant to also submit a letter from an attorney admitted to practice law in the State certifying that “(1) the attorney has made reasonable efforts to investigate the underlying facts of the claim, and (2) based on the attorney’s investigation, the attorney reasonably believes that the claim is not frivolous.” Significantly, the bill applies prospectively to claims filed with an insurer on or after the bill’s October 1, 2019, effective date.
Questions about this advisory can be directed to Salvatore Cardile, at (410) 653-0460 or email@example.com.
SIGNIFICANT CASE SUMMARIES
PENNSYLVANIA CASE SUMMARIES
Bayview Loan Servicing, LLC v. Wicker
Pennsylvania Supreme Court
No. 3 WAP 2018, 2019 Pa. LEXIS 1845
Decided: March 28, 2019
Personal knowledge of facts contained in a business record is not necessary for a witness to authenticate those business records
Bank of America assigned a mortgage to Bayview Loan Servicing which was the subject of an ongoing foreclosure action against Defendants/Homeowners. Bank of America filed a praecipe to substitute Bayview Loan Servicing as the Plaintiff in the foreclosure action. At trial, Plaintiff produced its litigation manager to authenticate Plaintiff’s business records, which provided information pertaining to Defendants’ mortgage and promissory note; their alleged default and indebtedness; and the foreclosure process. Defendants argued that testimony from Plaintiff’s litigation manager would constitute hearsay because he lacked personal knowledge of the records Plaintiff sought to admit, as the records originated from Bank of America and not Plaintiff.
Plaintiff’s litigation manager testified he worked as Plaintiff’s litigation manager for approximately two years and had access to Plaintiff’s “master servicing records’’ of delinquent borrowers and that he was familiar with Plaintiff’s file. He further testified that Plaintiff and Bank of America “work in conjunction, hand-in-hand for each loan” to ensure accuracy as is the “regularly conducted activity at Bayview.” Defendants argued that Plaintiff’s litigation manager could not authenticate records that contained information from Bank of America because the litigation manager never worked for Bank of America. The Trial Court allowed the testimony because the litigation manager had personal knowledge of how the records are forwarded to Plaintiff and how they are used. The Trial Court further reasoned that there was no evidence of motive or opportunity to prepare an inaccurate record.
The Trial Court did not abuse its discretion in admitting the business records that Plaintiff’s litigation manager authenticated. According to the Supreme Court, “the Uniform Business Records as Evidence Act (Act), . . . and Pennsylvania Rule of Evidence 803(6) . . . require that a custodian or other qualified witness testify that the record was made ‘at or near the time’ of the event recorded and that the record was kept in the regular course of business. Moreover, both provide for the trial court to make a determination in regard to whether the circumstances surrounding the record ‘justify its admission’ or ‘indicate a lack of trustworthiness.’” The Court found: “[W]e will continue to allow our trial courts to utilize their broad discretion in evidentiary matters by applying the business record exception . . . and the Act to determine if the witness ‘can provide sufficient information . . . to justify a presumption of trustworthiness . . . .’”
Questions about this case can be directed to Chloe Gartside, at (215) 564-2928 ext. 8511 or firstname.lastname@example.org.
Buchan v. Milton Hershey Sch.
Pennsylvania Superior Court
No. 739 MDA 2018, 2019 Pa. Super. LEXIS 282
Decided: March 27, 2019
Pennsylvania Superior Court holds that voluntary withdrawal of a federal court action does not toll the statute of limitations, where the federal action has not been dismissed for lack of jurisdiction pursuant to 42 Pa.C.S. § 5103 or pursuant to 28 U.S.C.S. §1367.
On December 28, 2016, Plaintiff Buchan filed a Complaint in the U.S. District Court for the Middle District of Pennsylvania arising from the time she spent as a resident and student at the Milton Hershey School. On June 19, 2017, Plaintiff filed a Notice of Voluntary Dismissal Without Prejudice pursuant to Fed. R. Civ. P. 41. Almost one month later, on July 11, 2017, Plaintiff initiated a state court action in the Dauphin County Court of Pleas. The Court found that it was undisputed that the two-year statute of limitations for Plaintiff’s claims began to run on her eighteenth birthday—January 4, 2015. On October 27, 2017, Defendant filed Preliminary Objections to the First Amended Complaint, alleging, inter alia, that the statute of limitations barred the claims. Plaintiff averred in her Response that the instant Complaint was timely because the filing of a Complaint in federal court within the statute of limitations had tolled the statute of limitations for timely filing the state-law claims in state court. The Trial Court sustained the Preliminary Objections and dismissed the Complaint with prejudice.
The Superior Court held that, in the absence of an order from the federal court, Plaintiff’s timely filed federal court action did not toll the statute of limitations on her state claims. Where the former student voluntarily dismissed the federal action against the school and other Defendants and then refiled similar claims in state court, the Trial Court did not err in sustaining Defendants’ Preliminary Objections because the former student’s claims were time-barred. Further the Superior Court held that the statute of limitations had not been tolled by 42 Pa.C.S. § 5103 because the federal action had not been dismissed by the United States for lack of jurisdiction, and the limitations period had not been tolled by 28 U.S.C.S. § 1367 because that statute only applies when a Plaintiff voluntarily dismisses any claim, other than one that is pending before a Federal Court under supplemental jurisdiction.
Questions about this case can be directed to Christopher Gallagher, at (215) 564-2928 or email@example.com.
Kowalski v. TOA PA V, LP
Pennsylvania Superior Court
No. 80 WDA 2018, No. 125 WDA 2018, 2019 Pa. Super. 93
Decided: March 27, 2019
With respect to his breach of contract and negligence claims, arising out of recurring flooding to his property, Plaintiff’s causes of actions accrued upon the first occurrence of flooding.
This case concerned recurring flooding on the property of the Appellant, Brian Kowalski, which resulted from ineffective storm water management on the part of a developer, in conjunction with construction previously completed uphill from Mr. Kowalski’s property. Mr. Kowalski, was aware of the ongoing flooding issues at the subject property but purchased it at a sheriff’s sale in 2012, several years after the construction at issue was completed. The property’s previous owner began to notice the flooding issues in 2007 and immediately complained to the developer that its ineffective storm water management was a breach of the developer’s agreement that it had entered into with the Township and to which the property owner was an intended beneficiary. The developer ignored the complaints of the property’s previous owner, and no claim was filed until 2013, after the property was purchased by Mr. Kowalski.
Mr. Kowalski brought suit in the Court of Common Pleas of Beaver County, alleging that the developer “breached [its] duty of care by failing to design, construct, and maintain a storm water management system that prevented unreasonable water runoff.” Mr. Kowalski asserted further that through its failure to prevent the flooding at issue, the developer had breached its contract with the Township. The Court of Common Pleas found that both claims were barred by the statute of limitations.
The Superior Court affirmed on both counts. With respect to Mr. Kawolski’s breach of contract claim, the Court found that “the breach alleged . . . accrued in 2007,” when the developer failed to remedy its ineffective implementation of storm water management plans, in spite of complaints it had received from the property’s previous owner. With respect to Mr. Kawolski’s negligence claim, the Court held that the cause of action accrued “in 2007, when (the property’s previous owner) first noticed flooding.”
Questions about this case can be directed to Sam Dunlop, at (412) 926-1432 or firstname.lastname@example.org.
Kiely v. Phila. Contributionship Ins. Co.
Pennsylvania Superior Court
2019 Pa. Super. LEXIS 277
Decided: March 26, 2019
Because the underlying complaint alleged a purposeful attack and not an occurrence, or accident, as required to trigger coverage under the homeowners and umbrella policies, extrinsic evidence of the insured’s diminished mental capacity could not be considered in deciding whether a duty to defend existed.
The insured, through her attorney-in-fact, engaged an individual to perform home aid services. Such services were necessary because the insured had a stroke and suffered from bipolar disorder. One day, she became irate and attacked the care giver, choking and punching her while hurling racial slurs and threatening to kill her. After the attack, the insured was given a psychiatric examination, but she was released from the hospital. She continue to live on her own and was never declared to be incompetent.
At the time of the attack, the insured had a homeowners policy and an umbrella policy, both of which required an occurrence to trigger the bodily injury liability coverage. The suit by the care giver alleged assault an battery, intentional infliction of emotional distress, breach of contract, and false imprisonment and it sought both compensatory and punitive damages. The insurer denied coverage citing the lack of an occurrence and raising various exclusions not germane to the court’s decision.
Cross motions for summary judgment were denied because of the belief that there was an unidentified disputed question of fact. The case proceeded to trial and the insured presented extrinsic evidence bearing upon her mental state, specifically, it was questioned whether she had the requisite mental capacity to formulate the intent to harm the care giver. The Court granted a non-suit in favor of the insurer. The insured moved unsuccessfully to remove the non-suit, prompting the appeal.
The Superior Court affirmed the determination that the policies did not apply. The Court confined its analysis to the allegations of the underlying complaint and the policies in question. The Court explained that it was not allowed to consider the extrinsic evidence of the insured’s diminished mental capacity. The allegations of the underlying complaint did not aver or even suggest that the insured lacked the mental capacity for intentional conduct. The policies required an occurrence to be the cause of the alleged bodily injuries and an occurrence was considered to be an accident, an unexpected and undesired event or something that happened unexpectedly or unintentionally. The key term was unexpected, which implied a degree of fortuity. In contrast, the allegations of the underlying complaint set forth a purposeful attack; it was no accident; instead, it was an intentional tort.
In light of its ruling regarding the extrinsic evidence, the Court declined to address the issue of whether the M’Naghten rule—which defines the legal insanity defense to criminal conduct—sets the standard against which diminished mental capacity should be judged in an insurance coverage dispute.
Questions about this case can be directed to Louis Long, at (412) 926-1424 or email@example.com.
Seeley v. Caesars Entm’t Corp.
Pennsylvania Superior Court
2019 PA. Super 87
Decided March 22, 2019
Superior Court holds that sufficient contacts for personal jurisdiction do not exist by virtue of a holding company’s maintenance of a subordinate entity in Pennsylvania.
Plaintiff Mr. Seeley slipped and fell in water which had accumulated on the floor of a public bathroom in Bally’s, Atlantic City, New Jersey, facility. Mr. Seeley, a New Jersey resident, filed a premises liability action in Philadelphia County against various Bally’s/Caesars entities. The allegation was that the Defendants “regularly-conducted” business within Philadelphia County by virtue of their operation of Harrah’s Philadelphia, located in Delaware County.
In response, the defense filed preliminary objections asserting lack of personal jurisdiction, specifically noting that: Bally’s was a New Jersey corporation; and Caesars was a Delaware corporation, with its principal place of business located in Nevada. It was further alleged that none of the Defendants engaged in “continuous or systematic” business activities in Pennsylvania or, more specifically, Philadelphia County and that, further, Caesars had no supervisory or oversight responsibilities with regard to Bally’s operations. The Trial Court lack of personal jurisdiction over Defendants and dismissed the complaint.
The Superior Court began its analysis by examining “specific” versus “general” jurisdiction. Specific jurisdiction is exercised when a defendant’s contacts with the forum state are at play, which was simply not the case here, since, among other matters, the incident itself actually occurred in New Jersey. However, with regard to general jurisdiction, the Court recognized that general personal jurisdiction can be established: when a corporation is incorporated under or qualified as a foreign corporation under the laws of Pennsylvania; it consents to the exercise of jurisdiction; or it carries on a continuous or extended part of its general business within Pennsylvania. This lattermost option was explored by the Court.
After limited discovery on the issue of jurisdiction, it became evident that: Plaintiffs could not quantify the yearly cost that Bally’s spent on Pennsylvania print and radio advertising; the percentage of Bally’s patrons who were actually Pennsylvania residents could not be identified; there was no indication as to what percentage of Bally’s own employees were Pennsylvania residents; Bally’s did not own or lease any property in Pennsylvania, nor was it a registered business in Pennsylvania; neither Caesars nor Bally’s had any plans for nor were they under contract for any type of Pennsylvania business; Bally’s did not provide transportation to or from their casino to Pennsylvania residents; and, finally, Caesars did not pay taxes to Pennsylvania, the only pecuniary benefit received by Caesars “from” Pennsylvania deriving from the separate entity, Harrah’s Philadelphia.
Accordingly, the Superior Court held that Plaintiffs failed to establish sufficient evidence of Caesars’ contacts with Pennsylvania through its mere ownership of Harrah’s Philadelphia, as imputed to Bally’s, or that Bally’s own personal contacts with Pennsylvania were so continuous and systematic so as to allow the court to assume jurisdiction. Accordingly, the judgment of the Trial Court was affirmed.
Questions about this case can be directed to Ryan Blazure, at (570) 820-0240 or firstname.lastname@example.org.
Morse v. Fisher Asset Mgmt., LLC
Pennsylvania Superior Court
No. 1104 WDA 2018
Decided: March 15, 2019
When a trial court sustains preliminary objections to enforce an agreement for alternate dispute resolution and dismisses a complaint, the dismissal does not stay the action for purposes of the statute of limitations.
Plaintiff alleged that her timely-filed 2009 Complaint in the Trial Court suspended the limitations period, and that the Court’s Order directing the parties to arbitration automatically stayed the case. The Court noted that at the time the 2009 complaint was filed, Defendants could have sought enforcement of an arbitration agreement either by filing preliminary objections or a petition to compel under 42 Pa.C.S.A. § 7304. Had the Defendants filed a petition to compel, the Court Order would have included a stay of the proceedings. Because Defendants filed preliminary objections pursuant to Rule 1028 seeking dismissal, which were sustained, the 2009 Complaint was dismissed, and the action was not stayed.
Because the Trial Court sustained preliminary objections that sought enforcement of an agreement for alternate dispute resolution and dismissed the 2009 complaint, the 2009 action was not stayed for purposes of the statute of limitations.
Questions about this case can be directed to Jolee Bovender, at (717) 255-7626 or email@example.com.
Am. Interior Constr. & Blinds v. Benjamin’s Desk, LLC
Pennsylvania Superior Court
No. 3257 EDA 2017
Decided: March 11, 2019
Technical noncompliance with rules regarding service of original process will be excused where Defendant received actual notice of suit, and Plaintiff did not intend to stall machinery of justice.
Plaintiff, a subcontractor who performed work for Defendant, sought to serve a Notice of Intent to file a lien under the Mechanics’ Lien Law after not receiving payment for its work. Plaintiff used FedEx, a private courier/delivery service, to deliver the Notice of Intent to the Defendant. Plaintiff then filed a Complaint to enforce its lien. Defendant filed Preliminary Objections in the nature of a Demurrer, arguing that service was improper under the Mechanics’ Lien law. Plaintiff argued that service by courier was personal service by an adult in the same manner as a writ of summons in assumpsit. The Trial Court sustained the Preliminary Objections and struck the Complaint for lack of proper notice. The Trial Court reasoned that a private postmark is not the equivalent to a United States Postal Service postmark.
In reversing and remanding to the Trial Court, the Superior Court agreed that the although the Plaintiff elected to mail the original process to Defendant via FedEx, resulting in technical noncompliance with the rules governing service of original process, said noncompliance would be excused absent an intent to stall the judicial machinery or actual prejudice. The Court noted that the Defendant received actual notice of the Notice of Intent and did not allege an intent to stall or actual prejudice. The Court relied upon Rule 126 to construe liberally the rules of civil procedure to excuse the misstep because the deviation did not affect the substantial rights of the parties and it, nevertheless, satisfied the purpose of the statute of limitations by supplying the Defendant with actual notice.
Questions about this case can be directed to James Swartz, III, at (610) 332-7028 or firstname.lastname@example.org.
NEW JERSEY CASE SUMMARIES
Haines v. Taft
New Jersey Supreme Court
No. A-13/14 September Term 2017, 079600
Decided: March 26, 2019
Supreme Court holds that medical bills not paid by the plaintiff’s PIP carrier, because they are beyond the PIP limit selected, are not collectable from the tortfeasor and are not “boardable” at trial.
Both Plaintiffs addressed in the Court’s decision, involving two lawsuits consolidated for review, were injured in two separate motor vehicle accidents and were insured under standard auto policies that provided $15,000 in personal injury protection (“PIP”) coverage. Neither Plaintiff could sustain a claim for bodily injury pursuant to their policies’ limitation-on-lawsuit option.
Plaintiffs filed suit against their respective alleged tortfeasors, seeking to recover medical expenses in excess of their PIP coverage. Each Defendant moved to preclude the Plaintiffs from presenting evidence of medical expenses that exceeded their PIP coverage, arguing that evidence of losses collectible under PIP coverage were inadmissible. In response, Plaintiffs argued that medical expenses exceeding PIP coverage constituted admissible “economic loss.” The Trial Courts precluded Plaintiffs from admitting evidence of medical expenses exceeding their PIP coverage, and the Appellate Division reversed.
The Supreme Court reversed the Appellate Division and found that the legislature had not intended to deviate from the no-fault PIP system in favor of the fault-based system that would allow economic damages of medical expenses in excess of an elected lower amount of PIP coverage. The Court held that the out-of-pocket overage was not recoverable in a third party action against the tortfeasor(s) and the amount of such overage, therefore, is not “boardable.” The Court stated that allowing injured parties to sue for medical expenses above their elected amount of PIP coverage, but below the standard coverage amount of $250,000, would undermine the no-fault system’s intent to reduce court congestion. The Court reasoned that a contrary ruling could lead to an absurd result where an injured party electing a lower PIP coverage limit could receive a higher overall reimbursement.
Questions about this case can be directed to Michael Bishop, at (908) 574-0510 or email@example.com.
Gage v. Coll. of N.J.
New Jersey Superior Court, Appellate Division
No. A-3787-17T1, 2019 N.J. Super. Unpub. LEXIS 657
Decided: March 22, 2019
Landowner college did not have duty of care to injured independent contractor when the landowner did not direct, supervise, or manage the contractor’s work.
Defendant College of New Jersey (TCNJ) contracted with A&J Construction to replace steam pipes on campus. Defendant David Jurkin worked for TCNJ as its project engineer. Plaintiff Gage, who had extensive experience digging and laying pipes, worked for A&J. A&J made arrangements for the delivery of a metal trench box to stabilize the area where Plaintiff had been working. Plaintiff did not wait for the trench box to arrive, although he knew it was on the way, but instead worked in the ditch without it and was injured when the trench collapsed.
There was no evidence in the record showing that Defendants directed, supervised, or managed A&J’s work. On the contrary, Plaintiff’s co-workers testified that Defendant Jurkin left the ways, means, and methods of the work to A&J, an experienced, qualified, and capable contractor. Plaintiff himself testified that A&J’s superintendent told him where to work. The evidence revealed that Jurkin occasionally visited the job site to perform periodic inspections of work and materials but that he did not direct how A&J performed its work or act as a foreman. The Trial Court granted summary judgment to Defendants, concluding that they owed Plaintiff no duty of care.
The Appellate Division affirmed. Although a landowner generally has a non-delegable duty to use reasonable care to protect invitees against known or reasonably discoverable dangers, a landowner is under no duty to protect an employee of an independent contractor from the very hazard created by doing the contract work. This exception applies unless the landowner retains control over the manner and means by which the work is to be performed, or where the work constitutes a nuisance per se, or where one knowingly engages an incompetent contractor. As none of these exceptions applied, Defendants were entitled to judgment in their favor.
Questions about this case can be directed to Charles Skriner, at (908) 574-0513 or firstname.lastname@example.org.
DC CASE SUMMARY
Little v. SunTrust Bank
District of Columbia Court of Appeals
Decided: March 28, 2019
D.C. Court of Appeals holds family lacked standing under Spokeo v. Robins for consumer protection complaint based upon exposure to attorney’s fees.
SunTrust Bank sued members of the Strong Family (the “Family”) seeking court approval to resign as co-trustee of the Strong Family Trust and a complete release from liability for its actions as co-trustee. In response, the Family filed a counterclaim for violations of the District of Columbia Consumer Protection Procedures Act (CPPA), alleging that SunTrust made false representations about a proposed fee increase, its right to make a unilateral fee increase, and its right to resign as a corporate trustee and to obtain a release from liability. The Trial Court granted summary judgment for SunTrust on the Family’s CPPA claim, finding that SunTrust had not made material misrepresentations to the Family and that the Family had not relied on any representations made by SunTrust.
On the Family’s appeal of the trial court’s entry of summary judgment, the D.C. Court of Appeals ordered the parties to address in oral arguments whether the Family had alleged a sufficient injury to meet the requirements of Article III standing, which the U.S. Supreme Court recently stated in Spokeo, Inc. v. Robins requires a showing of a “concrete and particularized injury” in order to establish injury-in-fact. The Family argued that it suffered a concrete and particularized injury when it was exposed to attorney’s fees incurred in responding to SunTrust’s lawsuit and relied on several cases from other jurisdictions that had found incurring attorney’s fees a sufficient basis to establish a concrete injury.
The D.C. Court of Appeals distinguished the cases cited by the Family as cases involving “wrongful” and “abusive” legal practices in violation of federal law, whereas SunTrust’s suit was not based on its alleged misrepresentations to the Family and sought to enforce a statutory right under the Uniform Trust Code. The Court of Appeals held that the Family failed to allege a concrete injury and remanded the case to the D.C. Superior Court with instructions to dismiss the case for lack of standing. Because the Strong Family did not have standing, the Court of Appeals did not address the merits of the case or review the Trial Court’s reasoning for granting summary judgment.
Questions about this case can be directed to Peter Biberstein, at (202) 945-9506 or email@example.com.
VIRGINIA CASE SUMMARY
Dominion Res., Inc. v. Alstom Power, Inc.
Virginia Supreme Court
2019 Va. LEXIS 35, 2019 WL 1561485
Decided: April 11, 2019
The collateral source rule may apply to a breach of contract action where plaintiff has been reimbursed by an insurer for the full amount sought in damages.
Plaintiff and Defendant entered into a contract concerning services performed by Defendant at Plaintiff’s power generation facilities. Pursuant to that contract, Defendant was required to obtain certain insurance policies naming Defendant as an additional insured. Defendant obtained two eroding policies, both naming Plaintiff as an additional insured. In addition, Plaintiff obtained its own insurance policy. A boiler accident at one of Plaintiff’s power-generation facilities killed three workers and injured two others. The employees and estates filed suit against Plaintiff, which ultimately settled for more than $5 million. In addition, Plaintiff incurred almost $10 million in defense costs. The combination of insurance payments from the three available policies fully reimbursed Defendant for the costs incurred in defending and settling the litigation.
Plaintiff brought suit, alleging that Defendant breached the contract in multiple ways. Plaintiff sought as damages the amount it incurred in defending and settling the boiler accident litigation that was not covered by the policies obtained by Defendant; in other words, the amount Plaintiff recovered from its own policy. Defendant argued that Plaintiff had suffered no recoverable damages. As the collateral source rule had only previously been applied to tort cases in Virginia, the United States District Court for the District of Connecticut certified the question to the Virginia Supreme Court.
A fundamental principal of damages is that a plaintiff may not receive a double recovery for a single injury. The purpose of compensatory damages is to make a plaintiff whole, not leave him better off because of the injury. However, a defendant should not be permitted to escape liability because a plaintiff has another source of recovery. Since the law must sanction one windfall and deny the other, it favors the victim of the wrong rather than the wrongdoer. Applying this rationale, the Virginia Supreme Court determined that the collateral source rule may apply in a breach of contract action. However, the Court cautioned that it will not apply in every case, or even in most cases, and that a case-by-case analysis is required.
Questions about this case can be directed to Lacey Conn, at (202) 945-9502 or firstname.lastname@example.org.