eNotes: Liability – September 2021
September 01, 2021
SIGNIFICANT CASE SUMMARIES
FEDERAL CASE SUMMARY
Star Buick GMC v. Sentry Ins. Grp.
United States District Court for the Eastern District of Pennsylvania
2021 U.S. Dist. LEXIS 99433
Decided: May 26, 2021
The all-risks policy did not provide coverage for Star Buick’s business income losses sustained as a result of suspended operations during the COVID-19 pandemic.
Star Buick sought declaratory judgment that its insurance policy with Sentry provided coverage for loss of business income due to suspension of business operations during the COVID-19 pandemic. Star Buick operates multiple car dealerships throughout Pennsylvania and suspended operations the day after the Governor of the Commonwealth issued an Order prohibiting the operation of businesses that are not life-sustaining. As a result, Star Buick incurred substantial losses. Sentry filed a Motion to dismiss the action arguing the policy did not provide coverage for the claimed losses because: (1) Star Buick did not sustain direct physical loss of or damage to property; (2) access to the property was not prohibited by civil authority due to damage to other property; and (3) the claims are excluded by the policy’s virus exclusion.
Three policy provisions were relevant to the action: business income, civil authority and virus exclusion. The unambiguous language of the provisions made it clear that the policy did not provide coverage for the claimed losses. The business income provision did not provide coverage because Star Buick did not sustain physical loss or damage to property. Star Buick did not plausibly allege a covered cause of loss, and no surrounding property was damaged by the loss; therefore, the civil authority provision also did not provide coverage. Further, even if there had been coverage for the losses under either the business income or civil authority provisions, the virus exclusion would bar recovery.
Questions about this case can be directed to Amanda Hennessey at (717) 237-7103 or firstname.lastname@example.org.
PA CASE SUMMARIES
Mortimer v. McCool
Pennsylvania Supreme Court
Nos. 37 MAP 2020, 38 MAP 2020
Decided: July 21, 2021
In a majority opinion, Supreme Court of Pennsylvania endorses a narrow application of the triangular enterprise theory, which could allow an entity to be held liable for another entity’s debt.
Plaintiff was injured by a drunk driver who had consumed liquor at a restaurant managed by Tapias. Tapias leased their liquor license from 340 Associates. Under a separate and distinct contract, Tapias leased the restaurant’s property from McCool Properties. Plaintiff sued the liquor licensee (340 Associates) in a Dram Shop action and successfully recovered a $6.8 million verdict. However, 340 Associates could not satisfy the judgment, and Plaintiff sought to pierce the corporate veil to collect from McCool. McCool was owned in equal parts by two brothers and their father, and it held legal titles for numerous properties unrelated to Plaintiff’s accident. 340 Associates was owned solely by the two brothers, in equal parts, and its only asset was the liquor license. The Common Pleas Court rejected Plaintiff’s request to hold McCool liable for 340 Associates’ judgment, noting that the Pennsylvania Supreme Court had not recognized enterprise liability. Plaintiff appealed and the Superior Court affirmed.
The Pennsylvania Supreme Court held that enterprise liability is viable in this Commonwealth, but only for cases of great injustice and inequity. The Court explained enterprise liability as a triangular framework, under which liability first runs from a sister-debtor corporation to the common owners, and then from the common owners to the other sister corporation. Although triangular piercing does not require a “perfect” identity of ownership, the Court noted that a showing of substantial common ownership between the sister corporations is necessary. In this case, the Court held that enterprise liability was not available to reach McCool’s assets. Substantial common ownership did not exist between the sister corporations because the father held one-third ownership of McCool, but no ownership of 340 Associates.
Questions about this case can be directed to Marjorie Moreno at (717) 237-7157 or email@example.com.
Rice v. Diocese of Altoona-Johnstown
Pennsylvania Supreme Court
No. 3 WAP 2020, 2021 Pa. LEXIS 3081
Decided: July 21, 2021
In sexual abuse case against the Diocese, discovery rule and fraudulent concealment doctrine could not save time-barred claim.
Plaintiff began this tort action against the Diocese of Altoona-Johnstown for their alleged role in covering up and facilitating a series of alleged sexual assaults. These assaults occurred roughly thirty-six years prior to the start of the suit, from 1974-1981. The abuse was not reported until 2006. Plaintiff did not file suit until 2016. The Diocese filed an Answer and New Matter, and a Motion for judgment on the pleadings, raising the statute or limitations as a defense. The Trial Court granted the Motion for judgment on the pleadings. The Court held that Plaintiff was not claiming that they were unaware of their injuries, but of a secondary cause of their injuries. Therefore, Plaintiff should have investigated or brought suit against these parties during the limitations period. The Superior Court reversed.
The Pennsylvania Supreme Court reversed the Superior Court. It held, 4 to 2, that Plaintiff was “on notice” of secondary causes of injuries at the time that she became aware of her primary injuries. The injury in this matter was the assault and not the cover-up. Consequently, the majority held that the two-year statute of limitations tolled two years from the date of the last assault. Trial Court’s dismissal of the case was reinstated.
Questions about this case can be directed to Logan Nagle at (717) 255-7234 or firstname.lastname@example.org.
Degliomini v. ESM Prods., Inc.
Pennsylvania Supreme Court
No. 5 EAP 2020
Decided: June 22, 2021
Pennsylvania Supreme Court holds that City of Philadelphia cannot, via release, avoid liability for a claim that it failed to repair and maintain public streets.
Plaintiff Degliomini participated in a charity bicycle ride which took place on various Philadelphia streets. Prior to doing so, he signed a release in which he released various parties, including the City of Philadelphia, from claims for personal injury arising out of his participation in the event. Mr. Degliomini was seriously injured when he rode into a large unmarked sinkhole that was located in the roadway. Mr. Degliomini and his wife filed suit against the City of Philadelphia, among others. The City of Philadelphia unsuccessfully argued to the Trial Court that the release prevented the Degliominis from proceeding with their lawsuit. Following a trial in which evidence was presented that the City was aware of the sinkhole and had made incomplete attempts at repair months prior to the race, the jury found in favor of the Degliominis.
On appeal, the Supreme Court of Pennsylvania noted that an exculpatory clause will not be enforced if it contravenes public policy. Furthermore, the Court stated that there is a public interest in the maintenance and repair of dangerous conditions on government-owned streets. Additionally, the Political Subdivisions Tort Claims Act creates an exception to governmental immunity for injuries caused by negligence in the maintenance and repair of a dangerous condition of the streets. If enforced, the release would insulate the City of Philadelphia from liability for injuries caused by such a condition. Therefore, the release contravened public policy and was invalid because it would prohibit what the Political Subdivisions Tort Claims Act expressly allowed.
It is contrary to public policy to enforce an exculpatory contract immunizing the City of Philadelphia from its essential duty of public service. Because enforcement of the release under the circumstances presented would jeopardize the health, safety and welfare of the public at large, the release violated public policy and was invalid.
Questions about this case can be directed to Jeanette Ho at (412) 926-1449 or email@example.com.
HTR Rests., Inc. v. Erie Ins. Exch.
Pennsylvania Superior Court
Nos. 902 WDA 2020, 903 WDA 2020
Decided: August 10, 2021
A court may properly grant coordination of cases that originate in outside counties. However, a court cannot coordinate cases that are not yet pending.
Two Allegheny County based businesses filed suit in the Allegheny County Court of Common Pleas against Erie Insurance Exchange seeking coverage for alleged business interruption losses pertaining to COVID-19 related shutdowns. The Allegheny County businesses sought to coordinate their cases, pursuant to Pa.R.C.P. No. 213.1, with (1) other actions against Erie on the same coverage issue pending in Philadelphia County and Lancaster Counties and (2) all other present and future Pennsylvania actions against Erie on the same coverage issue. Erie objected to the Motion. Several other businesses with similar coverage claims against Erie were made aware of the coordination and objected, while others agreed, including a business from Lancaster County and a business from Philadelphia County. The Trial Court granted the Motion to coordinate and, among other things, ordered that the Allegheny County, Philadelphia County, and Lancaster County cases be coordinated for all matters up to full and final resolution. The Trial Court also ordered Erie to notify the Court of other similar situated plaintiffs so that those cases could be transferred to Allegheny County as well. Finally, the Trial Court set a timeline for plaintiffs to object to the coordination. Subsequent to the Court’s coordination Order, several Plaintiffs filed their objections. Erie filed a timely appeal of the coordination Order arguing, among other things, that the Trial Court improperly divested other County Courts of jurisdiction and Plaintiffs of their choice of venue. Additionally, Erie argued that the Trial Court’s Order improperly forced the coordination of actions not pending at the time of the Order. Erie also argued that the Trial Court improperly considered the Rule 213.1 balancing factors in ordering the coordination.
Focusing on the plain language of Rule 213.1, the Superior Court held that it was proper for the Trial Court to coordinate cases that originated outside of Allegheny County with cases that originated inside of Allegheny, although the Motion was not brought by a party in an outside county. However, the Superior Court found that it was improper for the Trial Court to order coordination of cases not yet pending, because the plain language of Rule 213.1 requires a case to be pending before it can be coordinated. Finally, the Superior Court remanded the case back to the Trial Court related to several objections raised by Plaintiffs, after the coordination order, as Rule 213.1 requires the Trial Court to address all parties’ objections to coordination before issuing its coordination Order.
Questions about this case can be directed to Brook Dirlam at (412) 926-1438 or firstname.lastname@example.org.
Dooley v. Tate
Pennsylvania Superior Court
No. 1721 EDA 2020
Decided: July 27, 2021
Despite rear-end collision, Plaintiff’s comparative negligence precludes recovery.
Plaintiff sought damages for injuries allegedly sustained in a rear-end automobile collision. At trial, Plaintiff and Defendant gave conflicting versions of the accident. Both were travelling southbound on I-476 in Delaware County, PA. Plaintiff testified that congested traffic caused him to brake and stop before he was rear-ended. Defendant testified that a vehicle had pulled in front of him, followed by the Plaintiff, suggesting that the Plaintiff was chasing the vehicle. Plaintiff’s vehicle then pulled alongside the other vehicle, taking up two travel lanes, and both vehicles suddenly braked and stopped, despite the roadway ahead of them being clear. During trial, a dash-cam video from Defendant’s truck was shown to the jury. The jury returned a verdict finding Plaintiff 65% responsible for the accident. Plaintiff’s post-trial motions were denied.
On appeal to the Superior Court, Plaintiff argued that the Trial Court erred in failing to grant a new trial because the verdict was against the weight of the evidence since Plaintiff had been rear-ended, and Defendant failed to drive slowly enough to bring his vehicle to a stop within the assured clear distance ahead. In a challenge to the weight of the evidence, great consideration is given to the trial judge’s findings and reasons because the trial judge heard and saw the evidence presented. In denying Plaintiff’s post-trial motions, the Trial Court reasoned that the dash-cam video enabled the jurors to assess the credibility of the competing versions of the accident. The Trial Court opined that even its own review of the video supported the credibility determination by the jury and the apportionment of liability.
The Superior Court affirmed the judgment in favor of Defendant because the evidence supported the verdict in that the Plaintiff suddenly and unnecessarily braked on a high-speed highway and, consequently, was mostly responsible for the accident.
Questions about this case can be directed to James F. Swartz, III at (610) 332-7028 or email@example.com.
Rodriguez v. Keystone Quality Transp. Co.
Pennsylvania Superior Court
No. 2287 EDA 2019
Decided: July 23, 2021
Superior Court orders a new trial where evidence was improperly admitted by the trial court that the driver-employee of the subject ambulance was fired after the subject accident.
Plaintiff was employed as a nurse’s assistant with a Philadelphia hospital and was riding as a front seat passenger in an ambulance owned by Defendant and being driven by an employee of the Defendant, Daniel McCanns. Plaintiff and Mr. McCanns were transporting a patient to the hospital when Mr. Canns rear-ended a car that was stopped at a red light at the intersection of Girard Avenue and 38th Street in Philadelphia. Plaintiff sustained various injuries in the accident, for which she received Workers’ Compensation benefits from the hospital-employer. Plaintiff also filed suit against the Defendant ambulance company alleging that Mr. McCanns was negligent and reckless in his operation of the ambulance at the time of the accident. The jury verdict totaled $610,000.
Mr. McCanns was terminated after the accident due to a positive drug screen. Prior to trial, Defendant filed a Motion in limine to preclude evidence of Mr. McCann’s termination pursuant to Pa.R.E. 407 regarding subsequent remedial measures, however, the Trial Judge denied the Motion. Testimony was elicited at trial by Plaintiff’s counsel regarding Mr. McCann’s termination, and Plaintiff’s counsel stated at closing argument, “remember that the driver was terminated because of this accident. So I submit to you that the defendant is negligent and caused the injuries suffered by [Plaintiff].” Post-trial Motions and appeals were filed. The primary issue raised by Defendants on appeal is whether the Trial Court erred by denying Defendant’s Motion for a new trial based upon the improper admission of subsequent remedial measure evidence in violation of Pa.R.E. 407.
The Superior Court reversed. By allowing Plaintiff to introduce evidence of Mr. McCann’s post-accident termination, the Trial Court abused its discretion by misapplying the law to the extent that it ultimately resulted in a manifestly unreasonable, biased or prejudiced result to the Defendant, as opposed to harmless error.
Questions about this case can be directed to Doug Keil at (412) 926-1428 or firstname.lastname@example.org.
Bogdan v. Am. Legion Post 153 Home Ass’n
Pennsylvania Superior Court
2021 Pa. Super. 127
Decided: June 23, 2021
Liquor liability carrier permitted to intervene in suit to pose specific questions to jury related to its duty to indemnify.
Plaintiff’s decedent was shot and killed in the parking lot of an American Legion following a bar fight between two intoxicated patrons. Plaintiff alleged negligence and negligent security against the Legion, as well as a dram-shop claim, and sought punitive damages. The Legion’s defense was funded by its liquor liability carrier, Underwriters Insurance Company, subject to a reservation of rights to deny coverage pursuant to two exclusions in its policy: an Absolute Firearms Exclusion and the Punitive or Exemplary Damages Exclusion. Underwriters also filed a separate declaratory judgment action to resolve the coverage issues.
During the discovery phase of the case, Underwriters sought to intervene in the underlying suit to secure a special jury verdict form and to ask the jury questions to obtain a clear determination of the basis for the jury’s verdict and to later assist with coverage determinations in the declaratory judgment action. Plaintiff and the Legion objected to the carrier’s petition to intervene. The Trial Court denied the Petition, reasoning that the Petition, filed nearly two years after the start of litigation, was unduly delayed. The carrier sought interlocutory appeal.
The Superior Court reversed. First, it held that the Order denying intervention was sufficiently important to permit immediate appellate review. Second, it found that the Trial Court had manifestly abused its discretion in determining that Underwriters’ intervention was untimely, finding instead that Underwriters had no reason to intervene until special interrogatories in relation to the verdict could be submitted. Finally, the Superior Court found that the Trial Court’s concern that the intervention and special interrogatories would cause confusion to the jury was error as “[p]otential confusion does not prevent Underwriters from being able to intervene and is instead something that can be addressed at the time the interrogatories are proposed.”
Questions about this case can be directed to Julia Morrison at (717) 441-7056 or email@example.com.
MD CASE SUMMARY
Latz v. Parr
Maryland Court of Special Appeals
2021 Md. App. LEXIS 545
Decided: July 6, 2021
Finding that exercising some care and control of an animal on one’s premises may be sufficient to establish liability in negligence dog bite cases.
Mr. Parr and Ms. Nichols were walking a dog named Ravyn without a leash, when it chased a cat named Shadow into the apartment of Ms. Latz, Shadow’s owner. In her effort to protect Shadow, Ms. Latz was injured. She sued Mr. Parr and Ms. Nichols in the Circuit Court for Howard County for negligence and strict liability. After Ms. Nichols filed for bankruptcy, Ms. Latz dismissed the claims against her.
Mr. Parr filed for summary judgment. The Trial Court determine that Ms. Nichols, not Mr. Parr, had the dog more often at her home, made decisions about how to care for the dog, and was therefore the owner of the dog. As a result, the Court granted Mr. Parr’s Motion, determining that the dog is in the care and custody of Ms. Nichols, not Mr. Parr, and that therefore Mr. Parr could not be held responsible for the dog. Ms. Latz appealed.
Maryland’s Court of Special Appeals held that a reasonable fact-finder could find that Mr. Parr and Ms. Nichols jointly adopted and owned Ravyn even though Ms. Nichols was the primary custodian. The Court determined that the Circuit Court erred when it granted the Motion, because the evidence was legally sufficient to generate a jury question as to Ravyn’s ownership.
Questions about this case can be directed to Nicholas Schaufelberger at (202) 945-9502 or firstname.lastname@example.org.
NJ CASE SUMMARY
Estate of Gonzalez v. City of Jersey City
New Jersey Supreme Court
A-19 September Term 2020, 084381
Decided: August 4, 2021
Supreme Court finds police officers’ actions did not implicate the Good Samaritan Act and that a factual dispute remained as to whether certain provisions of the Tort Claims Act applied to the officers’ conduct.
Plaintiff was involved in a one-vehicle accident. Officers of the Jersey City Police Department were dispatched to the scene. They determined Plaintiff’s vehicle was inoperable and called for a tow truck. The officers offered to drive Plaintiff to a nearby gas or PATH station, but Plaintiff refused, saying he would wait for his brother. The officers were unable to wait with Plaintiff until his brother arrived. Before leaving the scene, the officers told Plaintiff to remain in the pedestrian walkway, which had a guardrail between the roadway and the sidewalk. However, Plaintiff was later struck and killed by another vehicle. According to a toxicology report, Plaintiff had a BAC of .209% at the time he died. The officers claimed that Plaintiff did not appear intoxicated.
Plaintiff’s estate filed suit against the Jersey City Police Department. The Trial Court granted summary judgment for Defendants, holding that the officers were immune under the Tort Claims Act. The Appellate Division reversed, holding that the officers’ duties at the accident scene were ministerial and that the TCA immunity was unavailable.
The Supreme Court affirmed but modified the Appellate Division’s ruling. The Court held that the police officers’ actions did not implicate the Good Samaritan Act, because none of their actions involved medical or emergency care, and their failure to act was not the kind of good faith rendering of care immunized by statute. The Court further noted that because neither officer believed that the driver was intoxicated, they did not make the necessary determination that would allow their actions to be immunized under the statute granting police officers immunity when removing intoxicated persons from a public place. Finally, the Court held that the facts that were in dispute warranted presentation to a jury on the threshold questions essential to determine whether the officers’ conduct was ministerial, for which the ordinary negligence standard applied, or discretionary, and if discretionary, whether the officers’ conduct was palpably unreasonable.
Questions about this case can be directed to Michael Bishop at (908) 574-0510 or email@example.com.
DC CASE SUMMARY
Some, Inc. v. Hanover Ins. Co.
United States District Court for the District of Columbia
2021 U.S. Dist. LEXIS 129796
Decided: July 13, 2021
Insured’s concurrent claims against carrier and agent survive Motion to dismiss.
In 2015, Plaintiff began constructing a housing complex and acquired two insurance policies for the project, both with the same carrier. One policy provided coverage through April 2018. In early 2018, the construction project neared completion, but would not be concluded until after April. Plaintiff’s insurance agent recommended letting the first policy lapse and advised that coverage would remain the same under the master policy. Plaintiff allowed the first policy to lapse, pursuant to the agent’s recommendations. In December 2018, after the project concluded, Plaintiff noticed structural defects with the project’s parking garage. After obtaining an engineer’s report regarding the damage, Plaintiff tendered a claim to the carrier. The carrier subsequently denied coverage, citing a policy exclusion that was not present in the lapsed policy.
Plaintiff filed suit against the carrier and the agent for the carrier’s denial of coverage and the agent’s negligence in failing to advise Plaintiff of the coverage available under the second policy. Plaintiff claimed that the agent was negligent in either misrepresenting the coverage available under the second policy or failing to advise Plaintiff that additional coverage was needed. The agent filed a motion to dismiss arguing that Plaintiff’s claims against the agent could not proceed until Plaintiff’s claims against the carrier were adjudicated. The agent argued that if coverage is found under the policy, then the agent is not liable.
The United States District Court for the District of Columbia held that the claims against the agent could proceed. The Court reasoned that Plaintiff’s claims against the agent are, at a minimum, in the alternative to Plaintiff’s claims against the carrier. The Court cited the longstanding rule that alternative claims can proceed concurrently. One claim should not be delayed merely because it is contingent on another claim within the suit. In other words, the Court rejected the agent’s argument because the mere possibility that the agent might not be liable is not proper grounds to dismiss the case. The Court denied the agent’s Motion to Dismiss.
Questions about this case can be directed to Ryan Stanley at (202) 945-9504 or firstname.lastname@example.org.
VA CASE SUMMARY
Estate of Potter v. BFK, Inc.
Virginia Supreme Court
Decided: July 22, 2021
Virginia Supreme Court holds statute of repose does not bar wrongful death action arising out of injury caused by non-structural equipment connected to building.
The Luck Stone Corporation owned and operated a stone quarry and land upon which it operates a surface-mining and processing operation for production of stone products. Part of this operation is a system for production of manufactured sand from crushed stone. There is a feed conveyer that carries product into the sand system. The system is a Buell Classifier connected by ductwork to a silo. The silo has a dust collector on top of it. The entire system is operated by a fan that creates a draw through the Buell Classifier up into the silo. The Buell Classifier separates the manufactured sand from other materials and sand then goes onto another conveyer. In 2007, Luck Stone replaced parts of the sand manufacturing system with products manufactured by BFK, Inc. Daniel Potter, a driver for Luck Stone, was killed in 2015 after a hopper containing stone material ruptured and buried him in falling debris.
The administrator of Potter’s estate filed suit against BFK and other defendants under the Virginia Wrongful Death Act. BFK filed a plea in bar, asserting that Potter’s action was time-barred under the statute of repose because the Buell Classifier did not qualify as equipment or machinery and, therefore, was subject to the five-year limitation imposed by the statute. The Trial Court determined the Buell Classifier was “ordinary building material” and sustained the plea in bar finding the action was time-barred by the statute of repose. Potter argued on appeal that the Circuit Court erred because it determined that the Buell Classifier was building material and not “equipment or machinery” for which the statute of repose would not apply.
Though the code does not include a definition of “equipment or machinery,” the level of quality control exerted by the manufacturer, the existence of a voidable manufacturer’s warranty, and the existence of use and/or installation instructions are some factors that indicate whether an item is exempt from the statute of repose. Non-fungible parts of land or buildings and fully assembled, independent mechanical devices that are not essential structural components of a structure or building are generally equipment under the statute. Applying these factors to the Buell Classifier, the court held it to be equipment. BFK exerted control over its installation and maintenance, and it came with an installation and operation manual. The Buell Classifier is not an essential component of the silo, neither fungible nor generic, and is a mechanical component. The Supreme Court reversed and remanded the case for further proceedings.
Questions about this case can be directed to Nicholas Phillips at (571) 464-0436 or email@example.com.