eNotes: Liability – March 2020
February 28, 2020
TT&H LAWYERS IN COURT
TT&H Attorney Christopher Gallagher wins dismissal of civil rights suit.
Chris Gallagher, an attorney in TT&H’s Philadelphia office, recently won the dismissal of a federal civil rights lawsuit filed in the United States District Court for the Eastern District of Pennsylvania. Plaintiff brought the action pursuant to 42 U.S.C. § 1983, alleging Defendants violated his rights under the 4th and 14th Amendments by unreasonably searching him without probable cause, leading to confinement and a false arrest. Dismissing the Plaintiff’s action with prejudice, the Court agreed with Attorney Gallagher that the Plaintiff failed to establish that his constitutional rights were violated. Law clerk and incoming associate, Matt Gerarde, contributed to the Motion to dismiss.
Questions about this case can be directed to Christopher Gallagher, at (215) 564-2928 or cgallagher@tthlaw.com.
Attorney Lacey Conn wins summary judgment for Condominium Association in property damage case.
Lacey Conn, an attorney in TT&H’s Fairfax, VA office, recently won summary judgment in a property damage action brought against a Condominium Association in Washington, DC. Plaintiff, who owned a condominium within the Association, brought suit against the Association, alleging that the foundation surrounding her building had been graded incorrectly, forcing water towards her unit. Eventually, water began entering the unit, coming up through the floors in several rooms, rendering the unit unlivable. Plaintiff sought to recover for damage to her personal property, for the repairs to her unit, and for the lost value of the unit. In winning summary judgment, Lacey relied upon the Association’s Bylaws, which contained a limitation of liability clause. Specifically, the Association was not liable for damages resulting from water which leaked or flowed from any portion of the common elements. Plaintiff did not dispute that the foundation was a common element. The Court granted the Motion for summary judgment, finding as a matter of law that the limitation of liability clause expressly prohibited any liability against the Association under the circumstances.
Questions about this case can be directed to Lacey Conn, at (571) 464-0433 or lconn@tthlaw.com.
Attorney Lauren Upton wins dismissal of negligence action.
Lauren Upton, an attorney in TT&H’s Baltimore office, recently won the dismissal of a negligence action resulting from a car accident. The action, which had been filed in the Circuit Court for Baltimore City, was brought against the registered owner of the involved vehicle under a theory of agency. Plaintiff alleged that the driver of the vehicle was an employee and/or agent of the Defendant.
Lauren won summary judgment for the Defendant. She established that he had sold the involved vehicle to the driver about a month prior to the accident and that the new owner had failed to register the vehicle after purchase. Lauren convinced the Court that, under the circumstances, the Defendant had rebutted the presumption that the driver was acting as his agent and/or employee and that he was the owner of the vehicle at the time of the accident.
Questions about this case can be directed to Lauren Upton, at (443) 641-0572 or lupton@tthlaw.com.
CLIENT ADVISORY
PENNSYLVANIA CLIENT ADVISORY
New legislative amendments expose state and local government entities and agencies to negligence claims for sexual abuse of minors.
Recent amendments to Pennsylvania’s Sovereign Immunity Act and Political Subdivision Tort Claims Act significantly increase the exposure of state and local government entities to liability for sexual abuse of minors. Only negligent acts within the statutory exceptions to immunity can subject a government entity to liability, and until now, liability had been capped at $500,000 and limited to specific types of damages. If a government employee engaged in “willful misconduct,” the entity itself retained its immunity.
The amendments, which were signed into law on November 26, 2019, effective immediately, change the landscape of government immunity as it relates to claims based upon sexual abuse of minors. Previously, government entities were immune from state law tort claims related to sexual abuse, because the immunity statutes provided no exception for these claims. The only theory available to plaintiffs was the “state-created danger” doctrine under the Fourteenth Amendment to the U.S. Constitution, which requires a level of fault well beyond negligence.
The amendments create a new exception to immunity under both the Sovereign Immunity Act and Political Subdivision Tort Claims Act, whereby a government entity and its employees may be held liable for conduct constituting a criminal offense under 42 Pa.C.S. § 5551(7) (including rape, sexual assault, and institutional sexual assault of a person under the age of 18) “if the injuries to the plaintiff were caused by actions or omissions of the [state or local government agency] which constitute negligence.”
Although no case law interpreting and applying these provisions is available yet, this new exception to immunity could be construed to permit recovery against a public school for a teacher failing to detect and report the sexual abuse of a student, and if the abuse is perpetrated by a teacher, for negligently hiring or retaining that teacher. It could also be applied in the context of alleged sexual assault of a minor while in police custody. This new exception to immunity is noteworthy in that, in the context of sexual abuse, a government entity could – in effect – be held liable for intentional acts. The new exception applies to all causes of action arising on or after November 26, 2019, and applies retroactively to causes of action which were not already time-barred under the 2-year limitations period applicable prior to that date.
Additionally, the amendments significantly extend the statute of limitations applicable to civil actions based upon sexual abuse. Previously, an injured party was required to notify the government entity of his or her claim within 6 months of the claim’s accrual. Although this 6-month notice requirement generally has not been enforced by the courts, civil actions brought against a government entity were subject to the 2-year statute of limitations on personal injury claims. Under the amendments, the 6-month notice requirement does not apply to civil actions for sexual abuse of an individual who was under age 18 at the time of the abuse, and such individuals now have a period of 37 years after reaching age 18 to bring such an action. This extended statute of limitations applies regardless of whether a criminal complaint was filed, and will surely pose evidentiary difficulties when claims are pursued decades after the alleged abuse. The new limitations period does not apply to claims that were already time-barred prior to the passage of the amendments on November 26, 2019, but does apply retroactively to claims that were not time-barred as of that date.
The amendments also expose government entities to unlimited damages for negligence relating to sexual abuse. While liability for negligent acts falling within all other exceptions to immunity is capped at $500,000, the amendments exclude claims for sexual abuse from this cap.
Thus, the new exception, along with the lack of any damages cap could have considerable financial impact upon state and municipal government entities and agencies, their insurers, and taxpayers.
Questions about this advisory can be directed to Karin Romano, at (412) 926-1426 or kromano@tthlaw.com.
FIRM NEWS
Thomas, Thomas & Hafer, LLP, Launches New Office in Fairfax, VA, Effective February, 2020.
February 25th, 2020. Thomas, Thomas & Hafer, LLP is announcing our 10th office location in Fairfax, VA. The location will complement our coverage in the Washington-Arlington-Alexandria Metropolitan Area. The office enhances the Firm’s ability to serve the needs of its clients in an effective, efficient and cost effective manner. The office address is:
Thomas, Thomas & Hafer, LLP
10555 Main Street, Suite 300
Fairfax, VA 22030
Phone: (571) 464-0432
Fax: (571) 464-0441
The office is led by TT&H Attorney Lacey Ullman Conn. Lacey is a partner who previously worked in the Washington D.C. office. Prior to joining Thomas, Thomas & Hafer, LLP, Lacey worked for a large national insurer, during which time she tried over 50 jury trials and obtained her Chartered Property Casualty Underwriter (CPCU) designation.
The office will work to provide exceptional legal services tailored to the needs and expectations of a diverse client base in a manner that meets the highest standards of professional integrity.
Thomas, Thomas & Hafer, LLP is a regional civil litigation defense firm with over 80 lawyers in ten offices throughout the Mid-Atlantic region.
SIGNIFICANT CASE SUMMARIES
FEDERAL CASE SUMMARIES
Danziger & De Llano, LLP v. Morgan Verkamp LLC
United States Court of Appeals for the Third Circuit
No. 19-1986, 2020 U.S. App. LEXIS 1382
Decided: January 15, 2020
Engaging in pre-complaint discovery did not constitute waiver of personal jurisdiction defense, nor was the defense waived by removal.
Background
Plaintiff Danziger & De Llano is a Texas law firm. Frederick Morgan and Jennifer Verkamp were attorneys at Danziger until 2008, when they resigned and formed the Defendant law firm, Morgan Verkamp, located in Ohio. Subsequent to their departure, Plaintiff referred potential qui tam clients to Mr. Morgan and Ms. Verkamp. One of those clients, Michael Epp, was referred to Mr. Morgan and Ms. Verkamp with an oral contract that Plaintiff would receive one third of attorney’s fees as a referral fee. Mr. Epp retained Defendant as counsel, but he did not promise Plaintiff a referral fee. Defendant brought a qui tam action on behalf of Mr. Epp in the Eastern District of Pennsylvania and ultimately recovered a settlement of hundreds of millions of dollars. Plaintiff requested its one third referral fee which Defendant did not provide. Plaintiff then sued Defendant in Pennsylvania state court to recover the referral fee.
Plaintiff initiated suit via Writ of Summons. Thereafter, the parties engaged in pre-complaint discovery. Defendant later moved for Plaintiff to file a complaint and Plaintiff did so. After the complaint was filed, Defendant removed the case to federal court and then moved to dismiss for lack of personal jurisdiction. The District Court granted the motion and dismissed with prejudice. Plaintiff filed an appeal asserting that Defendant consented to personal jurisdiction by its participation in pre-complaint discovery and/or its decision to remove to federal court.
Holding
Defendant’s participation in pre-complaint discovery was not consent to personal jurisdiction, as the Pennsylvania Rules of Civil Procedure do not allow a defendant to raise the issue of personal jurisdiction until a complaint has been filed. Furthermore, Defendant did not consent to personal jurisdiction as a result of its decision to remove the case to federal court, as a defendant who removes to federal court carries with it the defenses it had available in state court.
Questions about this case can be directed to Jonathan Danko, at (717) 441-3957 or jdanko@tthlaw.com.
Jones v. SWEPI L.P.
United States District Court for the Western District of Pennsylvania
No. 2:19-cv-00050, 220 U.S. Dist. Lexis 7390
Decided: January 16, 2020
Pennsylvania requirement that an employer can only waive its immunity, if it is expressly and unequivocally set forth in writing, operates, despite a choice of Texas law provision in a contract, the application of which would have held the employer liable under Texas law.
Background
Jones was killed as a result of a workplace accident involving a hydraulic jack sold by Consolidated Rig to Jones’ employer, Deep Well, under a written agreement that included a choice of law provision selecting Texas law. Unlike Pennsylvania law, Texas law does not require an express and unequivocal waiver of immunity. After the action was filed against the seller of the hydraulic jack and two other defendants, Jones’ employer was joined based upon a choice of Texas law provision in the written agreement. Applying Texas law would make Jones’ employer liable to indemnify Consolidate Rig, whereas applying Pennsylvania law would immunize Jones’ employer under Pennsylvania’s workers compensation statutory scheme.
Holding
Since the accident occurred in Pennsylvania, applying Texas law would violate Pennsylvania’s materially greater interest in protecting its workers, and offend the public policy of Pennsylvania.
Questions about this case can be directed to Joe Holko, at (610) 332-7005 or jholko@tthlaw.com.
PENNSYLVANIA CASE SUMMARIES
Roverano v. John Crane, Inc.
Pennsylvania Supreme Court
Nos. 26 EAP 2018, 27 EAP 2018
Decided: February 19, 2020
Supreme Court holds per capita apportionment in asbestos cases applies rather than percentage apportionment.
Background
In the course of his employment, Roverano was exposed to a variety of asbestos products over an 11 year period. After he was diagnosed with lung cancer, he filed his action against 30 Defendants claiming that each of their asbestos products caused his lung cancer. Crane joined the Johns-Manville Personal Injury Trust. Later in the lawsuit, one Defendant moved to include 14 asbestos bankruptcy trusts on the verdict slip. None of the 14 trusts were named Defendants. Before trial, a number of Defendants reached a settlement with Plaintiffs but some trusts did not.
The jury returned a verdict in favor of Plaintiffs for $5,189,265.14 against two Defendants and 6 of 8 Defendants who had reached a settlement with Plaintiffs. Although the two Defendants argued that the jury should have apportioned liability on a percentage basis under Pennsylvania’s Fair Share Act and considered the Johns-Manville Trust’s payments to Plaintiffs and any compensation the Plaintiffs had received or will receive from the other 14 bankruptcy trusts, the Trial Court applied a per capita (by or for each Defendant) allocation and divided the verdict amount by the 8 Defendants found liable by the jury. Accordingly, each Defendant was held liable for $648,858, plus $29,604 in delay damages and an additional $156,250 for Mrs. Roverno’s loss of consortium.
The Superior Court held that the Fair Share Act replaced per capita apportionment with percentage allocation and that to do otherwise would result in no one defendant ever being held 60% or more at fault, negating the effect of the Act. The case was remanded for a new trial on damages.
Holding
The Supreme Court disagreed with the Superior Court and held, “Lung cancer resulting from asbestos inhalation is inherently a single, indivisible injury that is incapable of being apportioned in a rational manner because the individual contributions to the Plaintiff’s total dose of asbestos are impossible to determine . . . Consequently, when two or more actors combine to cause an indivisible injury, and each is a substantial contributing factor, each actor is the legal cause of the entirety of the harm. Because it is impossible to determine which actor caused the harm, it follows that it is impossible to apportion the amount of each Defendant’s liability on a percentage basis.” And, therefore, it would be ”unreasonable and impossible of execution” to require a calculation of each individual Defendant’s percentage of liability in asbestos litigation because of the nature of the injury. After finding that the Fair Share Act’s language is consistent with a per capita apportionment in asbestos cases, they reversed the Superior Court and remanded the case to the Trial Court to consider whether the Defendants submitted sufficient requests and proofs to apportion liability to the settled bankruptcy trusts that were not included as part of the jury’s liability verdict.
Chief Justice Thomas Saylor dissented on the issue of apportionment, arguing that “the majority . . . attributes insufficient weight to the clear indicia of the legislature’s intent to proceed in a new direction by implementing a fair share or comparative responsibility regime.”
Questions about this case can be directed to Joe Holko, at (610) 332-7005 or jholko@tthlaw.com.
Grix v. Progressive Specialty Ins. Co.
Pennsylvania Superior Court
No. 312 MDA 2019
Decided: February 10, 2020
Stacked UIM benefits were denied where decedent was not a resident relative of her parents’ home at the time of the auto accident.
Background
Plaintiffs Grixs’ daughter died in a motor vehicle accident that involved a vehicle owned by the Grixs. At the time of the accident, the Grixs owned 5 vehicles and carried stacked UIM coverage with Defendant Progressive Speciality. Plaintiffs claimed they were entitled to stacked UIM benefits for their daughter because (1) she was a resident relative of their household and (2) they paid premiums for her.
In looking at the evidence, the Superior Court found that although the daughter received mail at her parents house and kept some personal belongings there, she could not be considered a “resident.” The daughter had signed a lease for an apartment six weeks prior to her death. She slept in the apartment every night, paid bills, and participated in the cleaning and upkeep. Additionally, Progressive’s policy unambiguously stated that it was to be notified within 30 days of changes to residents in the household. The Court found that the Grixs’ failure to comply with the insurance policy provisions did not entitle them to stacked UIM benefits.
Holding
Summary Judgment was upheld in favor of insurance carrier Progressive Speciality because evidence revealed that decedent was not a resident of her parent’s home at the time of the accident, despite her parents paying premiums on her behalf.
Questions about this case can be directed to Jolee Bovender, at (717) 255-7626 or jmbovender@tthlaw.com.
Derr v. Nat’l Fire Ins. Co.
Pennsylvania Superior Court
No. 1340 EDA 2019
Decided: February 6, 2020
Employer who maintained fleet of vehicles is not required to notify employees that UIM has been rejected.
Background
Plaintiff, a municipal employee, was injured in a motor vehicle accident while operating a vehicle owned by his employer. Plaintiff’s claim for underinsured motorists coverage was denied by the employer’s automobile insurer because the municipality, as the named insured, had rejected UIM coverage on the fleet of vehicles it owned. Plaintiff filed a Complaint seeking declaratory judgment claiming that the denial of coverage violated the Pennsylvania Motor Vehicle Responsibility Law (MVFRL) and was against public policy. The insurer filed preliminary objections which were sustained and the Complaint was dismissed.
On appeal to the Superior Court, Plaintiff claimed that when an insurer makes a mandatory offer of UIM coverage under the MVFRL to an employer that maintains a fleet of vehicles operated by employees on a daily basis, public policy suggests that the MVFRL requires the insurer to require the employer to notify its employees of its intent to reject UIM coverage on the fleet. The Court noted that there was no precedential case law or statute stating such a requirement and the public policy argument had never been analyzed by Pennsylvania appellate courts.
Although not bound by the decisions, the Court reviewed analogous, conflicting decisions from various state trial courts and from the Eastern District of Pennsylvania, which discussed public policy as it relates to rejection of UIM coverage. The Court concluded that the notion that an employer who fails to notify its employee driver that UIM coverage has been rejected acts against public policy is an anomaly. Since relevant case law holds that it is not against public policy where some employees are not covered for UIM, where the coverage was explicitly rejected by the employer, it is not against public policy if all employees are not covered for UIM where the employer explicitly rejects such coverage. Thus, a named insured’s rejection of some or all drivers of its vehicles does not violate public policy.
Holding
The Court affirmed the Order of the Trial Court sustaining the preliminary objections and dismissing the complaint in its entirety because an employer, as a named insured, may reject UIM coverage for any driver of its vehicles, including its employees, without a requirement to notify the employees.
Questions about this case can be directed to James Swartz, III, at (610) 332-7028 or jswartz@tthlaw.com.
Eckert v. Unitrin Auto Home Ins. Co.
Pennsylvania Superior Court
No. 1013 EDA 2019, 2020 Pa. Super. Unpub. LEXIS 249
Decided: January 22, 2020
Superior Court holds that Trial Court did not abuse its discretion when it granted the Defendant’s Motion for summary judgment pursuant to the “Regular Use Exclusion” that was found in the Plaintiff’s automobile policy.
Background
Plaintiff Linda Eckert is a school bus driver. She was involved in a motor vehicle accident with an underinsured driver while in the scope of her employment. Plaintiff filed a claim with her personal automobile carrier, Unitrin Auto Home Ins. seeking underinsured motorist coverage. Defendant rejected Plaintiff’s claim based on the regular use exclusion provision contained in her policy. The “Regular Use Exclusion” in the automobile insurance policy states, in relevant part, that Defendant “do[es] not provide [UIM c]overage for ‘bodily injury’ sustained . . . [b]y you while ‘occupying’ . . . any motor vehicle you ‘own’ or any motor vehicle which is furnished or available for your regular use. . . .”
Plaintiff filed suit seeking UIM coverage under her automobile policy. Defendant filed its Answer with New Matter, and a Counterclaim for Declaratory Relief asserting the “Regular Use Exclusion” in the UIM policy barred coverage and later a Motion for summary judgment. The Trial Court entered summary judgment on the declaratory judgment claim, concluding that “Regular Use Exclusion” precluded Plaintiff’s recovery of UIM benefits.
On appeal, Plaintiff argued that the Trial Court erred in granting the Motion for summary judgment pursuant to her automobile insurance policy’s “Regular Use Exclusion,” as there was a genuine issue of material fact as to whether her use of the school bus constituted “regular use.” She emphasized that her use was not “regular” because her employer precluded her personal use of the fleet vehicles and that she only drove the bus for five to six hours a day.
Holding
The Court determined that it was undisputed that Plaintiff was injured while driving a school bus, which she did not own. The Court also found that it was undisputed that she drove the particular bus in which she was injured about 80 percent of the time, and that she had regular access to all vehicles in the fleet. Lastly, the Court determined that it was undisputed that she did not pay insurance premiums to compensate for the risk that Plaintiff would sustain an injury driving a vehicle that she used regularly, but that her personal automobile insurance policy did not cover. Accordingly, the Superior Court affirmed the ruling of the Trial Court and held that the “Regular Use Exclusion” barred coverage under the automobile policy.
Questions about this case can be directed to Christopher Gallagher, at (215) 564-2928 or cgallagher@tthlaw.com.
Cragle v. O’Brien
Pennsylvania Superior Court
2019 Pa. Super. 360
Decided: December 20, 2019
Plaintiff was not entitled to adverse inference for altered medical record.
Background
David Cragle initiated a medical malpractice action resulting from negligent treatment of a knee condition. During treatment, he saw Dr. Matucci. Dr. Matucci’s office note indicated that Cragle had swelling in his calf and bleeding from the back of the knee. He applied a pressure dressing and advised Cragle to stay off of, and elevate, the leg, and to see his regular physician the following Monday. In addition to the above, the office note stated that Dr. Matucci was admitting Cragle to the hospital, because he was having a hard time walking, for evacuation of a hematoma, and for irrigation of the wound. Dr. Matucci testified that he did not know how this information was added to the note, but that none of the added information was accurate. Dr. Matucci testified that Cragle did not need to be admitted to the hospital, and Cragle did not contend that Dr. Matucci sent him to the hospital. The record also contained a prescription for Oxycodone written by Dr. Matucci but dated the day after Cragle’s appointment and was not included in the office note.
During trial, Dr. Matucci had no explanation as to how the inaccurate information was added to his office note, or why he dated the prescription the wrong date. Cragle requested that the judge instruct the jury on Standard Jury Instruction 5.70, Intentional Alteration or Destruction of Documents, which permits an adverse inference where a party intentionally alters a relevant document, but cannot satisfactorily explain the alteration. Cragle did not specifically request Standard Jury Instruction 14.40, Alteration or Destruction of Medical Records, which permits an adverse inference where a party intentional alters medical records and cannot satisfactorily explain the alteration. The Trial Court declined to give an adverse inference instruction. The jury found Defendants negligent, but also found that their negligence did not cause Cragle’s damages.
Cragle appealed, arguing that it was error for the Court to fail to give an adverse inference instruction pursuant to Instruction 14.40 because Dr. Matucci’s medical note was contradictory and altered for self-preservation, and it could be assumed that this alteration was motivated by Dr. Matucci’s concern that the unaltered material would have been unfavorable to his position.
Holding
The Superior Court held that Cragle did not specifically request Instruction 14.40 and thus his argument based on that instruction was waived. Further, it held that the medical alteration in this case “was not the type or degree which supported an ‘adverse inference’ instruction.” The note had information concerning events that did not happen, but there was no contention that the remainder of the note was inaccurate, or that any information was missing from the note. Thus, there was no reason to give an adverse inference. Further, even if it was error for the trial court to fail to give Instruction 5.70, the error was harmless because any adverse inference would have supported a finding of negligence. Here, the jury found Defendants negligent, and thus any error due to failure to provide an adverse inference was harmless.
Questions about this case can be directed to Julia Morrison, at (717) 441-7056 or jmorrison@tthlaw.com.
MARYLAND CASE SUMMARIES
Nat’l Ink and Stitch, LLC v. State Auto Prop. & Cas. Ins. Co.
United States District Court for the District of Maryland
No. SAG-18-2138
Decided: January 23, 2020
Under certain insurance policies, software and data can be susceptible to physical loss and damage and entitled to coverage.
Background
Plaintiff sought coverage for damage sustained to its computer system after a ransomware attack. After downloading new software to combat the attack, the computer system lost art files and was slowed down. Additionally, some of the ransomware virus remained dormant in the system. Plaintiff’s insurance policy stated the Plaintiff had coverage for “direct physical loss or damage to covered property at the premises described in the declarations caused by or resulted from any covered cause of loss.” Covered property included “electronic media and records.” Plaintiff’s insurer denied coverage for the cost of replacing Plaintiff’s computer system. The insurer contended that because the Plaintiff only lost data and could still use the computer system, it did not experience any “direct physical loss or damage.” Rather, the data was an intangible asset, not a direct physical loss. Plaintiff argued the system was covered under the plain language of the policy.
Holding
The District Court found that Plaintiff could recover for the loss of data and software on the computer system or the loss of optimal function of the computer system. Data and software can be susceptible to physical loss or damage. In addition, to recover, Plaintiff did not have to demonstrate an “utter inability to function.” The impaired functioning of the system was sufficient. Summary judgment was granted in favor of Plaintiff.
Questions about this case can be directed to Lauren Upton, at (443) 641-0572 or lupton@tthlaw.com.
Pa. Nat’l Mut. Cas. Ins. Co. v. Jeffers
Maryland Court of Special Appeals
No. 960, September Term, 2017
Decided: January 31, 2020
An insurer is not obligated to indemnify the insured for injury that arose before or after the requisite terms of the policy period.
Background
Two minors sought a declaratory judgment that Penn National shall tender the full amount of the judgment entered in a lead paint action. Penn National was not the insurer of the property for the entirety of the time the minors were exposed to lead. In addition, a portion of the damages for one of the minors was alleged to have occurred in utero. Penn National asserted it was obligated to tender a pro-rated portion of the judgment encompassing the period of time that Penn National was the insurer of the property owner of the property at which the minors resided.
The matter presented three issues: (1) whether an insurer had a duty to indemnify its insured for injury that arose before or after the requisite terms of the policy period when the insured is seeking coverage for continuous bodily injury, i.e., lead paint exposure; (2) whether a plaintiff could suffer in utero damages; and (3) whether an insurer must pay for all interest on the full amount of the judgment when it is only obligated to pay a portion of the judgment.
Holding
First, the Court of Special Appeals noted that Maryland follows a “pro rata by time-on-the-risk allocation” for cases of injury from continuous exposure to harmful substances like lead paint. Therefore, an insurer is not obligated to indemnify the insured for injury that arose before or after the terms of the policy period. An insurer does not make unqualified promises to pay the entirety of the judgment; rather, an insurer promises to pay for the period during which the insurance policy applied. While Plaintiff may recover for bodily injury in utero, in this matter, the Plaintiff failed to present sufficient evidence that any bodily injury was suffered in utero. As for the interest, an insurer remains liable for all interest up until it has tendered its liability limit in the matter.
Questions about this case can be directed to Lauren Upton, at (443) 641-0572 or lupton@tthlaw.com.
Hector v. Bank of New York Mellon
Maryland Court of Special Appeals
No. 3100, September Term 2018
Decided: January 29, 2020
For a trustee to be held personally liable, it must be personally at fault, i.e., that the trustee individually “committed, inspired, or participated” in the tortious conduct.
Background
Plaintiffs sued three Defendants in a lead paint negligence action – two property owners and BNYM. BNYM was sued in its individual capacity, not trustee capacity. BNYM was appointed as trustee of the Trust that owned the property to initiate foreclosure proceedings when the original property owner defaulted on her loan. Plaintiff resided at the property while the Trust had ownership.
BNYM moved for summary judgment. Plaintiffs alleged that BNYM was an “owner” of the property pursuant to the Baltimore City Code and had a duty to maintain and/or manage the property. BNYM argued that as trustee, they had no responsibility to manage the property and thus cannot be found negligent. The Circuit Court granted summary judgment.
Holding
Maryland recognizes a difference between a party in its trustee capacity and individual capacity. An entity can be individually liable only if the entity, in its capacity as trustee, was personally at fault for the injuries. Personally at fault means the entity “committed, inspired, or participated” in the tortious conduct. The Court of Special Appeals held that Plaintiffs failed to produce any evidence the BNYM was personally liable in this action, even if the trustee could be considered an “owner” under the Baltimore City Code. The trustee’s role at the property was merely passive. BNYM were not enabled with authority to make improvements upon the property. Therefore the Trial Court’s entry of summary judgment was appropriate.
Questions about this case can be directed to Lauren Upton, at (443) 641-0572 or lupton@tthlaw.com.
DC CASE SUMMARY
Hale v. United States of America
U.S. District Court for the District of Columbia
No. 13-1390 (RDM)
Decided: August 9, 2019
In case of first impression, U.S. District Court for the District of Columbia holds alleged OSHA violations do not preclude application of contributory negligence defense.
Background
Plaintiff Robert Hale sued the U.S. Government for damages under the Federal Tort Claims Act for injuries that he sustained, when performing repairs at a building in the Washington Navy Yard owned by the U.S. Department of the Navy. Hale was employed by a subcontractor for the Navy and was at the Navy building to perform HVAC repairs. In order to access the HVAC unit, Hale climbed into a dark space without a flashlight and crawled along a wooden plank in search of the unit controls. Hale then stood up and struck his head on a conduit, lost his balance, and fell twelve feet through a drop ceiling, and landed on top of a pile of carpet tiles in the building’s kitchen. Hale suffered multiple fractures to his wrist as a result of the fall. Hale had never been to the work location prior to the date of the accident.
The Government argued that Hale’s claims were barred by contributory negligence, and Hale argued that the Government’s violation of various OSHA regulations precluded the defense of contributory negligence. Under long-standing D.C. law, a plaintiff cannot recover in negligence if the plaintiff failed to exercise ordinary care and that failure was a substantial factor in causing the alleged injuries or damages. Hale tried to avail himself of an exception to contributory negligence that was first articulated in the case of Martin v. George Hyman Constr. Co., which held that a defendant’s violations of safety statutes imposing a higher duty of care than the reasonable care required under the common law, preclude the application of contributory negligence.
Holding
Judge Randolph D. Moss found that Hale was contributorily negligent because he failed to carry a flashlight and this contributed to his fall. Judge Moss then examined the legislative history of OSHA and held that the Government’s violation of OSHA statutes did not preclude the application of contributory negligence. Judge Moss found that the plain and unambiguous language of OSHA makes clear that OSHA is not intended to change the common law, and it would “contravene the plain language of the statute” to hold that contributory negligence does not apply where a plaintiff alleges OSHA violations. Judge Moss held that Hale’s contributory negligence in failing to use a flashlight barred his recovery, because neither the text nor purpose of OSHA suggested that Congress intended for a defendant’s violation of OSHA to bar the defense of contributory negligence.
Questions about this case can be directed to Peter Biberstein, at (202) 945-9506 or pbiberstein@tthlaw.com.
VIRGINIA CASE SUMMARY
Radiance Capital Receivables Fourteen, LLC v. Foster
Virginia Supreme Court
833 S.E.2d 867
Decided: October 24, 2019
Waiver of the statute of limitations contained in a guaranty was not valid under Virginia law.
Background
On February 21, 2006, Wilson Building executed a promissory note in favor of New South Federal Savings Bank based on a construction loan. On March 2, 2006, Defendants executed a Continuing Guaranty agreement with Bank in which they personally guaranteed and promised to pay all of Wilson’s debt. In the Guaranty, Defendants agreed to waive the benefit of any statute of limitations with respect to the Guarantor’s liability under the agreement. Wilson eventually defaulted on the loan and a demand for payment was sent in August of 2010. On November 23, 2015, Plaintiff, the assignee of Bank and new holder of the Guaranty, filed a complaint against Defendants seeking to collect the principal balance due on the note, interest, and attorney’s fees. Defendants asserted that the claim was barred by the applicable statute of limitations.
During the hearing on Defendants’ Plea, the parties agreed that the Virginia 5 year statute of limitations applied; however, Defendants argued that the waiver in the Guaranty did not meet the specific requirements of Va. Code § 8.01-232, which addresses the effect of promises not to plead the statute of limitations. Plaintiff argued that the Guaranty contained a waiver of the statute of limitations defense, as opposed to a promise not to plead. The Circuit Court sustained the Plea and dismissed the case with prejudice, finding that the contractual waiver was neither valid nor enforceable under Virginia law.
Holding
A written promise not to plead the statute of limitations is valid only when: (1) it is made to avoid or defer litigation pending settlement of any case; (2) it is not made contemporaneously with any other contract; and (3) it is made for an additional term not longer than the applicable statute of limitations. The waiver at issue does not meet these requirements, as it was made contemporaneously with the Guaranty and attempted to waive the right to plead the statute of limitations for an indefinite period of time. A waiver of the right to plead the statute of limitations and a promise not to plead the statute of limitations have the same practical effect; therefore, Plaintiff’s argument to that effect is misplaced. The order dismissing the case with prejudice was affirmed.
Questions about this case can be directed to Lacey Conn, at (202) 945-9502 or lconn@tthlaw.com.