eNotes Liability: April 2021

SIGNIFICANT CASE SUMMARIES

FEDERAL CASE SUMMARIES

Snair v. Speedway LLC
United States District Court for the Western District of Pennsylvania
2021 U.S. Dist. LEXIS 9053

Decided: January 19, 2021

Summary Judgment granted for snow removal subcontractor, but not contractor, in slip and fall case.

Background

Plaintiff slipped and fell on what he alleged was a patch of snow and ice while passing through an area between the fuel pump and column supporting the canopy covering the fuel-dispensing area. At the time of the fall, the gas station had a contract in place with a snow removal company to remove all snow from the fueling areas when called by the gas station or when there was a two inch accumulation of snow. At the time of the fall, the snow removal company had a contract in place with a subcontractor to perform “certain of the services” and listed several items that were out of the scope of the subcontract. Given the subcontract, the snow removal company joined the subcontractor to the litigation on a theory of contribution and indemnification. The gas station, snow removal contractor, and snow removal subcontractor all filed for summary judgment on various grounds.

Holding

Upon reviewing the specific language of the subcontractor’s contract with the original snow removal company, the District Court found that the area where the Plaintiff’s fall occurred was outside of the scope of its contractual duties, and accordingly, it had no contractual obligation to indemnify the snow removal company. The Court accordingly granted the subcontractor’s Motion for summary judgment. The District Court denied the gas station’s and snow removal contractor’s summary judgment motions finding that there were issues of fact relating to notice and whether the snow removal company breached a duty under its contract with the gas station. The snow removal company’s motion for reconsideration as to its argument that its contractual duty was not triggered at the time of the accident was denied.

Questions about this case can be directed to Brook Dirlam at (412) 926-1438 or bdirlam@tthlaw.com.

Dukich v. IKEA US Retail, LLC
United States District Court for the Eastern District of Pennsylvania
No. 20-2182

Decided January 14, 2021

Economic loss doctrine does not bar plaintiff’s claims under the UTPCPL when asserted under a theory of negligence, even if plaintiff only pleads economic injury.

Background

Plaintiffs brought this class action related to two voluntary recalls issued by IKEA. The product at issue was a dresser sold throughout the United States that could tip over if not properly anchored to the wall. IKEA stated eligible purchasers could either have the item repaired via installation to the wall or refunded by returning the product. Plaintiffs opted to return the product for an approximate cash value of $200. However, the IKEA in their town refused to accept the return and provide a refund. Plaintiffs brought suit under the UTPCPL for deceptive or unfair practices and for negligence due to the store’s failure to accept the recalled item. Plaintiffs did not seek damages for personal injuries or diminution in the value of the dressers. At issue was IKEAs motion to dismiss for failure to state a claim due to the economic loss doctrine.

Holding

The Eastern District of Pennsylvania denied the Motion to dismiss. The Court held that Plaintiffs’ claims could proceed under both the UTPCPL and a theory of negligence although they only pled economic injury. The prior law of economic loss doctrine stated that plaintiffs are prohibited “from recovering in tort economic losses to which their entitlement flows only from a contract.” The law has evolved to allow for a plaintiff’s recovery for solely economic losses if the defendant breaches a duty that arises independent of any contractual duty between the parties.

The duty between the two parties arose from two voluntary recalls issued by IKEA to refund for purchase value or repair the eligible dressers. This duty was placed on all local IKEAs to accept a return of the product for their purchased value. This duty arose independent of any prior contractual duty between Plaintiffs and IKEA. Thus, Plaintiffs can recover in tort for economic losses, and the economic loss doctrine does not bar their claims, because the duty to refund or repair eligible items from IKEA was independent.

Questions about this case can be directed to Matthew Gerarde at (267) 861-7584 or mgerarde@tthlaw.com.

Wright v. Whitehall Township
United States District Court for the Eastern District of Pennsylvania
No. 5:20-cv-02664, 2021 U.S. Dist. LEXIS 5422

Decided: January 12, 2021

Eastern District Court allows claims for conspiracy to violate civil rights under 42 U.S.C. §§ 1983 and 1985 to be re-plead while dismissing Amended Complaint.

Background

This civil rights action was brought following an altercation at a high school basketball game in Whitehall, Pennsylvania. Plaintiff Wright’s son, Mekhi Burkett, was among a group of several African American teenagers watching from the bleachers. One of these individuals, Nyceire Allen, had given the (Caucasian) Whitehall Athletic Director “attitude,” which was reason to order his ejection from the premises with the help of Whitehall Township police. Four white police officers went into the bleachers to remove Allen, and faced questions from the other teenagers over why the ejection was necessary. Upon the insistence of the A.D. from the floor, the officers began using force to remove Mr. Allen, including a canine. Burkett was knocked down several bleachers during the removal altercation.

Following this removal, Burkett and a friend were dragged several feet by the officers into the hallway outside the gymnasium. Burkett was placed into a chokehold with his arm pinned behind his back. Despite asserting that he “couldn’t breathe” and that his arm was being broken, Burkett was lifted and slammed into the floor. He sustained a concussion. Burkett and three other African American students were then taken into custody. Burkett and the others were held in custody for over an hour without medical attention before they were allowed to speak to their parents. Plaintiff Wright, on behalf of her son, then alleged a number of claims against Defendants. These included among other claims, violations of and conspiracy to violate Burkett’s constitutional rights, Pennsylvania State Constitutional violations, and assault and battery. Defendant Whitehall Township moved to dismiss the Amended Complaint.

Holding

As a result of the Motion, all claims in the Amended Complaint were deemed to fail. While almost all of the parties and most claims were deemed futile and dismissed with prejudice, the Court allowed leave to re-plead claims for conspiracy to violate civil rights under Sections 1983 and 1985. Although deficient in their current state, the court acknowledged with an abundance of caution, that there could be facts yet un-pled that made these particular claims plausible. These unstated facts could theoretically lead to a conclusion that the officers had an agreement to deprive Burkett and the others of their constitutional rights, and as such, the Eastern District Court dismissed these claims with leave to re-plead.

Questions about this case can be directed to Logan Nagle at (717) 255-7234 or lnagle@tthlaw.com.
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PA CASE SUMMARIES

Sayers v. Heritage Valley Health Sys.
Pennsylvania Superior Court
2021 Pa. Super 42

Decided: March 15, 2021

Trial Court properly decides statute of limitations issue on preliminary objections where right to relief was clear on the face of the Complaint.

Background

Patricia Sayers died on April 19, 2015 allegedly as a result of “combined drug poisoning,” due to the alleged professional negligence of Defendants. Plaintiff filed Writs of summons against the various Defendants on April 18, 2017, but no service was made on any Defendant. Plaintiff had the writs reissued on August 10, 2017, but again, no service was made. New counsel entered an appearance on behalf of Plaintiff and Writs were reissued for a second time on April 3, 2019, nearly four years after Plaintiff’s death. These reissued Writs were eventually served on all Defendants, and Plaintiff filed a Complaint sounding in professional negligence. All Defendants filed Preliminary Objections based on the statute of limitations. Defendants asserted that the failure to make a good faith attempt to serve the 2017 Writs, as reflected on the face of the Complaint and the docket entries, caused the tolling effect of the Writs to be nullified such that when the Writs were finally served in 2019 the statute of limitations had run. Plaintiff filed Preliminary Objections to Defendants’ Preliminary Objections asserting that Defendants objections should be overruled as the defense of the statute of limitations could only be raised as New Matter to the Complaint.

During limited discovery on the statute of limitations issue, no documentation or other evidence was developed revealing any effort to serve Defendants with the 2017 Writs. The Lower Court ruled, based on the face of the Complaint and the limited discovery, that the 2017 Writs failed to toll the statute of limitations as there was no showing of a good faith effort to effectuate service. Plaintiffs appealed.

Holding

The Superior Court affirmed the dismissal of the Complaint on Preliminary Objections. Although the Court agreed that the statute of limitations is an affirmative defense to be raised in New Matter, the Cooper exception permitted the Lower Court to rule on the statute of limitations even when raised by Preliminary Objections. This exception applies when the merits of the defense are clear on the face of the complaint or if apparent from the record that if the defense was raised as New Matter, the defendant would be entitled to relief on a Motion for judgment of the pleadings. After determining that the Cooper exception applied, the Superior Court agreed that the record evidence was clear that there was no “good faith” effort to serve the 2017 Writs on Defendants. The Court agreed that without evidence of a “good faith” effort to serve the 2017 Writs, those filings did not act to toll the statute of limitations. Thus, the eventual service made in 2019 was beyond the 2-year statute of limitations, and Plaintiff’s Complaint was properly dismissed.

Questions about this case can be directed to Rebecca Sember-Izsak at (412) 926-1446 or resember@tthlaw.com.

Ziegler v. Encompass Ins. Co.
Pennsylvania Superior Court
No. 1170 MDA 2020

Decided: February 22, 2021

No breach of contract where insurer agrees to pay loss, though not under the coverage provisions sought by Plaintiffs.

Background

Plaintiffs’ vehicle was damaged after it became stuck in the snow in their driveway and slid off the driveway. Plaintiffs filed a claim for the damage to their vehicle under the comprehensive provision of their auto policy. When Plaintiffs were dissatisfied with what Encompass agreed to pay for the damage under the collision coverage, they filed an action alleging breach of contract and bad faith. After Plaintiffs’ first two complaints were dismissed following Preliminary Objections, Plaintiffs filed a Second Amended Complaint alleging breach of contract and fraud seeking the same relief, but which included no new factual allegations. Plaintiffs claimed that they were entitled to comprehensive coverage rather than collision coverage, which provided for a better recovery. The Trial Court dismissed Plaintiffs Second Amended Complaint with prejudice.

On appeal, the Court noted that Encompass denied coverage under the comprehensive loss because it considered the accident to be a result of a collision. The accident was treated as a collision because the policy specifically defined the types of losses covered under the comprehensive provisions and Plaintiffs’ description of the loss failed to fall within the specifically enumerated provisions. Encompass was willing to perform under the collision provisions, but Plaintiffs wanted more than what the policy provided. In order to be a comprehensive loss, it must first be determined that the occurrence did not constitute a collision. Collision was defined as “the upset or contact of a covered vehicle . . . with another vehicle or object.” There was no breach of contract merely because Plaintiffs rejected Encompass’ offer to pay the claim as a collision loss because the accident did not fit the definition of a comprehensive loss under the terms of the policy. There can be no breach of contract where the insurance company refuses to pay damages that are not covered under a particular section of the policy but is willing to pay damages under the pertinent section of the policy.

Holding

The Superior Court affirmed the dismissal of the Plaintiffs’ Second Amended Complaint with prejudice because there was no breach of contract merely because the insurer offered to pay for damages under a different coverage than sought by Plaintiffs.

Questions about this case can be directed to James F. Swartz, III at (610) 332-7028 or jswartz@tthlaw.com.

Sartain v. United Servs. Auto. Ass’n
No. 4 WDA 2020
Pennsylvania Superior Court

Decided: February 4, 2021

Superior Court upholds Trial Court’s finding that an insurer acted in bad faith by failing to adequately investigate liability and never changing its valuation of damages despite mounting evidence to the contrary; however, the Superior Court also found that the Trial Court did not abuse its discretion in declining to award punitive damages.

Background

This bad faith action arose from USAA’s handling of its insured’s underlying claim for underinsured motorist benefits (“UIM”). The insured was driving downhill when she struck the rear of another vehicle which had just backed onto the roadway. The insured sustained various injuries to her neck and back which required multiple surgeries as well as psychiatric treatment for PTSD. The insured sought UIM benefits under her mother’s USAA policy; however, after review of the matter, USAA found the insured to be at fault and valued the claim at $200,000. The insured thereafter provided a medical report to substantiate the claim for PTSD and disputed liability. USAA failed to retain an expert to evaluate the liability portion of the claim.

The UIM claim was eventually submitted to arbitration. The arbitrator found the insured not at fault and valued her injuries at $600,000. The insured’s estate subsequently pursued a bad faith claim against USAA. The Trial Court found that USAA had acted recklessly and without reasonable basis in continuing to evaluate the claim at $200,000. The Court also determined that USAA’s position on liability represented a “significant failure” to investigate and reevaluate its position. The Trial Court awarded attorney’s fees as bad faith damages, but declined to award punitive damages.

Holding

The Superior Court found no error of law and concluded that the evidence supported the Trial Court’s findings of fact. USAA never changed its valuation of the claim despite “mounting evidence” that the insured’s damages exceeded $200,000. The Superior Court was not persuaded by the insurer’s argument that its valuation hinged on liability and/or comparative negligence and, therefore, was properly considered. To the contrary, the evidence submitted at the time of trial demonstrated that USAA did not consider evidence of the insured’s psychological injuries and should have modified its evaluation accordingly. Finally, the Superior Court held that the Trial Court did not abuse its discretion in declining to award punitive damages. The finding of bad faith does not compel and award of punitive damages, and there was no evidence to conclude that the Trial Court’s decision was manifestly unreasonable.

Questions about this case can be directed to John Lucy at (717) 441-7067 or jlucy@tthlaw.com.
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MD CASE SUMMARIES

Blake v. Chadwick
Maryland Court of Special Appeals
September Term, 2019, No. 1939

Decided: February 26, 2021

Contributory negligence, if present, defeats recovery because it is a proximate cause of the accident; mere generic negligence is not contributory.

Background

Plaintiff Annette Blake filed a suit for damages in the Circuit Court for Baltimore City on behalf of herself and two passengers, her minor grandchildren, as the result of a three-car pile-up on Martin Luther King Boulevard in Baltimore City, Maryland. Defendants were two drivers, David Chadwick and Denia Phillips. Chadwick was driving a truck owned by Co-Defendant, the Mayor and City Council of Baltimore City (‘the City”). Prior to the accident, Blake knew that her vehicle needed a new radiator and that based on prior experiences, her vehicle would shut down when it overheated. She purchased a new radiator and was driving to her mechanic at the time of the accident. She elected to drive on streets with no shoulder. At the time of the accident, the radiator caused Blake’s vehicle to shut down in the middle of a busy street causing the subject accident. Defendant drivers moved for summary judgment arguing that Blake was contributorily negligent.

The Circuit Court granted the Motion for summary judgment on the grounds that Blake was contributorily negligent by knowingly driving a car in an unsafe condition and that the crash occurred as a result of the Plaintiff’s car breaking down. Blake appealed to the Court of Special Appeals which was confronted with the question whether Blake was barred from recovery against either Defendant driver on the ground that she herself was contributorily negligent.

Holding

The Court of Special Appeals held that the Circuit Court properly granted the Motion for summary judgment because the undisputed facts showed that Blake was negligent as a matter of law and that her negligence under the circumstances was the direct and proximate cause of the accident.

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

Giant of Md. LLC v. Webb
Maryland Court of Special Appeals
No. 413, September Term, 2019

Decided: February 25, 2021

Jury verdict of $399,000 reversed and judgment entered for grocery store in harm caused by independent contractor.

Background

Plaintiff was a customer in a grocery store who fell and was injured after being struck by an independent contractor’s cart used to carry product to stock shelves. The independent contractor was not a defendant. While there were thirty cameras in the store, the incident was not captured. A Motion for summary judgment and Motion in limine were denied. The Motion in limine sought to preclude Plaintiff’s counsel from encouraging the jurors to make the grocery store an insurer of its customers’ safety while on its premises. An appeal was filed by Defendant grocery store following a jury verdict in Plaintiff’s favor.

Holding

The Maryland Court of Special Appeals reversed and remanded the matter for entry of judgment in favor of the Defendant. The Court found that general control over an independent contractor’s work is not sufficient to extend liability to the entity hiring them. Rather, it is necessary to demonstrate that the hiring entity had “retained control over the operative detail and methods.” The Court also found that a spoliation instruction was improper in this instance as there can be no act of destruction or failure to preserve evidence not proven to exist and, therefore, no act or omission from which inferences can arise.

Questions about this case can be directed to Michael Burgoyne at (443) 570-6941 or mburgoyne@tthlaw.com.
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DC CASE SUMMARY

Erie Ins. Co. v. W.M. Barr & Co.
United States District Court for the District of Columbia
2021 U.S. Dist. LEXIS 41329

Decided: March 5, 2021

Subrogating insurer’s negligence claim from housing explosion survives Motion to Dismiss.

Background

Erie’s insured experienced water leaks in her basement. The basement leak was subsequently repaired by a contractor. The contractor applied an exterior epoxy throughout the interior of the basement. In order to remove extra epoxy from the floor, the contractor applied acetone and a spray to the floor. After a flame was noticed, an explosion occurred. The insured’s house suffered damages as a result of the explosion. Erie reimbursed their insured, pursuant to the policy. Erie filed suit against the contractor and the manufacturers of the acetone and the spray alleging negligence and breaches of the implied warranty of fitness for particular purpose. Both manufacturers moved to dismiss the Complaint.

Holding

The U.S. District Court for the District of Columbia held that Erie stated a cognizable claim for negligence, but failed to state a claim for breach of the implied warranty of fitness for particular purpose. The Court reasoned that the negligence claim was cognizable because Erie had sufficiently pled that the manufacturers’ negligent failure to warn caused the explosion. The Court also reasoned that the breach of implied warranty of fitness for particular purpose was not cognizable because the manufacturers had no reason to know the particular purpose for which the contractor intended to use the products. As a result, the Court dismissed the breach for implied warranty of fitness for particular purpose and denied the motion to dismiss related to the negligence claim.

Questions about this case can be directed to Ryan Stanley at (202) 945-9504 or rstanley@tthlaw.com.