banner
Picciano & Scahill, P.C. Newsletter
iNews
In this Issue
Trial Tips: The 1% Case
The "Robing Room"
Act of Terrorism
Medicare Advantage Liens
Dog Bite Case
Reaffirmation of "Ancient Principle"
Employee of the Month

 

Lauren Wilkinson
  
This month we are proud to salute one of our many outstanding paralegals, Lauren Wilkinson, who has over ten years experience in insurance defense. Lauren assists a senior attorney with Complex Construction Litigation and also assists two associates with their litigation work. Thank you Lauren for all of your efforts!

 

We are on Facebook
Like us on Facebook
Join Our List
Join Our Mailing List
Issue: 49               
April 2013  

Trial Tips:  The 1% Case

 

Frank Scahill
Frank Scahill

Consider this scenario and let's talk about trial strategy. 

 

You are defending against the perfect case for the a plaintiff. Two Pedestrians crossing Ave. H in Brooklyn, with a green traffic/ pedestrian signal in their favor, within a designated crosswalk. Your client is proceeding south on Coney Island Ave in the right lane with a green light, well within the speed limit. She is driving a minivan, taking her 4 year old to day care at 9:00 o'clock in the morning on a clear sunny summer day. The lane to her left is blocked by a tractor trailer also moving south through the intersection on a green light. Suddenly, and without warning, a northbound vehicle turns left, in front of the tractor trailer and collides with your client. The northbound vehicle spins 360 degrees and strikes the two pedestrians, mother and daughter, causing serious injuries. The carrier for the left turning car offers their policy limits of $700,000. You have $1.3 million in coverage. A verdict on damages will exceed the combined $2 million in coverage. How do you defend the case knowing joint and several liability will expose your entire policy if your client is found 1% at fault?

 

You know the Court will charge the following to the jury: PJI 2:79 "Motor Vehicle Accidents-Collision at Intersection Controlled by Traffic Control Signal: A green light is an invitation to proceed. The driver who has a green light has the right to assume that the light is red for cross traffic and that other drivers will stop for the red light. However, a driver who has a green light must still use reasonable care under the circumstances. Thus, if the driver saw or should have seen another vehicle in the intersection or so near the intersection that a collision was likely to occur, the driver was required to use reasonable care to avoid the collision." Any plaintiff's lawyer can make a lot of hay with that charge. How could any driver not be at least 1% at fault when all they had to do was slow down, keep a better look out, be more attentive.

 

I just finished a trial in Brooklyn with these exact facts and was able to settle the case for a $250,000 contribution from our carrier while the jury was deliberating. My adversary was a very fine attorney who put in a great case. I felt my case also went in well. I had a very credible and intelligent client who testified strongly, and I liked the jury. Nevertheless I had grave doubts about getting out of the case entirely.

 

On a 1% case you have to swing for the fences on closing arguments. Ask the jury not to compromise, that the facts do not call for any compromise at all. Stress that fact repeatedly. Tell them if the plaintiff has proven his or her case then you accept their verdict.  But, if the plaintiff has not proven his or her case, say that and say that LOUDLY! Remember if they find against you, you will be eating a lot of crow before them when you start the damages phase of the trial. Keep your credibility. Stress that they are the judges of the facts and it is their call, not yours. Put the jury back in the moment when the accident happened, that split second when the co-defendant turned dangerously and reckless in front of your client. Ask them, What did your client do wrong? Use your client's first name always. Answer the question you just asked. "Jessica wasn't speeding, she wasn't careless, she wasn't reckless, she was obeying the speed limit, she had the right of way. What requirement are you putting on her that the law does not? If you ask the plaintiff, Jessica is held to a standard that no one in New York is required to obey. I ask you to just treat Jessica fairly and apply the law fairly. I can ask nothing more of you."

 

With a bit of luck and enough doubt in the plaintiff's mind that they could end up with nothing from your carrier, perhaps you can squeeze out a good settlement and save your carrier  a million dollars as I was able to do. Lastly, don't be a hero and be realistic. If the case is going south, drop your rosy predictions and let your claims person know. Always stay cautiously optimistic and GOOD LUCK !  

 

 

The "Robing Room"

 

There are several internet sites which profess to rate the performance of the Judges we appear before for trials.

Gavelbangers.com; Judgepedia

and "The Robing Room" have all popped up in recent years and promise an insider's look  at the Judges of the Trial Courts of New York and the Federal bench. Some of the comments are intemperate and ill advised. The submissions are anonymous and I doubt anyone would own up to some of the posts. Take this one for example on a Queens Trial Assignment Part Judge, "Horrible attitude, would be better served working desk 22 at a local DMV...if he had the skills required to handle the work. Oddly, the rest of the people working in his part are terrific."

 

Nevertheless, The Robbing Room is worth a quick glance when you receive an assignment to a Trial Judge. At least you will know what you are getting into. To my colleagues who have a good experience, I urge you to post a favorable comment. I just finished a trial in Kings before a very capable and fair Judge. When I looked at the comments posted about him, I could not disagree more. I posted the following:

 

"I am the Managing Partner of a New York Defense Firm and I have been trying cases in Brooklyn for 30 years. I totally disagree with the negative comments posted about Judge Mark Partnow. I just finished a trial with Judge Partnow on a high exposure case for the defense. The case involved very serious injuries to two plaintiffs with a seven figure exposure to my client's insurance carrier. Judge Partnow spent hours during the trial negotiating a settlement and when the parties could not agree, he pushed the case forward. The matter settled after the jury had the case for deliberations. Despite his disagreement with the insurance carrier's position on value, he was fair to both sides, engaged in the trial, fair on rulings and knew the law. The Judge was a gentleman on the bench and in discussions in Chambers. I found him to be extremely bright, fair and he lets you try your case. As a Trial lawyer, we can ask for nothing more. The Judge's staff including his personal secretary, Clerk and Court Personnel were all courteous, helpful and professional. I would have no hesitation of being assigned to his part."

Act of Terrorism

 

Insurance Law § 3404 (e) codifies the New York Standard Fire Insurance Policy that insures against all "direct loss" caused by fire and lightning, and provides the "minimum level of coverage permissible" with respect to those perils (see Lane v Security Mut. Ins. Co., 96 NY2d 1, 5, 747 NE2d 1270, 724 NYS2d 670 [2001]). Thus, fire insurance policies must contain "terms and provisions no less favorable to the insured than those contained in the standard fire policy" (Insurance Law § 3404 [f] [1] [A]). If a policy contains a less favorable term, it "is enforceable as if it conformed with the statutory standard" (1303 Webster Ave. Realty Corp. v Great Am. Surplus Lines Ins. Co., 63 NY2d 227, 231, 471 NE2d 135, 481 NYS2d 322 [1984]). In Lane v Security Mut. Ins. Co. (96 NY2d 1, 747 NE2d 1270, 724 NYS2d 670 [2001]), the Court of Appeals held that a fire insurance policy that excludes coverage for an intentional fire set by "an insured" violates Insurance Law § 3404.

 

Commercial property insurance is generally offered in either an all-risk policy or a named-perils policy (see Parks Real Estate Purch. Group v St. Paul Fire & Mar. Ins. Co., 472 F3d 33, 41 [2d Cir 2006]). "Named-perils" covers only specifically enumerated risks, whereas an "all-risk" agreement generally covers all risks of physical loss, except for those perils specifically excluded. Those losses caused by fraud or, in some cases, by a fortuitous and unforeseen event are likewise excluded.

 

In TAG 380 v ComMet 380, Inc. 10 N.Y. 507 (June 3, 2008), the Court of Appelas addressed the issue of whether an "Act of Terror" is covered under a lease which required the tenant to "keep and maintain" insurance for the value of the building "against loss or damage by fire and against loss or damage by other risks included under the standard Extended Coverage Endorsement as presently adopted for use with the New York Standard Fire Insurance Policy, in an amount not less than the then full insurable value of the Building" ComMet 380 Inc. was the owner of 380 Madison Ave. TAG 380 was the tenant at  the property. TAG 380's insurance policy specifically noted, "TERRORISM IS EXCLUDED."

 

The Court of Appeals found in favor of the Property owner noting, "TAG's insurance violated Insurance Law § 3404. In Lane v Security Mut. Ins. Co. (96 NY2d 1, 747 NE2d 1270, 724 NYS2d 670 [2001]), we held that a fire insurance policy that excludes coverage for an intentional fire set by "an insured" violates Insurance Law § 3404. In that case, the plaintiff insured's son, a stranger to the policy, damaged the insured premises by setting it on fire. We held that the insurer violated the Insurance Law by providing less coverage than the minimum level of coverage for fire insurance provided in the standard policy, because it disallowed coverage for a third party intentionally using fire to cause damage to the building. The same reasoning can be applied here too, where terrorists may cause fire damage to a building. We reject TAG's contention that because terrorism is not specifically mentioned as a named peril, it is outside of the coverage."

 

 

APPELLATE DECISIONS OF NOTE
Medicare Advantage Liens

 

What should an Insurance Carrier do with a lien presented (usually by the Rawlings Company) on a Medicare Advantage plan, not a strict Government Medicare Lien?

 

This lien concerns Medicare Advantage organizations acting as "secondary payers" under the Medicare Act. The lien involves benefits received under the Medicare Advantage program, which is set forth in Part C of the Medicare Act. (See 42 U.S.C. §§1395w-21-1395w-29). 

 

We wrote about this issue in November of 2012, reporting that two Judges from the Supreme Court of Kings County held that the Medicare Act does not preempt GOL §5-335. (See Trezza v. Trezza, 32 Misc. 3d 1209(A), 934 N.Y.S.2d 37, 2011 WL 2640794 (N.Y. Sup. Ct. June 23, 2011); Ferlazzo v. 18th Avenue Hardware, Inc., 33 Misc. 3d 421, 929 N.Y.S.2d 690 (N.Y. Sup. Ct. Aug. 22, 2011).

 

The Rawlings Company thereafter successfully appealed Judge Kramer's 2011 decision. Trezza v Trezza, 104 A.D.3d 37 decided on December 26, 2012, by the Appellate Division Second Department, reversed the decision of the lower Court and held that the Medicare Advantage lien is valid, preempting the General Obligations law provision which extinguished the lien (5-335).

 

Judge Dickerson, writing for the unanimous panel held, "Based on the express preemption provision set forth in 42 USC § 1395w-26(b)(3), as well as the regulations set forth in 42 CFR 422.108(f), we hold that General Obligations Law § 5-335, insofar as applied to Medicare Advantage organizations under Part C, is preempted by federal law since it would impermissibly constrain contractual reimbursement rights authorized under the "Organization as secondary payer" provisions of the Medicare Act (see 42 USC § 1395w-26[b][3]; 42 CFR 422.108[f]; Potts v Rawlings Co., LLC, 2012 WL 4364451, 2012 U.S. Dist LEXIS 137802 [SD NY 2012]; see also Phillips v Kaiser Found. Health Plan, Inc., 2011 WL 3047475, *6, 2011 U.S. Dist LEXIS 80456, *20-21 [ND Cal] 

 

"The Medicare Act contains an expansive express preemption provision [and] prohibits States from limiting [secondary payer] rights" (citation omitted)]; cf. Do Sung Uhm v Humana, Inc., 620 F3d at 1148-1153 [in considering the preemption provision of Medicare Part D, which incorporates the express preemption provision in Part C, the Ninth Circuit concluded that the statute preempted state consumer protection claims and fraud common law claims]). Moreover, we agree with the conclusion expressed most recently in a case from the United States District Court for the Southern District of New York that this is so "[w]hether or not there is a private right of action for [Medicare Advantage] organizations" (Potts v Rawlings Co., LLC, 2012 WL 4364451, *10, 2012 U.S. Dist LEXIS 137802, *36)."

 

Dog Bite Case

Could there be a more perfect name for  a plaintiff in a dog bite case than, Wolfgang Doerr?  Doerr v Goldsmith was decided on April 16, 2013 by the Appellate Division, First Department (2013 NY Slip Op 02501). 

 

The plaintiff, Wolfgang Doerr, was injured when riding his bicycle and he encountered the defendant's dog. As plaintiff was riding nearby, defendant called for the dog, which was not wearing a leash, to come to her, resulting in the dog's running into plaintiff's path of travel. Judge Mendez of New York County denied summary judgment to the dog owner in 2011. The Appellate Division reversed holding:  "New York does not recognize a common-law negligence cause of action to recover damages for injuries caused by a domestic animal" (Egan v Hom, 74 AD3d 1133, 1134 [2d Dept 2010]). Rather, when harm is caused by a domestic animal, its owner can be held liable if he knew, or should have known, of the animal's vicious propensities (Petrone v Fernandez, 12 NY3d 546, 550 [2009]; Collier v Zambito, 1 NY3d 444, 446 [2004]; see also Bard v Jahnke, 6 NY3d 592, 596-597, 599 [2006]). The term "vicious propensities" includes "the propensity to do any act that might endanger the safety of the persons and property of others in a given situation" (Collier v Zambito, 1 NY3d at 446). Here, there is no evidence that defendant had knowledge that her dog had a propensity to interfere with traffic, and her motion for summary judgment should have been granted (see Smith v Reilly, 17 NY3d 895 [2011]). The dissent believes that this case is distinguishable because it was defendant Smith's action in calling the dog and defendant Goldsmith's action in letting it go, "not the dog's own instinctive, volitional behavior, that caused the accident." However, in Petrone (12 NY3d at 546), a mail carrier alleged that the dog's owner violated a local leash law and that the violation proximately caused her injuries. The Court of Appeals held that the defendant's violation of local leash law was "irrelevant because such a violation is only some evidence of negligence, and negligence is no longer a basis for imposing liability after Collier and Bard" (see 13 NY3d at 550 ) see also Tesmer v Colonna, 77 AD3d 1305 [4th Dept 2010])

 

Here, the accident occurred when defendant's dog collided with plaintiff, and defendant's alleged negligence in calling the dog does not provide a basis to depart from the strict liability rule recognized by the Court of Appeals in Petrone, Bard and Collier (see Bloomer v Shauger, 94 AD3d 1273, 1274 [3d Dept 2012]).

 

 

Read the decision here.

 

Reaffirmation of "Ancient Principle" 

 

"Insurance coverage cannot be imposed based on liability for which insurance was not purchased or provided" is a commandment written in stone on the desk of every Insurance Coverage attorney. 

 

The Appellate Division, First Department, took the opportunity to reaffirm this "ancient principle" in a brilliant opinion by Judge David Saxe in Seneca Insurance Co. v. Cimran Co., Inc., decided on April 9, 2013 (2013 NY Slip Op 2360). Here, Seneca disclaimed coverage claiming defendants had misrepresented on their insurance application that they had no intention of conducting demolition or construction at the premises. The facts of the underlying case alleged, that on October 12, 2009, while construction was under way to add three additional stories onto defendants' one-story building at 34-45 Francis Lewis Boulevard, in Flushing, Queens, an employee of the subcontractor handling the framing for the additional floors fell and sustained injuries. While the complaint in the personal injury action states merely that the plaintiff fell at "the construction site," the bill of particulars adds that the incident took place while "the plaintiff was working on the fourth floor on top of the steel framing of the fourth floor side and/or edge." Judge Saxe granted Summary Judgment to Seneca reciting some basic tenets of Insurance Coverage disputes:

 

1.      Coverage cannot be afforded on liability for which insurance was not purchased" (Holman v Transamerica Ins. Co., 183 AD2d 589, 591, 584 N.Y.S.2d 23 [1st Dept 1992], affd 81 NY2d 1026, 616 N.E.2d 499, 599 N.Y.S.2d 913 [1993]).  

2.      While the obligation to defend is broader than the duty to indemnify, it "does not extend to claims not covered by the policy" (National Gen. Ins. Co. v Hartford Acc. & Indem. Co., 196 AD2d 414, 415, 601 N.Y.S.2d 4 [1st Dept 1993]). "[I]f the allegations interposed in the underlying complaint allow for no interpretation which brings them within the policy provisions, then no duty to defend exists" (Atlantic Mut. Ins. Co. v Terk Tech. Corp., 309 AD2d 22, 29, 763 N.Y.S.2d 56 [1st Dept 2003]).  

3.      If a policy insures a portion of a building, it does not cover an injury occurring in another portion of the building. See Axelrod v Maryland Cas. Co. (209 AD2d 336, 619 N.Y.S.2d 10 [1st Dept 1994]).

 

As an aside, Justice Sheila Abdus-Salaam, dissented in this case. On April 5, 2013 Governor Cuomo nominated Justice Abdus-Salaam to the Court of Appeals.    

 

 

Read the decision here.  

 

SEND US YOUR QUESTIONS OR COMMENTS
If you have someone to add to our email list, or if you have questions or comments about this newsletter, please contact Frank Scahill at fscahill@psnylaw.com.

Picciano & Scahill, PC

900 Merchants Concourse-Suite 310
Westbury, New York 11590
516.294.5200  
DISCLAIMER:
This newsletter is for education and information purposes only, and is not intended to provide legal advice. No attorney-client relationship exists or is created by the use of this newsletter or the information provided herein.  This newsletter should not be used as a substitute for competent legal advice from a professional attorney in your state.
 
 
Attorney Advertising.