CM Report of Recent Decisions (2003v2)
2003 Volume 2
A summary of significant recent developments in the law focusing on substantive issues of litigation and featuring analysis and commentary on special points of interest.
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Articles in this report
A Legislative Assault Upon the Surviving Remnant of Illinois Tort Reform
The 2002, Volume 4, edition of this column applauded Unzicker v. Kraft Food Ingredients Corp., 203 Ill. 2d 64, 783 N.E.2d 1024, which construed 735 ILCS5/2-1117 to permit the jury to consider the fault of plaintiff’s employer in determining whether the defendant’s fault is less than 25% of total fault, thereby limiting his liability for plaintiff’s non-medical damages, to several and not joint liability. The court reasoned that plaintiff’s employer is one who “could have been sued by the plaintiff” within the purview of the statute and thus one whose fault should be considered -- notwithstanding the worker’s compensation statute’s exclusivity provision which limits the employer to employee liability to worker’s compensation.
Don't Discount Potential Prejudgment Interest Recovery
Subrogation specialists, and sometimes even their counsel, too often discount the possibility of prejudgment interest as a component of their recovery. Too easily the assumption is made that because the damages in an action for the negligent damage or destruction of property are “unliquidated,” prejudgment interest cannot be recovered. A sampling of property damage case law on the subject shows how wrong the assumption can sometimes be.
In Kirby v. Norfolk Southern Railway Co., 2002 A.M.C. 2113, 300 F.3d 1300 (11th Cir.), the Eleventh Circuit Court of Appeals held that a railroad’s liability for damaged cargo was not limited under Himalaya clauses in either of two carriers’ bills of lading. A Himalaya clause extends the carrier’s defenses and limitations of liability under the bill to the carrier’s agents and subcontractors.
Forum Selection Clause in Vessel Owner's Bill of Lading Issued to Non-Vessel Operating Common Carrier Enforceable Against Shipper
In Kukje Hwajae Ins. Co., Ltd. v. M/V Hyundai Liberty, 2002 A.M.C. 1598, 294 F.3d 1171 (9th Cir.), the Ninth Circuit Court of Appeals held that a shipper was bound by the forum selection clause in a bill of lading issued by the vessel owner to an intermediary non-vessel operating common carrier (NVOCC). Accordingly, the court upheld dismissal of an action for damaged cargo against the vessel brought outside the designated forum.
A Washington appeals court recently held that a homeowner’s policy provided coverage for mold and water damage at the insureds’ home which doubled as a bed and breakfast. DePhelps v. Safeco Insurance Co. of America, 65 P.3d 1234 (Wash. App.). Through a reading of the “whole policy,” the court determined that “it covers the insureds’ use of [the] … residence as a bed and breakfast.” The policy’s coverage provision was clear in that it insured the home when used “primarily as a private residence.” But the court noted that the policy “also refers to and covers various aspects of room rentals.”
How Far Do Rights in a Personal Name Extend?
On June 2, 2003, Spike Lee sued Viacom Inc. for its plans to rename its TNN cable channel “Spike TV.” In court papers, Lee alleged that Viacom’s planned rebranding to Spike TV was a deliberate attempt to hijack his name, image and reputation. Lee’s suit claimed trademark infringement and a violation of his right of publicity.
Illinois Second Appellate District Follows "Michael Nicholas" Holding That Indemnification Provision in Construction Contract is an "Insured Contract"
There may be potential coverage under an employer’s CGL policy for allegations brought by a general contractor against the employer seeking indemnification and contribution for injuries to the employer’s employee. This potential coverage may arise despite the existence of an exclusion for bodily injury to an employee. West Bend Mutual Ins. Co. v. Mulligan Masonry Co. Inc., 786 N.E.2d 1078 (Ill. App.).
Circumstantial evidence alone is enough to win. Recently the United States Supreme Court so held, finding that plaintiff employees in “mixed-motive” employment discrimination cases do not have to present “direct evidence.” Instead, the Court ruled that employees can prove their case through inferences drawn from the totality of the employer’s conduct (i.e. circumstantial evidence). Desert Palace, Inc. v. Catharina Costa, 123 S. Ct. 2148 (U.S.)
Plaintiff, Sumitomo Marine and Fire Insurance Company, Ltd., issued two insurance policies to Sumitomo Bank, Ltd. and Sumitomo Bank Capital Market’s Inc., respectively, tenants in the World Trade Center. The policies listed the Port Authority of New York and New Jersey (owner of the World Trade Center) as an additional named insured “under the polic[ies’] Comprehensive General Liability Coverage, with respect to ‘liability arising out of the ownership, maintenance or use of that part of the premises leased to’ Sumitomo Bank, Ltd.” and Sumitomo Bank Capital Market’s, Inc.
U.S. Supreme Court Rejects $145 Million Punitive Damages Award in "State Farm v. Campbell"
Finding the case “neither close no difficult” under the principles annunciated in BMW v. Gore, the U.S. Supreme Court has vacated a $145 million punitive damages award in a bad faith action against State Farm in which the compensatory damages totaled $1 million. State Farm Mut. Automobile Ins. Co. v. Campbell, 123 S. Ct. 1513 (U.S.). Justice Kennedy, writing for the 6-3 majority, concluded that the award was excessive and in violation of the Due Process Clause of the Fourteenth Amendment to the Constitution.
