CM Report of Recent Decisions (2005v2)
2005 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.
Articles in this report
"Clifford v. Wharton," 817 N.E.2d 1207 (III.App.2004): A Restatement §414 Claim Against a General Contractor by any Other Name is Still a Restatement § 414 Claim
In recent personal injury litigation involving construction-related accidents, plaintiffs' attorneys have employed a strategem in cases against general contractors arising under Restatement § 414. That section provides that “one who entrusts work to an independent contractor, but who retains the control of any part of the work, is subject to liability for physical harm to others for whose safety the employer owes a duty to exercise reasonable care, which is caused by his failure to exercise his control with reasonable care.” Plaintiffs' attorneys, fearing that they do not have the evidentiary muscle to convince a trial court or jury that a general contractor has control over the work, have repackaged their § 414 claims into claims arising under Restatement § 343 which subjects a possessor of land to liability for physical harm caused to invitees by conditions on the premises.
"On Premises" Insuring Agreement of Financial Institution Bond Does Not Cover Loss Resulting From Theft Perpetrated by Telephone
The Seventh Circuit has recently held that the “on premises” insuring agreement of a financial institution bond does not cover losses resulting from theft perpetrated by telephone, despite the fact that certain predicate acts occurred on the premises of the insured bank. Private Bank & Trust Co. v. Progressive Casualty Ins. Co., 409 F.3d 814 (7th Cir. 2005).
Adams v. Bath & Body Works: The Newest Roadmap for Illinois Spoliation Remedies
In Illinois, there is no general duty to preserve evidence. Boyd v. Travelers Ins. Co., 166 Ill. 2d 188 (1995). However, the preservation of an allegedly defective product is important both to the proof of a claim and to defend against liability. Prior to filing a lawsuit, a potential litigant owes a duty to take reasonable measures to preserve the integrity of relevant and material evidence. Shimanovsky v. General Motors Corp., 181 Ill. 2d 112 (1998).
An Earth Movement Exclusion is Limited to Damage Caused by Natural Causes (Absent Specific Policy Language to the Contrary)
The Florida Supreme Court held in Fayad v. Clarendon National Ins. Co., 2005 WL 729172 (Fla, 2005), that damages caused by blasting are covered under an ‘all-risk' insurance policy that expressly excludes damage caused by earth movement. In deciding this issue, the Court resolved a split in the Florida District Courts of Appeals.
CYBERSMEAR (Not Something You Put on a Bagel)
One of your employees at home on her personal computer has created a web log (blog), i.e., a personal diary in which she talks about her life and her experiences. The title of her blog is “Anonymous.” She does not identify herself specifically in any of her entries into the blog. The blog is available on the Internet to anyone who wants to visit Anonymous' blog. She also has links to other blogs. Recently, she has been chatting on her blog about the stresses and difficulties in her life. She has complained about the company. More recently she has complained specifically about management and how employees are treated. She also has alleged that the company's president and COO are having a gay love affair. She claims that the treasurer is spending company entertainment money on extravagant and wild sex parties.
California Supreme Court Rules That Weather Conditions Clause in Homeowner's Policy Does Not Violate Proximate Cause Rule
The California Supreme Court has recently held that an insurer may, consistent with the efficient proximate cause doctrine, rely on the weather conditions clause of a homeowner's policy to deny coverage for losses proximately caused by a rain-induced landslide. Julian, et al. v. Hartford Underwriters Ins. Co., 110 P.3d 903 (Ca. 2005).
Developing a Claim of Successor Liability-A Practical Guide to Recovery When Your Primary Target Defendant Has No Seizable Assets
CM partner Dean Rauchwerger has authored a practical guide on the alternative liability theories of successor liability and alter ego/piercing the corporate veil to pursue when a target defendant corporation no longer has recoverable assets. This article focuses on successor liability.
Florida Courts Confirm - There is No Loss of Consortium Claim Arising Out of Personal Injury to Non-Seamen on the High Seas
Two recent Florida decisions – one state and one federal – confirm that loss of consortium claims are not allowed under general maritime law in connection with injury to non-seaman on the high seas.
Indiana Supreme Court Refuses to Recognize Spoliation of Evidence as an Independent Tort
The Indiana Supreme Court has held that the negligent or intentional destruction or discarding of evidence relevant to a tort action does not give rise to an independent claim for spoliation of evidence. Gribben v. Wal-Mart Stores, Inc., 824 N.E.2d 349 (Ind. 2005).
Insurer Not Entitled to Reimbursement of Defense Costs Incurred While Defending Non-Covered Claims
In General Agents Ins. Co. of America, Inc. v. Midwest Sporting Goods Co., et al., 2005 WL 674685 (Ill. 2005), the Illinois Supreme Court reviewed whether an insurer was entitled to reimbursement of the amounts paid for the defense of its insured in an underlying lawsuit where it was later determined that the insurer had no duty to defend.
As we reported in New York CM Report of Recent Decisions – Volume 2, 2004, the New York Court of Appeals in Broadnax v. Gonzalez, 777 N.Y.S.2d 416 (2004), held that, even absent a showing of independent physical injury to her, a mother may recover damages for emotional harm when medical malpractice causes miscarriage or stillbirth. In our "Learning Point" at the conclusion of that report, we discussed the opinion of the New York Appellate Division – Second Department in Sheppard-Mobley v. King, 778 N.Y.S.2d 98 (2d Dep't 2004), which was decided right after Broadnax was handed down. Sheppard-Mobley has now itself been reviewed by the Court of Appeals, and the Second Department's expansive interpretation of Broadnax has been rejected. (2005 WL 1106014; publication pages not yet available).
No Duty to Defend False Advertising or Copyright Infringement Claims Under "Advertising Injury" Provision of CGL Policy
In Skylink Technologies, Inc. v. Assurance Co. of America, 400 F.3d 982 (7th Cir. 2005), the U. S. Court of Appeals for the Seventh Circuit ruled that a CGL carrier owed no duty to defend false advertising or copyright infringement claims under the policy's advertising injury provision.
No Implied-In-Fact or Quasi Contract Exists between Law Firm and Client's Excess Insurer
The District of Columbia Court of Appeals has recently determined that attorneys may not recover their fees from someone other than the client who hired them. Jordan Keys & Jessamy, LLP v. St. Paul Fire and Marine Ins. Co., 870 A.2d 58 (D.C. Ct. App. 2005).
Protective Orders-Not Everything Can Be Swept Under the Rug!
Litigants frequently seek protective orders to prevent dissemination of documents and other information. There are, however, significant limits to the amount and type of documents and information that can legitimately be kept secret from the public.
Second Circuit Holds That a Waiver of Subrogation Provision Applies to Breach of Contract and Gross Negligence Claims
Although Universal Builders held that a waiver of subrogation provision will apply to gross negligence claims under New York law, thus making it much harder for certain subrogation actions that were going to rely upon a gross negligence claim to get around a waiver of subrogation provision under New York law, there are still some loop holes which may apply to your case. It is still important to discuss your case with a competent and qualified subrogation attorney to determine whether there is subrogation potential, do not merely close the file because there is a waiver of subrogation provision.
Silica Constitutes a "Pollutant" for Purposes of a Total Pollution Exclusion
In Garamendi v. Golden Eagle Ins. Co., 127 Cal.App.4th 480, 25 Cal.Rptr.3d 642 (1st Dist. 2005), an insured sought coverage under a CGL policy for claims resulting from alleged exposure to silica and silica dust during sandblasting operations. The insurer was in liquidation. The claims administrator denied coverage based upon a Total Pollution Exclusion in the subject policy. The insured challenged this denial at the trial court level and lost. The Court of Appeals upheld the denial and coverage was excluded.
South Carolina Adopts Tort Reform
On March 21, 2005, Governor Mark Sanford of South Carolina signed H. 3008, some parts of which went into effect immediately. Most, however, became effective July 1, 2005.
Standard Pollution Exclusion Provision Limited to Traditional Environmental Pollution Claims in New Jersey
The Supreme Court of New Jersey recently held that a standard pollution exclusion clause in a commercial general liability insurance policy was limited to traditional environmental pollution claims, and therefore did not apply to fumes emanating from floor coatings and sealants in a shopping center. Nav-Its, Inc. v. Selective Ins. Co. of America, 183 N.J. 110 (2005).
Supreme Court Holds That the ADA is Applicable to Foreign Vessels
In Douglas Spector, et al v. Norwegian Cruise Lines, Ltd., 125 S.Ct. 2169 (2005), the Supreme Court reversed the U.S. Court of Appeals for the Fifth Circuit and held that Title III of the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12181 et. seq., is applicable to foreign flag cruise ships operating in U.S. waters.
The Latest Chapter In "Thompson v. Gordon"
In Volume 4 of the 2004 CM Report of Recent Decisions, we reported that the Illinois Supreme Court had issued a supervisory order directing the Illinois Appellate Court, Second District to vacate its opinion in Thompson v. Gordon, 813 N.E.2d 241 (2d Dist. 2004)(allowing non-Illinois licensed engineer to provide expert testimony in Illinois case) and remanding for further proceedings, including consideration of a cease and desist order entered by the Illinois Department of Professional Regulation (the “Dept”) against the non-Illinois licensed engineer expert. Thompson v. Gordon, 817 N.E.2d 894 (Ill. 2004).
By what right may an insurer, which has no legal relationship with a co-insurer, seek contribution for benefits paid on behalf of their common insured?
I submit the legal predicate is quasi-contract or contract implied in law, not unlike the legal fiction by which some jurisdictions have permitted a tortfeasor indemnity against another who is guilty of more egregious fault.
The United States District Court for the Eastern District of Virginia has predicted that Virginia state law would recognize a legal malpractice cause of action by an insurer against a law firm retained to represent one of its insureds. Gen. Sec. Ins. Co. v. Jordan, Coyne & Savits, LLP, 357 F.Supp. 2d 951 (E.D. Va. 2005).