CM Report of Recent Decisions (2005v3)
2005 Volume 3
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
"Dramshop" Liability Extended Beyond Liquor Providers
In West v. East Tennessee Pioneer Oil Co., 2005 WL 1981883 (Tenn. 2005), the Tennessee Supreme Court held that a convenience store owes a duty of care to persons on roadways not to sell gasoline to a clearly intoxicated motorist and not to assist the motorist in pumping gas, and may also be held liable for ensuing motor vehicle accidents on a “negligent entrustment” theory based on its sale of gas.
"Insured vs. Insured" Exclusion in D & O Policy Applies to Bar Coverage for Claims Brought by a Former Director and Officer
The U.S. Court of Appeals for the Eleventh Circuit recently held that a D & O policy’s “insured vs. insured” exclusion bars coverage for claims brought by a former director and officer. Sphinx Int’l, Inc. v. National Union Fire Ins. Co. of Pittsburgh, Pa., 412 F.3d 1224 (11th Cir. 2005).
"Risk" Language Provides Coverage Before Actual Collapse Occurs
In a case of first impression, the Pennsylvania Supreme Court interprets the common yet controversial property insurance policy provision: “damage caused by or resulting from risks of direct physical loss involving collapse of a building or any part of a building.” 401 Fourth Street, Inc. v. Investors Ins. Group, 879 A.2d 166 (Pa. 2005).
A Home Run for Property Owners Faced with Trip and Fall Allegations Pertaining to Height Differentials on Sidewalks, Driveways, Parking Lots and Stairwells
The Illinois Appellate Court, First District recently affirmed summary judgment for defendants finding that a 4-5 inch height differential between a metal grate aligning a sidewalk and nearby tree did not create a pitfall, trap or snare, and thus was not unreasonably dangerous. Mazin v. Chicago White Sox, Ltd., 2005 WL 425418 (2005).
California Supreme Court Holds That a Bar Owner Can Be Held Liable for Injuries to a Patron When the Owner Had Actual Notice of an Impending Assault on the Patron
In Delgado v. Trax Bar & Grill, 36 Cal. 4th 224 (2005), the California Supreme Court held that a group attack on a bar patron in the bar’s parking lot was sufficiently foreseeable so as to impose a duty on the bar to provide measures to protect the patrons.
Discounted Portion of Medical Bills Given Asset Status
Arthur v. Catour, 216 Ill. 2d 72 and Foust v. McFarland, 698 N.W.2d 24 (Minn. App. Ct.), have aligned Illinois and Minnesota with those jurisdictions that permit plaintiffs to introduce full medical charges as billed - notwithstanding that those charges have been discounted pursuant to contract between the plaintiff’s medical insurer and the healthcare provider.
Even Though Indiana Has No Cases Interpreting "Collapse," Indiana Supreme Court Affirms Punitive Damage Award Against an Insurer that Applies the Wrong Definition
In Monroe Guaranty Ins. Co. v. Magwerks Corp., 829 N.E.2d 968 (2005), a case with which all insurers doing business in Indiana should be familiar, the Indiana Supreme Court rendered Indiana’s first decision on the meaning of collapse. The Court determined, in accord with the majority of jurisdictions around the country, that “collapse” in a property insurance policy means a substantial impairment of the structural integrity of a building or any part of a building. While acknowledging that the meaning of collapse within Indiana was a matter of first impression, the Court then affirmed a punitive damage award against an insurer that had applied a more restrictive definition to reject the claim.
Illinois Opinion Increases Liability Exposure of Parent Corporations
Our friends who handle casualty defense or risk management for parent corporations should be aware of a significant decision recently issued by the Illinois Appellate Court that could substantially increase the exposure of parent corporations to liability for injuries to subsidiary employees or third parties.
The case is: Forsythe v. Clark USA, Inc., 2005 WL 2397724 (Ill. App. 2005).
In Equally Divided Opinion, Michigan Supreme Court Defines "Waste" for Purposes of Pollution Exclusion
In City of Grosse Pointe Park v. Municipal Liability and Property Pool, 473 Mich. 188, 702 N.W.2d 106 (Mich. 2005), the Michigan Supreme Court addressed the issue of whether the term “waste,” as used in the pollution exclusion clause of a liability policy, included human sewage. Although the Supreme Court agreed on the outcome – sewage is “waste” under the policy’s exclusion clause – neither justice who wrote an opinion garnered a majority. As a result the opinion binds the parties, but does not establish binding precedent. Nevertheless, it is a good indicator of how this issue will be decided in the future.
Kyoto and Carbon Credits: New Mitigation and New Liabilities Property Insurance Update
Notwithstanding the political wrangles in the U.S. over the Kyoto Protocol, it now forms an ongoing consideration for commercial interests concerned with carbon producing facilities in Kyoto signatory states. This includes their business interruption insurers.
Ninth Circuit Holds Failure to Submit Proof of Loss Does Not Bar Coverage Under NFIP Policy
In June 2005, just a few months before Hurricanes Katrina and Rita devastated the Gulf Coast, the Ninth Circuit addressed the respective duties of insurers and insureds under flood insurance programs established by the Federal Emergency Management Agency (“FEMA”). The court held that an insured who purchased a FEMA Standard Flood Insurance Policy from a Write-Your-Own flood insurer was not bound by provisions of FEMA’s Flood Insurance Manual that prohibit insurers from waiving a proof of loss in certain circumstances. Pecarovich v. Allstate Ins. Co., 135 Fed. Appx. 23, 2005 WL 1331803 (9th Cir. 2005).
Office Paramours Create a New Twist in the Law
Q. Can an employee successfully allege that an office romance between a supervisor and co-worker creates a hostile work environment?
A. The California Supreme Court recently said yes. . . .
Q. But will other courts follow?
A. Read on….
Product Liability - The Top 30 Hooks!
Choosing the “right hooks” in litigating your product liability case makes the crucial difference in maximizing success. Below is a bottom-line punch list of the hooks that must be explored if you are to be on the winning side, as a plaintiff with the burden of proof to show an unsafe or unreasonably dangerous product or as a defendant with the burden to defend the product and its manufacturing, marketing and post-sale practices.
Sixth Circuit Holds that the Costs of Contractor's Overhead and Profit May be Included in Calculation of the Actual Cash Value of an Insured's Claim
The Sixth Circuit, applying Tennessee law, holds that “the actual cash value of [a] loss … includes overhead and profit where a contractor would reasonably be utilized to make repairs.” Parkway Associates, L.L.C. v. Harleysville Mut. Ins. Co., 129 Fed. Appx. 955, 963 (6th Cir. 2005).
