nfl disability board’s acknowledgment in mike webster case: a … · three concussions during one...

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NFL Disability Board’s Acknowledgment in Mike Webster Case: A Vicious Hit to NFL’s Position in Concussion Litigation?By Jarett L. Warner

The number of former players joining the litigation against the NFL for neurologi-cal and wrongful death claims relating to concussions incurred during their

playing days is mounting as fast as the instances of discord in the New York Jets’ locker room. The number is now more than 4,000 former players.

Most recently, former pro-bowler and two-time Super Bowl cham-pion, defensive end Neil Smith filed a lawsuit claiming that he suffers from cognitive impairment and the early onset of dementia caused by concussions sus-tained during his playing career. He even claims that he sustained three concussions during one game in his 1988 rookie sea-son that were undiagnosed and untreated.

Recent developments have led some to believe that the NFL has taken a huge blow of its own to its defenses in the litigation. Last month, ESPN published a 1999 letter from the director of the NFL Disability Board to the attorney of former Hall of Famer Pittsburgh Steeler Mike Webster denying additional disability ben-efits based on the determination of the NFL Disability Board that “Mr. Webster’s disability arose while he was an active player”

Spring 2013 — Volume 7, Issue 1

In ThIs Issue: 1 Insurance Coverage Corner • NFL Disability Board’s Acknowledgment in Mike Webster Case: A Vicious Hit to NFL’s Position in Concussion Litigation? 3 Electronic Waivers 5 New York and New Jersey Enact Mediation Programs for Superstorm Sandy Insurance Claims 6 MMA Stands a Fighting Chance of Legalization in New York; Senate Approves Bill Allowing Competitions 7 New York’s Highest Court Declines to Apply Assumption of Risk to Rollerblading Accident 11 HRRV in the Public Eye 12 HRRV Decisions of Interest

Recent Southern District of New York Decision Provides Insight on Perplexing Notice and Prejudice Issues

By Abbie havkins and Linda Fridegotto

In Atlantic Casualty Insurance Com-pany v. Value Waterproofing, Inc.,

No.11 Civ. 7565, Southern District of New York, January 15, 2013 (DLC), Judge Denise Cote provided significant insight into several recent and long-standing perplexing insurance cover-age issues.

By statute, New York State has aban-doned its longstanding minority rule that insurers can disclaim based on late notice even in the absence of prejudice. With regard to insurance policies issued after January 17, 2009, an insurer can no longer disclaim cov-erage on the basis of untimely notice unless the insurer was prejudiced by the late notice. See N.Y. Insurance Law § 3420(a)(5). When the notice is given within two years of the accident or occurrence but is still untimely, the insurer has the burden of proving that it

Legal Insights / Spring 2013—Volume 7, Issue 1 / www.hrrvlaw.com2

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and that medical reports reflect that “his disability [was] the result of head injuries he suffered as a football player with the Pittsburgh Steelers and Kansas City Chiefs.”

The plaintiffs in the NFL Concussion litigation will undoubt-edly argue that the Disability Board’s determination that Mike Webster’s injuries were caused while playing in the NFL es-tablishes that the NFL had prior evidence that concussions lead to permanent neurological and other health problems. The Disability Board is also likely to have similar records re-lating to other former players.

Based on this evidence, the plaintiffs will likely request that the court preclude the NFL from arguing whether concus-sions cause long-term neurological and other health issues. The plaintiffs will base this argument on the legal principle of collateral estoppel.

Collateral estoppel (also known as issue preclusion) pre-cludes litigants from challenging the determination of an issue in a subsequent action if it was already fully and fairly litigated in a prior litigation. In order to give the previous de-termination preclusive effect, “the issue must have been ac-tually litigated in the prior proceeding, the parties must have been given a full and fair opportunity to do so and the issue must provide the basis for the final judgment entered there-in.” Hartley v. Mentor Corp., 869 F.2d 1469, 1471 (U.S. Court of Appeals for Fed. Cir. 1989). The factual issues between the prior and current litigation would need to be identical.

However, it is unlikely that the NFL will be collaterally es-topped from arguing causation between the concussions and the long-term health problems of former players.

First, the NFL has a strong argument that the determina-tion made by the NFL Disability Board is independent of the opinions and determinations made by the NFL, and thus, the NFL did not have a full and fair opportunity to litigate the issue. The NFL Disability Board is comprised of three repre-sentatives from both the owners and players, along with a representative chosen by the NFL commissioner. This is quite different than if the NFL Disability Board was made based on a vote of the owners of the 32 NFL teams.

Most importantly, the NFL can argue that, because there are a multitude of variables between the thousands of former players who are suing, collateral estoppel cannot be applied. For example, the thousands of players have a vast array of differences as to their history of playing football, concus-sions and health issues. Some players may have sustained

concussions while playing football in high school, while oth-ers may have suffered concussions while playing college football. Some players may have previously returned to a game after a concussion, while others did not.

Certainly, even to the extent the NFL is not precluded from an argument as to its lack of knowledge as to the long-term effect of concussions, the determination made by the NFL Disability Board could be presented during the course of the litigation and at the time of trial of evidence. This circumstan-tial evidence will help the players demonstrate that the NFL had knowledge of the long-term effects of concussions and, in turn, failed to warn. However, this will require the players’ attorneys to present evidence from the Mike Webster case (or similar cases/determinations made by the NFL Disability Board) to establish the prior knowledge that the NFL had re-lating to the known effects of concussions.

Ultimately, the court could determine that, in part, since the decision concerning Mike Webster was made by the NFL Disability Board, which was created by the collective bargain-ing agreement, all of the cases should be sent to an arbitrator to hear. This is the subject of a pending motion to dismiss by the NFL. Such a result would take the monetary awards out of the hands of potentially sympathetic juries and put them in the hands of an arbitrator. This would be a touchdown for the NFL in the litigation.

Oral argument concerning the NFL’s motion to dismiss is scheduled for April 2013.

Contact

Jarett L. Warner: 646-747-5104 or [email protected]

NFL Disability Board’s Acknowledgment in Mike Webster Case: A Vicious Hit to NFL’s Position in Concussion Litigation?From page 1

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Electronic Waivers: Are They Worth the Paper They Are Written On?

By Carla Varriale

Although the answer to this question depends on indi-vidual jurisdictions, in New York, the answer is yes.1 The

fact that a waiver is electronic and involves a “click-through” process and not a physical signature does not render the waiver invalid.

Under New York Electronic Signatures and Records Act, N.Y. Tech Law § 304 (ESRA), an electronic signature is a valid sig-nature. ESRA provides in pertinent part:

[A]n electronic signature may be used by a person in lieu of a signature affixed by hand. The use of an elec-tronic signature shall have the same validity and effect as the use of a signature affixed by hand.

1 For example, courts in Florida and Minnesota have also held that electronic waivers are enforceable. See Hinely v. Florida Motorcycle Training, Inc. (2011 Fla. App. LEXIS 6757) and Waltz v. Life Time Fitness , Inc. (2010 Minn. App Unpub. LEXIS 741).

N.Y.[**20] Tech. L. § 304, and:

‘Electronic signature’ shall mean an electronic sound, symbol, or process, attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the record.

N.Y. Tech. L. § 302.

In 2002, the New York State Legislature amended ESRA, eliminating the previous requirement that an “electronic sig-nature” include an:

Identifier, including without limitation a digital signature, which is unique to the person using it, capable of veri-fication, under the sole control of the person using it, attached to or associated with data in such a manner that authenticated the attachment of the signature to particular data and the integrity by the party using it to have the same force and effect as the use of a signa-ture affixed by hand.




Electronic Waivers: Are They Worth the Paper They Are Written On?From page 3

Although there are few New York decisions addressing the validity of electronic waivers in the sports/recreation context, one court has opined on this issue. In Stephenson v. Food for Survival, 21 Misc.3d 1132A, 875 N.Y.S.2d 824 (N.Y. County 2008), a negligence case involving an adult participant injured during a basketball game organized by the New York Corpo-rate Athletic League, the court upheld an electronic waiver and relied on it, in part, to dismiss the case.

In order to play on a team, each team member had to fill out a form online, including a waiver provision which stated that the undersigned:

Acknowledge and duly understand that each partici-pant will be engaging in activities [***5] that involve risk of serious injury, including permanent disability and death, and severe social and economic losses which might result not only from their own action, inactions or negligence but the actions, inactions or negligence of others, the rules of play, or the condition of the prem-ises or of any equipment used. Further, that there may be other risk not known to us or not reasonable fore-seeable at this time.

* * *3. Assume all the foregoing risks and accepted person-al responsibility for the damages following such injury, permanent disability or death.

4. Release, waive, discharge and covenant not to sue the Lawyers Athletic League, Inc., Lawyers Athletic Association, Inc., the Lawyers Basketball League, the New York City Corporate Basketball League, Lawyer Volleyball League and its related Leagues and affiliated organizations, their directors, commissioners, referees, employees, agents, facilities and sponsors from any and all liability to the undersigned, his or her heirs and next of kin for any and all claims, demands, losses or damages on account of injury, including death or damage to property, caused or alleged to be caused in whole or in part by the negligence of Lawyers Ath-letic League, Inc. or its related “releasees” enumerated above.

The release further stated that:

By checking this box, the participants have read the above waiver and release, understand that they are giv-ing up substantial rights by checking it and check it vol-untarily. In support of its motion for summary judgment, the defendant submitted copies of the online waiver and the game roster signed by the plaintiff.

Addressing the waiver language, Justice Paul G. Feinman held:

Waivers, such as that submitted to the League by Ste-phenson, have been found to be valid by the courts. In Bufano v. National Inline Roller Hockey Ass’n. (272 A.D.2d 359, 359-360, 707 N.Y.S.2d 223 [2d Dep’t 2000]) where the plaintiff was injured in a fight with another player during a game, the release signed by the player was upheld as enforceable because it “ex-pressed in clear and unequivocal language the intent to relieve the defendants of all liability for personal in-juries . . . caused by the defendants’ negligence.” The Court also noted that by voluntarily participating in the game, the plaintiff assumed the risk of the injuries that he sustained. See also Castellanos v. Nassau/Suffolk Dek Hockey, Inc., 232 A.D.2d 354, 648 N.Y.S.2d 143 (2d Dep’t 1996) (by voluntarily participating in a game, an experienced player who signed a waiver form, assumed the risk of the injury that he sustained). Here, too, the online release submitted by Stephenson expressly releases the League from injury caused by any negli-gence by the League and also indicates that the signer assumes the risk and accepts personal responsibility for not only his own “action, inactions or negligence but the actions, inactions or negligence of others” (Affirma-tion in Support of Lora H. Gleicher, Exhibit H). More-over, electronic signatures are valid under new York law (state Technology Law § 304 [2]). 875 N.Y.S. 2d 824 (emphasis added).

Justice Feinman noted that there was no conflict between the online waiver and the assumption of risk and indemnifica-tion provision contained in the game roster that was signed by Id.

Under New York law, electronic waivers may be enforced when they are clear, conspicuous, unambiguous and do not run afoul of public policy (such as insulating the party pro-tected by the waiver from the parties’ own negligence). It is also helpful when, as illustrated in the Stephenson case, they are supported by complementary language in a roster or day-of-event registration form. A carefully drafted waiver, electronic or otherwise, may provide a useful defense in a negligence action — and protection is only a click away.

Contact

Carla Varriale: 646-747-5115 or [email protected]





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New York and New Jersey Enact Mediation Programs for Superstorm Sandy Insurance Claims

By Matthew Kraus and hilary R. Levine

In the wake of the destruction caused by Hurricane Sandy, New York and New Jersey separately enacted legisla-

tion establishing mediation programs to afford policyholders an opportunity to resolve disputed insurance claims. Such legislation mirrors similar mediation programs that were es-tablished in the aftermath of Hurricanes Andrew, Katrina and Rita.

The new York RegulationOn February 25, 2013, the New York Department of Financial Services enacted an emergency amendment to Insurance Regulation 64, 11 N.Y.C.R.R. 216.13, which now requires New York licensed insurers to participate in nonbinding me-diations with respect to disputed or unresolved claims for loss or damage to real or personal property that occurred between October 26, 2012 and November 15, 2012 in New York, Kings, Queens, Bronx, Nassau, Suffolk, Rockland, Or-ange and Westchester counties. The Emergency Regulation does not include damages to automobiles, flood insurance claims made under the national flood insurance program, disputes concerning right of appraisal or claims that are the subject of civil actions filed against the insurer.

Pursuant to the Emergency Regulation, New York insurers are required to provide notice to claimants who have dis-puted or unresolved claims of their right to request media-tion: (1) at the time the insurer denies a claim in whole or in

part; (2) within 10 business days of the date that the insurer receives notification that the claimant disputes a settlement offer, if the difference between the parties is $1,000 or more; or (3) within two business days if the insurer has not made an offer to settle within 45 days after its receipt of proper proof of loss, statements and forms requested by the insurer. Moreover, the Emergency Regulation applies retroactively to denied claims or where more than 45 days has elapsed since the insurer’s receipt of the proof of loss. It directs insurers to provide notice to claimants within 10 business days of the enactment of the regulation.

If an insured requests mediation, that request must be for-warded to an “approved organization” within three business days, and New York insurers must cover the cost of the me-diation fees. New York insurers are also required to mediate in good faith, which includes sending a representative who has knowledge of the claim and authority to make binding claim decisions.

The new Jersey RegulationSimilarly, on February 5, 2013, the New Jersey Department of Banking and Insurance (NJDBI) enacted Order No. A13-104, amending a prior New Jersey law governing the time period in which New Jersey insurers must respond to inquiries. Spe-cifically, Order No. A13-104 shortened the time period from 15 working days to five from the time of receipt with respect





New York and New Jersey Enact Mediation Programs for Superstorm Sandy Insurance ClaimsFrom page 5

MMA Stands a Fighting Chance of Legalization in New York; Senate Approves Bill Allowing Competitions By Carla Varriale

Mixed martial arts (MMA) is one step closer to legal-ization in New York. New York’s Senate has voted

to permit single discipline MMA competitions in New York State. Bill S.2755 allows single discipline MMA organizations to hold professional competitions in the state and gives the state Athletic Commission jurisdic-tion to regulate professional MMA bouts. There have been no MMA bouts held in New York since the sport was banned more than a decade ago.

New York is one of a handful of states that do not allow MMA bouts. Forty-seven states, including the neighbor-ing state of New Jersey, embrace the sport — a fact that has not been lost on both legislators and proponents of sanctioning the sport. MMA bouts held at the Prudential Center in Newark, New Jersey, and other venues that are accessible from New York have siphoned fans, and much-needed revenue, from New York. In fact, the spon-sor of the bill, Sen. Joseph Griffo-R, Rome, has observed that allowing MMA bouts in New York would create jobs and stimulate New York’s ailing economy.

The next step for the bill, and the fate of recognition of MMA in New York, is a vote in the Assembly. Fans, pro-moters and even legislators are waiting to see, if after that vote, MMA is still standing.

Contact

Carla Varriale: 646-747-5115 or [email protected]

to claims stemming from Hurricane Sandy-related damages. An insurer may request a one-time extension of an additional five days; however, it must be sought prior to the expira-tion of the initial extension, and no further extensions will be permitted.

Likewise, NJDBI has issued a news release revealing its in-tention to establish a mediation program that is similar to the one created in New York. That program would permit policy-holders to submit disputed claims, including homeowner’s, automobile and commercial property claims: (1) that have a value greater than $1,000; (2) where there is no reasonable suspicion of fraud; and (3) that stem from policies that were in force at the time Hurricane Sandy made landfall. The pro-posed mediation program will not include flood insurance claims.

Insurers authorized or admitted to transact business in New Jersey and the New Jersey Insurance Underwriting Associa-tion are obligated to participate in the program. Surplus line insurers and risk retention groups have the option of partici-pating in the mediation program on a case-by-case basis. New Jersey insurers are required to notify policyholders with open or unresolved homeowner’s, automobile and commercial claims of their right to request a mediation conference and must provide detailed instruction for filing that request. New Jersey insurers will be responsible for the cost of the media-tions; however, policyholders will be responsible for their own attorneys’ fees. NJDBI expects that the program will be opera-tional by early April.

While these emergency measures are designed to expedite the claims process and assist policyholders who have sus-tained damages resulting from Hurricane Sandy, such mea-sures now propose an increased burden and responsibility on insurance companies that transact business in New York and New Jersey, as policyholders are now afforded the additional entitlement to participate in a mediation funded by the insur-ance company. Such a new requirement was not contracted for or included in many policies of insurance at the time of their acceptance, and as such, insurance companies could contest the constitutionality of those amendments.

Contact

Matthew Kraus: 646-747-5127 or [email protected]

hilary R. Levine: 646-747-6778 or [email protected]




New York’s Highest Court Declines to Apply Assumption of Risk to Rollerblading AccidentBy Jarett L. Warner

“As a general rule, application of assumption

of the risk should be limited to cases appropriate for absolution of duty, such as personal injury claims

arising from sporting events, sponsored athletic and recreative activities, or

athletic and recreational pursuits that take place at

designated venues.”

In Custodi v. Town of Amherst, 20 N.Y.3d 83, 957 N.Y.S.2d 268 (October 30, 2012), the Court of Appeals considered whether the assumption of risk doc-

trine should be applied to a rollerblading accident.

In July 2007, the plaintiff, an experienced rollerblader, broke her hip while roller-blading. While rollerblading through her residential neighborhood in the Town of Amherst, she observed a truck blocking her path on the street. She rollerbladed onto the sidewalk to avoid the truck and was in the process of rollerblading down the defendants’ driveway back into the street when she fell due to a two-inch differential between the driveway and drainage gutter that ran along the street.

The plaintiff commenced a negligence action. Upon the completion of discov-ery, the defendants moved for summary judgment arguing that the plaintiff as-sumed the risk of injury by voluntarily engaging in the rollerblading activity and that the height dif-ferential between the driveway and gutter did not proximately cause the accident.

The trial court granted the defendants’ motion, holding that the plaintiff assumed the risk of injury. The Appellate Division, Fourth Department re-versed the decision.

Upon appeal to the Court of Appeals, the defen-dants argued that the Appellate Division erred to apply the assumption of risk doctrine because, due to the fact that the plaintiff chose to roller-blade on their property with an awareness that there could be bumps and height differentials in the sidewalk, the plaintiff assumed the risk of in-jury. Conversely, the plaintiff argued that she did not assume the risk of injury since she was not participating in a sporting competition or an ath-letic activity at a designated venue.

The Court of Appeals held that the assumption of risk doctrine did not apply, stating that:

As a general rule, application of assumption of the risk should be limited to cases appropriate for absolution of duty, such as personal injury claims arising from sporting events, sponsored athletic and recreative activities, or athletic and recreational pursuits that take place at designated venues. In this case, the plaintiff was not rollerblading at a rink, a skating park, or in a competition; nor did defendants actively sponsor or promote the ac-tivity in question.

The Court of Appeals also expressed concern that were it to apply the as-sumption of risk doctrine to this case, it would extend the doctrine to persons traversing streets and sidewalks and alter the general duty of landowners to maintain their property in a reasonably safe condition.

Contact





From page 1

was prejudiced by the late notice. N.Y. Insurance Law § 3420(c)(2)(A). Under the statute, an insurer is prejudiced if the failure to provide timely notice “ma-terially impairs the ability of the insurer to investigate or defend the claim.” N.Y. Insurance Law § 3420(c)(2)(C). When notice is given after two years of the accident or occurrence and is untimely, the insured has the burden of proving that the insurer was not prejudiced by the late notice. Under N.Y. Insurance Law § 3420(a)(3), an injured claimant has an independent right to provide written notice of an accident or occur-rence to an insurer. If such notice is timely, the fact that the insured party failed to give timely notice does not prevent the injured party from recovery against the insurer. See Gen. Accident Insurance Group v. Cirucci, 46 N.Y.2d 862 (1979).

Since the enactment of the revised statute, there have been relatively few reported decisions on what constitutes sufficient prejudice. The statute itself is a significantly lower standard than that in other states requiring that an insurer show prejudice in order to sustain a late notice defense. Some states, in-cluding New Jersey, require an insurer to demonstrate that the late notice caused the insurer to lose the underly-ing case it otherwise would have won. In other words, if the insured was likely to lose the underlying case, then its late notice to its insurer was harmless and therefore, by definition, not preju-diced. The Atlantic Casualty decision refused to adopt this near impossible standard.

The underlying Action Atlantic Casualty is an insurance cov-erage dispute which arose out of a

breach of contract and negligence lawsuit pending in state court. Atlantic Casualty sought a declaratory judg-ment that it had no duty to defend or indemnify Value Waterproofing Inc. in the underlying action. Atlantic Casualty asserted that it was prejudiced by its failure to receive timely notice of the claim.

Atlantic Casualty issued a commercial general liability policy to Value. KFC, a property owner in New York, hired Value to perform work on its roof. In February 2010, shortly after the work was com-pleted, a major snowstorm hit New York leaving 20 inches of snow on the roof of KFC’s premises. The roof collapsed two days after the storm. KFC contact-ed Value and confirmed that Value had a certificate of insurance for the job at KFC’s location. KFC provided notice of the collapse to its insurer, Greenwich, in March 2010. The building was sub-sequently demolished at the direction

of the New York City Department of Buildings.

Greenwich notified Atlantic Casualty of the collapse in September 2010. After a thorough investigation, including an inspection and interviews with workers for Value, Atlantic Casualty determined it would deny coverage.

Prior to the events surrounding the collapse, Value had procured a com-mercial general liability policy through NYC Guardian, a brokerage firm. In its executed application for insurance, Value indicated that 100 percent of the construction work it performed was in-doors and on residential properties (as opposed to commercial). A policy was procured listing certain classifications under the Commercial General Liability Coverage Declarations: dry wall or wall board installation, masonry, painting and tile and stone interior construc-tion. An inspection on Value’s account later revealed, however, that Value had employees conducting work on the exterior of buildings and engaged in stucco and waterproofing work. Value later contacted NYC Guardian to add coverage for roofing work.

Atlantic Casualty calculated the pre-miums for the additional coverage for roofing based upon the representations that the insured would only conduct residential roofing work. Had the work been commercial roofing, the premi-ums would have been up to 10 percent higher.

The underlying subrogation action for breach of contract and negligence aris-ing out of Value’s work on KFC’s prem-ises and the collapse was commenced by Greenwich. Value sought coverage from Atlantic Casualty.


Some states, including New Jersey, require an insurer

to demonstrate that the late notice caused the insurer

to lose the underlying case it otherwise would have

won. In other words, if the insured was likely to lose

the underlying case, then its late notice to its insurer was harmless and therefore, by definition, not prejudiced.

The Atlantic Casualty decision refused to adopt this near

impossible standard.




From page 8

The Declaratory Judgment ActionAtlantic Casualty commenced the in-stant declaratory judgment action for a declaration that it did not owe Value a defense or indemnity because: (1) the loss was not an “occurrence”; (2) Value’s work did not fall within the clas-sifications; (3) the loss was excluded by the Contractual Liability Ex-clusion; (4) the loss was excluded by the Prop-erty Damage exclusions; and (5) Atlantic Casualty was prejudiced by the late notice it received of the occurrence.

Judge Cote noted that the duty to defend is measured against the allegations of the plead-ings, but the duty to pay or indemnify is de-termined by the actual basis of the insured’s liability to a third person. See Servi-done Const. Corp. v. Sec. Ins. Co. of Hartford, 64 N.Y.2d 419, 424 (1985).

The Court further noted that typically the determination of whether a duty to defend exists is made by a compari-son of the allegations of the complaint to the insurance policy’s terms. For an insurer to be relieved of the duty to defend, there must be no possible factual or legal basis on which an in-surer’s duty to indemnify under any provision of the policy could be held to attach. Judge Cote noted that because the duty to defend is a contractual obligation, the parties to an insurance contract may modify that duty. For example, they may, as was the case in

the Atlantic Casualty policy, “agree that extrinsic evidence may be considered on an examination of the duty to de-fend.” Since the policy contemplated that extrinsic evidence could be con-sidered in determining whether a duty to defend existed, the Court reviewed extrinsic evidence in assessing Atlantic Casualty’s duty to defend.

Judge Cote found that, based on the

extrinsic evidence, Value’s delay of roughly six months in providing notice to Atlantic Casualty was unreason-able. The Court also found that the arguments to excuse the delay were unavailing. The remaining issue was whether Atlantic Casualty was preju-diced by the delay. Judge Cote found that it was.

The District Court found that Atlantic Casualty had “shown that the late no-tice materially impaired its ability to in-vestigate the claim and defend against it.” The Court observed that Green-wich’s adjuster was able to inspect the property on four occasions prior to the demolition of the insured premises. The

late notice prevented Atlantic Casualty from being able to ascertain potential causes of the roof collapse, “informa-tion which would be highly relevant to an investigation and defense of a claim like the one made here.”

Defendants made several arguments as to why Atlantic Casualty was not prejudiced. They argued that Atlantic Casualty did little to investigate the

loss even after it re-ceived notice of the col-lapse. They argued that Atlantic Casualty had received ample discov-ery, and therefore, it had “more than adequate information concern-ing the facts associated with the collapse.” They also argued that Atlantic Casualty “was required to demonstrate at trial precisely how its de-fense in the handling of subrogation action had been impaired.”

The Court found none of these arguments to

be persuasive. It noted that because the property had been demolished six months before Atlantic Casualty received notice, there were “no mean-ingful investigatory steps that remained available to it that it failed to take.” The Court further found that neither the “existence of litigation and its attendant opportunities for discovery” removed the prejudice to Atlantic Casualty.

The Court noted that Greenwich and Value were adverse parties in the un-derlying subrogation action; therefore, the scope of Value’s repair work on the property, whether the repairs were





made negligently and whether any de-ficient repairs proximately caused the roof’s collapse, were central issues in the subrogation litigation. The Court found that Atlantic Casualty was not required to rely on its “adversary’s in-vestigation to defend its insured in the underlying action.”

The Court further held that Atlantic Casualty was not required to show precisely how KFC’s investigation may have been biased or incomplete. It was not disputed that Atlantic Casualty had a right to inspect the remnants of the roof and its component parts and that the defendants had denied Atlantic Casualty the opportunity to make that inspection. It was therefore unreason-able to impose upon Atlantic Casualty the burden to show precisely how it would have been advantaged by that inspection. Atlantic Casualty was found to have satisfied its burden of demon-strating that it was prejudiced by the late notice it received: it therefore did not have a duty to defend Value in the underlying subrogation action or in-demnify it.

The Classification LimitationAlthough the determination on the is-sue of late notice and the prejudice suffered was sufficient to relieve Atlan-tic Casualty of its duty to defend and indemnify, the Court also addressed Atlantic Casualty’s argument that the work was not covered by the policy. Value argued that the classification limitations were tantamount to exclu-sions and that it was the insurer’s burden to prove they applied. Atlantic Casualty maintained that the classifica-tion limitation delineated the scope of coverage, and it was therefore Value’s

burden to show its claim fell within the scope of the policy.

The distinction is important for other reasons as well. Under New York law, an insurer that does not timely and ef-fectively assert (i.e., through a prompt disclaimer and not a reservation of rights) the applicability of an exclusion or the breach of a condition will not be allowed to assert either as a defense. However, the insurer will, absent preju-dice, not generally lose its right to as-sert the absence of coverage.

The Court agreed with Atlantic Casu-alty. Value’s policy included five clas-sifications, including a “Roofing Res” classification. Value had paid additional premiums in order to obtain coverage for “Roofing Res” and the other clas-sifications and therefore they could not be considered as exclusions: Value therefore had the burden to show its work was covered by the policy. Value’s arguments that its work on the roof fell within the “Tile, Stone, Marble, Mosaic or Terrazzo-Interior Construction” clas-sifications were quickly dismissed by the Court. More detailed analysis was conducted on whether the “Roofing Res” classification could be applied.

From page 9

The District Court found that . . . the late notice

prevented Atlantic Casualty from being able to ascertain potential causes of the roof collapse, “information which would be highly relevant to

an investigation and defense of a claim like the one

made here.”

Value argued that its work fell within the scope of roofing work and that the “Res” was ambiguous or, at best, an arbitrary insurance code or a pos-sible abbreviation for restoration — the industry standard for residential was “Resd.”

Atlantic Casualty disputed that the type of work on the roof constituted roofing as it did not involve work on the roof deck of the impermeable barrier on the roof. In addition, it argued that the clas-sification was only for residential work.

While the Court agreed that Value’s work constituted “Roofing,” it was not persuaded that the “Res” did not refer to residential. As it had done for purposes of determining the scope of the duty to defend, the Court looked to extrinsic evidence to make this find-ing. Value’s application for insurance stated that its work was 100 percent residential. There was no evidence it ever communicated to its broker that it intended to do commercial work. While the broker had authority to request additional classifications on Value’s be-half, there was nothing to indicate that the broker had done so. Furthermore, had Value really intended to obtain a commercial classification, it would have been charged a higher premium. Given that the classification provided coverage only for residential roofing, there was no possible factual or legal basis for Atlantic Casualty’s obligation to indemnify to be triggered.

Atlantic Casualty’s declaratory judg-ment request was granted in its entirety.

Contact

Abbie havkins: 646-747-5100 or [email protected]

Linda Fridegotto: 646-747-5114 or [email protected]





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Charlie Zegers (Tara’s husband), Tara Fappiano, and Carmen Nicolaou at the Westchester County Bar Association.

Ritzert named to super LawyersGail Ritzert was selected to appear in 2012 New York Metro Super Lawyers. She was also highlighted in The New York Times Magazine special section — “The Top Women Lawyers in the New York Metro Area” — in the areas of insurance cov-erage and construction litigation.

Gail focuses her practice on insurance coverage and insur-ance defense matters, concentrating in the coverage and defense of catastrophic injury cases arising from construc-tion accidents, products and premises defects, transporta-tion claims, and the defense of municipalities and schools. She works closely with national construction and electrical contractors, real estate developers, property managers and franchisors.

Fappiano honored for serviceTara Fappiano was recently honored by the Westchester County Bar Association for her service as the co-chair of the association’s Environmental Law Committee.

Tara is the firm’s resident partner in its White Plains (West-chester County) office. She concentrates her practice on in-surance defense actions, focusing on injury cases arising out of construction accidents, products liability, premises defects and property damage, with a particular focus on toxic tort and environmental litigations.

Rosenfeld Appears at nightclub & Bar showSteve Rosenfeld recently appeared on a number of panels at the annual Nightclub & Bar Trade Show and Convention in Las Vegas. He spoke on assault and battery claims, liquor liability, third-party security pros and cons and nightclub and bar litigation and loss control.

Steve has provided counseling and representation to sports, recreation and entertainment entities; producers and promot-ers of live entertainment; venue owners and operators; recre-ation facilities; and nightclubs for over 25 years.

Varriale speaks at sports Law ConferencesCarla Varriale recently spoke at the Sport and Recreation Law Association’s 2012 Annual Sport, Physical Activity,

n HRRV IN THE PuBLIC EYE

Recreation and Law Conference in Greensboro, North Caro-lina. SRLA is an organization of more than 100 sports law professors, who meet yearly to discuss trends and develop-ments in the sports law industry with the objective of provid-ing an exemplary education for their students.

Carla is also slated to participate in a panel discussion, “Ris-ing Spectator Injuries and Deaths Raise Safety Concerns,” at the National Sports Safety and Security Conference and Exhibition on August 2 in New Orleans.

Carla represents Major League Baseball teams, minor league teams and other clients in the recreation and sports industries.




HRRV DECISIONS OF INTEREST

Court Rejects Claim of Causal Connection Between Alleged Traffic Light Malfunction and Loss of FetusPajotte v. The City of New YorkSupreme Court, Kings CountyIndex No. 10891/2005November 21, 2012

Mid-day on January 10, 2004, Karlene Pajotte was in-volved in a motor vehicle accident with another vehicle

at the intersection of Bedford Avenue and Avenue W in Brooklyn. Pajotte claimed the traffic light at the intersection malfunctioned and that she proceeded into the intersection with a green light. Petrocelli Electric Company had a contract with the City of New York to repair traffic signal lights in the Borough of Brooklyn.

As a direct result of the collision, Pajotte claimed loss of a fe-tus at seven weeks’ gestation, thereby meeting the threshold showing of a “serious injury” within the statutory definition of Insurance Law § 5102(d).

The police accident report noted that the traffic signal at the subject intersection was defective. Logs kept by the New York City Department of Transportation indicated that Petrocelli was advised of the alleged defective traffic signal at 11:46 a.m. on January 10, 2004. The contract between Petrocelli and the City required Petrocelli to respond to traffic signal malfunctions within two hours of such notice.

Both Petrocelli and The City sought summary judgment based on a number of different theories:

• First, it was argued that Petrocelli did not owe a duty to the plaintiff as she was neither a direct nor incidental ben-eficiary of the Petrocelli-City of New York contract.

• Second, using the plaintiff’s own testimony as to the time of the accident and the time noted in the Department of Transportation logs, it was argued that since the accident occurred within the two-hour window that Petrocelli had to respond to defective traffic signals, Petrocelli could not be culpable, even if the traffic light had malfunctioned.

• Third, it was demonstrated that when a Petrocelli crew arrived at the subject intersection, the traffic signal was functioning.

• Fourth, using the testimony of a Petrocelli employee as an a expert on traffic signals, it was shown that a traffic sig-nal could never fail so as to have two green lights in dif-ferent directions, and that if a malfunction had occurred, the traffic signal had a fail safe device, which would lock the light on the traffic signal to either red or flashing red.

• Fifth, it was argued that the loss of a fetus could not be causally con-nected to the accident. A board-certified physician in obstetrics/gy-necology and reproductive endocrinology opined that until a fetus is twelve weeks old, the fetus is protected by the mother’s pelvic bones and that since the fetus was only six to sev-en weeks old on the date of accident, the fetus could not have been harmed since it would have been protected by the plaintiff’s pelvic bones.

After lengthy, contentious oral argument before Kings County Supreme Court Justice Sylvia Ash, summary judgment was granted to Petrocelli and The City. Justice Ash noted that there was simply no issues of fact concerning whether the subject traffic signal was in fact defective.

Contact

Petrocelli electric Company was represented by Amol n. Christian.

Amol n. Christian: 516-620-1703 or [email protected]





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Court Dismisses Claim of Train Inspector Against Third-Party Contractors Citing Lack of Presence and Proximate CauseHernandez v. Alstom Transportation Inc.Supreme Court, Queens CountyIndex No. 20234/10March 7, 2013

Plaintiffs Victor and Teoista Hernandez commenced a personal injury action in Supreme Court, Queens County

against defendants Alstom Transportation Inc., Alskaw LLC and Panasonic Avionics Corporation. Plaintiff Victor Hernan-dez, a train operator for the New York City Transit Authority (NYCTA), was allegedly injured while at work at the Fresh Pond Yard. Specifically, Hernandez alleged that he was in-specting a train when he was struck by a shoe paddle that had been propped into a conductor’s cab door.

Alstom and Alskaw moved for summary judgment to dismiss the Verified Complaint against them, arguing that they were third-party contractors and, thus, owed no duty to the plain-tiff. Additionally, Alstom and Alskaw argued that they neither created nor had notice of the alleged dangerous condition which caused the plaintiff’s accident, and that such condition was not the proximate cause of the plaintiff’s alleged injuries.

In support of their motion, Alstom and Alskaw submitted the Affidavit of Alstom’s former quality inspector, John Shea, who averred that at the time of the alleged accident, Panasonic was performing updates to the NYCTA subway trains located at the Fresh Pond Yard. The modifications were supervised by a representative from NYCTA. Shea also stated that no employees of Alstom and Alskaw were present on the night of the alleged accident. Thus, the evidence establishes that only Panasonic and NYCTA were present on the night of the accident.

In granting Alstom and Alskaw’s motion for summary judg-ment, Judge Sidney Strauss held since Alstom and Alskaw were not present at the train yard on the night of the accident, the plaintiff cannot establish that any of their actions were the proximate cause of the accident.

Contact

Jarett L. Warner and Lindsay Kaplow represented defendants Alstom and Alskaw.


Lindsay Kaplow: 646-747-5123 or [email protected]

summary Judgment Granted in Radiator CaseFigueroa v. Reclaim Housing Development Fund CorporationSupreme Court, Bronx CountyIndex No. 350624/10January 4, 2013

Plaintiffs claimed that a four-year-old infant plaintiff sus-tained injuries when he fell onto an exposed metal piece

protruding from an uncovered radiator in the plaintiffs’ apart-ment. The infant-plaintiff was playing in the bedroom with his sister, when he fell onto the metal piece, sustaining a deep laceration to his lower back. The laceration required stitches, and the plaintiffs made claims of permanent scarring and disfigurement.

The plaintiffs testified that the radiator covers had been re-moved by contractors hired by the landlord and were never replaced, despite the plaintiffs’ requests for new covers. The building’s property manager testified that it was, in fact, the plaintiffs who removed the covers and disposed of them. He also explained that the metal piece was not a defect; it was a metal clip designed to hold on the radiator cover, and there-fore was a component of the radiator itself.

Despite these conflicting accounts relating to the radiator covers, the defendants moved for summary judgment. They argued that the landlord had no duty to provide radiator covers in the first place, and that the metal piece was not a defective condition, but merely a piece of the radiator itself. The defendants relied primarily on two controlling cases in support of the motion: Rivera v. Nelson Realty, LLC,7 N.Y.3d 530 (2006) and Rodriguez v. City of New York,799 N.Y.S.2d 195 (1st Dep’t. 2005).

Justice Allison Tuitt, in her decision granting the summary judgment motion, agreed with the defendants’ arguments and cited to both of these controlling cases in her decision. She found that the landlord had no duty to provide radiator covers in the apartment, and that there was no evidence of any defect as the metal clip was a piece of the radiator itself. Thus, the plaintiffs’ complaint was dismissed in its entirety.

Contact

Tara C. Fappiano and Tracy P. hoskinson represented the defendants.

Tara C. Fappiano: 914-290-6453 or [email protected]

Tracy P. hoskinson: 646-747-5134 or [email protected]





new York Appellate Court Rejects Mosh Pit Injury ClaimMarrero v. The City of New YorkAppellate Division, First Department102 A.D.3d 409; 958 N.Y.S.2d 51January 3, 2013

New York’s Appellate Division, First Department, which hears appeals from the trial courts sitting in New York

and Bronx Counties, has affirmed a New York County judge’s decision rejecting a concertgoer’s claim that his injuries (which included a (torn ACL and fractured tibia plateau re-quiring surgical repair) were caused by the failure of the concert promoter and its retained security contrac-tors, as well as the City of New York, to provide adequate security at an outdoor general admis-sion festival.

Jeffrey Marrero alleged that he was injured while attending Ozzfest 2006 at Randall’s Island on July 29, 2006. The plaintiff claimed that while stand-ing on the outskirts of a mosh pit (he was not able to move to any other location because of the crowd), he was kicked by someone engaged in moshing. Marrero claimed that Live Nation, the City of New York and several security companies re-tained by Live Nation (USI Strike Force and Concert Service Specialists) failed to provide adequate se-curity and properly control the crowd. Among other things, he argued that the festival was overcrowded, and the defen-dants were obligated to prevent and/or deter moshing.

The plaintiff claimed that he was walking toward the main stage of the venue; and the closer he got to the stage, the thicker the crowd became. During his progression to the

main stage, he encountered a group of aggressive dancers, although he claimed that he had never before observed a mosh pit or moshing and, in fact, did not know what mosh-ing was (at least prior to his being injured). The plaintiff said that he feared being struck by a dancer and, as such, took a few steps back and continued to watch the concert. Ap-proximately three minutes later, he was shoved from behind, causing him to stumble forward into the mosh pit, and was then struck by a mosher.

Live Nation and the City moved for summary judgment seek-ing dismissal of the plaintiff’s action on the grounds that neither owed the plaintiff a duty of care, since he appreciated and assumed the risk of his injuries when he knowingly po-

sitioned himself among a crowd, immediately adjacent to a mosh pit, at Ozzfest, a general ad-mission outdoor heavy metal festival. Live Na-tion also argued that it did not breach any duty it might have owed to the plaintiff since it provided adequate security as a matter of law, and that in any event, the plaintiff was injured as a result of the sudden and unex-pected action of a third party or third parties over whom Live Nation had no control.

Initially, Hon. Eileen Ra-kower, sitting in Supreme Court, New York County, granted the motion by Live Nation and the City finding that there were no questions of fact demonstrating that either

breached any duty of care they might have owed to the plain-tiff and dismissed the action in its entirety. Justice Rakower did not focus on the assumption of risk defense, but on the fact that there was no testimony and no evidence to establish that the dancing observed by the plaintiff was “violent.” She






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Court Finds Defendant Did not have notice of an Alleged Defect and that the Alleged Defect Constituted a Trivial DefectBrito v. 129 Wadsworth Company and Alma Realty Corp.Supreme Court, New York CountyIndex No. 108775/2010January 8, 2013

Plaintiff An-gela Maria Brito

claimed that she was injured as a result of tripping and falling due to an alleged defective condition existing in the vestibule area of the building located at 129 Wadsworth Avenue, New York, New York. The plaintiff claimed that she was injured as a result of the de-fendants’ negligent ownership, mainte-nance and opera-tion of the subject building.

In support of their summary judgment motion, the defendants argued on the motion that the al-leged defect was trivial, and that the defendants had no prior notice of the alleged defect. Justice Milton Tingling, sitting in Supreme Court, New York County, concluded that the defen-dants met their burden of proof and that they were entitled to summary judgment, including through the affidavit of an expert engineer. Justice Tingling found that the plaintiff failed to raise any triable issues of fact to defeat the motion.

Contact

Tara C. Fappiano and Kenneth Kim represented the defendants.


Kenneth Kim: 646-747-5123 or [email protected]

noted that the evidence demonstrated that the event was not a “sold out” event and there was ample security. She also noted that security personnel testified that it was a “quiet” day, and there were no problems.

Justice Rakower was unconvinced that there was any evi-dence to establish that the complained conduct — mosh-ing — rose to such a level that would have or should have alerted security personnel or warranted security personnel’s intervention. She also found that there was no testimony to establish that the plaintiff was injured due to moshing — pointing out that the plaintiff testified that he was pushed from behind, fell into the aggressive dancers and was struck in the side by one of the dancers. She noted that the testi-mony was not clear as to whether the dancer struck him ac-cidently or “slammed” into him while moshing.

Justice Rakower did not entertain the plaintiff’s overcrowd-ing contention (which arguably would have been defeated by the plaintiff’s own testimony that he was able to escape from the allegedly overcrowded area immediately after his injury), pointing out that there were approximately 5,000 to 6,000 people at this event, substantially fewer than in prior years.

In affirming the dismissal by Justice Rakower, the Appellate Division held that the defendants had met their initial burden of showing that they provided security measures, specifically noting the security plans, meetings and number of personnel present in light of the number of concert attendees. Addition-ally, the court noted that contrary to the plaintiff’s conten-tion, there was no evidence in the record to show that the identified person who shoved him was actually engaged in dangerous moshing or slam dancing. The court referred to the plaintiff’s own testimony — he stated that he was unsure whether his injury was due to an intentional push or someone simply bumping into him — and noted that, in either case, the unidentified party caused the plaintiff’s fault and, under the circumstances, the defendant could not be held liable for such unforeseen conduct.

Contact

steven h. Rosenfeld and Carmen A. nicolaou represented Live nation and the City of new York.

steven h. Rosenfeld: 646-747-5105 or [email protected]

Carmen A. nicolaou: 914-290-6341 or [email protected]

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Court Finds that Plaintiff Failed to establish the existence of a Dangerous Condition and that the Alleged Dangerous Condition Was nevertheless de minimusColon v. Elezaj & Sons Realty Supreme Court, Bronx CountyIndex No. 308570/2010December 10, 2012

Plaintiff Maria Colon claimed she slipped on a step, due to a hole and a slippery condition on February 16, 2010. She further claimed that the defendant proper-

ty owner was negligent in its ownership, maintenance and operation of the building located at 3220 Steuben Avenue, Bronx, New York.

In support of its motion for summary judgment, the defendant argued that the plaintiff could not establish the existence of a dangerous condition in the location where she fell, and if there was such a condition, that it was de minimus, and there-fore not actionable.

Justice Julia Rodriguez, sitting in Supreme Court, Bronx County, found that the de-fendant met its burden of proof on these two arguments, including through the af-fidavits of the property manager and an expert engineer. The court determined that the plaintiff failed to provide evidence raising a question of fact, even though the plaintiff submitted her own expert affidavit.

Justice Rodriguez, specifically referencing the defendant’s reply papers, noted that the plaintiff never claimed that there was an “edge” to the step that caused the fall, or that the steps were worn or eroded. Rather, the plaintiff identified a hole that was slippery as the defect. Thus, the plaintiff’s expert affidavit discussing a worn and rounded condition, that was slippery at the edge, was an attempt to raise a new theory of liability as the purported cause of the fall. Even so, the court noted that the defendant’s expert explains that even if there had been such a condition, it was irrelevant given the way the plaintiff was descending the stairs.

The court granted the defendant’s motion for summary judgment, finding that the defendant established its burden of proof that it maintained the building in a rea-sonably safe condition as a matter of law and that the size and depth of the alleged depression on a marble step did not constitute a defective condition. Further, the court held that the size and depth of the alleged depression constituted a de mini-mis condition ordinarily found on marble stairways, and thus was not actionable.

Contact

Tara C. Fappiano and Kenneth Kim represented the defendant.


Kenneth Kim: 646-747-5123 or [email protected]



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