The facts of Campbel were founded on two slip-and-fall accidents in the parking lot of a surgery center. Under its lease, the surgery center agreed to name the landlord as an additional insured on its general liability policy, which it did. Under the lease, the landlord was required to maintain the parking lot, including snow removal. It was undisputed that the plaintiffs were both patients of the surgery center and were injured due to slipping on ice in the parking lot.
The Appellate Division reviewed four of its prior published opinions in this area, in an effort to determine whether the surgery center’s carrier was obligated to defend and indemnify the landlord. Ultimately, the court found that the plaintiffs’ activities “arose out of” the surgery center’s use of the premises, thereby bringing the landlord within the center’s policy. Quite frankly, this was not a surprising result, given the court’s prior decisions. However, the court went on review the two policy types and determined that the center’s insurance policy was not a “true” excess policy, but rather a “primary insurance policy with an excess insurance clause.” The court then examined the the “other insurance” clauses of both policies The tenant’s policy, issued by Lexington Insurance company, mandated that if other insurance applied to the loss, the other insurance must pay first. Thus, according to its terms, the tenant’s Lexington policy only provided excess coverage to additional insureds. An examination of the language of the landlord’s own Maryland Casualty policy revealed that it was to be excess over any other primary insurance providing coverage for damages arising out of premises for which the insured had been added as an additional insured. The Campbel court concluded that since by its terms the tenant’s policy only afforded the landlord excess coverage, there was no other primary insurance available. Therefore, the condition limiting the coverage of the landlord’s own policy was not met and that policy must provide primary coverage.
WHY IS THIS IMPORTANT? This decision can be viewed as a significant roadblock at efforts to tender landlord’s defenses to tenants and their insurers for fall-downs which arise out of a tenant’s use of the premises. Tompkins, McGuire, Wachenfeld & Barry, LLP routinely counsels both property owners and tenants, as well as their insurers, on matters of general liability and insurance coverage. We would be happy to discuss the facts of your particular case as they might be affected by this new decision.
This entry contributed by: Joseph K. Cobuzio and Jared P. DuVoisin
In Whitten v. Sybron Chemicals, Inc., the defendant Sybron hired the plaintiff’s employer to perform maintenance on chemical manufacturing tanks. The plaintiff, a foreman, was injured in a fall from a ladder while repairing a piece of machinery inside one of defendant’s sludge tanks. He claimed the fall was caused by sludge the defendant’s employees failed to clean. However, he admitted he knew of the slippery condition. The court held that since the plaintiff worked for an independent contractor, and since the presence of the sludge was a known and visible hazard that was incidental to the very work the plaintiff was to perform, the defendant had no duty to ensure the plaintiff’s safety. This holding falls in step with a line of New Jersey case law that abrogates the general rule that landowners have a nondelegable duty to ensure the safety of all who enter onto the premises. It thus becomes important upon receiving notice of an accident to thoroughly investigate precisely how the injury occurred and under what circumstances.
Following a series of unfavorable rulings in the Appellate Division over the past few years, New Jersey courts were generally of the view that biomechanical experts could not be called upon by defendants to opine that a minor automobile accident could not have possibly caused a serious medical condition. However, on March 6, 2008, the New Jersey Supreme Court announced its decision on Hisenaj v. Kuehner, ___ N.J. ____ (2008), reversing an appellate court that overstepped its bounds in throwing out the report of Harold Alexander, PhD., based upon the conclusion that it was not supported by reliable scientific methodology. Thus, the defendants were left with the prospect of facing exposure for significant medical treatment, including spinal surgery, for a motor vehicle collision occurring at less than ten miles per hour. However, the Supreme Court found that the studies Dr. Alexander relied upon, as opposed to those used for support in prior cases, included similar accidents and similar victims in terms of age, gender and physical composition. Thus, the opinions offered were sufficiently supported by scientific data for admissibility.
This was an important victory for insurance carriers in New Jersey, as juries will no longer be left to determine whether low impact collisions correlate to serious medical conditions, especially in the spine, which often times are pre-existing. However, it remains important for defense counsel to insist that their biomechanical experts rely upon the most recent and up-to-date empirical evidence.
TMWB maintains an extensive automobile liability defense practice, representing insureds on personal auto, as well as commercial policies.
In Koruba v. American Honda Motor Co., Inc., an Appellate court affirmed dismissal on summary judgment the plaintiff’s product liability failure-to-warn lawsuit where, despite an ATV manufacturer’s warnings in the owner’s manual and oral warnings by the retailer seller at the time of sale, the plaintiff attempted an extreme jump and sustained serious injury. The court found that the plaintiff’s expert opinion on the need for on-product labeling was a net opinion on neither epidemiological data or empirical research linking such need to the magnitude of risk associated with jumping. The court also found no basis for the expert’s other opinion that Honda’s promotional marketing of its ATV sent a mixed message to consumers, resulting in their failure to heed warnings actually given.
In American Wrecking Corp. v. Burlington Ins. Co., et al., the fundamental issue was the impact of a “Cross Liability Exclusion” which was added, at the time of renewal, to the liability insurance policy purchased by plaintiff American Wrecking (AW), and provided by defendant Burlington. The question, decided November 29, 2007, was triggered by the filing of certain construction worksite personal injury claims, thus requiring the court to determine whether a fair interpretation of the Exclusion compelled indemnification or supports disclaiming. The court recites the history of the claims and the pertinent policy language and concludes that it would be against public policy and the law as the court understands it to uphold the Exclusion here. The construction contract between Roche, as owner, and plaintiff AW, as contractor, clearly provided that the owner was to be indemnified by AW, and AW’s plight, in turn, was to seek relevant insurance coverage. The original 2002 policy undisputedly provided liability coverage for AW and its additional insureds. In the more costly 2003 renewal policy, however, Burlington inserted the Exclusion, eliminating coverage for “any insured.” Thus, the Exclusion effectively eliminated liability coverage for AW and any entities listed as additional insureds under the policy. This result is fundamentally inconsistent with commercially reasonable standards. While the Exclusion is not ambiguous, clarity of meaning does not defeat the need to ensure that the policy language conforms to public expectations and commercially reasonable standards.
This decision further demonstrates New Jersey courts’ willingness to overlook unambiguous policy language in favor of obtaining a result in the best interest of the insured. Carriers must be careful not to include exclusionary provisions, even if clearly drafted, which can be seen as effectively excluding the main operations for which the insurance is purchased.
Contributed by: Joseph K. Cobuzio and Jared DuVoisin
In an important decision rendered August 23, 2007, the Appellate Division conclude d that where a car rented in New York and driven by a New York resident was involved in an accident in New Jersey with a New Jersey driver, New Jersey law would apply to shield the vehicle’s owner, Avis, from liability. In Aria v. Figueroa, the defendant driver rented a van from Avis in New York City and struck the plaintiff, a New Jersey resident, while in New Jersey. There is a significant distinction between New York and New Jersey law concerning a plaintiff’s ability to sue the owner of a vehicle for negligence committed by the driver. Under the New Jersey common law rule, so long as the driver is not an agent of the owner, a vehicle owner is not liable for the actions of the driver. On the other hand, N.Y. Vehicle and Traffic Law 388(1) provides: “[e]very owner of a vehicle used or operated in [New York] for death or injuries to person or property resulting from negligence in the use or operation of such vehicle[,]” where such use is permissive will be liable. The court held that although New York and New Jersey both have interests supporting the application of their respective law regarding Avis’ vicarious liability, given the literal limitation on the scope of operation of the New York statute, New Jersey law should apply. This case is important for New Jersey auto carriers insofar as plaintiff’s attorneys will often attempt to apply the New York statute whenever an accident has any tie to New York. The Court was clear here that unless the accident occurs in New York, the statute is inapplicable.