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Archive for the ‘Tort and Catastrophic Loss’ Category

Serving That Whiskey Might Be Risky – Liability Of Social Hosts In DUI Accidents

Posted on: February 15th, 2019

By: Stacey Bavafa

Under California Civil Code Section 1714, social hosts and other third parties may be held to be partially liable in the event of a drunk driving accident depending on the circumstances that led up to the accident. Under Sec. 1714, everyone is responsible for the result of his or her willful acts, but also for injuries sustained by another by a want of ordinary care or skill in the management of his or her property or person.

California courts have held that the furnishing of alcoholic beverages is not the proximate cause of injuries resulting from intoxication, but rather that the consumption of alcoholic beverages is the proximate cause of injuries inflicted upon another by an intoxicated person. Vesley v. Sager (1971) 6 Cal.3d 153; Bernhard v. Harrah’s Club (1976) 16 Cal.3d 313; and Coulter v. Superior Court (1978) 21 Cal.3d 144.

Therefore, social hosts who provide alcoholic beverages to a person may not be held legally accountable for damages suffered by the intoxicated person, or for damages the intoxicated person inflicts on another person resulting from the consumption of alcoholic beverages. In other words, if John Doe had 5 glasses of whiskey at a bar and ends up swerving in and out of his lane due to his inebriated state, and hits another vehicle causing injury to a third person, the bar who provided John Doe the 5 glasses of whiskey will not be required to pay for damages sustained by the third party.

There are however, two exceptions to the rule outlined above:

If an adult, including a parent or guardian, who knowingly serves alcoholic beverages at his or her residence to a person whom he or she knows, or should have known, to be under 21 years of age, the adult may be held liable for actions the minor takes as a result of the consumption of alcohol.

Further, if a business sells alcohol to an obviously intoxicated minor, in such that a reasonable person would be able to tell the minor was intoxicated, the business may face liability for harm arising out of the minor’s actions.

In the case of the underaged drinker, both the underaged drinker and the person who was harmed by the actions of the underaged drinker can file a civil claim against the social host or business to obtain recovery of his or her medical bills, property damage, pain and suffering, loss of income, and legal fees.

If you have any questions or would like more information, please contact Stacey Bavafa at (213) 615-7026 or [email protected].

Waiving the Right to Remove State Court Actions

Posted on: February 13th, 2019

By: Justine Baakman

Boilerplate Demands for Relief in Pennsylvania Complaint Alone Sufficient to Support an Amount in Controversy Exceeding $75,000

The Eastern District Court of Pennsylvania recently held that one may waive the right to removal to federal court even when there exists uncertainty as to whether the amount in controversy exceeds the $75,000.00 threshold for diversity citizenship. In Hutchinson v. State Farm Fire & Casualty, on January 17, 2018, the plaintiffs filed a breach of contract suit against the defendant in Pennsylvania state court. In their state action, the plaintiffs sought minimal damages totaling approximately $25,000.00 for specific costs relating to property damage they allege to have suffered. Despite those specifically-pled damages, the complaint included the nearly always pled boilerplate demands in Pennsylvania complaints for compensatory and punitive damages along with interest and attorneys’ fees against the defendant. Moreover, the plaintiffs filed their state court action in the Pennsylvania major trial division, thereby acknowledging the potential for the damages they sought to exceed the Pennsylvania compulsory arbitration cap of $50,000.00.

About three months following initiation of the state action, in April 2018, the defendant served the plaintiffs with requests for admission seeking an admission that the plaintiffs damages either exceeded or did not exceed the $75,000.00 threshold for removal. About one month later, in May 2019, the plaintiffs served their responses to those requests for admission. Although the plaintiffs admitted that their actual damages fell well below the $75,000.00 threshold, they indicated that once punitive damages, interest, and attorneys’ fees were accounted for, “their total damages could very well exceed $75,000.00.”

About one month later, in June 2018, the defendant removed the matter to the Eastern District Court of Pennsylvania. Shortly thereafter, the plaintiffs moved to remand the matter back to state court. The basis for that remand was the defendant’s untimely removal. In support of their request for remand, the plaintiffs argued that the defendant had known since initiation of the action in January 2018 that the amount in controversy exceeded $75,000.00. In arguing so, the plaintiffs focused on the boilerplate language in the complaint wherein they sought punitive damages, interest, and attorneys’ fees. In arguing against remand, the defendant focused on the boilerplate language of the relief sought in the complaint. Specifically, the defendant argued it was not legally certain that the damages the plaintiffs sought exceeded the $75,000.00 threshold until the plaintiffs answered its requests for admission. The Eastern District Court of Pennsylvania ultimately remanded the matter back to state court for the defendant’s failure to timely remove the action.

The impact of the Eastern District Court of Pennsylvania’s ruling on removal of state court actions is yet to be seen. It certainly leaves open the possibility that nearly all state court complaints in Pennsylvania could support a reasonable finding that the amount in controversy exceeds the $75,000.00 threshold for removal based on diversity of citizenship. And, more importantly, that failure to remove Pennsylvania state court actions – most of which are initiated via complaints seeking similar boilerplate relief as was at issue in the Hutchinson matter – within thirty (30) days of service of the complaint could result in waiver of the right to remove.

For additional information related to this topic and for advice regarding how to navigate removal of Pennsylvania state court actions, including torts, products liability, and catastrophic loss litigation, you may contact Justine Baakman at 267-908-7882 or [email protected]

A Series of Particular Events: Foreseeability and the First Circuit

Posted on: February 6th, 2019

By: Thomas Hay

A three-judge panel on the First Circuit denied Omni Hotel’s petition for review of their decision to overturn a lower court ruling that awarded summary judgment to Omni and reinstated a negligence charge filed by a man who was beaten, and his arm broken by a group of individuals in Omni Hotel’s Providence, Rhode Island hotel lobby. The First Circuit held that the development of a particular sequence of events can, without more, render future harm foreseeable.

The First Circuit’s opinion effectively broadened the duty of care imposed on hotels to protect guests and members of the public against spontaneous criminal conduct by a third party.

The plaintiff lived in a condominium complex adjoining the hotel. He had access to and regularly used the hotel’s services and amenities. On the night in question, hotel security had evicted from the premises a group of youths whose partying had caused a disturbance. Some of the evicted group returned outside the hotel with a case of beer and attempted to pick a fight with a passer-by which was seen by the hotel’s valet. A number of the group would later reenter the hotel’s lobby and proceed to beat the plaintiff resulting in the breaking of his arm.

While the lower court found that Omni had a special relationship to the plaintiff, as the “possessor of land that holds the land open to the public/member of the public,” on the issue of foreseeability, the lower court found that the hotel did not have a legal duty to protect the plaintiff from an attack spontaneously committed by third parties. Additionally, the lower court found it unforeseeable that the specific rowdy and later evicted group would spontaneously attack the plaintiff.

In the First Circuit’s review of the case, Omni cited Rhode Island cases that pertained to a “past occurrences” theory of foreseeability, whereas the plaintiff cited cases that illustrated a “sequence of events” theory of foreseeability. The First Circuit ultimately agreed with the plaintiff, saying that while it may not have been foreseeable that the group would assault the plaintiff at the time of their eviction, the attack was foreseeable by the time the group had returned and tried to pick a fight with the passer-by.

The First Circuit stated that the development of a particular sequence of events can, without more, render future harm foreseeable. According to Omni, this decision imposes an undue burden on businesses, “which will now unnecessarily face the prospect of a jury trial every time anyone is injured on their premises.”

While the implications of this case as it pertains to the liability of business owners and injuries that occur on their premises goes to be seen, hotels in the First Circuit should be wary of omitting to assist any guest or even member of the public from the actions of aggressive third parties.

If you have any questions or would like more information, please contact Thomas Hay at [email protected].

 

Mu v. Omni Hotels Management Corp., 885 F.3d 52 (1st Cir. 2018)
Mu v. Omni Hotels Management Corp., 882 F.3d 1 (1st Cir. 2018)

Georgia Court of Appeals Concludes the Term “Affiliate” is Ambiguous

Posted on: February 4th, 2019

By: Jake Carroll

In Salinas v. Atlanta Gas Light Company,[1] the Georgia Court of Appeals’ recently examined whether Georgia Natural Gas (“GNG”) and Atlanta Gas Light Company (“AGLC”) were “affiliates.” Both AGLC and GNG were owned and controlled, either directly or through an intermediary, by a company named AGL Resources, Inc.

In Salinas, AGLC sought to dismiss Plaintiff’s claims and compel arbitration. In support of its argument, AGLC relied on a term in GNG’s service agreement that required the Plaintiff to arbitrate any disputes with GNG’s “affiliates.” However, since the term “affiliate” was not defined in GNG’s agreement, the Court of Appeals looked at how the term “affiliate” is defined in the Georgia Code, Black’s Law Dictionary, and other jurisdictions, and ultimately determined that the term is ambiguous. The Court of Appeals construed the agreement against GNG—the drafter of the contract—and as a result, AGLC could not demand arbitration of Plaintiff’s dispute.

While the Court of Appeals did not set-out a specific definition for “affiliate,” the Court’s analysis provides a couple of practice tips to anyone involved in drafting, reviewing, or enforcing contracts, including commercial agreements, government contracts, or insurance policies.

  1. Define Your Terms: The Salinas Court may not have had to address the meaning of “affiliates” if the Agreement had defined the term. But, since the term was not defined, the Court looked elsewhere, including other jurisdictions, the Georgia Code, and the dictionary to determine its meaning. Including a definitions section is an easy way to set out the agreed-upon meaning of a term throughout a contract, and should not be overlooked.
  2. Be Explicit: If there is a certain sibling or parent corporation that should be a beneficiary of a contract, consider listing the specific “affiliates” to which the contract or agreement should apply.
  3. Check Your State’s Code: The Court noted that the term “affiliate” is defined over 20 times in the Georgia Code, and the definitions vary. For example, in the context of financial institutions, an affiliate is an entity that controls the election of a majority of directors, trustees of a financial institution, or an entity that owns or controls 50 percent or more of the financial institution. O.C.G.A. § 7-1-4 (1). In Georgia’s Corporations Act, the definition of affiliate is broader: “a person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a specified person.” O.C.G.A. § 14-2-1110 (1).[2] Depending on the type of corporate entity, “affiliate” may not include every entity in a corporate structure, and certain rules regarding ownership and control may be relevant.

If you need help with this issue, or any other commercial law questions, Jake Carroll practices construction and commercial law, is licensed to practice in Georgia and Florida, and is a member of Freeman Mathis & Gary’s Construction Law and Tort and Catastrophic Loss practice groups. He represents corporations and manufacturers in a wide range of litigation and corporate matters involving breach of contract, business torts, and products liability claims. He can be reached at [email protected].

[1] 347 Ga. App. 480; 819 S.E.2d 903 (2018).
[2] See also O.C.G.A. § 18-2-71 (1) (B) (“Affiliate” has multiple definitions, including “[a] corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote by the debtor or a person who directly or indirectly owns, controls, or holds with power to vote 20 percent or more of the outstanding voting securities of the debtor[.] …”).

PUNITIVE DAMAGES: How Much Is Too Much?

Posted on: November 1st, 2018

By: Rebecca Smith

On August 10, 2018, in the first Roundup cancer lawsuit to proceed to trial, a jury awarded Dewayne Johnson a total of $289 million dollars. On Monday, October 22, 2018, a San Francisco Superior Court Judge refused to overturn the jury verdict, however, ruled that if plaintiff would accept a reduction in the punitive damages from $250 million to $39 million she would deny Monsanto’s Motion for New Trial. On Friday, October 26, 2018, attorneys for Plaintiff Johnson accepted the trial court’s reduction of the punitive damage, reducing the total verdict to Mr. Johnson from $289 million to $78 million.

This case involved the trial of design defect and failure to warn claims asserted by Dewayne Johnson alleging that his exposure to glyphosate and glyphosate-based herbicides (Roundup) developed by Monsanto caused him to develop non-Hodgkin’s Lymphoma. At trial, the jury was asked to resolve the complex question of whether plaintiff’s exposure to Roundup caused his Lymphoma, to which the jury responded affirmatively. Monsanto challenged that determination in post-trial motions, however, Judge Suzanne Bolanos denied such contest, finding there was no legal basis to disturb the jury’s determination that plaintiff’s exposure to Roundup was a substantial factor in causing his Lymphoma. Judge Bolanos, however, did “disturb” the punitive damage award.

Monsanto had argued that there was no clear and convincing evidence of a specific managing agent authorizing or ratifying malicious conduct and accordingly that punitive damages should not be awarded. Judge Bolanos, however, indicated that when the entire organization is involved in acts that constitute malice, there is no danger a blameless corporation will be punished for bad acts of which it had no control. Further, she held that the jury could have concluded that Monsanto acted with malice by consciously disregarding a probable safety risk of Roundup and continuing to market and sell its products without a warning.

In addressing the amount of the punitive damages, Judge Bolanos began her disagreement with the jury. The award, she indicated, was extremely high for a single plaintiff and consisted largely of non-economic damages which the due process case law recognizes as a punitive element. Pointing to the prior U.S. Supreme Court decision of State Farm Mut. Auto Ins. Co. v. Campbell that “[p]unitive damages found to exceed the ceiling of what due process allows must be reduced,” Judge Bolanos ordered the ratio of compensatory damages to punitive damages be reduced to one to one.  Accordingly, the court held that regardless of the reprehensibility of Monsanto’s conduct, the constitutionally required punitive award could be no more than the compensatory damages award of $39 million.

It is unlikely that this case will end here. While the plaintiff has accepted the reduction in the punitive damages and accordingly, the reduced amount will be entered as a judgment, this does not preclude Monsanto from appealing the judgment. Further, should Monsanto appeal the judgment, plaintiff has reserved its right to appeal the reduction of punitive damages. This is a case well worth watching.

If you have any questions or would like more information, please contact Rebecca Smith at [email protected].