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Posts Tagged ‘#lawsuit’

Federal Court Finds Exclusions in HOA GL Policies Applicable to Wrongful Death Suit

Posted on: September 7th, 2018

By: Peter Catalanotti

Colony Insurance issued a commercial general liability policy to The Courtyards at Hollywood Station Homeowners Association Inc. (“HOA”) that operates an apartment complex in Florida. Great American Alliance Insurance issued an umbrella policy to the HOA.

Two tenants were killed in their sleep by carbon monoxide poisoning at a unit in the complex.

The mother of one of the tenants filed a wrongful death suit in state court alleging that the deaths were caused by a car fumes that traveled through the HVAC of the complex.

The insurance carriers filed a declaratory relief lawsuit in federal court arguing that they are not obligated to cover the wrongful death suit because of a total pollution exclusion.

Both policies contain an exclusion that the policy does not provide for coverage for “bodily injury which would not have occurred in whole or part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants at any time.”

The exclusion contains an exception whereby it does not apply to bodily injury caused by “smoke, fumes, vapor or soot produced by or originating from equipment that is used to heat, cool or dehumidifier the building.”

The HOA argued that the exception should apply because the carbon monoxide seeped through the AC vents.

In July 2018, the Court granted plaintiffs’ motion for summary judgment.  The Court found that the complaint “only lists the motor vehicle left running in the garage as a potential source of the carbon monoxide, and the Court cannot infer any other sources to create a duty to defend” (emphasis added).

According to the Court,

Since the source is unknown, Defendants would have the Court find that the carbon monoxide may have been produced by or originated from the building’s heating, cooling, or dehumidifying equipment, so the Exception could potentially apply. However, Plaintiffs’ duty to defend Courtyards HOA cannot arise from an inference that the carbon monoxide could have been produced by, or originated from, equipment used to heat, cool, or dehumidify the Unit.

The Court ultimately found that the facts alleged do not fall within the exception. Therefore, the carriers had no duty to defend in the underlying wrongful death action.

Colony Insurance Co. et al. v. The Courtyards at Hollywood Station Homeowners Association Inc. et al., Case #17-62467, in the U.S. District Court for the Southern District of Florida.

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

EEOC Settlement With Florida Hotel Is A Reminder To Be Careful In Implementing A Mass Termination Program

Posted on: August 1st, 2018

By: Jeremy Rogers

Recently, the EEOC announced a settlement in a lawsuit brought against SLS Hotel in South Beach.  The lawsuit, filed in 2017, followed an investigation into charges made by multiple Haitian former employees who had been terminated in April 2014. They worked as dishwashers in three separate restaurants located in the SLS Hotel.  They alleged that they had been wrongfully terminated in violation of Title VII of the Civil Rights Act on the basis of race, color, and/or national origin. All told, there were 23 dishwashers fired on the same day in 2014, all but 2 of which were Haitian.  On the date of termination, each terminated employee was called into a meeting with the HR department and fired.  When fired, they allege, they were told that they must sign a separation and final release in order to receive their final paychecks.  Prior to termination, they claim that they had been subjected to considerable forms of harassment including verbal abuse (they assert they were called “slaves”), being reprimanded for speaking Creole among themselves while Latinos were allowed to speak Spanish, and being assigned more difficult tasks than non-Haitian employees.

What makes this case interesting is that SLS had re-staffed these positions using a third-party staffing company. The new staff supplied by the staffing company were primarily light-skinned Latinos. The new staff also included at least one employee who had been terminated by SLS, but that individual was also Latino.  Articles about this case from when it was filed show that the EEOC took the position that SLS was attempting to hide their discrimination behind the use of the staffing company. SLS, for their part, asserted that they had made the decision to change to the use of a staffing company 2 years before the mass termination. Despite this, the district director emphasized once again, when the EEOC announced the settlement, that the EEOC will not allow companies to hide behind business relationships to engage in discriminatory practices.  This was, according to the EEOC, just such a case.

So how egregious did the EEOC believe this case to be?  They accepted settlement on behalf of 17 workers for the sum of $2.5 million, which works out to just over $147,000.00 per employee if split equally.

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

Is An Employee’s Intentional Act An Employer’s “Accident”?

Posted on: July 10th, 2018

By: Rebecca Smith and Zach Moura

It may just be, according to the California Supreme Court’s recent decision in Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co., Inc. (June 4, 2018, No. S236765).  In Liberty v. Ledesma, the underlying lawsuit was brought by a minor who sought damages for molestation committed by an employee of a general contractor (“L&M”) while the employee was working on a long-term construction project at the minor’s school.  In response to this underlying suit and the tendering of the action by L&M to its carrier, Liberty Surplus Insurance Corporation and Liberty Insurance Underwriters (“Liberty”), Liberty filed a declaratory relief action seeking to adjudicate that they had no duty to provide coverage under a general liability policy.

The certified question presented to the Supreme Court by the 9th Circuit Court of Appeals was when a third party sues an employer for negligent hiring, retention and supervision of an employee who intentionally injured that third party, does the suit allege an “occurrence” under the employer’s general liability policy?  The Supreme Court responded that the answer turns on whether the injury can be considered “accidental” and concluded “it can.”

In reaching its decision, the Supreme Court acknowledged that the act of L&M in hiring the employee who later turned out to be the molester was intentional and that the employee’s molestation of the student was also intentional; however, held that because L&M did not “expect” its employee to molest a student, an accident transpired as required by the definition of “occurrence” in the Liberty policy.  The Court emphasized that the issue of whether an act constituted an accident for purpose of coverage MUST be viewed from the standpoint of the insured.  Explaining their decision, the Court stated that because the molester’s acts were unanticipated from L&M’s perspective, they were accidents in the context of providing insurance.  The allegedly negligent hiring, retention and supervision were independently tortious acts according to the Supreme Court, which form the basis of their claim against Liberty for defense and indemnification.  Further, the Court stated that the molester’s intentional conduct did not preclude potential coverage for L&M.

While the Supreme Court effectively wiped out a line of California Court of Appeal decisions which held that the unexpected consequences of an intentional act are not an accident, the Court pointed out that if the determination was justified in that if the insurer’s argument regarding the definition of occurrence and accident were accepted, it would leave employers without coverage for claims of negligent hiring, retention or supervision whenever the employee’s conduct is deliberate.  Such a result, the Court opined, would be inconsistent with California law, which recognizes the cause of action even when the employee acted intentionally.

It is expected that the opinion will lead to an increase in claims to insurers from employers facing negligent hiring claims.  It may also lead to an increase in litigation of coverage for liability claims based on intentional acts that result in allegedly unexpected injury, which would previously have been denied on the basis that the unexpected consequences of an intentional act are not an accident and therefore, not an occurrence under personal injury liability coverage.

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

Something Rotten: Spoliation Claims Against a Plaintiff

Posted on: June 15th, 2018

By: Sean Ryan

The Georgia Supreme Court recently clarified that same duty and standard applies to a plaintiff as to a defendant in assessing potential spoliation claims. In Cooper Tire & Rubber Co. v. Koch, 303 Ga. 336 (2018), the Georgia Supreme Court stressed that the duty to preserve relevant evidence is “defined the same for plaintiffs and defendants” and “arises when the alleged spoliator actually or reasonably should have anticipated litigation.” While a plaintiff’s duty to preserve relevant evidence may more often revolve around the actual knowledge of litigation because a plaintiff largely controls when to bring a lawsuit, a plaintiff still “must act reasonably in anticipating whether litigation arising from an injury will occur.” In addressing reasonableness, a court should consider a non-exhaustive list of factors such as the type and extent of the injury, whether fault for the injury is clear, the level of sophistication of the party and familiarity with the likelihood of litigation is similar situations, and whether the party has hired an attorney, expert, or investigator.

In Koch, plaintiff’s husband died following a car accident where a tire tread, manufactured by Cooper Tire, separated from the left rear tire of the husband’s vehicle, allegedly causing the vehicle to strike a guardrail and overturn. The plaintiff allowed the vehicle and three tires without tread separation to be destroyed, saving only the allegedly defective tire. In the ensuing litigation, Cooper Tire moved to dismiss the lawsuit or impose sanctions against the plaintiff for spoliation of evidence.

Using the standard outlined above, the Supreme Court held the trial court did not err in finding the plaintiff did not actually contemplate litigation at the time the car was destroyed and should not reasonably have contemplated litigation. The Court cited the plaintiff’s lack of previous litigation experience, the belief by plaintiff and her husband that he would recover from his injuries, the plaintiff’s lack of investigation into the accident, and the plaintiff’s decision to retain counsel after the vehicle was destroyed. The Supreme Court also credited the fact that plaintiff’s counsel took steps to preserve evidence, albeit fruitless, once hired several weeks later.

What does this mean for defendants in tort cases moving forward? While the Court in Koch did not find the plaintiff’s conduct sanctionable, the case clarifies that a plaintiff must conform to the same standard as a defendant in preserving evidence relevant to their case and that this duty arises independent of the defendant’s duty. The case also sends a clear signal that a plaintiff will be expected to preserve evidence following consultation with an attorney or expert. Such consultation is a fair indicator that plaintiff anticipated or reasonably should have anticipated litigation. Armed with this case law, defendants are in a strong position to demand preservation of relevant evidence, including data from vehicles, cell phone data, and social media data.

If you have any questions or need more information, please contact Sean Ryan at [email protected].

Multi-Million Dollar California Verdict Affirmed Despite Questionable Causation

Posted on: March 6th, 2018

By: Theodore C. Peters

Proof of causation is a frequently debated topic in tort cases where the battle between “possible” and “probable” is bitterly fought.  Tort victims are left empty-handed unless they can sufficiently demonstrate the causal connection between the defendant’s conduct and the harm that befell them.  Speculation or conjecture is insufficient; a plaintiff must prove more.  But how much more, and where is the line drawn when there is no direct evidence supporting a causal connection and where it is equally plausible that the defendant’s act or omission did not cause the harm in question?  The California court of appeal, In Dunlap v. Folsom Lake Ford, recently provided some guidance.

In Dunlap, the plaintiff suffered personal injuries while driving a truck that flipped after its steering allegedly locked up.  The defendant car dealership admitted that a previous owner complained of similar steering problems, and there was evidence that the dealership had diagnosed a problem with worn ball joints, but denied that this was  the cause of the accident.  Rather, the defendant asserted that the accident occurred after the truck and the van it was towing jackknifed when the van suffered a blow out.  Prior to the litigation, the insurers took action to destroy both the truck and the van for salvage, so the parties’ experts were unable to physically inspect the vehicles and instead were limited to photographs which were admitted into evidence.  The photographs were inconclusive and the parties’ experts thus offered competing opinions of their respective interpretation of this evidence.

The defense accident reconstruction expert opined that, as a consequence of the jackknifing vehicles the truck was forcefully pushed, resulting in the equivalent of a PIT (police-intervention technique) maneuver which pushed the truck into a counterclockwise spin causing the accident.  In contrast, the plaintiff’s expert testified that “it was ‘more likely true than not’ that the worn-out ball joints caused the accident, and it was ‘not at all’ a close call.  In his opinion, if the ball joints had been replaced, ‘we would not be here today.’”  The court also noted that “[t]here was evidence that a particular defect (worn ball joints) was present in the truck, and that [the dealer] was aware the ball joints could cause steering lock and needed to be replaced but failed to replace them or verbally advise the owner to do so.”

The jury found in favor of the plaintiff and awarded over $7.4M in damages.  On appeal, the dealership claimed that, because there was no physical evidence that could confirm plaintiff’s expert’s opinion, plaintiff’s evidence as to causation was speculative and plaintiff’s expert should not have been permitted to testify that the ball joints were worn sufficiently to prevent steering.  In finding that the record supported a finding of causation based on non-speculative evidence, the court stated: “Expert testimony on causation can enable a plaintiff’s case to go to the jury only if it establishes a reasonably probable causal connection between the act and the injury… A possible cause only becomes “probable” when, in the absence of other reasonable causal explanations, it becomes more likely than not that the injury was a result of its action.  This is the outer limit of inference upon which an issue may be submitted to the jury.”  The appellate court concluded that substantial evidence supported the jury’s finding of causation, and affirmed the judgment.

The Dunlap opinion is consistent with a growing body of case law that favors letting juries decide issues of questionable causation where the proof satisfies a “more likely than not” standard.  While mere speculation and conjecture are certainly not enough, circumstantial evidence and reasonable inferences that can be drawn from such evidence are sufficient proof of causation to support a jury verdict.

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