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Posts Tagged ‘liability’

Georgia Supreme Court Clarifies the Essential Elements of a Failure to Settle Claim within Policy Limits

Posted on: March 18th, 2019

By: Phil Savrin

In recent years, Georgia has become fertile ground for setting up insurance companies for extra-contractual damages based on the failure to settle a liability claim within policy limits. Partly, the reason for this reputation is that the “ordinary negligence” standard governs these types of claims and there is broad language in the cases that a jury must generally resolve the reasonableness of the insurer’s decision not to settle the claim at issue. Of course, by the time the claim even exists there will have been a judgment entered in the liability case in excess of the limits of the policy, making it difficult to tease through the chronology of the case without the benefit of 20-20 hindsight. The challenge in defending these types of claims is often reconstructing the “lay of the land’ at the time the decision was made without the judge or jury focusing on what occurred or developed thereafter.

In 2003, the Supreme Court issued its decision in Cotton States Insurance Company v. Brightman, whose main holding is that an insurer can avoid a “failure to settle” claim altogether by tendering its limits even if the demand is conditioned on payments by other insurers over whom it has no control. A lesser known holding of Brightman, however, is its rejection of the intermediate appellate court’s holding that an insurer has an “affirmative duty” to engage in negotiations to determine whether the case can be settled within limits. Although implicit in this reasoning is that a demand for limits needs to have been made, subsequent case law has muddied the waters by suggesting that all that needs to be shown is that there was a “reasonable opportunity” for settlement within limits to state a claim for failure to settle within limits.  And because an ordinary negligence standard applies, insurers have had to defend against assertions – often backed up by expert witnesses – as to whether the insurer knew or should have known that the case could settle within the limits of coverage even in the absence of a demand.

The Supreme Court put an end to that uncertainty in First Acceptance Insurance Company of Georgia, Inc. v. Hughes, decided March 11, 2019. In a very powerful decision, the justices stated succinctly that “an insurer’s duty to settle arises when the injured party presents a valid offer to settle within the insured’s policy limits.” From that short holding it was relatively simple to find that First Acceptance could not be liable for the $5.3 million judgment because there had not been a valid time-limited demand for the policy limits of only $25,000.

Essentially, the holding of the case is that the burden is squarely on the injured party to make clear to the insurer that the liability claim against the insured can be resolved within the coverage of the policy. Although not stated expressly in the opinion, this holding makes sense given that the injured party is the only one (as opposed to the insurer or the insured) who knows at the time whether the case will settle within limits. Likewise, the effect of the decision is that the injured party must put its cards on the table in terms of its willingness to settle and not be allowed to reap rewards from keeping the insurance company in the dark as to the ability to settle within limits. In that manner, the decision restores a degree of sanity to the adjudication of these disputes by restricting the exposure to instances in which the insurance company has rejected a clear demand for settlement within its limits, with the remaining issue being whether the insurer acted reasonably considering all the circumstances that existed at that time.

If you have any questions or would like more information, please contact Phil Savrin at [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)

School Shootings: Is There a Constitutional Duty to Protect Students?

Posted on: January 16th, 2019

By: Jake Daly

Sadly, our nation’s schools are not free from shootings and other violent crimes. When such crimes occur on private property, the laws of many states provide the victims a remedy (money damages) against the owner of the property and/or the operator of the business located on the property. But what about crimes that occur on public property, particularly a school campus?

For example, Nikolas Cruz killed 17 students and school officials and injured 17 more during a shooting rampage at Marjory Stoneman Douglas High School in Parkland, Florida, on February 14, 2018. Fifteen students who survived the incident, but who claim to have suffered psychological injuries because of it, sued Broward County, Andrew Medina (a school monitor), Robert Runcie (school superintendent), Scott Israel (Broward County Sheriff), Jan Jordan (captain with the Broward County Sheriff’s Office), and Scot Peterson (school resource officer) for violating their substantive due process rights under the Fourteenth Amendment to the United States Constitution. Specifically, the plaintiffs alleged that the defendants had a constitutional duty to protect them from Cruz and that they violated this duty by intentionally disregarding warnings about Cruz, by maintaining a policy of allowing “killers to walk through a school killing people without being stopped,” and by failing to provide adequate training to school officials. The defendants denied liability on the ground that there is no constitutional duty to protect students from being harmed by third parties.

The lawsuit was filed in the United States District Court for the Southern District of Florida and was assigned to Judge Beth Bloom, who was nominated by President Barack Obama and confirmed by the Senate in 2014. In her order granting the defendants’ motions to dismiss, Judge Bloom relied on United States Supreme Court precedent holding that the Due Process Clause is “a limitation on the State’s power to act, not . . . a guarantee of certain minimal levels of safety and security.” In other words, “nothing in the language of the Due Process Clause itself requires the State to protect the life, liberty, and property of its citizens against invasion by private actors,” such as Cruz. Nevertheless, the Due Process Clause does impose a duty on state actors to protect people who are in their custody from harm by third parties. But, as Judge Bloom ruled, this duty does not apply to this case because students are not considered to be in the custody of the state such that they have been deprived of their ability to take care of themselves. Accordingly, the defendants did not violate the plaintiffs’ substantive due process rights.

This case serves as a good reminder that the defendant in any case must have owed the plaintiff a legal duty to act or refrain from acting in a specific way. A moral duty will not suffice. Liability cannot be based on how innocent or sympathetic the plaintiff is. Nor can liability be based on the fact that a tragic event has occurred. There is no question that the plaintiffs in this case were innocent and “deserving,” but that is not enough. There must have been a legal duty. The plaintiffs in this case lost because there is no constitutional duty owed by school officials to protect students from harm inflicted by third parties. To some, this rule may be seen as unfair and contrary to common sense, but there are good policy reasons for it. After all, the purpose of the Due Process Clause was to protect people from the state, not to ensure that the state protected them from each other.

For additional information, please contact Jake Daly at [email protected] or (770) 818-1431.

Who’s Liable for Letting the Dogs Out?

Posted on: October 23rd, 2018

By: Wes Jackson

“Cry ‘Havoc!,’ and let slip the dogs of war.”

William Shakespeare, Julius Caesar act 3, sc. 1.

 

Havoc indeed—in a case argued before the Georgia Supreme Court on October 10, two pit bulls slipped out of a tenant’s backyard gate with a broken latch and then mauled a woman walking her smaller dogs nearly two blocks away from the home. Police had to fatally shoot both dogs to end the attack, and the woman was life-flighted to a hospital where she stayed for seven days and was left disfigured after multiple surgeries.

The question before the Court was whether the landlord could be liable for the attack. The trial court entered summary judgment in the landlord’s favor because the plaintiff could not show the landlord had any prior knowledge of the dogs’ propensity for violence. The Georgia Court of Appeals reversed, holding that the question of the landlord’s liability should have been submitted to a jury.

The case exemplifies how thorny questions of proximate causation can jeopardize a defendant’s hopes at summary judgment. For example, the Court of Appeals found the trial court erred by failing to properly consider the fact that the landlord had known the gate latch was broken but failed to repair it. Additionally, the parties argued before the Court whether a landowner’s failure to keep the premises in repair could, as a matter of law, proximately cause an injury that happens more than two blocks away from the property. Given these arguments, the Supreme Court’s decision will likely either extend or limit the scope of landlords’ liability for injuries caused by their tenants or those that occur off the property.

The case is Tyner v. Matta-Troncoso et al., S18G0364. If you have any questions about this case or its impact on landlord liability, premises liability, or dog attack cases in Georgia, feel free to contact Wes Jackson at [email protected].

YMCA Owes No Duty To Provide Or Use AEDs When Renting Field To Private Soccer Club

Posted on: October 17th, 2018

By: Carlos Martinez-Garcia

California’s Fourth District Court of Appeal recently affirmed the trial Court’s order granting summary judgment in favor of the YMCA, disposing of a wrongful death lawsuit involving a patron who died of a heart attack on their property. The appellate court agreed YMCA had no statutory or common law duty to provide or utilize AED devices to an adult experiencing cardiac arrest, when that adult is a permissive user of the facility whose independent soccer club rented an outdoor portion of YMCA’s soccer field.

Decedent Mr. Adeal Jabo was a member of a private soccer league (“The League”) which rented the YMCA’s enclosed soccer field independent of the YMCA’s memberships. The YMCA had defibrillator AEDs on its premises and regularly took AEDs to YMCA-led sport events, however, it did not bring AEDs to the League games since the games were independent of the YMCA. Mr. Jabo experienced cardiac arrest after a League game, later dying from the attack. Mr. Jabo’s on site medical care was limited to CPR despite AED devices available at the front desk of the YMCA.

The presence and use of AEDs at facilities are governed by CA Health & Safety Code section 104113 and Civil Code sections 1797.196 and 171421. “Health Studios” are required to acquire, maintain and train personnel on the use of AEDs.

Although the Appellate Court held the YMCA was a “health studio” towards its members, in this case it was renting a field to a nonmember League that did not choose to accept YMCA’s membership or regulatory practices. The Court narrowly construed the statutory language that imposes duties on Health Studios to its members. Consequently, the YMCA did not bring itself within the statutory definitions and duties applicable to “health studios” that are required to supply AEDs to ensure the safety of its members.

Next, the Court looked at Civil Code 104113, which outlines duties related to AEDs, and also grants immunities for not only the use of AEDs, but also their nonuse. The Court held that as a matter of law, Civil Codes 1797.196 and 171421 did not impose a duty on the YMCA’s employee to apply and activate an AED given the ‘nonuse’ portion of the statute, even though the YMCA had an AED on site to promote the safety of its members and other patrons on site.

Lastly, the Appellate Court determined that the YMCA had no common law duty to supply and implement an AED, because it did not take any action to increase risk of injuries to the Soccer League members, and the YMCA merely rented a portion of its property for the League’s independent use. Imposing a common law duty on the YMCA would improperly broaden the Legislative’s intent.

If you have any questions or would like more information, please contact Carlos Martinez-Garcia at [email protected].