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FMG Law Blog Line

Posts Tagged ‘liability’

Look Mom, No Hands!

Posted on: January 24th, 2018

By: Seth F. Kirby

On January 22, 2018 a Tesla Model S slammed into a parked fire truck on California’s 405 near Culver City.  The driver of the Tesla stated that prior to the accident he had the car’s autopilot system engaged.  This is just the most recent in a series of accidents in which Tesla’s autopilot system has been implicated.   At present, Tesla’s autopilot system is limited to what it refers to as Traffic-Aware Cruise Control.  This feature, which is also provided by other car manufactures, allows the car to maintain a lane and speed up or slow down depending upon traffic conditions.  The system relies upon driver input to observe and avoid stationary objects, which may be the true culprit that resulted in the recent crash.  Interestingly, all Teslas are equipped to function autonomously, taking its passengers to a destination with no human interaction.  Such features are not yet enabled due to the need to obtain regulatory approval, and the features of the current systems have been changed several times to encourage drivers to be attentive when behind the wheel (i.e. requiring the driver to maintain their hands on the wheel).

The advent of various levels of autonomous driving presents challenges and opportunities for the insurance industry.  Theoretically, the implementation of autonomous vehicles over the next decade or longer will result in fewer accidents and injuries as computers will be more reliable and predictable drivers.  Of course, machines can have errors, and on the road at 60+ mph, errors can have drastic consequences.  This begs the question.  As vehicles become autonomous, who will the auto carrier be insuring?  The easy answer is that the policy is issued to the individual that owns the car, so clearly the carrier is insuring the individual for their potential liability. In many states, however, the insurance “follows the car” and covers bodily injury and property damage arising from the use of the vehicle no matter who (or what) is operating the vehicle.  If the autonomous car makes a mistake, the law presently considers the human driver to be responsible for the vehicle’s operation and the liability is placed on the driver.  That seems reasonable in our present environment in which driver interaction is required for the system to operate.  It may seem less reasonable once the systems become fully automatic.  At that point, the individual’s carrier is essentially insuring the machine and its software, effectively turning auto liability policies into product liability policies.

In the short term, the transition between human and computer controlled driving presents problems as it can lull the driver into a false sense of safety.  It appears that when the driver has less interaction with the driving process their attention wanes and they may fail to avoid obvious hazards.  This is no different than the problems caused by other forms of distracted driving (texting, eating, tuning the radio), it is just a new dynamic that is being added to the roadway.  Eventually, the human element may be removed from the equation, but whether that will result in a net improvement in vehicle safety remains to be seen.  I fully suspect that many aspects of auto liability insurance will need to evolve as technology begins to take over the wheel.

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

Will Innocent Sellers Catch a Break?

Posted on: January 12th, 2018

By: Jeremy W. Rogers

In a products liability case, any party along the line of distribution, from the design and manufacture, all the way down to the seller, may be held liable to a party injured from use of a defective product.  While it is easy to understand holding an entity liable for issues with the design or manufacture of the product, it can be less so with regard to a distributor or seller of the product. Under strict product liability, these entities are held liable because, the argument goes, it is more fair for an entity that places a defective product in the stream of commerce to bear the financial burden of an injury than an innocent consumer. But is that “fair” to an innocent seller or distributor of the product who committed no active negligence?  There are those in Congress and in some states that believe it is not.

In 2007, the Innocent Sellers Fairness Act was introduced into the House of Representatives.  That bill would make it so no seller of any product can be held liable for personal injury, monetary loss, or damage to property unless it can be proven that the seller was actively involved in some negligent act, such as manufacture, design, or installation.  Without proof of such active participation in a negligent act, the seller is, arguably, “innocent.” While the bill was never passed into law, several states have passed similar laws, including Colorado, Delaware, Kansas, Kentucky, Maryland, Minnesota, Mississippi, Missouri, New Jersey, North Carolina, North Dakota, Tennessee, and Washington. Unfortunately, Florida is not one of those states.

However, for those states that have not passed their own law, like Florida, those who support this premise on a national scale have not given up. The bill was re-introduced again in 2015.  Then, in February 2017, it was once again introduced.  Currently, the bill has not made it out of committee, but has been referred to subcommittee. Given the length of time it has been in committee, it does not appear the Innocent Sellers Fairness Act has much opportunity to be passed into law in the near future.  However, given the current makeup of Congress and the business friendly administration, one has to believe that the chances of seeing the bill come up again are good.

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

Landowner Scope of Duty

Posted on: January 11th, 2018

By: Owen T. Rooney

The California Supreme Court recently issued an opinion that limits the scope of duty and liability in premises liability cases. In  Vasilenko v. Grace Community Church, plaintiff was struck by a car as he crossed a public street, at night in the rain, between the main premises of a church and the church’s overflow parking area. Plaintiff alleged that the church owed him a duty of care to assist him in safely crossing the public street. The court ruled “that a landowner does not have a duty to assist invitees in crossing a public street when the landowner does no more than site and maintain a parking lot that requires invitees to cross the street to access the landowner’s premises, so long as the street’s dangers are not obscured or magnified by some condition of the landowner’s premises or by some action taken by the landowner.”

The court was motivated in part by the lack of control the church has over the public roadway, and in part by “the possibility that finding a duty in this case will cause some or perhaps many landowners to stop providing parking…. By providing parking, a landowner may decrease its invitees’ risk of injury from other dangers of the road as compared to invitees finding their own parking on the streets.”

This case should limit liability in cases where plaintiff tries to stretch the landowner’s “property lines” to conditions off the property.

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

Apartment Management and Owners Increasingly on the Hook for Violent Crime

Posted on: September 26th, 2016

By: Wes Jackson

Unknown assailants killed a 33-year-old father of three during an apartment robbery in 2015. Earlier this month, a Clayton County jury determined the apartment complex where the robbery occurred is liable for half of the $20 million verdict in the father’s wrongful death action. 

The jury apportioned 50% of the fault for the shooting against the owners and managers of Bradford Ridge Apartments in Forest Park, Georgia. Attorneys for the plaintiffs had argued that the apartment was located in a high-crime area and had lax security, which consisted of “courtesy officers” who patrol the grounds twice a day in exchange for a free apartment unit. Plaintiffs also pointed to the lack of significant changes in security measures after the murder of a 13 year old just two years before. The jury apportioned the other 50% of the $20 million verdict against the unknown shooters.

The verdict goes to show that apartment owners, managers, and their insurers continue to be targets for big judgements and could be left holding the bag after violent crime occurs on their premises, especially where the management knows of similar instances of violence on the premises in the recent past.  This is true despite Georgia law allowing juries to apportion damages to non-parties that plaintiffs did not sue.

At least in theory, owners and managers can avoid these huge verdicts by matching instances of crime on the premises with new security measures. But one question remains: how much extra security will satisfy a Georgia jury?

Construction Defects Can In Fact Be Accidents

Posted on: July 24th, 2013

By: Jonathan Kandel  

The Supreme Court of Georgia has further clarified the scope of coverage for construction defect claims under commercial general liability (CGL) insurance policies.  In Taylor Morrison Services, Inc. v. HDI-Gerling America Insurance Company, No. S13Q0462 (Ga. July 12, 2013), the court clarified that a construction defect claim constitutes an “occurrence,” as defined in a standard CGL policy, when the only damage alleged is to the work of the insured contractor.  While the court’s decision does not change the substantive scope of insurance coverage for construction defect claims, it shifts the focus of coverage.

In Taylor, a home builder’s insurance company filed a declaratory judgment action, seeking a declaration that there was no coverage for a class action lawsuit filed against the home builder.  The insured home builder had been sued by numerous homeowners, alleging that they suffered property damage to their houses, including water intrusion, cracked concrete slabs, and broken floors, due to the home builder’s alleged failure to include sufficient gravel under the homes’ foundations.  On appeal of the declaratory judgment action, the U.S. Court of Appeals for the Eleventh Circuit asked the Supreme Court of Georgia to clarify whether Georgia law requires damage to property other than the insured’s completed work for an “occurrence” to exist.  The Eleventh Circuit’s request appears to be based on the Supreme Court of Georgia’s decision in American Empire Surplus Lines Insurance Company v. Hathaway Development Company, 288 Ga. 749, 707 S.E.2d 369 (2011), which held that “an occurrence can arise where faulty workmanship causes unforeseen or unexpected damage to other property.”

The Supreme Court analyzed the usual and common meaning of “accident” – the operative term in the definition of “occurrence” – and concluded that the term refers to whether an event was intended or expected, not the nature or extent of the injury caused by the event or the identity of the person injured.  Based on its conclusion, the court held that an “occurrence,” as defined in a standard CGL policy, “does not require damage to the property or work of someone other than the insured.”

Recognizing that CGL coverage is not intended to insure against liabilities for the repair or correction of the insured’s faulty workmanship, the court explained that other provisions in a standard CGL policy account for that limitation.  For example, the court explained that coverage under a standard CGL policy is trigged by an “occurrence” that causes “property damage,” and a claim for the repair or replacement of faulty workmanship usually will not be for “property damage.”  The court also noted that claims for faulty workmanship may fall within the scope of certain “business risk” exclusions.

Finally, the court addressed whether the legal theory (or claim) asserted impacts the “occurrence” analysis.  Prior to Taylor, many Georgia courts found that there was no coverage when the only claim asserted against the insured was for breach of contract (not negligence).  The Supreme Court concluded that the legal theory (or claim) asserted usually will not determine whether the incident constitutes an “occurrence,” with one notable exception.  That being, when a “theory of liability is absolutely and necessarily inconsistent with the notion of an ‘accident’ – that is, when the theory of liability and the idea of an ‘accident’ are mutually exclusive – a claim premised upon such a theory of liability” cannot possibly constitute an “occurrence.”  The court identified fraud claims as an example of a theory of liability that is necessarily inconsistent with meaning of “accident.”   Moving forward, the availability of insurance coverage for construction defect claims will turn on whether there is “property damage,” as defined in a standard CGL policy, and whether exclusions to coverage apply.  The court’s decision brings Georgia law in line with the strong recent trend in other jurisdictions, including Florida, Maryland, South Carolina, Texas, and Virginia, among others.