Wednesday, April 22, 2015

Second Department Affirms Disqualification of Plaintiff's Counsel in "Bad Faith" Action

In Van Nostrand v. NYCM Fire Ins. Co., the plaintiff recovered an underlying judgment against NYCM's insured, Froehlich, in excess of Froehlich's liability insurance with NYCM.  The plaintiff then took an assignment of Froehlich's "bad faith" claim against NYCM for refusal to settle within policy limits.  Plaintiff commenced this action as subrogee of Froehlich and NYCM moved to disqualify plaintiff's counsel on the basis that he represented plaintiff in the underlying action, and would therefore have to be a witness in the "bad faith" action.  The Supreme Court agreed and the Second Department affirmed. 

First Department Finds That A Falling Wall Posed A Labor Law 240(1) Risk

In Purcell v. Visiting Nurses Found. Inc., the plaintiff was standing on a closed A-frame ladder in the basement of a building that was undergoing a gut renovation.  As he pulled on a "c-channel" attached to the first floor framing, an unsecured terracotta wall on the first floor collapsed, knocking plaintiff off the ladder.  In distinguishing the case from Misseritti v. Mark IV Constr. Co. (86 NY2d 487 [1995]), the First Department concluded, without making a factual distinction, that the Court of Appeals in Misseritti had found that the hazard of a falling wall is an ordinary hazard of construction, whereas the wall at issue in the present case was an object that required securing for the purposes of the undertaking.  Clearly, the First Department was suggesting that because the wall was positioned above the plaintiff, rather than next to the plaintiff (Misseritti), plaintiff was exposed to an elevation-related hazard.  As to the closed A-frame ladder, since it had been positioned by plaintiff's foreman, the Court found that it was not properly placed to provide adequate protection. Therefore, the First Department reversed the lower court and granted partial summary judgment on liability in plaintiff's favor pursuant to Labor Law 240(1).

Thursday, April 2, 2015

Court of Appeals Decides Duo of Cases Involving Labor Law § 240(1) - One Involving "Alteration" and The Other Involving A Slip On Ice

Saint v. Syracuse Supply Company

The Court of Appeals recently held, in Saint v. Syracuse Supply Company, that a plaintiff who was injured when he fell while installing a billboard advertisement and extension was engaged in the alteration of a structure and, therefore, Labor Law § 240(1) applied.
  
In Saint, plaintiff was employed as part of a three-person construction crew that was hired to replace an advertisement on a billboard in Erie County, New York.  The billboard, which was elevated fifty-nine feet from the ground, was composed of a two-sided, inverted “V”-shaped metal frame that was set on a metal tube embedded in the ground.  Each side of the metal frame contained panels that were secured to the frame by iron clips.  Advertisements, comprised of vinyl materials, were attached to the panels with ratchet straps.

The billboard contained six catwalks, two of which were located on the exterior of either side of the metal frame and four of which were located on the interior of the frame, with lower and upper catwalks on each side, set ten feet apart.  While all of the catwalks had safety cables, only the lower interior catwalks had a guardrail.  

On the date of the incident, plaintiff and his crew were installing a new advertisement and four extensions made of plywood cutouts.  The extensions were to be secured to the frame with nails, nuts, and bolts, and angle irons were to be bolted to the back of the extensions.  While the crew was attempting to remove the old vinyl advertisement that was still located on the billboard in order to install the new advertisement, they required assistance.  Plaintiff, who had been on the lower catwalk, went to the upper catwalk to assist them and, in so doing, detached his lanyard from the catwalk’s safety cable.  A strong gust of wind caused the vinyl advertisement to strike plaintiff in the chest, knocking him ten feet below to the lower catwalk.
  
Plaintiff and his wife sued defendant, the owner of the property on which the billboard was located, alleging violations of Labor Law §§ 240(1), 240(2), and 241(6).  Defendant moved for summary judgment, arguing that plaintiff was not engaged in a covered activity under the Labor Law, and plaintiffs cross-moved for partial summary judgment on the § 240(1) and § 241(6) claims.  The Supreme Court denied both motions, holding that the Labor Law sections applied and a question of fact existed as to whether plaintiff was the sole proximate cause of his accident. 

The Appellate Division, Fourth Department reversed and granted defendant summary judgment on the basis that “plaintiff’s work on the billboard did not constitute altering the building or structure for the purposes of Labor Law § 240, and instead was ‘more akin to cosmetic maintenance or decorative modification’” (p. 6, quoting Saint v. Syracuse Supply Co., 110 AD3d 1470, 1471 [4th Dep’t 2013]).  Further, the Fourth Department found that plaintiff “was not engaged in construction work within the meaning of § 241(6)” (id.).  

In reversing the Fourth Department’s decision, the Court of Appeals discussed that the purpose of Labor Law § 240(1) is to protect workers from elevation-related risks by placing absolute responsibility for safety practices on owners and contractors rather than the workers themselves and noted that the section is to be construed liberally.  As such, the Court concluded that “because plaintiff’s work required the attachment, at an elevated height, of custom-made wooden extensions that changed the dimensions of the billboard frame, plaintiff was engaged in alteration of the structure within the meaning of Labor Law § 240(1)” (p. 2, 6-7).  

First, the Court of Appeals rejected defendant’s argument that the Court’s analysis of plaintiff’s activity should be limited to the moment of plaintiff’s injury because “[d]efendant’s interpretation would compartmentalize a plaintiff’s activity and exclude from the statute’s coverage preparatory work essential to the enumerated act” and would strip workers of § 240(1)’s exceptional protection (p. 8).  In support, the Court cited Prats v. Port Authority (100 NY2d 878, 882 [2003]), in which the totality of that plaintiff’s actions were considered where that plaintiff had performed heavy alteration work for the same project at the same work site on numerous days prior to his injury (p. 8). 

Considering the totality of plaintiff’s actions with regard to the billboard, the Court then concluded that plaintiff was engaged in work that constitutes alteration within the meaning of the statute.  The Court noted that altering a structure requires the making of a significant physical change to the configuration or composition of the structure and does not include routine maintenance or decorative modification.  Thus, the Court held, since plaintiff’s job, at the time he was injured, was to install a new advertisement, and this work required the attachment of extensions that “changed the dimensions of the billboard’s frame and transformed the shape of the billboard,” plaintiff was engaged in an alteration of the structure (p. 9). 

The Court distinguished this case from others in which they found injured workers’ activities to be outside the coverage of the statute since those cases involved “simple tasks” and “minimal work” (p. 10).  Moreover, the Court noted, the installation of a new advertisement with extensions was not merely a decorative modification because it involved more than a change to the billboard’s outward appearance.  In this regard, the installation required a change to the billboard’s size and an adjustment of the frame.  Further, the change to the frame would require subsequent alteration of the billboard’s structure when a new advertisement replaced the one plaintiff was installing (p. 11).  The Court additionally noted that plaintiff was employed as a member of a “construction crew” and operated a crane used to hoist the extensions, which supports the conclusion that the work he was performing was covered by § 240(1).  The Court rejected defendant’s argument that an alteration can only occur where there is a permanent change to the structure on the basis such an interpretation would be at odds with the Court’s prior decisions and would undermine the worker protection purpose of the statute.  

The Court also found that it was error to dismiss plaintiff’s other Labor Law claims.  Specifically, the Court held that Labor Law § 240(2) should have been dismissed because the billboard platform was fifty-nine feet above the ground and no safety railing was provided to surround the upper rear catwalk despite the fact that the statute requires such a safety railing on any scaffold more than twenty feet off the ground.  As to section 241(6), the Court found that plaintiff was engaged in “construction work,” since the Industrial Code uses defines construction to include the alteration of a structure, in which, as discussed above, plaintiff was engaged.  



Nicometi v. The Vineyards of Fredonia, LLC

The Court of Appeals has now held in Nicometi v. The Vineyards of Fredonia, LLC that Labor Law § 240(1) does not apply where a construction worker on stilts slipped on ice and fell to the floor.  As the Court concluded, the statute does not apply because the plaintiff's “injuries resulted from a slip on ice, which” under the facts of this case “is a separate hazard unrelated to the elevation risk that necessitated the provision of a safety device in the first instance.”  

Judge Stein, a former Third Department Justice, wrote this 5-1 opinion for the Court.  Chief Judge Lippman dissented alone.  Judge Fahey did not participate.  It is worth noting that Judge Fahey was part of the Fourth Department panel for this case.  He dissented in favor of awarding the plaintiff partial summary judgment on section 240(1) liability.  

The plaintiff in Nicometi was injured while installing insulation between ceiling rafters at a newly developed apartment complex.  For his task, the plaintiff wore stilts that raised him anywhere from 18 to 36 inches off the ground.  While attempting to attach the insulation to the rafter, the plaintiff slipped on a thin patch of ice, fell to the ground, and was injured.  Accounts differ as to who first noticed the ice patch and also differ as to whether the plaintiff’s supervisor forbade the plaintiff from working near the ice.

The plaintiff moved in Supreme Court for partial summary judgment on his Labor Law § 240(1) claim.  As relevant here, one defendant moved to dismiss this claim.  Supreme Court granted the plaintiff's motion.  The Appellate Division, Fourth Department, modified the order on appeal, finding a question of fact as to whether the plaintiff was the sole proximate cause of his accident.  Two judges, including then-Fourth Department Justice Fahey, dissented as they believed the plaintiff was entitled to summary judgment.  While the majority and dissenters unanimously agreed that Labor Law § 240(1) applied to the plaintiff’s accident, the Fourth Department subsequently granted leave to appeal and cross-appeal to the Court of Appeals.

Rather than reaching the issue of sole proximate cause, the Court of Appeals resolved the case on the scope of Labor Law § 240(1) itself.  The Court agreed that the facts here were “virtually indistinguishable” from its holding in Melber v. 6333 Main St. (91 N.Y.2d 759 [1998]).  In Melber, a stilt-wearing construction worker tripped and fell over a conduit on the ground.  The Court of Appeals held that section 240(1) did not apply.  The conduit in Melber “was certainly a ‘hazard in the workplace’” but it was not “a ‘special’ elevation-related hazard.”

The majority here stated that the “relevant and proper inquiry is whether the hazard plaintiff encountered on the stilts was a separate hazard ‘wholly unrelated to the hazard which brought about [the] need [for a safety device] in the first instance.’”  The majority concluded that “plaintiff’s accident was plainly caused by a separate hazard – ice – unrelated to any elevation risk.”  The opinion further relied on plaintiff's testimony to show “it was the ice – not a deficiency or inadequacy of the stilts – that caused his fall.”  Therefore, the “ice that caused plaintiff to slip is indistinguishable from the electrical conduit, a portable light, or protruding pipes, none of which are hazards that call for elevation-related protective devices.”  

Notably, Chief Judge Lippman's dissent argues in favor of section 240(1) liability because “the combination” of ice and stilts “presents and exacerbates elevation-related risks” (dissent at p. 3). The majority specifically rejected this argument in a footnote, pointing out that debris and a conduit in prior Court of Appeals opinions rejecting use of section 240(1) could also be said to have “amplified” inherent risks in working at an elevation.  Thus “it remains the law that the plaintiff’s injuries must be caused by an elevation-related risk, ‘the type of extraordinary peril section 240(1) was designed to prevent’” (quoting Nieves v. Five Boro A.C. & Refrig. Corp., 93 N.Y.2d 914, 916 [1999]).

The majority also distinguished the plaintiff’s and the dissent's reliance on cases concerning the placement of ladders, such as Klein v. City of New York (89 N.Y.2d 833 [1996]).  In Klein, the Court held that failure to ensure “proper placement” of a ladder due to the condition of the floor constitutes a prima facie case of liability.  The Nicometi majority, however, cautioned that section 240(1) should be “construed with a commonsense approach to the realities of the workplace at issue” (quoting Salazar v. Novalex Contr. Corp., 18 N.Y.3d 134, 140 [2011]).  “Unlike ladders, stilts are not ‘placed’ in a stationary position and expected to remain still to ensure their proper and safe use.  Rather, stilts are intended to function as extensions of, and move with, the worker during performance of the designed task” (p. 14).  As such, a ladder that slips due to an unsafe condition “on the floor in the area where it is placed is distinguishable from the circumstances of plaintiff’s accident here” (p. 14).  

Summing up its reasoning, the majority declares that “plaintiff cannot recover under Labor Law § 240(1) because his injuries resulted from a slip on ice, which – under these facts – is a separate hazard unrelated to the elevation risk that necessitated the provision of a safety device in the first instance.”

Chief Judge Lippman began his dissent by analogizing stilts to ladders: “The majority would have us believe that while ladders placed on slippery substances present an elevation-related risk, stilts under the same circumstances do not.”  Lippman argued that “stilts placed on ice create the same ‘elevation-related risk’ as do ladders.”  To those familiar with recent Labor Law §  240(1) decisions, it is no surprise that Chief Judge Lippman's writings emphasize that the statute must be interpreted “liberally to protect workers.”  Here as well, Chief Judge Lippman argued that the majority’s interpretation extends Melber and did so in a way that does not favor the plaintiff.  Chief Judge Lippman also added that “placement is equally important for stilts” because both are moved as workers move.

More broadly, the opinion suggests that Judge Stein has staked ground as a foil for Chief Judge Lippman on the expansiveness of Labor Law § 240(1).  In many ways, the language of this opinion recalls an era of Labor Law jurisprudence during the 1990s and early 2000s.  The opinion quoted heavily from cases using cautionary language about “extraordinary protections”, “narrow class of dangers,” “special hazards,” and “usual and ordinary dangers.”  More than simply focusing on Melber, this opinion revives defense-friendly language from Rocovich v. Consolidated Edison Co. (78 N.Y.2d 509 [1991]), Ross v. Curtis-Palmer Hydro-Elec. Co. (81 N.Y.2d 494 [1993]), Narducci v. Manhasset Bay Assoc. (96 N.Y.2d 259 [2001]), Nieves (93 N.Y.2d at 916), Cohen v. Memorial Sloan-Kettering Cancer Ctr. (11 N.Y.3d 823 [2008]), and similar cases.  Even the warning in Ross that the statute does “not encompass any and all perils that may be connected in some tangential way with the effects of gravity” is quoted by the majority.  


In reviving the special hazard language, the opinion also appears to revive arguments about how section 240(1) should not apply if a plaintiff’s accident is “not ‘attributable to’ a ‘risk[] arising from construction work site elevation differentials’” (p. 11).  To that end, the majority also opined that “section 240(1) is not applicable unless the plaintiff’s injuries result from the elevation-related risk and the inadequacy of the safety device” (p. 7).

Thursday, July 10, 2014

Court of Appeals Reiterates That Insurance Law Applies Only For Bodily Injury Claims Under Policies Issued In New York

In KeySpan Gas EastCorp. v. Munich Reinsurance America, Inc., the plaintiff owned and operated manufactured gas plants (MGP) and brought suit against the defendant-insurer claiming that the insurance company had a duty to indemnify and defend environmental damages claims at two of the plaintiff’s MGP sites.  The defendant issued excess liability insurance policies to the plaintiff and required prompt notice of a potential indemnity claim.  Before any regulatory agencies had commenced a lawsuit or formal investigation, the plaintiff contacted the defendant about environmental concerns at the two MGP sites.  The defendant-insurer replied in two parts: first, it reserved all rights and coverage defenses, including that of late notice, and second, the defendant requested additional information about the MGPs.  Shortly thereafter, the plaintiff sent supplemental disclosures to the defendant, to which the defendant never responded.  The plaintiff commenced this suit after the DEC conducted a formal investigation.  The defendant asserted the affirmative defense of late notice warranting denial of coverage. 

The Supreme Court found that the defendant had no duty to indemnify or defend the claim on one of the properties, but held that an issue of fact existed regarding the reasonableness of the delay for the second property.  On appeal, the First Department held that the plaintiff failed to give timely notice under its insurance policy; yet, did not grant summary judgment because an issue of fact existed as to whether the defendant waived its right to disclaim coverage based on late notice.  While the First Department did not specifically cite to Insurance Law 3420(d)(2), it used its language to find that the defendant-insurer breached its duty.  The First Department essentially recited 3420(d)(2) in stating that the defendant had an “obligation” to disclaim coverage based on late notice “as soon as reasonably possible after first learning of the … grounds for disclaimer.”  The Court of Appeals found this to be in error, holding that where the underlying claim does not arise out of an accident involving bodily injury or death, 3420(d)(2) is inapplicable.  The Court clarified that 3420(d)(2) applies only in insurance cases involving bodily injury or death claims arising out of a New York accident and brought under a New York liability policy and that any Appellate Division case holding that 3420(d)(2) applies to claims not based on bodily injuries or death was wrongly decided and should not be followed.   As a result, the case was reversed and remanded.  The Appellate Division is to consider the defendant’s delay in giving notice of disclaimer under common-law waiver and estoppel principles

Monday, June 16, 2014

First Department Finds That Notice of Fire Was Not Sufficient To Apprise Insurer That Bodily Injury Claim Was Being Made

In Hermitage Ins. Co. v. Evans floor Specialist, Inc., two Evans' employees were injured in a fire on June 27, 2008, while they were engaged in refinishing the floor of an apartment in the Bronx.  Evans promptly provided notice to its insurer, Hermitage that a fire had occurred, but in a box on the notice of occurrence form regarding the name and address of injured persons or property damage, Evans stated "unknown, sedwick ave bronx."  A year after the incident, the two employees commenced an action against Evans. Hermitage received notice of the bodily injury claim on July 2, 2009.  After conducting an investigation, Hermitage disclaimed coverage on the basis of an "employee exclusion" in its policy and commenced an action against Evans and the injured employees for a declaration that it had no duty to defend or indemnify Evans against the employees' claim.  

The First Department upheld Hermitage's disclaimer on the basis that the notice of occurrence was not sufficient to apprise Hermitage that a claim for bodily injury was being made.  In so holding, the First Department found that Hermitage did not owe an absolute duty to investigate whether anyone was injured in the fire, stating that its earlier decision in GPH Partners, LLC v. American Home Assur. Co. (87 AD3d 843 [1st Dept. 2011]), was "inapposite." Instead, the Court reiterated that "[t]he rule is applied where the claim form provides the insurer with enough information about the nature of the claim to prompt an investigation to determine whether there are grounds to claim an exclusion."    

Monday, May 12, 2014

Leave Granted to Determine Whether Catheter Was a Foreign Object or Fixation Device

The Court of Appeals has granted leave to appeal in Walton v. Strong Memorial Hospital, a case involving the applicability of the foreign object exception to the medical malpractice statute of limitations.  The plaintiff, now 25, discovered that part of a polyvinyl catheter remained in his heart after heart surgery he had when he was three years old. That polyvinyl catheter had been used to monitor atrial pressure during and after the heart surgery. Three days following that surgery, however, doctors performed a second procedure to remove the polyvinyl catheter.  A portion of the catheter broke off and was not retrieved. 

It is undisputed that the plaintiff’s action was beyond the two year, six month statute of limitations for medical malpractice actions generally, and beyond the 10-year cap for tolling an infant’s malpractice claim. Thus, the plaintiff’s action would be timely only if it satisfied the foreign objects exception to the statute of limitations. Under the foreign objects exception, the plaintiff may commence an action within one year of the date of such discovery or of the date of discovery of facts which would reasonably lead to such discovery, whichever is earlier.” Notably, the tolling provision applies only to foreign objects and not to fixation devices or other listed exclusions.

The Appellate Division, Fourth Department, concluded that the polyvinyl catheter was a “fixation device” because it was “intentionally placed inside plaintiff’s body to monitor atrial pressure for a few days after the surgery.”


Wednesday, April 9, 2014

Leave Granted in Labor Law 240(1) Billboard Fall Claim

The Court of Appeals just granted leave to appeal in Saint v. Syracuse Supply Co., where the plaintiff was injured in a fall on an elevated billboard (he fell from one level of the billboard to a catwalk, but not completely off of the billboard). The Fourth Department dismissed the plaintiff's Labor Law § 240(1) claim, concluding that he was in the process of applying a new advertisement to the face of a billboard, and that his work was essentially cosmetic, which would not constitute a Labor Law protected activity. The plaintiff unsuccessfully asked the Fourth Department to grant leave, but the Court of Appeals has now agreed to hear the matter.

The plaintiff argued to the Court of Appeals that his job entailed changing the “structure” of the billboard by adding metal and wood extensions to the board as part of a project to attach a new vinyl advertisement. He further argued that, in light of the fact that his work constituted an “alteration” of the billboard, the Fourth Department decision appeared to impermissibly apply a ‘per se’ exclusion of billboard changing from the Labor Law. The defendant responded that the Fourth Department correctly applied the Court of Appeals’ prior precedent in Munoz v. DJZ Realty, LLC., in which the Court of Appeals concluded that pressing a pre-glued sheet to a billboard face, even to cover a billboard that was that was 12 feet by 24 feet in size, did not constitute a Labor Law protected activity. Here, the defendant alleged that application of the billboard face included the so-called “extension,” and that there was no “alteration” of the structure itself.

The New York State Trial Lawyers Association has already obtained status as amicus on the appeal.