Lead Paint and Medical Malpractice

In Burnett v. Jeffers, the Second Department held that there was sufficient evidence to hold a medical center liable for lead poisoning injuries due, not to post-injury care, but to a pre-injury failure to advise of and provide guidance about lead poisoning.  The Second Department affirmed the jury's finding that accepted medical practice would have been “to perform lead poisoning risk assessments and provide lead poisoning anticipatory guidance” during pediatric visits.  The Court also affirmed the jury's apportionment against the Hospital of 60% for one child and 40% for the other child. 

Court of Appeals Finds That Fall From Dumpster Raises Question of Fact Re: Labor Law Liability

In Ortiz v. Varsity Holdings, 2011 NY Slip Op 09161, the Court of Appeals held that questions of fact existed as to whether a safety device under Labor Law § 240 would have prevented a plaintiff’s fall from a six-foot tall dumpster. The plaintiff alleged that he had either one or both feet on the dumpster’s eight-inch ledge in order to rearrange and add debris to the dumpster. Due to procedural inferences favoring the plaintiff, the Court distinguished Toefer v. Long Is. R.R., 4 NY3d 399 (2005), where there was no elevation-related risk from a “four-to-five-foot descent from a flatbed trailer.”

As to the existence of an elevation-related risk, the Court added that the parties failed to demonstrate that plaintiff’s position on the dumpster either was or was not “necessary to the task.” Consequently, plaintiff’s assertion that he was “required to stand on or near the ledge” was sufficient in “context . . . and without contradictory evidence” to prevent summary judgment. Significantly, however, the Court added that the assertion alone could not be the basis for granting summary judgment to the plaintiff.

Taken collectively with the Court of Appeals’ other recent Labor Law § 240 decisions, this decision reflects a continued shift by the Court of Appeals toward finding that issues such as “adequacy of a safety device”, “availability of a safety device” and "necessity of performing the work in the manner in which it was performed” are questions of fact for the jury.

Second Department Issues Two Recent Decisions Applying Frye

Two panels of the Second Department recently issued decisions concerning Frye and the admissibility of expert testimony on medical causation.  In Ratner v. McNeil-PPC., Inc., at issue was the plaintiff's claim that there was a causal connection between the plaintiff's ingestion of Tylenol and her subsequent development of liver cirrhosis.  According to the plaintiff's experts, by extrapolating data from several observational studies, there is a causal connection between long-term use of acetaminophen in Tylenol and liver cirrhosis.  The Court, however, disagreed and upheld the trial court's order to preclude.  According to the Court, the plaintiff did not produce any clinical or epidemiological data or peer reviewed studies showing that there is a causal link between the therapeutic use of acetaminophen and liver cirrhosis.  As such, the plaintiff was required to provide some of other generally accepted method of establishing causation, but failed to do. Instead the plaintiff relied on a few case studies and case studies are not generally accepted methods of proving causation.  Furthermore, the case studies the plaintiff relied upon failed to conclude that acetaminophen caused liver cirrhosis.  Thus, given the abundance of clinical studies over the last fifty years which concluded that the theraputic levels of acetaminophen in Tylenol were safe, the Court concluded that there was "too great an analytical gap" to allow such opinion testimony.

In Lugo v. New York City Health & Hosp. Corp., the issue was whether the plaintiff's expert could opine that the infant plaintiff's brain injuries were caused by an episode of severe neonatal hypoglycemia lasting 81 minutes. The Court held that the trial court applied the Frye test too narrowly in excluding the evidence and reversed allowing the plaintiff's experts to opine on the issue.  According to the Court, the defendant's expert conceded that it is generally accepted that hypoglycemia can cause brain damage, that the scientific community does not recognize any level or duration of hypoglycemia considered safe and incapable of causing brain damage, and that individual susceptibility to toxic states varies among newborns.  Furthermore, the plaintiff produced studies showing that glucose levels lower than the plaintiff's for several hours duration may increase the risk for brain injury. Thus, when combining these studies with the defendant's concession, the Court concluded that the plaintiff's theory of causation was based on more than theoretical speculation and could be presented to a jury.       

First Department Holds That, Regardless of Whether A Judicial Admission is Deemed Formal or Informal, Coverage Cannot Be Created Where None Existed

In GJF Constr., Inc. v. Sirius Am. Ins. Co., 2011 NY Slip Op 08630 [2011], the First Department held that correspondence between attorneys that “admitted” GJF was an additional insured will not create coverage that otherwise did not exist. In response to plaintiff’s letter asking for confirmation of coverage for GJF or a deposition date for an underwriter, defense counsel responded that GJF was a covered insured. In reality, however, GJF was not “on file” with the insurer as required by the additional insured endorsement to the policy. Despite the “judicial admission” of coverage, GJF could not benefit from counsel’s error. Interestingly, the court issued a brief opinion affirming the decision below, but also two concurring opinions, making the decision unanimous as to the outcome but 2-2 on a question of law.

In dueling concurring opinions, the justices disagreed about whether the letter from defense counsel constituted a “formal” judicial admission like a statement in a stipulation or an “informal” judicial admission like a statement in an affidavit. Also, in one concurring opinion, justices argued that notifying an insurer 51 days after first notice of the incident underlying the claim was inexcusable as a matter of law.

Court of Appeals Holds Sect. 240(1) Does Not Apply When the Allegedly Necessary Safety Device Would Defeat the Objective of the Work to be Performed

In Salazar v. Novalex Contracting Corp., 2011 NY Slip Op 08446, a majority of the Court of Appeals dismissed this Labor Law action where the plaintiff was injured stepping into a trench that was “between 3 and 4 feet deep.” The plaintiff stepped backwards or fell into the trench while raking wet concrete to fill and level the floor, including filling the trench at issue. The trench was partially filled with concrete when the plaintiff was injured.

In this 4-3 decision, the majority concluded that under a “common sense approach,” it would be “contrary to the objectives of the work plan” for an owner or general contractor to cover or barricade trenches where the job was to spread concrete and fill them. The claim under Labor Law § 241(6) was rejected on substantially similar grounds. Since filling the trench was an “integral part of the job,” a building code provision about installing safety railing or fastening covers at hazardous openings should not apply.

By contrast, the dissent would have denied summary judgment on both claims. The dissent argued this was “precisely” the type of case to which 240(1) would apply and that there was no reason why the building code about hazardous openings should not apply. With respect to both of the majority’s conclusions, the dissent claimed that questions of fact exist because the record was not clear about whether the trench was “purposely being filled at the time,” or that “seepage [into the trench] was intentional.” The dissent reasoned that even if the court were to assume that the trench was being purposely filled, the case should go to a jury after testimony by “experts on construction techniques,” to decide whether the plaintiff could be protected while also filling the trench.

Fourth Department Reduces $33 Million Pain and Suffering Award

In Barnhard v. Cybex Intl., Inc., the plaintiff, a 24-year old female physical therapy assistant, suffered a fractured vertebra when a exercise machine tipped over and fell on top of her.  As a result she is quadriplegic and requires around the clock care.  At trial she argued that her injuries "left her unable to experience the joys of parenthood and grow the massage-therapy business she was in the process of founding at the time of the accident" (2010 WL 5760848).  The jury awarded the plaintiff $33 million for total pain and suffering, $28,563,128 for future medical expenses, $151,690 for past lost earnings, $1,797,612 for future lost earnings, and $792,435 for "future care of potential children."  The parties also stipulated to $1,689,439 for past medical expenses. 

On appeal, the Fourth Department reduced the pain and suffering award to $12 million.  The Court also vacated the jury's $792,435 award for "future care of potential children" as based entirely on speculation.  

First Department Holds 4 to 5-foot Fall From Dock Platform Subjects Owner To Labor Law Sect. 240(1) Liability

In Cassidy v. Highrise Hoisting and Scaffolding, Inc., the plaintiff fell 4 to 5-feet from a temporary loading dock at a building under construction. When not in use, a rail was in place across the loading dock. As a delivery was received, the rail would be removed. When the delivery was concluded, the rail would be replaced. Plaintiff leaned against the rail which came loose, causing him to fall. The First Department affirmed summary judgment to plaintiff, holding that his injuries were gravity-related and were the result of a failure of a safety device -the rail- which was intended to protect workers from falling.

Judge McKeon Issues First Decision Regarding the Medical Indemnity Fund

As reported in today's Law Journal, Judge Douglas McKeon (Sup. Ct., Bronx County) has now issued the first decision relating to the newly enacted Medical Indemnity Fund.  As we posted in April, the Medical Indemnity Fund was established to pay for future medical costs in medical malpractice cases involving alleged birth-related neurological injuries. In such cases, all future medical expenses will now be paid by the Fund, and not by the defendant or the defendant’s insurer.

In Mendez v. New York and Presbyterian Hospital, Judge McKeon discusses the new statute and how settlements should be approached. In this action the parties agreed to settle the case for $5.5 million with 50% allocated to non-Fund damages and 50% to Fund damages. Pursuant to Public Health Law Sec. 2999-j(14), the defendant must pay as a lump sum (1) the amount allocated to the non-Fund damages and (2) the attorney's fees on the portion allocated to the Fund. Attorney's fees are calculated on the total amount pursuant to Judiciary Law Sec. 474-a. Here that resulted in the defendant having to pay a total of $3,100,000 representing $2.75 million for non-Fund damages, plus $350,000 for the attorney’s fee on the non-Fund damages. The plaintiff receives $2,400,000, which represents $2.75 million for the non-Fund damages minus the attorney’s portion that award.  The plaintiff's attorney's total fee is $700,000.   

A few additional key points from the decision:

1. To be eligible for the Fund, the settlement must include a finding that the plaintiff is a qualified plaintiff, i.e has sustained a neurological injury as a result of medical malpractice.

2.  Medical expenses paid from the Fund are not limited to the dollar value of the settlement. 

3. "The creation of an obstetrical fund was an obvious vehicle by which to achieve the Governor’s dual objective of reducing both Medicaid costs and medical malpractice premiums while, on a human level, providing a lifetime of guaranteed care, geared to obstetrical mishap victims, as well as the comfort which comes to a parent by the knowledge that help will be provided to a handicapped child when mom and dad are gone” (p. 8).   

4. According to Judge McKeon, the Fund obviates the need for a Supplemental Needs Trust (SNT). Without an SNT, the plaintiff can “settle an action for up-front cash, buy a house and receive a lifetime of care without encumbering the cash or the house, which is the legal consequence of an SNT” (pp. 8-9). 

5. “As a general rule the existence of the Fund is not supposed to increase the amount of the settlement. In other words, an action settled pre-Fund for $4,000,000 should settle for $4,000,000 today” (pp. 10-11).  One potential exception identified by Judge McKeon may be where there is limited coverage (p. 11). As Judge McKeon notes, however, this exception is “evolving.”   In our opinion, therefore, decisions will have to be made on a case by case basis.

6. In obstetrical malpractice cases, historically, future medical care and treatment is by far the most costly element of damages, often substantially more than 50% of the total damages (pp. 12-13). While this precedent would justify a greater allocation of a settlement to Fund damages, Judge McKeon notes that certain practical realities must come into play (pp. 13-14). This is because the higher the amount that gets allocated to the Fund, the lower the amount of cash the plaintiff will receive. Thus, when settlements are smaller, consideration can be given to providing a larger cash portion to the plaintiff. Furthermore, according to Judge McKeon, where custodial care will not be necessary, that could be taken into consideration when determining the allocation (p. 15). Generally, however, an allocation of 50-50 is a good rule of thumb.

Landlord Not Entitled To Summary Judgment On "Ambiguous" Contractual Indemnity Provision

In Lopez v. Guei Shun Shiau, the First Department affirmed a denial of summary judgment on the issue of contractual indemnity between the defendant as third-party plaintiff and the third-party defendant Sheba Ethiopian Restaurant, Inc. Defendant Guei Shun Shiau is an out of possession landlord in this negligence slip and fall on an uneven sidewalk. While Shiau argued that it was entitled to contractual indemnity, the court found that the contractual indemnity provision contained in the parties' lease agreement was “ambiguous” and the intention to indemnify was not "unmistakable." Therefore, summary judgment was not appropriate.

Missing Document Charge Appropriate Sanction For Operative Report That May Never Have Been Created

In Krin v. Lenox Hill Hospital, the trial court granted a missing document charge in response to the plaintiff’s motion to strike on grounds of spoliation, and the First Department affirmed. In this medical malpractice action, the plaintiff complained that the defendants had failed to turn over a cosmetic operative report. The report at issue was allegedly dictated at some point, but it was not part of the file when records were disclosed. Considering the circumstances below and the conflict in the record as to whether such a document even existed, the First Department noted that a missing document charge was an appropriate sanction rather than striking defendant's answer.

First Department Splits Over Labor Law Liability Where Plaintiff Did Not Fall From a Height

In Reavely v. Yonkers Raceway Programs, Inc., the plaintiff alleged that violations of the Labor Law caused him to cut his fingers with a circular saw. The plaintiff had been instructed to cut plywood for a hang wall near a trench; his footing slipped on waterproofing that had not yet safely hardened. Although the plaintiff did not fall from the wall, he claimed that his injury was caused when he acted to prevent himself from falling.

Over a two-judge dissent, the First Department affirmed summary judgment in favor of the plaintiff under Labor Law § 240(1). The majority concluded that plaintiff was entitled to a safety device under the Labor Law and that the failure to provide one was the proximate cause of plaintiff’s injuries. By contrast, the dissent argued that the injury would have occurred regardless of whether the accident happened near a trench and that the better view of the accident was that plaintiff had simply lost his balance on a slippery level surface. The dissent’s logic resulted in the further statement that plaintiff's claim under Labor Law § 241(6) should also be dismissed.

Lippman Court Further Expands Labor Law 240(1)

Last year, we highlighted the First Department's decision in Wilinski v. 334 E. 92nd Hous. Dev. Fund Corp.  In this case, the First Department held that the collapse of pipes standing on the floor, like the collapse of a wall, does not give rise to a Labor Law Sec. 240(1) claim. The Court reasoned that because the pipes and plaintiff "'were at the same level at the time of the collapse the incident was not sufficiently attributable to elevation differentials to warrant imposition of liability pursuant to Labor Law § 240.'"

Today, the Court of Appeals, in a 4-3 decision, modified, holding that there is no categorical exclusion to Labor Law Sec. 240(1) for injuries caused by falling objects that are at the same level as the plaintiff at the time of the accident.  In doing so, the Court of Appeals eliminated an exception that had been well-recognized across the Departments and once again has expanded the reach of Labor Law 240(1). 

Relying on Runner v. New York Stock Exch, Inc., the Court held that the issue is "whether the plaintiff's injuries were the direct consequence of a failure to provide adequate protection against a risk arising from a physically significant elevation differential."  Applying that analysis the Court stated that there was a question of fact as to whether the plaintiff's injury was the direct consequence of the alleged failure to provide an adequate safety device.  According to the Court, the plaintiff merely asserted, but did not demonstrate, that safety devices could have been used and the defendant asserted, but did not demonstrate, that no safety devices were needed.

The Court also held that the Appellate Division properly denied the defendants' motion for summary judgment on the plaintiff's Labor Law Sec. 241(6) claims, which were premised on 12 NYCRR 23-3.3(b)(3) and 12 NYCRR 23-3.3(c).

Court of Appeals Modifies Finding Questions of Fact in Labor Law 240(1) Case

In Grove v. Cornell University, the plaintiff fell 30 feet from the basket of a motorized boom lift. Although the plaintiff was provided with a safety harness and lanyard, he failed to attach it to the basket before he fell. As a result, he fell through a malfunctioning gate on the basket that if properly working would have been self-closing.

The Third Department split 3-2 with the majority concluding that the safety harness and lanyard was an adequate safety device and that the malfunctioning gate was merely the failure to provide an additional redundant safety device. The majority also concluded that the plaintiff was the sole proximate cause of his injuries. The dissent, however, maintained that the defendant failed to establish that the malfunctioning gate was not a proximate cause of the fall, and so neither party had shown entitlement to summary judgment.

On Tuesday, the Court of Appeals modified, holding without discussion, that issues of fact remain on whether there was an adequate safety device and whether the plaintiff was the sole proximate cause of his injuries.

Court of Appeals Watch

Today, the First Department granted leave to appeal to the Court of Appeals in Angamarca v. New York City Partnership Hous. Dev. Fund, Inc., where a 3-2 majority of the First Department held that the trial court properly precluded the defendant from raising the issue of plaintiff’s immigration status with respect to  damages for future medical expenses.  Our full post from June 23rd regarding the case is here. 

A More Divided Court

This weekend the New York Times published an article showing that the frequency with which Chief Judge Lippman dissents is markedly higher than either of his two most recent predecessors. In fact, according to the article, Chief Judge Lippman's 15 dissents over this past term nearly matches that of the total number dissents authored by Chief Judge Kaye over her 16 years on the bench.  That there has been an increased frequency in dissents under the Lippman Court, however, is not new.  Judge Lippman himself has previously spoken about his philosophy at the Court of Appeals.  In an article last year year he stated, "I am a result-oriented person . . . and the result I am looking for is not necessarily unanimity.”  What this article adds is that according to recent research by Professor Vincent Bonventre, Judge Lippman's dissents reflect his "staunchly liberal" positions regarding the rights of criminal suspects and the injury claims of plaintiffs.  It also depicts Judge Lippman as leading a 3-judge liberal minority intent on either making their policy positions known to the Legislature and the public, or influencing future decisions.  For the full article click here. 

Court of Appeals Dismisses Complaints From 1993 World Trade Center Bombing Victims

Today, the Court of Appeals in Matter of World Trade Center Bombing Ltg. dismissed a lawsuit brought against the Port Authority for the 1993 World Trade Center Bombing.  The Court held that in performing security for the general public the Port Authority was performing a governmental or proprietary function and that it properly exercised its discretion in its security decisions to entite it to the common-law defense of governmental immunity. 

According to the 4-3 majority: "Our courts simply cannot ignore that this policy-based doctrine is intended to afford deference to the exercise of discretion by the officials of municipalities and governmental entities, especially with respect to security measures and the deployment of limited police resources. Governmental entities cannot be expected to be absolute, infallible guarantors of public safety, but in order to encourage them to engage in the affirmative conduct of diligently investigating security vulnerabilities and implementing appropriate safeguards, they must be provided with the latitude to render those critical decisions without threat of legal repercussion."

This case is also notable in that Chief Judge Lippman and Judge Smith did not take part.  Justice Mercure from the Third Department and Judge Prudenti from the Second Department sat by deisgnation.  Judge Mercure joined the majority and Judge Prudenti joined the dissent. 

Panel Drops Jury Award by 99% in Medical Malpractice Case

In Hugh v. Ofodile, the First Department cut by 99% a jury verdict to a plaintiff who claimed injuries following a thigh lift procedure. The medical malpractice action alleged a lack of informed consent and deviations from accepted practice. The plaintiff claimed injuries to her genital area, including scarring and a flattening of the labia majora. The jury awarded the plaintiff $60 million in pain and suffering damages [$10 million for past pain and suffering and $50 million for future pain and suffering]. Upon Post Trial Motion, the jury’s verdict was reduced to $4 million [$1 million for past pain and suffering and $3 million for future pain and suffering].

The Appellate Division sustained the liability findings, although noting that “the evidence of a departure was not overwhelming.” In reducing the pain and suffering award to a total of $600,000 [$300,000 each for past and future pain and suffering], the Appellate Division relied on the medical records which repeatedly described the plaintiff’s genitalia as “normal,” and the absence of expert testimony linking any alleged pain to the thigh lift surgery. In a partial dissent, Justices Richter and Catterson agreed with the reduction of the past pain and suffering award, but would have reduced to the future award to $1.3 million based on, among other things, the plaintiff’s long life expectancy.

Second Department Further Narrows Scope Of Medical Malpractice Actions Asserted By Nonpatients

Today the Second Department issued an interesting decision in the case Fox v. Marshall.  The Fox case arose out of the murder of Denice Fox by her neighbor the defendant Evan Marshall.  Marshall had a history of substance abuse and psychiatric problems and had been treated numerous times at different drug abuse and mental health facilities.  The plaintiff alleges that on the day before the murder, Marshall, who had voluntarily admitted himself to defendant SLS Residential Inc.'s substance abuse and mental health facility, received a pass to leave the facility to visit his mother.  Marshall allegedly then purchased cocaine and spent the night at his mother's house.  The next morning after allegedly driving his car into a woman jogging, he forced his way into Fox's house and killed her.  

The plaintiff commenced an action in negligence and medical malpractice against SLS, its related corporate entities and various employees of those entities, as well as against Marshall and his mother.  On the medical malpractice action against SLS and a psychiatrist that worked for SLS, the plaintiff claimed that they breached their duty to the public by failing to properly diagnose Marshall and giving him a pass to leave the facility.  

Each of the defendants moved to dismiss the complaint.  The Supreme Court denied the motions holding that a mental health facility may owe a duty to protect the public from the actions of an outpatient where there is evidence that the facility has the ability to control the patient's actions and has knowledge that the patient may be a danger to others.  The Second Department modified dismissing only the medical malpractice causes of action and cause of action against Marshall's mother.

With respect to the medical malpractice cause of action, the Court assessed a physician's duty of care in light of it previous decision in Donohue v. Copiague Union Free School Dist. (64 A.D.2d 29 [2nd Dept. 1978]).  Based on the duty analysis set forth in Donohue, the Court held that extending "a physician's duty of care beyond a narrow class of potential defendants, such as immediate family members, cannot be supported under any analysis of duty."  Furthermore according to the Court, "'[w]hile moral and logical judgments are significant components of the [duty] analysis, we are also bound to consider the larger social consequences of our decisions and to tailor our notion of duty so that the legal consequences of wrongs [are limited] to a controllable degree'. Therefore, regardless of any sense of outrage which is evoked by the heinous actions of Evan Marshall, society's interest is not best served by concluding that a doctor who treats a patient, within the context of mental health, undertakes a duty to the public at large." (internal citations omitted).

Notably, last year we published an article in the New York Law Journal titled, "Defining the Duty of a Physician: Recent Developments" (Sept. 8, 2010).  In that article we discussed several recent cases that had addressed the issue of duty in a medical malpractice case.  In particular, we argued that the approach taken by the First Department in Cregan v. Sachs (65 A.D.3d 101 [1st Dept. 2009]) failed to properly treat the issue of duty as a legal question to be initially decided by the court.  In contrast, today's Fox decision properly recognizes that the issue of duty is a legal question for the court and adopted an analytical approach that coincides very nicely with the analysis we advocated in our article.   

It is also notable that the Court's implicit restriction of a doctor's duty to third-parties as limited to when those third parties are family members is similar to a limitation used by the Court of Appeals in Laratro v. City of New York (8 N.Y.3d 79 [2006]).  In Laratro, at issue was whether the City had a special relationship with the plaintiff sufficient to give rise to a duty of care where a co-worker called 911 on behalf of the incapacitated plaintiff and received assurances from emergency personnel that help was on the way.  The Court of Appeals held that while a special relationship can be created where the caller is not the plaintiff, those circumstances should be limited to where the caller is a family member. 

Suffolk County Pilot Program For E-Discovery In Med Mal Cases

Below is the release from the Suffolk Bar:

"On August 17, 2011 at the Suffolk County Bar Association Headquarters at 5:30 p.m. there will be an informational session regarding a new pilot program concerning the early resolution of electronic discovery issues in medical malpractice cases. At a date to be determined, the parties to a medical malpractice assigned to PART 17 (Justice Peter H. Mayer's Part), will be required to complete an electronic discovery Order. The session will cover information regarding the substance of the Order as well as any related procedural issues. Comments and questions from the Bar will be appreciated. Please contact Jill at Justice Mayer's Chambers (631) 852-1760 or jmeise@courts.state.ny.us."

First Department Finds That Agreement Signed By Only One Party Is Insufficient To Trigger Additional Insured Provision

In Cusumano v. Extell Rock, LLC, an unsigned Construction Agreement that named Hard Rock Cafe as an additional insured, and a "Work Authorization" signed only by the named insured, Region Facility Services, was held to be insufficient to trigger Twin City Fire Insurance Company's additional insured provision that requred a written contract or agreement requring Region to add Hard Rock as an additional insured. The Court found that an agreement signed by only one party is not "executed" as that term is used in an insurance policy (Nicotra Group LLC v. American Safety Indem. Co., 48 AD3d 253). Therefore, the Court held that Twin City was not obligated to defend or indemnify Hard Rock.

The Court further held that a declaration that Twin City was not obligated to defend or indemnify Hard Rock in the underlying actions was the proper method for disposing the action, rather than by judgment dismissing the complaint against Twin City (Maurizzio v Lumbermens Mut. Cas. Co., 73 NY2d 951, 954 [1989]).

First Department Addresses Causation In Medical Malpractice "Loss of Chance" Case

In King v. St. Barnabas Hospital, a Riker's Island correctional officer, Thorrie Murray, was playing a basketball game at the facility's gym when he suffered a cardiac arrest.  When medical personnel arrived, he was unconscious and not breathing.  After using the "quick look" function on the defibrillator to see whether there was electrical activity in the heart and finding a mixture of asystole and some V-fib, the defendants shocked Officer Murray in an attempt to restore his heartbeat.  Those efforts, as well as others, however, were unsuccessful. 

Officer Murray's estate commenced this medical malpractice action alleging that it was a departure from emergency protocols to defibrilate the decedent while he was in asystole and in failing to timely administer epinephrine and atropine.  The defendants moved for summary judgment arguing that the defendants acted within accepted standards of practice and that nothing they did had a detrimental effect on the outcome.  The trial court agreed and granted the motion.  The court noted that even under "the best circumstances, plaintiff's expert cannot predict whether Officer Murray could have been saved or if cardiac function could have been restored." The court further found that the plaintiffs failed to offer any statistics of survival rates of patients in asystole or whether the administration of epinephrine or atropine increases the chances of survival.  The First Department, however, reversed.

The Court held that New York permits claims for negligent resuscitation efforts to the extent the defendants departed from life support protocols and deprived the plaintiff of "any possibility of survival."  According to the Court "[W]e cannot endorse a rule that would essentially absolve first responders of liability where they deviate from life support protocols.  The very fact that advanced life support protocols exist for patients in an asystolic state means that adherence to the protocols afford a chance of reviving the patient, notwithstanding the grave nature of the condition.  It necessarily follows that failure to follow the protocols reduces the chances of reviving the patient."  Thus, even in the absence of the ability to quantify whether the defendants actions decreased the chances of survival, the Court held that the protocols raised a question of fact sufficient for the jury.  

While the correctness of this decision is certainly an debatable issue, this case now presents an opportunity to face head-on a further issue that has long been lingering in "loss of chance" cases in New York.  That issue is, whether damages in a loss of chance case should be limited to the percentage of the chance lost or whether the plaintiff should receive full damages?  A further discussion of this issue is contained in an article we published, "Loss of Chance: Confusion in New York's Standard of Proof" (Nassau Lawyer, October 2007).    

 

Majority of Appellate Panel Holds That Immigration Status of Resident Alien is Immaterial to Future Medical Expenses

In Angamarca v. New York City Partnership Hous. Dev. Fund, Inc., the 34 year-old plaintiff was injured in a two-story fall through an improperly covered opening. He suffered severe injuries, including a traumatic brain injury and multiple fractures of the vertebrae. As relevant here, the jury awarded plaintiff $100,000 for past pain and suffering, $1,000,000 for future pain and suffering and $16,721,684 for future medical expenses.

On appeal from the judgment entered after trial, defendant argued that it was improperly precluded by the trial court from raising the fact that plaintiff was an undocumented alien who had expressed a desire to return to his native country, and the plaintiff cross-appealed for addittur of his pain and suffering awards.

In a 3-2 decision, the majority of the First Department held that the trial court had properly precluded the defendant from raising the issue of plaintiff’s immigration status. The majority found that the Court of Appeals’ decision in Balbuena v. IDR Realty LLC (6 NY3d 338 [2006]), was controlling. According to the majority, the Balbuena-Court held that, when a plaintiff has suffered such severe injuries that he is unable to work, mitigation of damages is no longer an issue and therefore the immigration status of the plaintiff is irrelevant.

The majority also increased the plaintiff’s past and future pain and suffering awards to $1,500,000 and $3,500,000, respectively.

The two dissenting justices disagreed with the majority, stating that Balbuena had no application to the present appeal. The dissent found that Balbuena does not limit consideration of plaintiff’s immigration status in regard to any item of damages, noting that the prevailing appellate authority is to permit the jury to consider the plaintiff’s immigration status (Coque v. Wildflower Estates Devs. Inc., 58 AD3d 44 [2nd Dept. 2008]).

The dissent further observed that the purpose of “compensatory damages” is to reimburse the injured party for the actual costs incurred as the result of his injuries, “not to bestow a windfall.” Here, since plaintiff testified that he had planned to stay in the United States for only a short period of time to earn $20,000 to return to his country:

"it is not prejudicial to require that. . . plaintiff present the jury with an accurate portrayal of the likely cost of his future medical treatment, wherever it is to be rendered. To the contrary, it is unfair to prevent. . . defendant from putting. . . plaintiff to his proof by precluding the defense from presenting facts material to the accurate assessment of damages."

Labor Law 240(1) Dismissed on Sole Proximate Cause for Failing to Obey Instructions

In Paz v. City of New York, a rope scaffold was elevated and tied to a building overnight to prevent pedestrians from accessing the scaffold. Plaintiff was instructed to ascend a ladder, climb onto the scaffold and lower it to the ground. Plaintiff instead elected to remain on the scaffold as he attached his safety harness. Plaintiff fell and was injured.

In affirming the dismissal of plaintiff's Labor Law 240(1) cause of action, the First Department held that plaintiff was the sole proximate cause of his accident because he was aware of the procedure that he was supposed to follow, but he "chose for no good reason not to do so."

The Court went on to affirm the dismissal of plaintiff's Labor Law 200 claim on the basis that general instructions as to what needs to be done, but not how to do it, coupled with oversight of the timing and quality of the work and authority to stop work, is an insufficient basis upon which to prove control over plaintiff's work.

Lastly, the Court found that the Industrial Code provisions relied upon by plaintiff did not apply to the facts of the case to support his Labor Law 241(6) claim.

"Lien Waiver" Not Broad Enough To Support Contractual Indemnity For Bodily Injury Claim

In Suazo v. Maple Ridge Assoc. LLC, the owner and developer of a construction site sought contractual indemnity from the employer of a delivery driver who was injured while delivering doors to the construction site. The owner/developer based its claim on a "Waiver of Liens and Indemnity Agreement" executed by plaintiff's employer. In dismissing the owner/developer's claim, the First Department found that the parties' agreement pertained only to payment for labor and materials provided at the construction site, and that the employer agreed to indemnify owner/contractor for any non-payment claims or liens filed by its subcontractors or suppliers. The Court held that, given the overall purpose of the Agreement, the reference to "any claim" in the Agreement was not broad enough to encompass claims for bodily injury.

Use of CPLR 4401 Motion During Trial

In Botwinik v. Moseson, after the jury was empaneled, but before opening statements, the defendant orally moved in limine to preclude plaintiff's expert nurse from testifying on the basis that the nurse was not qualified to give a medical opinion on the issue of lack of informed consent (CPLR 4401-a). The plaintiff cross-moved to substitute the testimony of a physician if the court determined that the nurse's testimony would be insufficient. The court granted the defendant's motion and dismissed plaintiff's case.

On appeal, the First Department reversed. The Court noted that a CPLR 4401-a motion must be made "at the end of plaintiff's case" (see also CPLR 4401 - motion "after the close of evidence presented by an opposing party"). Here, since the motion was made before plaintiff had the opportunity to present her case, the trial court abused its discretion when it granted the defendant's motion.

The Court also observed that courts favor disposition of cases on their merits, rather than on oral application made while the jury is waiting (see Murray v. Brookhaven Mem. Hosp. Med. Ctr, 73 A.D.3d 878 [2010]).

Second Department Issues Big Foreclosure Decision

In a case having potentially enormous implications on foreclosure actions in New York State and throughout the country, the Second Department in Bank of New York v. Silverberg, addressed whether a party has standing to commence a foreclosure action when that party's assignor, Mortgage Electronic Registration Systems, Inc. (MERS), was listed in the underlying mortgage instruments as a nominee and mortgagee for the purpose of recording, but was never the actual holder or assignee of the underlying notes.

As Judge Leventhal described MERS in the Court's decision: "'In 1993, the MERS system was created by several large participants in the real estate mortgage industry to track ownership interests in residential mortgages' (Matter of MERSCORP, Inc. v Romaine, 8 NY3d 90, 96). MERS was intended to 'streamline the mortgage process by using electronic commerce to eliminate paper.'  MERS's implementation followed the delays occasioned by local recording offices, which were at times slow in recording instruments because of complex local regulations and database systems that had become voluminous and increasingly difficult to search (see Peterson, Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System, 78 U Cin L Rev 1359, 1366 [2010]).

'Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in the MERS system' (Matter of MERSCORP, Inc. v Romaine, 8 NY3d at 96 [internal footnotes omitted]).

The MERS system facilitated the transfer of loans into pools of other loans which were then sold to investors as securities (see Peterson, at 1361-1362). MERS delivers savings to the participants in the real estate mortgage industry by allowing those entities to avoid the payment of fees which local governments require to record mortgage assignments (see Peterson at 1368-1369).

Lenders identify MERS as nominee and mortgagee for its members' successors and assignees. MERS remains the mortgagee of record in local county recording offices regardless of how many times the mortgage is transferred, thus freeing MERS's members from paying the recording fees that would otherwise be furnished to the relevant localities (id.; see Matter of MERSCORP, Inc. v Romaine, 8 NY3d at 100). This leaves borrowers and the local county or municipal recording offices unaware of the identity of the true owner of the note, and extinguishes a source of revenue to the localities. According to MERS, any loan registered in its system is 'inoculated against future assignments because MERS remains the mortgagee no matter how many times servicing is traded.'  Moreover, MERS does not lend money, does not receive payments on promissory notes, and does not service loans by collecting loan payments."

Judge Leventhal speaking for the Court held:

"because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the corrected assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.

MERS purportedly holds approximately 60 million mortgage loans (see Michael Powell & Gretchen Morgenson, MERS? It May Have Swallowed Your Loan, New York Times, March 5, 2011), and is involved in the origination of approximately 60% of all mortgage loans in the United States (see Peterson at 1362; Kate Berry, Foreclosures Turn Up Heat on MERS, Am. Banker, July 10, 2007, at 1). This Court is mindful of the impact that this decision may have on the mortgage industry in New York, and perhaps the nation. Nonetheless, the law must not yield to expediency and the convenience of lending institutions. Proper procedures must be followed to ensure the reliability of the chain of ownership, to secure the dependable transfer of property, and to assure the enforcement of the rules that govern real property."

Is Electronic Filing Of Notice Of Entry Sufficient To Start Clock For Appeal?

In Fazio v. Costco Wholesale, the plaintiffs claimed that the defendant's appeal was untimely because defendant filed its Notice of Appeal 32 days after it was served electronically with Notice of the Entry.  The First Department held that electronic filing did not satisfy the requirement of notice by a party.  According to the court, "New York State Court Electronic Filing (NYSCEF) site confirmation shows the date on which the order with notice of entry was filed electronically and e-mail notifications were sent to counsel for the parties. However, the NYSCEF site's transmission of notification of the entry to e-mail service addresses 'shall not constitute service of notice of entry by any party' (22 NYCRR 202.5b[h][3]). 'A party shall serve notice of entry of an order . . . on another party by serving a copy of the notification . . . and an express statement that the transmittal constitutes notice of entry' (id.). The only affidavit of service in the record shows that the notice of entry was served on defendant by mail. Thus, defendant had 35 days to notice its appeal (see CPLR 2103[b][2])."

Plaintiff's Employer Functioned as "One Company" With Defendant

In Carty v. East 175th Street Housing Dev. Fund Corp., the First Department found that the plaintiff's employer functioned as one company with defendant for purposes of barring plaintiff's claims under Workers' Compensation Law 11. More specifically, the Court reached its conclusion upon finding that the two entitites shared the same president and director of finance, financial management, administrative headquarters and insurance policy, as well as functioning with a common purpose. Moreover, although the building was owned by the defendant, the plaintiff's employer paid all of the building's operating expenses and had employees to operate the facility.

Panel Discusses Jury Charge In A Labor Law 240(1) Case

In Ramirez v. Willow Ridge Country Club, Inc., the plaintiff was in the process of demolishing a second-story deck attached to the defendant's building when he allegedly fell off the deck through a space where the railing had been removed. By contrast, his foreman testified that plaintiff was straddling between an A-frame ladder and an extension ladder affixed to the building when a gutter he was removing broke free, causing plaintiff to lose his balance and fall. The foreman further testified that he specifically admonished the plaintiff to stop.

The jury returned a verdict finding that the defendant had violated Labor Law 240(1), but that the violation was not a substantial factor in causing the accident. In affirming the jury's verdict, the First Department observed that the jury was instructed that it should find for defendants if the jury concluded that plaintiff's actions were the only substantial factor in bringing about the accident. As such, the jury specifically had not been instructed on the recalcitrant worker defense. The Court held that the verdict was consistent with the charge and "pereceive[d] no ground upon which [the] verdict should be disturbed."

For those who are curious as to what the PJI has to say with respect to the "recalcitrant worker defense," the proposed charge is found at PJI 2:217.2, and suggests that the jury be charged the following:

If, however, you decide that plaintiff in this case was a “recalcitrant worker,” then you must find for the defendants. Recalcitrant means that the worker deliberately and unreasonably failed or refused to use an available and adequate safety device. “Deliberately” means intentionally. It does not mean negligently or carelessly. In order to establish that the plaintiff was a recalcitrant worker, the defendant has the burden of proving (1) that [specifiy device such as safety harnesses/vests and tie lines] were provided to the plaintiff and were adequate and safe (2) plaintiff knew both that the safety harness and tie lines were available and that he was expected to use them (3) he chose for no good reason not do to so and (4) had he not made that choice he would not have been injured.

If the foregoing conditions are met, then you will have determined that plaintiff was the sole proximate cause of his accident, and you need proceed no further.

New York Loosens Attorney Admission Rules For In-House Counsel

The Court of Appeals has amended its rules for the Admission of Attorneys adding Part 522 relating to the registration of in-house counsel in New York. The amendment, effective April 20, 2011, permits attorneys in good standing in certain other U.S. jurisdictions to act as in-house counsel for a New York organization without satisfying traditional admission requirements.  For complete details click here.     

New York Establishes Medical Indemnity Fund (also referred to preenactment as the Neurologically Impaired Infant Fund or NIIF)

On Thursday, March 31st, the New York State Legislature passed its first on-time budget in five years. Significantly, for medical malpractice practitioners, the budget included the creation of the Medical Indemnity Fund. The Fund was established to pay for future medical costs in birth-related neurological injury lawsuits. In those cases, all future medical expenses will be paid through the Fund, not by the defendant or its insurer. We are still working our way through analyzing the new legislation, but some of the important early highlights to note:

(1) The law will apply to all birth-related neurological injury lawsuits where no judgment has been entered and no settlement agreement has been entered into by the parties before April 1, 2011.

(2) The costs covered by the Fund include "future medical, hospital, surgical, nursing, dental, rehabilitation, custodial, durable medical equipment, home modifications, assistive technology, vehicle modifications, prescription and non-prescription medications, and other health care costs actually incurred for services rendered to and supplies utilized by qualified plaintiffs."

(3) The plaintiff's attorney's fee will be based upon the "entire sum awarded" by the jury or the court, or the full sum of the settlement. It "shall be paid in a lump sum by the defendants and their insurers pursuant to section four hundred seventy-four-a of the judiciary law; provided however that the portion of the attorney fee that is allocated to the non-fund elements of damages shall be deducted from the non-fund portion of the award in a proportional manner."

(4) Every settlement agreement for an alleged birth related neurological injury shall provide that in the event the administrator of the fund determines that the plaintiff or claimant is a qualified plaintiff, all payments for future medical expenses shall be paid in accordance with the fund provisions. When the settlement agreement does not have such a provision, "the court shall direct the modification of the agreement to include such term as a condition of court approval."

(5) Where the jury or court has made an award for future medical expenses, either party can make an application to the court "that the judgment reflect that, in lieu of that portion of the award that provides for payment of such expenses, and upon a determination by the fund administrator that the plaintiff is a qualified plaintiff, the future medical expenses of the plaintiff shall be paid out of the fund." The Court must grant such a request if the applicant makes a prima facie showing that the plaintiff qualifies for the Fund.

Initially, the most important aspect to note is that if you have a case involving an infant neurologically impaired at birth, which has not settled or reached a judgment as of April 1, 2011, your case appears to qualify for the Fund. That will result in significant cost savings for defendants and plaintiff's counsel will have to advise their clients of how the Fund will operate.

Beyond that, at this preliminary stage, we will hold-off on discussing any other specific implications of the new Fund. Of course, we welcome any insights or perspectives you would like to share. As we continue to analyze the statute and receive feedback, we will provide periodic updates on this blog.

Second Department Makes Rare Admission

In Stukas v. Streiter, the Second Department made a rare admission that its decisions related to a plaintiff's burden in opposition to a motion for summary judgment in medical malpractice cases "lacked a precise consistency."  In Stukas, the defendant moved for summary judgment, making a prima facie case that it did not depart from standard and accepted practices. In response the plaintiff attempted to raise a question of fact on that issue, but did not address the issue of causation.  At issue on appeal was whether the plaintiff was required to address causation, even though the defendant had not raised it in its motion.  The Appellate Division held that despite many of its own cases stating or implying to the contrary, a nonmoving party is not required to raise a triable issue of fact when the moving party has not addressed the issue.  

CPLR 2001 Can Only Bend So Far

In Goldenberg v. Westchester County Health Care Corporation, the plaintiff commenced a special proceeding to file a late notice of claim, attaching a copy of a proposed complaint.  After the Supreme Court granted the petition, the plaintiff served the hospital with a notice of claim as well as a summons and complaint.  The plaintiff, however, did not purchase an index number and failed to file a summons and complaint.  The Court of Appeals held that while CPLR 2001 was amended to allow trial courts to fix or overlook defects in the filing process, the amendments were not meant to excuse a complete failure to file within the applicable statute of limitations. Since the plaintiff never filed a summons and complaint, the Court held that the mistake could not be excused.  

Court Declines to Apply Assumption of Risk to Rollerblading on A Sidewalk

In Ashbourne v. City of New York, the plaintiff was injured while rollerblading on a public sidewalk. She commenced an action against the City and NYCHA. The trial court dismissed the plaintiff's complaint on the basis of the assumption of risk doctrine. On appeal, the First Department reversed and reinstated the complaint.

The First Deparment initially observed that, in Trupia v. Lake George CSD (14 NY3d 392 [2010]), the Court of Appeals declined to apply the assumption of risk doctrine by limiting the doctrine to protect only organizers and sponsors of athletic and recreational activities because of their "enormous social value". The First Department then observed that assumption of the risk doctrine was applied by the Court of Appeals to a golfing game in Anand v. Kapoor (2010 NY Slip Op 09380 [2010]) because "[a] person who chooses to participate in a sport or recreational activity consents to certain risks that are inherent in and arise out of the nature of the sport generally and flow from such participation."

Applying the foregoing analsyis, the First Department held that the rollerblading engaged in by plaintiff on a public sidewalk was not part of an organized sporting event, but was merely a form of exercise no different than jogging. As such, plaintiff did not consent to the negligent maintenance of the sidewalk by the City.

Third Department Declines to Adopt First Department Interpretation of "Use of Auto" Exclusion in CGL Policy

In Essex Ins. Co. v. Grande Stone Quarry, LLC, the underlying plaintiff was injured while using an ATV on property owned by Grande Stone Quarry. Grande Stone notified its insurer, Essex Ins. Co., of the potential claim. Essex disclaimed coverage pursuant to an endorsement amending its policy in pertinent part as follows:

This insurance does not apply to "bodily injury". . . or any injury, loss, or damages. . . arising out of, caused by or contributed to:

a. by ownership, non-ownership, maintenance, use, or entrustment to others of any "auto". . . all terrain vehicle (ATV), or motorcycle. Use includes operation and "loading" and "unloading".

By comparison, the standard language in Essex's CGL policy, which was amended by the above-referenced endorsement, excluded coverage as follows:

"Bodily injury". . . arising out of the ownership, maintenance, use or entrustment to others of any. . . "auto". . . owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading".

As can be seen, the exclusion was clearly amended to apply to ATV use. As can also be seen, the exclusion was amended to delete the limiting language for application to ownership or use of an ATV by "any insured." Despite the foregoing, the Third Department found that the exclusion did not apply to "any other persons" without adding such explicit language. The Court stated that Essex had "failed to create an exclusion having a definite and precise meaning, unattended by danger of misconception" (citations omitted). (The Third Department did not discuss the fact that the exclusion also applied to "non-ownership" of any ATV).

Most notably, the Third Department specifically observed that it was declining to adopt the holding of the First Department, thereby creating a conflict between the Departments on this issue, in DMP Contr. Corp. v. Essex Ins. Co. (76 AD3d 844, 846-47 [1st Dept. 2010] [holding that: "The plain meaning of this language, which focuses on the connection between a vehicle and the injury, not between a vehicle and the insured, is that bodily injury occurring as described is not covered, whether or not it is the insured who owned, maintained, used or entrusted to others the subject automobile]).

Whether a conflict between the Departments on the interpretation of this exclusion presents enough "leaveworthiness" for the Court of Appeals to take this issue might be dependent upon whether other insurers have similarly amended the standard CGL policy language to exclude coverage to use of "autos" or ATV's by persons other than the insured while operating such vehicles on the insured's property. If the issue is limited to Essex's policy, it may not present sufficient statewide implications or be of such public importance as to warrant leave. Stay tuned to this blog for any further developments.

Court Upholds Verdict Despite Evidence of Pre-Existing Condition and Failure To Give Comparative Negligence Charge For Physically Disabled Person

As discussed in our most recent blog, extensive evidence was offered to show that the plaintiff in Stewart v. NYCTA suffered from pre-existing conditions. The trial court limited the application of this evidence to the issue of damages, indicating that there was no evidence that the plaintiff was unable to walk the stairs on which he fell on the day of his accident. The jury ultimately found the plaintiff to be 20% at fault for the happening of his accident. The First Department affirmed both the trial court's determination and the jury's verdict.

Notably, however, the First Department indicated that the trial court should have charged the jury with PJI 2:47, which states: "Comparative Negligence—Persons Under Disability—Aged or Physically Disabled Person -- One who is disabled by reason of physical defects is held to a standard of care measured not by the care expected of an adult person without physical defects, but by that care which a reasonably prudent person having the same physical defects would use under the same circumstances. A person laboring under a physical handicap must use caution commensurate with the increased hazard caused by his disability." The trial court had instead given a simple comparative negligence charge. Taking this fact into consideration, the First Department found that the error in failing to give the Disabled Person charge was harmless.

(1) Pain and Suffering Award for Multiple Spinal Injuries and (2) Reduction of Future Loss of Earnings

In Stewart v. NYCTA, the plaintiff slipped and fell on defendant's stairs. The plaintiff sustained the following injuries: (1) a contusion of the cervical spine which required a laminectomy and fusion surgery; (2) compression fractures of the thoracic spine and (3) lumbar laminectomy and fusion surgery. The plaintiff required a baclofen pump to be surgically implanted to prevent muscle spasms in his legs. He has continued difficulty sitting, standing, walking, bending, dressing himself and sleeping. The first Department affirmed awards of $2 million for 9 years of past pain and suffering and $2.7 million for 20 years of future pain and suffering.

The Court reduced the jury's award of $900,000 for future loss of earnings, observing that it was against the weight of the evidence for the jury to assume, given the plaintiff's extensive pre-existing conditions, that he would work for the remainder of his life (20 years). Instead, the Court applied a work-life expectancy of 7.5 years based upon statistical averages. As such, the award for future loss of earnings was reduced to $337,500. (The Court also reduced future medical expenses from $1.3 million to $665,000 as being unsupported by the evidence).

Pain and Suffering Award for Trimalleolar Fracture w/Surgery

In Hopkins v. NYCTA, the First Department affirmed jury awards of $350,000 for past pain and suffering and $275,000 for 55.4 years of future pain and suffering for a 22 year-old female who sustained a trimalleolar fracture of her right ankle in a trip and fall. The plaintiff underwent internal fixation surgery with a second surgery to remove screws. She was left with permanent pain and limitation of motion in her ankle and the potential for future surgery due to early onset arthritis.

First Department Dismisses Appeal for Failure to Assemble a Proper Record

In Lynch v. Con Ed, the plaintiff tripped on a defect in a roadway near a manhole cover. She sued Con Edison and Nico Asphalt, who Con Ed had hired to re-pave the area around the manhole. After trial, the jury found Nico free from negligence and because of the configuration of the verdict sheet it did not reach the issue of Con Ed's liability. The trial court thereafter denied plaintiff's motion to set aside the verdict and plaintiff appealed.

In dismissing plaintiff's appeal, the Court stated:"The appeal is dismissed because plaintiff failed to assemble a proper record on appeal, including the trial transcript and the minutes of the charge conference (see Sebag v Narvaez, 60 AD3d 485 [2009], lv denied 13 NY3d 711 [2009]; CPLR 5526; Rules of App Div, 1st Dept [22 NYCRR] § 600.5). Without the benefit of a proper record, this Court cannot "render an informed decision on the merits" (Matison v County of Nassau, 290 AD2d 494, 495 [2002])."

Court of Appeals Supports Renewal of Annual Aggregate Limits Under Excess Policies

In Union Carbide Corp. v. Affiliated FM Ins. Co., Union Carbide had purchased primary and excess insurance involving multiple layers of coverage spread across multiple insurers up to at least $100 million in coverage. The primary policy covered UCC up to $5 million, with the policy aggregate limit being applicable to a 12 month policy period despite the fact that the policy was written for a three year period. UCC, an asbestos producer, was compelled to pay over $1.5 billion in defense, settlement and judgment costs for claims asserted over the applicable policy period.

At issue on this appeal was the fifth layer of excess, between $70 and $100 million, which was insured by six carriers at $5 million each. The fifth layer excess carriers insured UCC on a "follow-the-form" basis subject to the Declarations of the primary policy. In holding that the annual aggregate for each insurer, $5 million, renewed annually as did the primary insurer's aggregate limit, the Court found that the "follow-the-form" clause "serve[s] the important purpose of allowing an insured, like UCC, that deals with many insurers for the same risk to obtain uniform coverage, and to know, without a minute policy-by-policy analysis, the nature and extent of that coverage."

The Court declined to find as a matter of law, however, that, with respect to one of the excess carriers, a two-month extension of its policy period exposed the carrier to a fourth annual aggregate, thus leaving the issue open to be decided on motion or at trial.

Additional Insured Endorsement Covering Work Performed By Named Insured For Additional Insured Does Not Insure Lessor Under Lessee's Policy

In Admiral Ins. Co. v. Joy Contractors, Inc., a tower crane operated by Joy Contractors Inc. that had been leased from New York Crane, collapsed during the construction of a high-rise condominium project, resulting in the deaths of seven people. Joy was insured for the project under a Commercial General Liability (CGL) policy issued by Lincoln General Ins. Co. and an excess liability policy issued by Admiral Ins. Co.

New York Crane sought additional insured coverage from Lincoln and Admiral under an additional insured endorsement which provided that "all insureds shown in a written contract, or agreement. . ." are additional insureds, "but only with respect to liability . . . caused . . . by [Joy's] acts or omissions; or . . . [t]he acts or omissions of those acting on [Joy's] behalf; in the performance of [Joy's] ongoing operations for the additional insured(s)" (emphasis added).

In affirming the denial of coverage to New York Crane, the First Department rejected the contention that "Joy's contractual obligation to follow industry standards in its operation of the crane leased to it by New York Crane transformed Joy into a party working 'for' or 'on behalf' of New York Crane. Plainly, the parties had a lessor/lessee relationship, which could have been insured by an appropriate endorsement, such as one for leased equipment (see e.g. Westchester Fire Ins. Co. v Continental Cas. Co., 2006 WL 786866, 2006 Minn App Unpub LEXIS 274 [Minn App 2006])."

Fall From A Height Held Not to Be Labor Law 240(1) Related Because Plaintiff Was Not Hired To Perform Elevation-Related Tasks

In Simoes v. City of New York, the plaintiff was working as a flagman directing traffic at a renovation project. A manlift being used in the course of the renovations malfunctioned. As such, it was driven to a nearby vacant lot. Significantly, however, the manlift was unable to ascend the curb next to the lot, so "plaintiff climbed up the boom and into the aerial basket in an attempt to use the controls in the basket to negotiate the manlift over the curb. Moments later, a foreman drove another vehicle toward the manlift in an attempt to push it into the lot. When that vehicle made contact with the manlift, the manlift fell over with plaintiff still within the aerial basket."

In a unanimous opinion, the First Department affirmed the dismissal of plaintiff's Labor Law § 240(1) claim, holding that plaintiff "was not protected by the statute since his duties as a flagman did not entail elevation-related risks"(citing Rocovich v Consolidated Edison Co., 78 NY2d 509, 514 [1991]; Modeste v Mega Constr. Inc., 40 AD3d 255 [2007]; Jamison v County of Onondaga, 17 AD3d 1142, 1143 [2005]).

Managing Agent Exposed to Potential Liability For Lead Paint Condition

In Ortiz v. Gun Hill Mgt., Inc., the First Department affirmed a finding of questions of fact with respect to the scope and extent of a managing agent's control over the property, which if "complete and exclusive" could render the agent liable for failing to abate a lead-based paint condition that allegedly injured the infant plaintiff. More specifically, the Court found that contract language giving the agent "complete and unfettered authority to undertake all repairs costing less than" $2,000, as well as the repair of any condition it deemed an emergency, could give rise to a finding of control.

The Court also found that issues of fact existed as to whether the agent could be held liable to plaintiffs for its alleged affirmative acts of negligence (again, assuming a finding of exclusive control). The Court observed that the agent purportedly failed to timely or adequately remedy the condition despite plaintiff's repeated complaints for several years. In addition, the agent did not move the infant plaintiff into another apartment until two months after the Department of Health and Mental Hygiene had found 10 lead-based paint violations.

Helpful Practice Tip: Remember to Object to Jury Verdict Sheet When Necessary

Also in Aguilar v. New York City Transit Authority, the trial court took into consideration the extensive proof of plaintiff's psychological trauma, to recommend that the jury verdict sheet include an itemization of damages for past and future mental pain and suffering as well as past and future physical pain and suffering. The defendant failed to object, but apparently raised the novelty of this practice as an issue on appeal. In declining to consider the issue, the First Department held that "[b]ecause defendants failed to object to the errors in the verdict sheet, the charge became the law applicable to the determination of the case." Moreover, the Court also observed that the error in the charge was not so fundamental as to prevent the jury from fairly considering the issues at trial.

Recent Pain and Suffering and Loss of Consortium Awards For Leg Amputation

In Aguilar v. New York City Transit Authority, the First Department described the accident and injuries involving the plaintiff as follows: "Plaintiff, a 45-year-old married mother of three, was hit by a bus, dragged along the street and remained under the bus for some time while rescuers attempted to free her. As a result of the accident, her left leg was amputated above the knee and her right leg was rendered, essentially, useless. Plaintiff underwent 10 surgeries, had numerous setbacks and suffers from post-traumatic stress disorder and severe depression. She depends on others for the most basic of care, and because of complications from her prosthesis and residual pain from the accident, she has been unable to engage in relations with her husband."

The jury awarded the plaintiff $8 million for 3.7 years of past pain and suffering and $8 million for 32.6 years of future pain and suffering. The jury awarded the husband $1 million each for past lost services and future loss of services. On appeal, the First Department conditionally reduced the awards to $5 million for past pain and suffering, $5 million for future pain and suffering, and $500,000 for past loss of services, thereby affirming the future loss of services award of $1 million.

Missing Drain Cover Not A Structural Defect

In Harris v. Trustees of Columbia University, the First Department held that a missing drain cover is not a structural defect for purposes of imposing liability upon an out-of-possession landowner who retains the right of re-entry to its premises. The Court also held that Building Code provisions pertaining to load-bearing floors were inapplicable to plaintiff's claim, since the provisions were intended to protect against a harm not suffered by plaintiff.

Court of Appeals Reminds Us of Broker's "Dual Agency Status"

In People v. Wells Fargo Ins. Servs., Inc., the Court of Appeals held that an insurance broker does not breach its fiduciary duty to its customer when it fails to disclose the fact that the broker will receive compensation from the insurer for the policy it will ultimately place on behalf of the customer. The Court noted that this practice has recently been prohibited by regulation of the Insurance Department (11 NYCRR 30.3[a][2] effective January 1, 2011). Since the allegations in this particular case arose prior to enactment of the regulation, and because the regulation is not retroactive, the Court found that it did not apply to this case.

The broader significance of the Court's decision, however, is its reminder that typical agency principles are not strictly applied to brokers. The Court observed that a broker is the agent of the insured, but customarily is paid by the insurer. The broker, at times, also acts on behalf of the insurer, i.e. when collecting premiums. The broker thus has a more complex relationship with its customer than a typical agent. The Court further described the broker as having a "dual agency status."

Court Dismisses Action In Favor of Non-Appealing Party

In Ikeda v. Hussain, the First Department reversed the denial of defendant Hussain's motion for summary judgment on threshold serious injury grounds, granted the motion and dismissed the plaintiff's complaint. Upon a search of the record, the Court also granted the cross-motion of non-appealing co-defendants, Christine and Samantha Brooks. The Court held "if plaintiff cannot meet the threshold for serious injury against one defendant, [she] cannot meet it against [others]" (citing Taylor v Vasquez, 58 AD3d 406, 408 [2009] [internal quotation marks omitted]).

Court Of Appeals Addresses Proof Of Damages In A Wrongful Birth Case

In a wrongful birth action, the plaintiff alleges that the defendant failed to detect birth defects in utero and had the defects been detected the parents would have taken steps to terminate the pregnancy.  Damages in such an action are the increased financial obligation to the parents arising from the extraordinary medical treatment the child will need during his/her minority. 

In Foote v. Albany Medical Center, the plaintiffs brought a wrongful birth action claiming through their expert that while government services were available to pay for the cost of care for the child, those services only provided a baseline and did not provide the child with "optimal" care.  The Supreme Court granted the defendants' motion for summary judgment finding that the plaintiffs failed to raise a question of fact as to whether they had or will incur extraordinary expenses in raising the child because of the availability of government services.  The Third Department, however, reversed finding that the plaintiffs' expert affidavit raised a question of fact as to whether available government services were sufficient to meet all of the child's needs.  The Third Department also noted that to the extent government services were available, they would be set off as collateral sources. 

Today the Court of Appeals affirmed holding that the plaintiffs raised a question of fact as to whether there is a difference between the resources provided by government programs and the extraordinary medical and other treatment or services necessary for the child.  The Court, however, did not express an opinion whether pursuant to the statutory collateral source rule "'the availability of another source of compensation does not obviate'" plaintiffs' injury but, instead, can only offset any damages awarded after trial (Foote, 71 AD3d at 28). That issue, along with issues pertaining to liens, if any, and the underlying medical malpractice issues remain open for consideration by Supreme Court."

The implication should be that damages are limited to only what the parents will have to pay out-of-pocket, above and beyond what is already publically available at no charge to them, in order to meet the child's actual needs.  

Second Department Agrees With First That Ex Parte Arons Interviews Permitted Before Note Of Issue

Following the Court of Appeals decision in Arons v. Jutkowitz, some questioned whether ex parte interviews of nonparty treating physicians were allowed only after the filing of the note of issue. In Wright v. Stam, the Second Department agreed with the First Department's decision in Shefer v. Tepper, that such interviews were allowed, and in fact, preferred prior to the filing of the note of issue.  

First Department Agrees With Third Department On Collateral Source Issue

In Adams v. Genie Indus., Inc., at issue was whether the defendants were entitled to collateral source offsets for future Social Security disability benefits and Social Security benefits received by the plaintiffs' daughter.  The trial court granted an offset of $608,559.08 for SSD benefits and $24,000 for Social Security benefits for the plaintiff's daughter.  The First Department, however, reversed holding that the defendants failed to prove with reasonable certainty that SSD benefits would continue because the jury found that the plaintiff would be able to return to work.  Furthermore, the Court followed the Third Department (Young v. Knickerbocker Arena, 281 A.D.2d 761 [3rd Dept. 2001]) in holding that Social Security benefits for a child are not collateral sources because these benefits belong to the child and not the plaintiff. 



Case To Watch At The Court of Appeals

Yesterday the Court of Appeals heard arguments in State Farm Mut. Auto Ins. Co. v. Langan.  The case will ask the Court to revisit its 1963 decision in McCarthy v Motor Veh. Acc. Indem. Corp. (16 AD2d 35 [1962], affd 12 NY2d 922 [1963]), which upheld the denial of uninsured motorist benefits for injuries resulting from intentional conduct. As Justice Mastro of the Second Department, however, noted in his partial dissent "in the years since McCarthy was decided, the overwhelming national trend has been to permit such coverage under facts similar to those at bar, with a substantial majority of jurisdictions now doing so."  The Court, therefore, could decide to adhere to years of precedent or break from precedent and join the majority of other states.  A decision can be anticipated in mid-March. 

At issue is also whether the plaintiff is entitled to recover benefits under the policy's mandatory personal injury protection (PIP) endorsement and its death, dismemberment, and loss of sight provisions.  The majority held that unlike with uninsured motorist benefits, intentional conduct was irrelevant.  The issue is whether from the insured's perspective the accident was unexpected, unusual or unforeseen.  The dissent, however, found such a decision inconsistent with its prior holding in this case that no coverage was available for intentional conduct under the entire policy. Furthermore, the dissent argued that it could not support "radically" different interpretations of similar language within the same policy. 

Second Department Reinstates Class Action By Delivery Drivers

Hernandez v. Chefs Diet Delivery - In a class action brought by delivery drivers pursuant to Labor Law Article 6, the defendants moved to dismiss on the basis that the plaintiffs were independent contractors.  The Supreme Court agreed, but the Second Department reversed holding that the facts set forth in the complaint were sufficient to establish that the defendants exercised the requisite degree of control over their work or the means to do their work.  According to the Court, "[s]pecifically, the plaintiffs alleged that the defendants, among other things, provided daily delivery manifests directing the drivers as to where deliveries were to be made, reimbursed the drivers for mileage, and required the plaintiffs to attend mandatory meetings, to obtain approval for vacation time, to undergo approximately one to two weeks of training, and to refrain from playing loud music while making deliveries."

The Appellate Division also held that federal income tax forms designating some of the plaintiffs as independent contractors were not conclusive.  Additionally, a confidentiality and noncompete agreement signed by one of the plaintiffs was not dispositive.  Instead, the Court noted that the noncompete agreement weighed in favor of the plaintiffs.

Additional Insured's 4 Month Delay In Providing Notice of Accident Held Untimely As A Matter of Law

In Kogan v. North St. Community, LLC, the plaintiff was injured in a slip and fall on ice that had allegedly accumulated in a parking lot owned by North St. The First Department affirmed the denial of North St.'s motion to dismiss, finding that questions of fact existed as to whether North St. had notice of the alleged condition. The Court dismissed the case against North St.'s snow removal contractor, Tripicchio, finding that Tripicchio was not obligated to salt the parking lot. The Court further held that Tripicchio could not be obligated to indemnify North St. under either contract or common law.

Finally, the Court held that Tripicchio's insurer, Merchants Mutual, was not obligated to insure North St. for this loss. It was established that North St. learned of the accident approximately two weeks after it occurred, but failed to notify Merchants until four months later. This delay, the Court held, was untimely as a matter of law.

Default Reinstated Where Plaintiff Failed To Show Meritorious Cause of Action

In Chiaramonte v. Coppola, an action alleging medical malpractice and wrongful death, the trial court had granted plaintiff's motion to vacate a default judgment entered against her for failure to appear at a scheduled status conference (see 22 NYCRR 202.27[b]). On appeal, the First Department reversed, finding that plaintiff had failed to show a meritorious cause of action. The Court observed that the affidavit of plaintiff's expert failed to make factual allegations, describe the extent of his or her knowledge of the matter, or state with specificity the observations as to the procedures or treatments performed and defendant's alleged deviations from the acceptable standards of medical care. Nor did the expert explain how the alleged departures from those standards contributed to the decedent's death.

First Department Departs From The Remainder of The Appellate Divisions to Find 240(1) Liability For Fall From "Passageway"

In Auriemma v. Biltmore Theatre LLP, the plaintiff, who was assigned to install electrical conduit in a building, was injured in a fall from a plank that was being used by workers to enter an excavation trench. The plaintiff had planned to cross the trench by walking down the plank, crossing the trench to a ladder on the other side and then ascending the ladder back to the ground floor. The plank gave way and the plaintiff fell to the bottom of the trench. The plaintiff was not performing work in the trench.

In holding that the plaintiff was entitled to partial summary judgment on liability pursuant to Labor Law 240(1), the First Department rejected the defendant's argument that 240(1) did not apply because the plank was a passageway. In so holding, the decision of the First Department is in conflict with the remainder of the Appellate Division (and its own prior precedent, see Ryan v. Morse Diesel, Inc., 98 A.D.2d 615 [1st Dept. 1983] [an accident arising on “a passageway does not lie within the purview of section 240(1)”]).

For example, in Paul v. Ryan Homes, Inc. (5 A.D.3d 58 [4th Dept. 2004]), the plaintiff, a painter, attempted to enter a house under construction by using an unsecured plank. The plank tipped, causing him to fall to the concrete floor. The Fourth Department held that 240(1) did not apply because the plaintiff “used the plank as a passageway to enter the house, and there is no evidence in the record before us that the plank was used as a scaffold, ladder or other device enumerated in the statute” (id. at 61) . In other words, the plank was not a tool used in the performance of the plaintiff’s work, but rather was “merely a passageway from one place of work to another” (id.).

Similarly, in Donohue v. CJAM Associates, LLC (22 A.D.3d 710, 711-712 [2nd Dept. 2005]), the plaintiff fell from a ramp which provided access to the building where he was working. The Second Department held that “[t]he ramp from which the injured plaintiff fell was not being utilized in the performance of his work in the building under construction, i.e., it was not being utilized as a ladder, scaffold, hoist, or other safety device for the benefit of the injured plaintiff in his work. Rather, it was used as a passageway for laborers at the work site and, as such, did not come within the purview of Labor Law § 240(1)” (id. At 711-712).

In Straight v. McCarthy Bros. Co. (222 A.D.2d 775 [3rd Dept. 1995]), the plaintiff, a steamfitter/plumber, was injured at a construction site when he fell from a plank while entering the building where he was working and sustained injuries. The Third Department held that “the plank was not being utilized in the performance of Straight’s work in the building under construction, i.e., it was not being utilized as a ladder, scaffold, hoist or other safety device for the benefit of Straight in his work as a plumber. Rather, it was used as a passageway for laborers to transport materials and debris at the work site and, as such, did not come within the purview of Labor Law § 240(1)"(id. at 776).