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Envista Forensics White Paper

Designed to Fail Controlling How Machinery and Systems React When Failure Happens

Author: Melissa Simpson, P.E., Project Engineer, Envista Forensics

Although the phrase “failure is not an option” may be a common philosophy, the prudent engineer will consider the effects of failure and the preferred outcome in order to mitigate dangerous or undesirable results. Though the future cannot be predicted with certainty, the certainty of failure is assured. When it comes to the design of machinery or systems, there is a reasonable expectation for engineers to render a design with careful consideration to operation in both ideal and less-than ideal circumstances. Following industry standards and best practices are implicit in responsible engineering. Read the full article

 

Uninsured and Underinsured Motorist Coverage in New Jersey

Source: Zarwin, Baum, DeVito, Kaplan Schaer Toddy, PC

On January 10, 2022, New Jersey lawmakers agreed to proposed litigation exposing insurers to potential bad faith lawsuits where an unreasonable delay or denial of payment on uninsured or underinsured motorist benefits is determined to have taken place. S.B. 1559, known as the New Jersey Insurance Fair Conduct Act, was then signed by Governor Phil Murphy, and the statute went into effect on Tuesday, January 18. Notably, the new law allows litigants successful in proving a claim under this statute to recover extra-contractual damages, up to three times the limit of their policy, as well as attorney’s fees.
As is common with newly enacted statutes, there is some question as to how the law will be applied. The law enables those entitled to uninsured (UM) or underinsured (UIM) coverage to file suit against an insurer who has:
  1. unreasonably denied a claim for coverage or payment of benefits,
  2. unreasonably delayed coverage or payment of benefits, or
  3. Any violation of the provisions of section 4 of P.L. 1947, c. 379 (C. 17:29B-4)[1]
An individual who brings suit against an insurance carrier, pursuant to this act, shall not be required to prove the insurance company’s actions were of such a frequency as to indicate a general business practice.
If the claimant establishes a violation of this new Act, they are entitled to:
  1. Actual damages caused by the violation of this act, which shall include, but not be limited to, actual trial verdicts that shall not exceed three times the applicable coverage amount; and
  2. Pre- and post-judgment interest, reasonable attorney’s fees, and all reasonable litigation expenses
It is important to note the new statute is limited to UM and UIM coverage, and not to other coverages provided by the insurer. Where, as is the case here, a statute contains such seemingly subjective standards as “unreasonable behavior,” the question will frequently arise how exactly an insurance company may properly act without triggering exposure. Aside from the specific examples identified above, there will, unfortunately, be little actual guidance until the statute is implicated in future litigation.
One final note on the breadth of applicability of the new statute. “Insurers” under the new law is defined to include “any individual, corporation, association, partnership or other legal entity which issues, executes, renews or delivers an insurance policy in this State, or which is responsible for determining claims made under the policy.” The clear implication based on the plain language of the statute is the newly created statutory bad faith liability could potentially attach to individual claims adjusters. Whether this is simply a poorly worded statute or the legislature’s intention was to actually hold individual adjusters personally liable is not yet clear.
Please contact Matthew Kessler ([email protected]) or Philip Odett ([email protected]) with any questions on the new statute or any aspect of New Jersey automobile coverage or litigation.
[1] Section 4 of the referenced statute (known as the New Jersey Unfair Claims Settlement Practices Act) lays out 15 prohibited actions; violation of these provisions is one of the bases for recovery under the New Jersey Insurance Fair Conduct Act.
 

Is Joint and Several Liability Alive in Pennsylvania?  The Fair Share Act After Spencer

For the last decade, following the passage of the Fair Share Act, civil defendants in personal injury matters were relieved to only be paying their “fair share” when a jury would award a Plaintiff damages. In other words, if a party was found to be 10% liable, they would pay 10% of the award. However, recently there have been two Superior Court cases that have cast doubt on the intention of the Fair Share Act.

The Fair Share Act, 42 Pa.C.S. § 7102, was passed in 2011. The act was designed to limit the liability of multiple tortfeasors when they were found to be less than 60% at fault. 42 Pa.C.S. § 7102(a)(1)(3)(iii). When there is more than one tortfeasor involved, “each defendant shall be liable for that proportion of the total dollar amount awarded as damages in the ratio of the defendant’s liability to the amount of liability attributed to all defendants” or other individuals determined to be liable. 42 Pa.C.S. § 7102(a)(1)(2). The Fair Share Act effectively prevented individuals and businesses who were only partially responsible for an incident to only pay their “fair share” of the damages. However, Spencer v. Johnson reshaped the legal landscape for tort law in Pennsylvania. 249 A.3d 529 (Pa. Super. Ct. 2021).
 
Spencer involved a pedestrian struck while crossing the street. The vehicle that struck the pedestrian was a company vehicle driven by an employee’s husband. The employee’s husband was not employed by the company. The husband operated the vehicle without the employee’s consent and while the employee was at a family gathering unrelated to her work. It was undisputed that the pedestrian was not at fault for the accident and the driver was at fault.
 
The pedestrian sued the company, employee, and husband under a theory of negligence and several vicarious liability theories. The jury found the company 45% liable, the husband 36% liable, and the employee 19% liable. At this juncture, the Fair Share Act comes into the legal analysis of the case. No party was found to be more than 60% liable. Therefore, under the Fair Share Act, each party was liable only for their percentage of liability. For example, the company would only be responsible for 45% of the damages since they were found to be 45% liable. 
 
 At the trial level, the plaintiff argued the company’s share of liability should be coupled with the employee’s liability since it was a company vehicle. The trial court rejected this argument because the employee was not operating in the scope of her employment when she was attending a non-work-related family party. The plaintiff appealed the trial court’s decision to the Superior Court. Not only did the Superior Court reverse the trial court based on the fact that the employee was required to be available “24/7” and drove the vehicle to her mother’s home, but the Superior Court engaged in a sua sponte discussion of the parameters of the Fair Share Act. This sua sponte discussion set forth a was a complete reversal as to how the Fair Share Act has been interpreted by Courts.
 
Spencer has the potential to significantly reshape the way the Fair Share Act will be applied by the Courts. Previously under the Act, each party was evaluated to determine their liability. Once a single tortfeasor surpassed the 60% threshold, then joint and several liability could apply. After Spencer, if a plaintiff is found to be 0% comparatively negligent, then the Fair Share Act does not apply. Thus, an individual or business tortfeasor could be subject to joint and several liability, meaning they could be held 100% responsible to pay for all the damages even if they are only determined to be 1% liable.
 
After Spencer, the question arises whether or not this interpretation of the Fair Share Act will stand. Will the Pennsylvania Supreme Court address the matter? Will the Superior Court use this interpretation in a holding? In November, eight months after Spencer, the Superior Court in Synder v. Hunt, No. 851 EDA 2020, 2021 WL 5232425, at *6 (Pa. Super. Ct. Nov. 10, 2021) previewed how the Courts would be interpreting the Fair Share Act after Spencer.
 
Synder involved a woman, the plaintiff, tripping over a shared section of driveway and was injured. Several properties had easements to utilize the driveaway. As part of each property’s right to utilize the driveway, they were required to maintain the driveaway. The plaintiff sued the owners of the various properties that utilized the driveway and were required to maintain it. In an unpublished opinion, the Superior Court explained that without finding the plaintiff contributed to her injury, the various property owners are not shielded from liability from the Fair Share Act. The Superior Court’s opinion again sua sponte instructed the trial court to apply joint and several liability to the Defendants due to there being no proven allegation of comparative negligence and cited to Spencer.
 
Currently, there is a debate as to whether Spencer  (and now Snyder) is binding law on lower courts or if it is mere dicta. The Synder opinion is not published nor is it precedential. However, Synder displays the Superior Court’s understanding that Spencer was not an anomaly and Defendants who have minimal potential liability in a large damages case must be prepared to potentially “pick up the whole bill” if a jury finds them at 1% negligent and does not find Plaintiff negligent.
 
Zarwin Baum will continue to monitor the status of the proceedings and any impact on the law of damages and liability. For questions or further information, please contact Theodore Schaer ([email protected]; 267-765-9606), Gregory Mallon ([email protected]; 267-765-0344) or another member of the Casualty and Professional Liability Defense Practice Group. Law Clerk Matthew Coughlin contributed greatly to the writing and research for this article.
 

Congress Ends Arbitration for Employee Related Sexual Assualt and Harassment Claims.

By E. Bryan Paul

Clark, May, Price, Lawley, Duncan & Paul, LLC

On February 10, 2022, Congress passed The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2022. The intent of this law is to end any dispute as to whether the Federal Arbitration  Act, 9 U.S.C. § 1 et seq. (FAA), preempted state laws that sought to prohibit mandatory pre-dispute arbitration of employee sexual harassment claims. The law amends the FAA and invalidates pre-dispute arbitration agreements between employers and employees that would obligate the parties to arbitrate claims of sexual assault or sexual harassment. It is expected that President Biden’s will sign the Act into law in the coming weeks.   

It is the desire of Congress and the President that these cases be litigated in open Court, rather than arbitration. Should both parties consent to the process, they could still arbitrate the claims.

This is a significant development for employers and insurers alike. One of the positive aspects of arbitration is that it enables employers to avoid the unpredictability of jury trials while reducing the cost and expense of litigation.  Insurers and employers should take this into account when considering the potential costs of such claims. Arbitration agreements remain valid as to all other forms of discrimination. 

Given this development, Employee Arbitration Agreements need to be revised to take into consideration this new law. This new development reinforces the need for strong and updated handbooks, and Employers taking prompt and remedial action when a complaint of harassment is made.  

 

GVK'S Petition is Partially Successful: Comprehensive Insurance Disclosure Act is Signed Subject to Modification Agreement

By William Parra and Corey Reichardt

Source: Gallo Vitucci Klar LLP

Governor Hochul signed the Comprehensive Insurance Disclosure Act ("CIDA") into law on December 31, 2021. However, she did so subject to a "signing memo" stating that she agreed with the intent of the bill but had reached an agreement with the Legislature to ensure that the scope of the disclosure it required was "properly tailored for the intended purpose," i.e., to ensure litigants were adequately notified about of the potential limits of insurance coverage.

There are two important points to consider. First, the CIDA is presently the law and effective immediately. Defendants' compliance in pending actions is presently due in 60 days (March 1st), and within 60 days of answering in new actions. However, the Governor's agreement with the Legislature refers to chapter amendments modifying the CIDA which must be agreed to and passed by the Legislature and Governor. We understand that proposed amendments have already been drafted that address many concerns raised in our petition against the CIDA's present form. When passed, the proposed changes should significantly lessen the time, expense and burden to defendants and their insurers, in complying with the CIDA.

Since the CIDA is presently law, the proposed amendments have not been agreed to or passed, and it is unclear when they may be, we summarize the CIDA's requirements due by March 1st, as well as the proposed modifications. The CIDA significantly expands defendants and their insurers' obligations, amending CPLR §3101(f) to require the following additional disclosures:

  • Complete copies of all primary and excess policies or other agreements (SIRs, captives, etc.) that may cover any part of a judgment, including their related policy applications, which were previously expressly exempt from disclosure under CPLR §3101(f);
  • Identification of any other lawsuit(s) that have or may deplete the limits of such policies, including their caption, filing date, identity and contact information for each party's attorneys, claims adjusters, TPAs and claims adjusters the TPAs report to;
  • The amount of legal fees/expenses in other suits that have eroded such policy limits, including identity of the receiving attorneys/law firms;
  • The present/remaining amount of such policies' coverage limits;
  • Defendants have an "ongoing obligation," through the course of litigation and for 60 days after any settlement, judgment or appeal, "to make reasonable efforts to ensure" this information remains "accurate and complete," and to provide updated information within 30 days of when defendants or their attorneys become aware of it; and
  • Pursuant to newly created CPLR §3122(b), defendants and their attorneys must each certify that all required disclosures are accurate and that they will take reasonable efforts to ensure that they remain accurate, as described above.

Compliance with these directives will significantly increase the time and expense required of defendants, their attorneys and adjusters alike. There is understandably confusion and concern over whether to immediately begin complying with them in pending matters or wait and see whether less onerous changes will be enacted in time to render the present requirements moot.

The most significant proposed amendments to the CIDA, include:

  • Deleting the CIDA's retroactive effect, limiting its application to actions commenced after the amendments' effective date;
  • Increasing the disclosure deadline in new actions from 60 to 90 days;
  • Deleting the obligation to disclose policies and all other suit/attorney/adjuster information in other actions that have or may erode policy limits;
  • Deleting the policy application disclosure requirement; and
  • Limiting the "ongoing [disclosure] obligation" to require reasonable efforts to provide accurate information initially, at the note of issue filing, and when engaging in court-conducted settlement negotiations, mediations or at trial.
The difference between the enacted CIDA's requirements and the proposed changes are significant. We will continue monitoring the legislative and executive branches' progress in agreeing to and passing less onerous amendments to the CIDA.
 
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