Defense Digest - Volume 17 No 4 (December 2011) Mar 08 Vol ... Digest V… · Vol. 17, No. 4...

Vol. 17, No. 4 December 2011

MARSHALL DENNEHEY OPENS CLEVELAND, OHIO OFFICE

By Samuel G. Casolari, Jr., Esq.*

On August 1, 2011, Marshall,Dennehey, Warner, Coleman & Gogginopened a new office in Cleveland, Ohio.Marshall Dennehey’s new Ohio office islocated on Cleveland’s historic PublicSquare, readily accessible to Cleveland’scultural and commercial life. The newoffice will serve as a platform and foun-dation for growth in the state of Ohio.

Marshall Dennehey’s Ohio officeserves the entire state of Ohio, handling complex cases in allstate and federal courts. Marshall Dennehey’s Ohio lawyershave achieved considerable success in defending clientsthrough jury verdicts and appeals. Our trial team is composedof dedicated lawyers who work diligently to achieve the bestresults consistent with client expectations and cost efficiencies.

From its new vantage point in Cleveland, Marshall Den-nehey will continue to expand throughout the state of Ohio.From Toledo to Steubenville and from Ashtabula to Cincin-nati, Marshall Dennehey’s Ohio lawyers have earned respectfor proven skills at every stage of litigation, from dispositivemotions to jury verdicts to successfully defending appeals.

Our casualty practice includes a substantial auto defensepractice, a vigorous retail and restaurant liability practice, spe-cial investigation practice, product liability, employer-relatedintentional torts, coverage issues and some of the most com-plex professional liability and appellate matters.

With our new platform in Ohio, and our commitment tocontinue our progress through the state of Ohio, your casesand claims are in capable and good hands. ★

* Sam, a shareholder and the managing attorney of our Cincinnati, Ohio, office, canbe reached at 216.912.3801 or [email protected].

* Dan is a shareholder in our New York City office in Wall Street Plaza. He can bereached at 212.376.6432 or [email protected].

Volume 17 • No. 4 • December 2011

On The Pulse…

OUR MARITIME LITIGATIONPRACTICE GROUPBy Daniel J. McDermott, Esq.*

What is maritime law? The terms“maritime” and “admiralty” are fre-quently used interchangeably. “Admi-ralty” refers to the body of law andprocedures that govern matters relatedto the carriage of goods or passengerson the high seas and navigable inlandwaters. The term “maritime,” however,is a little bit more general.

Today’s practice of maritime lawis said to have an ancient past that dates as far back as 900B.C. Rich with history, our journey to undercover thesecrets of modern day admiralty law takes us across theAtlantic to the Mediterranean Seas where a form of inter-national law was born out of the longstanding customs ofthe sea. Fast forward to the late 14th Century, the Englishcourts established a system of separate Courts of Admiraltythat eventually made the quick boat ride across theAtlantic during the time England colonized North America.These courts were given the jurisdiction to hear civil casesknown as “a thing done upon the sea,” and this continuedin the U.S. until 1966 when the courts unified….but youalready knew all of this. Well, whatever its origin, it is veryold indeed. Doctrines only available and recognizable tothose practicing admiralty contain the true past of thisancient practice and can be found in several medievalmaritime codes—or Davy Jones’ Locker. Contrary tourban legend, I of course only know this history by secrethandshake and scrolls that were shown to me when Ibecame a Proctor of Admiralty.

(continued on page 4)

DEFENSE DEFENSE

DDiiggeesstt

Samuel G. Casolari, Jr. Daniel J. McDermott

A T T O R N E Y S - A T - L A W

FEDERALEmployment Law

Employees: Comfortable in Their Own Genes? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

FLORIDACivil Practice/Mediation

Mediation Attendance in Florida: Failure to Comply Results in Harsh Sanctions . . . . . . . . . . . . 7

Civil Practice/SettlementsTwo Seldom Noted Traits of Florida Statutory Proposals for Settlement . . . . . . . . . . . . . . . 8

SIU/FraudOn Borrowed Time: the Examination Under Oath Explained . . . . . . . . . . . . . . . . . . . . . . . 10

NEW JERSEYInsurance Coverage

The Duty to Defend Under An Indemnification Clause, All Defendants Secure Summary Judgment – Two Wrongs (The Trial Court and Appellate Division) Don’t Necessarily Make A Right, At Least As to A Question Not Answered by the New Jersey Supreme Court . . . . . . . . . . . . . . 12

NEW JERSEY (cont.)Insurance Coverage

New Jersey Supreme Court Broadened View of Duty to Defend A Claim for Emotional Distress . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Workers’ CompensationCan “Excess” Mean Less? A Broader Interpretation in Cardiovascular Injuries. . . . . . . . . . 21

PENNSYLVANIAAttorney Liability

An Argument Against Imposing Liability Against Attorneys for Aiding and Abetting their Client’s Breach of Fiduciary Duty Under Pennsylvania Law . . . . . . . . . 22

Health CareCounsel Fees on Future Medical Damages in Medical Malpractice Cases: Do We Have to Cut Another Check? . . . . . . . . . . . . 24

Health Care LiabilityClarifying Qualifications Necessary to Provide A Written Statement in Support of A Certificate of Merit . . . . . . . . . . . . . . . 25

Workers’ CompensationA “Super” Victory for Employers . . . . . . . . . . . . . . . 27

Defense Digest


On The Pulse…Marshall Dennehey Opens Cleveland, Ohio Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Our Maritime Litigation Practice Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

A Message From Our Executive Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

On The Pulse…Important and Interesting Litigation Achievements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Our Recent Appellate Victories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Other Notable Achievements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Our Office Locations and Contact Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Firm Background and Statement of Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31About Our Publication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

IN THIS ISSUE

Defense Digest


The oppressive days of sum-mer are now long behind us,together with the seemingly steadyweekend rain followed by Hurri-cane Irene together with otherstorms. What does this mean forthe firm? Once Labor Day arrives,so does the busiest time of the year. Traditionally, the fall isfilled with trials, and with close to 450 trial lawyers in thisfirm, there is not a day when the firm does not have multipletrials ongoing.

This is not to say that during the summer months the firmwas not busy planning. It is generally during this time of the yearthat senior management makes plans for the upcoming year. Letme advise you of certain decisions that have been made and howthe implementation of those decisions will enhance the servicethat we provide to you, our loyal clients.

As referenced in this column previously, a final decision hasbeen made to relocate our Philadelphia office to 2000 MarketStreet. Construction will commence in the immediate future.This office will be state-of-the-art both in design and in tech-nology. To an extent, we had outgrown our current space, withMarshall Dennehey lawyers and employees being scattered oneight different floors. The new space allows the firm to con-solidate to five floors, one of which will include a conferencecenter. It also allows for additional growth.

Aside from the move to 2000 Market, the firm has investedin two new critical systems: new billing and accounting systemand new phone system. With so many of the firm’s clients havingtheir own billing mandates and with the move to electronicbilling predominant in the defense industry, the new billing andaccounting system will be better able to respond to the needs ofour clients and coordinate disparate billing systems. Training isongoing, and we hope to have this system in place well beforethe firm’s move to 2000 Market Street. The phone system wasmandated in part by the simple fact that the firm, because of itsgrowth, had outgrown the current system.

In terms of staffing, I am pleased to advise that on October1, 2011, Arthur Bromberg and Anna DiLonardo joined ourfirm as shareholders in our newest office located in Long Island,New York. These two shareholders will bring with them twospecial counsel and two associates. Arthur Bromberg and anassociate will work out of the firm’s Roseland, New Jersey, office.

We are also pleased toannounce the hiring of MaureenFitzpatrick as special counsel tothe firm. Maureen has spent acareer in handling traditional pro-fessional liability matters, in par-ticular, lawyers and accountants

malpractice together with employment matters. Maureenbrings her talents to an already strong litigation practice groupin the Professional Liability Department and will be housed inour King of Prussia, Pennsylvania office.

The firm also continues to hire entry level lawyers. I ampleased to advise that the firm has hired three lawyers whowere summer associates in 2010. Specifically, ChristopherDiCicco will be working in our Roseland, New Jersey, office;Jillian Marks in our Manhattan office; and Peggy Reilly inPhiladelphia. In addition, the firm also hired four lawyers whohad completed judicial clerkships. They are Aaron Hymes,Allison Krupp and Anison Keffer, Harrisburg, Pennsylvania,office; and Julie Dorfmann, Roseland, New Jersey, office.

Another decision reached over the summer was the reloca-tion of the firm’s Employment Law Practice Group into the Pro-fessional Liability Department. Previously and due to industrymandates at the time, this group was housed with the Workers’Compensation Department as many of our clients, particularlyself-insured clients, utilized the same risk management team tohandle employment and workers’ compensation matters. Afterreviewing this concept, we believe that over the last ten years,these disciplines have been separated and most of our clientsinclude employment practices as a part of a professional liabilitypractice. This will go into effect January 1, 2012.

Finally, as many of you know, Kathleen McGrath has fora long time served as the chair of the firm’s Health CareDepartment. Under her supervision, the department hasgrown substantially and is now regarded as the strongest inPennsylvania, New Jersey and Delaware. Aside from overseeingthe Health Care Department, Kate also served on the board ofdirectors and was an active member of the CompensationCommittee. As of January 1, 2012, Kate will be giving up heradministrative responsibilities. However, Kate, who wasnamed in 2011 as the Montgomery County, Pennsylvania TrialLawyer of the Year, will remain with the firm handling cases andworking with Kevin FitzPatrick as he transitions into his roleas the firm’s new director of the Health Care Department.


A MESSAGEfrom ourEXECUTIVECOMMITTEEBy Philip B. Toran, Esq.Chairman of the ExecutiveCommittee

* Phil Toran can be reached at 215.575.2813 or [email protected].

OUR MARITIME LITIGATION PRACTICE GROUP(continued from page 1)

Our current maritime practice at Marshall Denneheyhas grown and still takes us on a fascinating journey muchlike its ancient past. In less than two years, the MaritimeLitigation Practice Group has extended its footprint fromthe New York City metropolitan area to such diversedomestic locations as Houston, Texas; St. Louis, Missouri;Duluth, Minnesota; and Long Beach, California. Interna-tionally we are in Germany, France, Asia and Somalia; notto mention taking on new cases pending in Florida;Philadelphia, Pennsylvania, and southern New Jersey.

As diverse as the geographic locations of the maritimepractice, the types of representations we are handling con-tinue to be equally as diverse.

Amongst a varied caseload, the group handles cargosubrogation cases involving onboard vessel fires, contain-ers overboard and the damage, loss or theft of goods dur-ing carriage via various modes of transportation, such asocean vessels, inland truckers and rail carriers. In one casea vessel lost containers overboard when the vessel rolledover and sank in Caribbean waters. Prosecuting a cargoloss of this size can take us in to several million dollars.Another maritime casualty example takes us on a voyagefrom east Asia to the ports of our own west coast. The car-go on this specific vessel sustained fire damage. Again, thisloss involves several million dollars worth of cargo.

The liability side of our maritime practice is the areain which we have experienced the biggest growth. In theNew York metropolitan area, we are defending severalmarine construction bodily injury cases, representing gen-eral contractors and municipalities for several agencies inthe city of New York. We are defending cases brought bydock builders and long shore harbor workers. Those typesof cases fall under the purview of general maritime law, theLong Shore Harbor Workers’ Compensation Act, theJones Act and New York State Labor Law. Our group hasfurther presented lectures to the Maritime Law Associationand Marine Claims & Recovery Forum on the interplaybetween New York Labor Law (specifically, the “scaffoldlaw”), which is an absolute liability statute, and other tradi-tional maritime remedies.

Traveling to new territory, we head to the City ofBrotherly Love where we represent a Philadelphia portauthority, a major hub of maritime activities. Some of thematters we are handling here are a mediation involving alease dispute with one of the major marine terminal oper-ators in the port. We work closely with their chief counseland executive director, advising the board of directors on

the best strategies and options to pursue in this dispute.We successfully defended the port in a recent lawsuitbrought by a longshoreman who was injured during cargodischarge operations from a vessel at a marine terminal.

No maritime practice would be complete without amatter taking us into international waters. We recentlyprovided an opinion letter stating that an insurer maydecline coverage to a world-renowned humanitarian orga-nization for a loss in Somalia they claimed was coveredunder a marine warehouse insurance policy. Somali terror-ists invaded and took over the organization’s warehouse,resulting in a loss of over $4 million to the organization.The insurance policy excluded losses due to acts of terror-ism. Although the insured’s broker argued that the loss wasnot a result of terrorist activity, our analysis found to thecontrary. As a result of our opinion letter, the insurerdeclined coverage, and the insured ultimately withdrewthe $4 million claim.

In New Jersey, we are defending a marine constructioncompany in the Cape May area for a claimed defense inthe design and construction of a bulkhead for a condo-minium association on Ludlam Bay. We are also defendingagainst a $5 million allision claim in Duluth, Minnesota,against a ship repair company. In this matter, a 1,000 toncargo ship hit an underwater hidden obstruction, floodingthe ship’s engine room and causing the ship’s stern to set-tle to the bottom of the slip.

Our case handling also resulted in having a case dis-missed for lack of personal jurisdiction that was pending infederal court in New York. This case involved a products lia-bility claim for the wrongful deaths of two operators of ahigh-performance power boat during a competition inwhich the boat was travelling in excess of 120 miles perhour when it flipped over, causing the deaths of the twooperators. Our client is a Missouri resident who does nobusiness in New York. The case is being transferred to theFederal District Court in Missouri.

The journey continues as more of Marshall Den-nehey’s offices are becoming actively involved in the admi-ralty and maritime practice like never before. In the greatsunny state of Florida, attorneys from our four offices arehandling several maritime matters including cargo subro-gation and defense of freight forwarders. We look forwardto the ever-increasing presence of our maritime groupfrom New York to Florida and anywhere in between. ★

Defense Digest


Defense Digest


The Genetic Information Nondis-crimination Act of 2008 (GINA) (P.L.110-233, 122 Stat. 881) may haveentered the employment litigation arenawith only a whisper when it took effecton November 21, 2009, but the newestlaw banning discrimination has beenlabeled by some as “the most sweepingfederal anti-discrimination law in nearly20 years.” New Law Bans Genetic Dis-

crimination, by Joe Markman, Los Angeles Times, November21, 2009. GINA protects the privacy of genetic testing resultsand prohibits health insurance providers and employers fromacting in a discriminatory manner through the improper collec-tion and/or use of genetic information.

Under Title II of GINA, it is illegal for an employer toactively seek out or use genetic information to discriminateagainst employees or applicants. Genetic information includesinformation about an individual’s genetic tests and the genetictests of an individual’s family members, as well as informationabout the manifestation of a disease or disorder in an individualor the individual’s family members. Family medical history isalso included in the definition of genetic information because it is often used to determine if someone has an increased risk of developing a disease, disorder or condition in the future.Genetic information does not include information such as age,gender, race or ethnicity.

In enacting GINA, Congress recognized that with advance-ments in genetic, genomic and reproductive technologies, wehave the ability to develop better knowledge of disease and inturn more effective treatments to combat disease. With scientificadvancement it is possible to catch disease at its onset (if notbefore) and perhaps offer preventative or curative therapies inthe not too distant future. However, many have concern about

the privacy and protectability of genetic testing and, thus, do notsubmit to genetic screening for fear that this sensitive informa-tion could be released and interfere with their health insuranceand employment. An employee who is at a greater risk of devel-oping cancer could be more expensive to an employer both froma productivity perspective as well as a health insurance perspec-tive, and, thus, an employer might view this employee as lessdesirable. GINA was enacted to protect those who want to knowwhether their genetic makeup makes them more vulnerable tocertain diseases, like Alzheimer’s Disease, without risking poten-tial repercussions from employers or health insurers who couldgain access to such data.

Privacy RightsAccording to the EEOC regulations, an employer violates

GINA by requesting or seeking genetic information. Thus, notonly is an employer prohibited from asking an employee forgenetic information, he also cannot conduct internet searchesthat could lead to the discovery of genetic information (i.e.employer cannot search an employee’s name and heart disease),actively listen to third party conversations or ask an employeeabout his health with the intent of eliciting genetic healthinformation. While an employer can ask an employee how hermother’s cancer treatment is going, the employer may not fol-low up with questions about whether anyone else in the familyhas been diagnosed with cancer or had cancer screenings.

There is an exception for “water cooler” conversations, pro-tecting an employer from the discovery of genetic testing orinformation during casual conversation or through a Facebookstatus update where the employer is a “friend” of the employee.The regulations provide a number of other exceptions to the ruleas well, understanding that there are many innocent ways thatan employer can acquire genetic information. Employers justneed to be able to establish that they came across the informa-tion by chance and not because of a deliberate search.


Federal—Employment Law

EMPLOYEES: COMFORTABLE IN THEIR OWN GENES?By Stephanie K. Rawitt, Esq.*

* Stephanie is a shareholder in our Philadelphia, Pennsylvania, office. She can bereached at 215.557.2649 or [email protected].

● GINA protects the privacy of genetic testing results. ● Employers are prohibited from acting in a discriminatory manner through the improper collection

and/or use of genetic information.● Employers should comply with GINA’s requirements now in order to shield themselves from

liability exposure.

KEY POINTS:

Stephanie K. Rawitt

Defense Digest


Kevin has been working with Kate for the last eighteen monthsin order to ensure a smooth transition. Kevin will be joining thefirm’s board of directors. We are also pleased to announce thatWilliam Banton, Esquire will become the assistant director ofthis department.

In summary, while the summer months are often slowerpaced, management at Marshall Dennehey has been veryactive in growing the firm, strengthening its practice groups

and looking for ways to improve the delivery of legal servicesto our clients.

As I routinely do when concluding these messages, onbehalf of all employees of the firm, to our clients, I extend ourgratitude and heartfelt thanks for your ongoing support. Toour many employees, firm management hopes that thechanges addressed above only enhance your work experience atMarshall, Dennehey, Warner, Coleman & Goggin. ★

MESSAGE FROM THE EXECUTIVE COMMITTEE(continued from page 3)

EMPLOYEES: COMFORTABLE IN THEIR OWN GENES?(continued from page 5)

The regulations also provide a safe harbor for an employer’sinadvertent receipt of genetic information. Employers, for exam-ple, have the ability to request an employee’s medical documen-tation when an employee requests Family Medical Leave or seeksan accommodation under the Americans with Disabilities Act.GINA does not affect the employer’s right to request medicalinformation under these statutes. The employer should, how-ever, warn individuals and health care providers when seekingmedical information under the FMLA or ADA (or for anotherlegitimate reason) that genetic information should not be pro-vided. If, despite such a warning, genetic information is pro-vided, the employer will not be in violation of GINA.

GINA also places limitations on an employer’s ability to dis-close an employee’s genetic information. GINA requires anemployer that possesses any genetic information about anemployee to maintain such information in separate files and treatsuch information as a confidential medical record. Employers areprohibited from disclosing such genetic information except: (1)to the employee upon request; (2) to an occupational or otherhealth researcher; (3) in response to a court order; (4) to a gov-ernment official investigating compliance with GINA if theinformation is relevant to the investigation; (5) in connectionwith the employee’s compliance with the certification provisionof the FMLA or such requirements under state family and med-ical leave laws; or (6) to a public health agency.

DiscriminationGINA also prohibits discrimination on the basis of genetic

information in any aspect of employment, including hiring,firing, pay, job assignments, promotions, layoffs, training, fringebenefits or any other term or condition of employment. Thus, ifan employer becomes aware of an employee’s genetic informa-tion, that information cannot be used in making employmentdecisions concerning that employee. For example, an employercannot make employment decisions because Joe Employee has afamily history of Parkinson’s Disease or Sally Employee’s family

has the breast cancer gene. The rationale behind the law is thatno one should be denied a job or fair treatment in the workplacebased upon the concern that he or she may develop a medicalcondition at some point in the future.

ApplicabilityTitle II of GINA applies to employers with 15 more

employees and is enforceable through the procedures and reme-dies of Title VII of the Civil Rights Act of 1964.

GINA Litigation and ImplementationGINA litigation has been slow to commence. There were no

EEOC GINA claims filed in 2009 (not surprising as the law didnot take effect until November 21, 2009). In 2010, there were201 GINA claims filed with the EEOC, accounting for .02% ofthe EEOC charges filed last year. As of September 2011, the onlymention of GINA in published court opinions is where GINAwas inappropriately included by plaintiffs in multi-countemployment actions and, accordingly, summarily dismissed.

GINA’s slow start should not fool employers into thinkingthat this statute won’t lead to litigation in the future. Usinggenetic health information in making employment decisions isnot of great concern to many individuals at the present timebecause the information that GINA was designed to protect isnot, for the most part, out there at present. Our populationhas not begun to take full advantage of the information thatcan be obtained through genetic testing. However, as sciencecontinues to advance, it is likely that more will seek genetictesting. For example, within the past decade, the discovery ofthe breast cancer gene has led many women who have a familyhistory of the disease to submit to testing to determine if theyare at risk for that particular type of cancer. It is hoped thatGINA will make people feel comfortable using genetic testingto obtain this important information.


Defense Digest


There is some confusion regardingthe mediation attendance requirementsimposed by the Florida Supreme Courtand whether alternatives, such as “phon-ing in” or sending counsel as a “repre-sentative” of the carrier, suffices to meetthose requirements.

The purpose of this article is toclarify whose attendance is required andto discuss the sanctions (imposed

against the parties, their insurers and the attorneys) for failureto comply with the attendance requirements.

Finally, this article will discuss a proposed change to themediation attendance requirement that is currently under con-sideration by the Florida Supreme Court. If enacted as cur-rently drafted, it will pose increased scheduling pressure onclaims handlers and defense counsel alike.

The Current Rule: Fla. R. Civ. P. 1.720Fla. R. Civ. P. 1.720(b) specifies who must attend media-

tion, stating that unless stipulated by the parties or changed byorder of the court, a party is deemed to appear at a mediationconference only if the following persons are physically present:

(1) The party or its representative having full authori-ty to settle without further consultation;

(2) The party’s counsel of record, if any; and(3) Where insurance is involved, a representative of

the insurance carrier for any insured party who isnot such carrier’s outside counsel and who has fullauthority to settle up to the amount of the plain-tiff ’s last demand or policy limits, whichever is less,without further consultation.

It further states that “[i]f a party fails to appear at a dulynoticed mediation conference without good cause, the courtupon motion shall impose sanctions, including an award ofmediator and attorneys’ fees and other costs, against the partyfailing to appear.”

It is not enough that counsel for an insured and the insurerappears at the mediation: failure of an insurer to send a represen-tative of the insurer who has full authority to settle will result inexpensive sanctions. In Mash v. Lugo, 49 So. 3rd 829, 829-830(Fla. 5th DCA 2010), the Fifth District Court of Appeal granteda motion for sanctions against Fernando Lugo and Manuel A.Irizarry and their counsel after Mr. Lugo and Mr. Irizarry failedto appear for a court-ordered mediation conference. Mr. Mashand his counsel appeared for the mediation session, but only Mr.Lugo’s and Mr. Irizarry’s counsel, Mr. Muniz, appeared for Mr.Lugo. In response to the motion for sanctions filed by Mr. Mash,the attorneys for Mr. Lugo and Mr. Irizarry filed affidavits statingthat Lugo’s and Irizarry’s insurer, Aequicap Insurance Company,held the exclusive right to decide to defend or settle any claim orsuit within policy limits, that Lugo and Irizarry did not have theauthority to bind the insurer to any settlement, and that attorneyMuniz had full settlement authority on behalf of the insurer. Theappellate court stated that Mssrs. Lugo and Irizarry’s counsel’sclaim that he had full authority to settle the case on behalf of theinsurer did not excuse the appellees’ and the insurer’s representa-tive’s failure to attend.

Parties who fail to appear at mediation will be sanctioned(as will their attorneys who fail to advise their clients about themandatory mediation requirement). Doorstep Bevs. Of Long-wood, Inc. v. Collier, 928 So. 2nd 482, 483 (Fla. 5th DCA2006.) The facts of Doorstep were that Mr. Collier did notappear for the scheduled mediation and no motion was filedwith the court to excuse his appearance. Mr. Collier was ordered


Florida—Civil Practice/Mediation

MEDIATION ATTENDANCE IN FLORIDA: FAILURE TO COMPLY RESULTS IN HARSH SANCTIONS

By Pamela St. John Lynde, Esq.*

● For insurers, the most important thing about mediation is that it requires a representative of theinsurance carrier for any insured party who is not such carrier’s outside counsel and who has fullauthority to settle up to the amount of the plaintiff’s last demand or policy limits, whichever is less,without further consultation.

● Failure to comply with that requirement, and others, will lead to costly sanctions. ● It is possible that the mediation rules may change in the future, requiring more planning and coor-

dination between defense counsel and the claims handler.

KEY POINTS:

Pamela St. John Lynde

* Pamela is an associate in our Jacksonville, Florida, office. She can be reached at904.358.4206 or [email protected].

Defense Digest


There are two “clocks” or “faucets”that are critical for statutory proposalsfor settlement. Most people in our fieldunderstand that serving a Florida statu-tory proposal for settlement (hereinafterreferred to as a “proposal”) sooner ratherthan later is preferred from a strategicstandpoint. This is because the “clock”can start ticking on defense attorney’sfees sooner. However, what many do not

understand is that there is a corresponding “clock” that stops.This is the clock on plaintiff ’s taxable costs for purposes of cal-culating a net judgment in the event of a plaintiff ’s verdict.

In order for a defendant to be entitled to a sanction as aresult of a proposal, the plaintiff ’s net judgment is key. Such netjudgment must be equal to or less than the proposal threshold.The “proposal threshold” is that number that equals 75% of thedefendant’s proposal amount. “Net judgment” generally is thesum of two numbers: (1) the dollar verdict figure and (2) thetaxable cost award to which plaintiff would have been entitledat the time of the serving of the proposal.

The method of calculating a net judgment, and its impor-tance, is difficult to understand without considering concreteexamples. Accordingly, let us consider two scenarios. In eachscenario, we will assume that a defendant has served a valid pro-posal for $100,000 and that the jury returns a verdict for$55,000 against the defendant.

In Scenario 1, the proposal was served very late in the caseand, by then, the plaintiff had hired three experts and taken eightdepositions, incurring $30,000 in taxable costs. The net judg-ment in Scenario 1 would be $55,000 + 30,000, or $85,000.Because such $85,000 exceeds $75,000, the defendant would notbe entitled to a sanction of attorney’s fees and costs pursuant to itsproposal. Such lack of a sanction would occur despite the fact thatsuch defendant had done “well” at trial—by obtaining a $55,000verdict after serving a $100,000 proposal.

In Scenario 2, the proposal was served quite early in thecase, when the plaintiff had not retained any experts and hadtaken only two depositions, incurring only $5,000 in taxablecosts. The net judgment in Scenario 2 would be $55,000 +$5,000, or $60,000. Because such $60,000 is less than $75,000,the defendant would be entitled to a sanction pursuant to itsproposal. The sanction would be assessed against, or set offagainst, the plaintiff ’s award. Such sanction would equal thedefendant’s reasonable attorney’s fees and costs incurred afterthe date the proposal was served through the end of trial. Thissanction can obviously be quite substantial.

Thus, there are two critical “clocks,” or “faucets.” The firststart or open as to the defense attorney’s fees and costs. The second stop or close as to the plaintiff ’s taxable costs for the netjudgment calculation. By serving a statutory proposal for settle-ment as early as reasonably possible in a case, one can use the two“clocks” or “faucets” to maximize one’s leverage against theplaintiff as the case progresses. The key Florida cases on thesemechanics are the Supreme Court of Florida’s White v. Steak &Ale of Florida, Inc., 816 So. 2d 546 (Fla. 2002) and State FarmMut. Auto. Ins. Co. v. Nichols, 932 So. 2d 1067 (Fla. 2006) cases.

Statutory proposals can be effective, even against the indi-gent plaintiff. The typical plaintiff has no exposed assets orincome prospects. Here is a scenario which gives such a plaintiffsomething to lose as a result of a proposal.

We will build on Scenario 2 above involving a $100,000proposal for settlement and a net judgment of $60,000. Wewill assume that attorney’s fees and costs incurred by thedefense after the date of service of the proposal equaled$50,000. In such event, the plaintiff would only be entitled toan award of $5,000 (calculated by subtracting the sanction of$50,000 from the $55,000 verdict) plus his or her total taxablecosts on the case. The plaintiff attorney’s non-taxable costs andcontingency fee would eat up most or all of such $5,000. Theplaintiff personally would then walk away from the case as awhole with zero dollars. Such plaintiff might even still owe onmedical bills from his or her providers. Again, this plaintiff


Florida—Civil Practice/Settlements

TWO SELDOM NOTED TRAITS OF FLORIDA STATUTORY PROPOSALS FOR SETTLEMENT

By John W. Heilman, Esq.*

* John, an associate in our Tampa, Florida, office, can be reached at 813.472.7817or [email protected].

● There are two “clocks” or “faucets” that are critical for statutory proposals for settlement.● Statutory proposals can be effective, even against the indigent plaintiff.

John W. Heilman

KEY POINTS:

It is also likely that the plaintiff ’s bar has not truly graspedonto this new statute, perhaps because experienced litigatorsare aware of the challenges in establishing that an employmentdecision was made based upon genetic information. Nonethe-less, the litigation will come. Mary Employee will take FMLAleave to care for a family member with Huntington’s Diseaseand subsequently will face a layoff or staff reduction. JohnEmployee will share his family history of diabetes and thenreceive unwanted discipline. Jane Employee may oppose a jobassignment, claiming that she was assigned to a lower stress butless desirable position because she has a family history of heartdisease. Even where such tangible employment decisions areindeed based upon legitimate business reasons, GINA claimswill be filed.

The trend around the country favors protecting geneticinformation. Most recently, on September 7, 2011, CaliforniaGovernor Gerry Brown signed the California Genetic Infor-mation and Nondiscrimination Act (CalGINA) into law. TheCalifornia law is even more encompassing than GINA in that,in addition to codifying the many protections of the federal

law, it incorporates genetic information into the state’s civilrights codes. Other states have codified some form of geneticprotection laws, but California’s is the most encompassing. Itis expected that more states will enact their own versions ofGINA in the not too distant future.

Employer ActionTherefore, now is the time for employers to learn about

GINA and their obligations under this statute. Compliancewith GINA is the best means by which employers can shieldthemselves from liability exposure. What can employers donow? GINA language should be included on FMLA and ADApaperwork. Employers should also modify employee hand-books to include GINA, and staff should be educated aboutGINA as well. Attorneys in our employment practice groupare available to assist clients as they learn about the statue andbegin to incorporate its standards into their operations. We areavailable to conduct seminars, draft policies and modifyemployee handbooks to ensure that employers are in compli-ance with GINA. ★

Defense Digest


EMPLOYEES: COMFORTABLE IN THEIR OWN GENES?(continued from page 6)

to pay the following amounts as sanctions: 1) to the mediator, allfees charged by the mediator in connection with the appellatemediation; 2) to opposing counsel, reasonable attorney’s fees andcosts incurred in preparing for and attending the appellate medi-ation and filing the motion for sanctions; and 3) to the clerk ofthe court, $500 as a sanction for willful failure to comply withthe court’s mediation order.

In a related proceeding, Mr. Collier’s attorney admitted thathe had failed to advise Mr. Collier of the attendance requirement.The attorney then was ordered to pay the sanctions earlierimposed upon Mr. Collier.

Failure of a party to attend will result in expensive sanctions,even where he sends his attorney and the party is available byphone. That a party has the ability to “appear” by phone does notsatisfy the requirement of Rule 1.720 (unless stipulated by theparties or permitted by order of the court). In Segui v. Margrill,844 So. 2nd 820 (Fla. 5th DCA 2003), a party who had beenordered to participate in appellate mediation argued that heshould not be sanctioned because his attorney attended the medi-ation with “full settlement authority.” He further contended thatsanctions were not warranted since during the mediation hecould have been contacted at all times by telephone. The FifthDistrict Court of Appeal rejected the arguments as meritless. “Werequired [Mr.] Margrill to attend mediation because a party’s

actual presence at mediation is often critical to its success. Coun-sel is clearly not a ‘party,’ regardless of whether he or she is givenauthority to settle by the client.” The Fifth District Court ofAppeal then stated that appropriate sanctions for a party’s failure to comply with the court’s order included the award ofreasonable attorney’s fees and mediator fees, citing Carbino v.Ward, 801 So. 2nd 1028 (Fla. 5th DCA 2001) (awarding appellate attorney’s fees as a sanction for failure to appear at amediation, although such fees were not specifically referencedin the sanction rule).

The Proposed Change to Rule 1.720The Florida Supreme Court is considering re-writing Rule

1.720(b) and other parts of Rule 1.720.

This new rule—as presently proposed and drafted—willrequire each party to file with the court, ten days prior to themediation, a written notice identifying the person or personswho will be attending the mediation conference as a party repre-sentative or as an insurance carrier representative, and confirm-ing that those persons have sufficient settlement authority as is set forth in section (b) of the new rule. Comment: this rule, ifimplemented, will require special coordination between defensecounsel and claims hander.

The proposed rule (proposed text in italics) reads as follows:(continued on page 11)

MEDIATION ATTENDANCE IN FLORIDA: FAILURE TO COMPLY(continued from page 7)

Defense Digest


A recent Florida Supreme Courtopinion has drawn industry-wide atten-tion concerning the contractual provi-sions requiring an insured to attend anexamination under oath as a pre-requi-site to coverage. Interestingly, CusterMedical Center v. United Auto InsuranceCompany, SC-08-2036 (Fla. Nov. 4,2010) is limited on the topic of exami-nations under oath as the case primarily

focuses on the refusal of a claimant to attend an independentmedical examination. Regardless, the case has the plaintiff ’s barrejuvenated in what it undoubtedly construes as one of the morepertinent victories in recent Florida PIP history. Despite thisturn of events, from a defense perspective, this matter is greatlyunresolved and subject to interpretation.

The Supreme Court decision was a review of the Third Dis-trict Court of Appeals’ decision in United Automobile InsuranceCompany v. Custer Medical Center, 990 So. 2d 633, 635 (Fla. 3dDCA 2008). Custer Medical Center appealed to a higher courton the basis that the lower court’s decision was contrary to the sta-tus of the law. In order to clarify the application of law, theSupreme Court heard this matter and expanded the primaryissues beyond the initial case controversy. That primary issuefocused upon whether or not the non-appearance of the claimantat a PIP independent medical examination could legally be con-strued as a breach of the insurance contract, thereby negatingcoverage. While this issue seemed to drive the controversy, thecourt likely took liberty in discussing general policy obligations asapplied to Florida’s No Fault Statute. It is these liberties thatstirred the present controversy as it now exists.

Following the procedural history and topical discussionregarding PIP independent medical examinations, footnote #1 ofthe decision appears to suggest that the insurance policy require-ment that an insured submit to an examination under oath, as acondition precedent, is likely invalid as it is contrary to the inten-

tion of Florida’s No Fault Statute. Tellingly, it is this single foot-note that has sent the insurance industry into action by way ofmotions seeking authorization to file briefs to better address orclarify the court’s position regarding the examination under oathissue. Despite this fervor of attention, the fact remains that theplaintiff ’s bar has already embraced this decision, making it diffi-cult for the carrier community to conduct meaningful investiga-tions into PIP claims. This encroachment upon the contractualobligation of the insured is particularly dangerous to the industryfor a number of reasons. While the examination under oath isoften used as a tool to combat and investigate fraud, it has abroader application in terms of PIP claim investigations. Causa-tion, medical necessity and eligibility are all factors often in needof review in order to determine whether or not a benefit is actu-ally due and owed. Without clarification from the high court, acarrier’s ability to determine coverage will be greatly hindered.

The dicta in Custer suggests that the contractual obligationof a claimant is only secondary to Florida’s statutory scheme. Indoing so, the court appears to suggest that the existence of the NoFault Statute itself serves as a reformation of any and all policyconditions that are in conflict with Florida’s PIP Statute. To thatend, it appears as though the court has now created a divergencein opinion as to what is and what is not a reasonable condition tobe imposed upon an insured.

To clarify the controversy, Florida’s legislature is activelyconsidering legislation to clarify and/or modify the Custer deci-sion. The Senate Banking and Insurance Committee passed Sen-ate Bill 1930, sponsored by Senator Ellyn Bogdanoff, R-Ft.Lauderdale, which provides consumer protection against stagedautomobile accidents. This bill also offers tools to help lawenforcement officers fight motor vehicle PIP fraud, which willgreatly assist the insurance community as a whole. Highlights ofSenate Bill 1930 include extending from 30 to 90 days theamount of time insureds have to pay claims when an insurer sus-pects the claim may not be legitimate, capping attorney’s fees onpersonal injury cases and allowing insurance companies to tourclinics and other health facilities where treatment is occurring.


Florida—SIU/Fraud

ON BORROWED TIME: THE EXAMINATION UNDER OATHEXPLAINED

By Jeffrey G. Rapattoni, Esq.*

* Jeff is a shareholder in our Cherry Hill, New Jersey, office and can be reached at856.414.6076 or [email protected].

● The court’s misinterpretation of a carrier’s policy language will be short lived based upon past precedentsfrom across the country.

● The best advice is to wait and see before engaging in a protocol revision.

KEY POINTS:

Jeffrey G. Rapattoni

Defense Digest


(b) Appearance at Mediation. Unless otherwise per-mitted by court order or stipulated by the parties inwriting, a party is deemed to appear at a mediationconference if the following persons are physicallypresent:(1) The party or a party representative having

full authority to settle without further con-sultation.

(2) The party’s counsel of record, if any.(3) A representative of the insurance carrier

for any insured party who is not such car-rier’s outside counsel and who has fullauthority to settle in an amount up to theamount of the plaintiff ’s last demand orpolicy limits, whichever is less, withoutfurther consultation.

That proposed rule states that a “party representative havingfull authority to settle” shall mean “the final decision maker withrespect to all issues presented by the case who has the legal

capacity to execute a binding settlement agreement on behalf ofthe party.”

Additionally, that proposed rule further provides that“[u]nless otherwise stipulated by the parties, each party, 10 daysprior to appearing at a mediation conference, shall file with thecourt and serve opposing counsel written notice identifying theperson or persons who will be attending the mediation confer-ence as a party representative or as an insurance carrier repre-sentative, and confirming that those persons have the authorityrequired by subdivision (b).”

Finally, the proposed rule states that “[i]f a party fails toappear at a duly noticed mediation conference without goodcause, the court, upon motion, shall impose sanctions, includingaward of mediation fees, attorneys’ fees, and costs, against theparty failing to appear. The failure to file a confirmation ofauthority... or failure of the persons actually identified in theconfirmation to appear at the mediation conference shall createa rebuttable presumption of a failure to appear.” ★

MEDIATION ATTENDANCE IN FLORIDA: FAILURE TO COMPLY (continued from page 9)

could have had a $100,000 settlement if he or she had acceptedthe early proposal. Of this $100,000, he or she would havelikely walked away with about $25,000 (assuming, for example,a 40 percent contingency fee, $7,500 in costs and $27,500 inmedical liens paid). Instead of having $25,000 in hand, theplaintiff would, in reality, under Scenario 2 be left with zero dol-lars. Thus, even a broke, unrecoverable plaintiff has something tolose ($25,000, in this example) as a result of the proposalmechanics. The $25,000 would be money that was lost, althoughthe plaintiff won a verdict at trial.

As important, a proposal as described in Scenario 2 puts pressureon counsel for the indigent plaintiff. As the case progresses afterthe proposal, plaintiff ’s counsel will know that each dollar ofexpense incurred by both his or her office and by defense coun-sel’s office could be money lost to a sanction arising from a pro-posal. In light of the great expense associated with bringingappropriate treating physicians and experts to deposition andtrial, plaintiff ’s lawyers will want to get out of a case sooner ratherthan later with a strong, early proposal. ★

TWO SELDOM NOTED TRAITS OF FLORIDA STATUTORY PROPOSALS FOR SETTLEMENT(continued from page 8)

Interestingly, this bill is a companion measure to House Bill1411, sponsored by Representative Jim Boyd, R-Bradenton.This House Bill seeks to expand the police reporting of motorvehicle accidents, permitting more discovery from health careproviders and expanding a carrier’s ability to request docu-mentation from a claimant. The controversy surroundingCuster may likely be moot by legislative mandate. Of course,at this time, it is too early to tell which laws or versions willactually be enacted, however, it appears that the legislature islooking for an enactment to begin in July of 2011.

Given these developments, the insurance communitymust remain diligent moving forward. As is the case with thepassing of any new legislation, the case law has yet to be writ-ten or interpreted. The installment of these new laws willmore likely than not bring about a whole host of new deci-sions concerning the contractual right to an examinationunder oath. I would look for the next twelve to eighteenmonths to be a period of comment and review by the courtswhich will ultimately act as further interpretation on Custer,one way or another. ★

ON BORROWED TIME: THE EXAMINATION UNDER OATH EXPLAINED(continued from page 10)

Defense Digest


In Kieffer v. Best Buy, 205 N.J. 213(2011), the New Jersey Supreme Courtaddressed once again the often complexquestion of contractual indemnification.The issue was whether All CleaningSolutions Co. (All Cleaning) wasrequired by the terms of its indemnifica-tion agreement to pay the legal costsincurred by Best Buy and AmericanIndustrial Cleaning Co. (AIC) in

defending a lawsuit that was dismissed against all three defen-dants for lack of evidence.

AIC entered into an agreement with Best Buy to cleanand provide maintenance for its stores. AIC subcontractedwith All Cleaning for the daily cleaning of the Best Buy store.While Tina Kieffer was shopping there, she fell and broke herankle. She initially sued Best Buy only, alleging that Best Buy’snegligent maintenance caused her to slip and fall in an aisle inthe store. Following a third party complaint by Best Buyagainst AIC, claiming that AIC was contractually bound todefend and indemnify Best Buy (on an informal basis Best Buyalso demanded additional insured protection), and a fourthparty complaint by AIC against All Cleaning seeking the samerelief, Kieffer filed an amended complaint in which she namedBest Buy, AIC and All Cleaning. She alleged that her fall wascaused by an unsafe, slippery floor. We are not told the time ofher accident. Early on the day of the accident, All Cleaninghad swept, mopped and scrubbed the floor. It had last waxed

the floor three months earlier. According to the Best Buy manager’s notation on a floor-maintenance form, the waxingwas “satisfactory.”

Kieffer’s expert opined that in the area of the fall, the floorfinish material was not properly applied and that “hazardousconditions” created by Best Buy, AIC and All Cleaning causedthe fall.

The floor service agreement between Best Buy and AIC per-mitted AIC to delegate its duties to others, but AIC remained“solely responsible for the conduct of all such Subcontractors.”

The Best Buy/AIC agreement also provided that AICwould indemnify, defend and hold harmless Best Buy for all“suits, causes of action, claims, and demands” which areasserted against Best Buy “by reason of, or arising from: (1)the breach of this Agreement by Contractor….”

The agreement between AIC and All Cleaning, whichAIC drafted, required All Cleaning to defend, hold harmlessand indemnify AIC and Best Buy “from any connection withany act of negligence, omission, or conduct arising out of theoperation of [All Cleaning’s] business and [its] performanceor non-performance of the services.”

The trial court granted summary judgment in favor ofall three defendants, concluding that they were not negligentor otherwise liable for Kieffer’s injuries. The court noted thatKieffer did not know why she fell and that her only observa-tion was that the floor was shiny. The court rejected herexpert’s conclusion that the floor was negligently maintainedas nothing more than a bare conclusion unsupported by factual evidence, a “net opinion.”


Dana C. Argeris

New Jersey—Insurance Coverage

THE DUTY TO DEFEND UNDER AN INDEMNIFICATION CLAUSE,ALL DEFENDANTS SECURE SUMMARY JUDGMENT—TWO

WRONGS (THE TRIAL COURT AND APPELLATE DIVISION)DON’T NECESSARILY MAKE A RIGHT, AT LEAST AS TO A QUES-TION NOT ANSWERED BY THE NEW JERSEY SUPREME COURT

By Dana C. Argeris, Esq.*

● An indemnitee was not entitled to reimbursement of defense costs when the indemnitor securedsummary judgment and the clause required a finding of negligence.

● A question left open—when a business invitee alleged negligence by the owner, contractor and sub-contractor, and all three obtained summary judgment, was the owner entitled to reimbursement ofdefense costs when the clause was not explicit as to the owner’s alleged negligence but required pro-tection against all work related claims?

KEY POINTS:

* Dana is a shareholder in our Cherry Hill, New Jersey, office. He can be contactedat 856.414.6080 or [email protected].

Defense Digest


Best Buy moved to hold AIC liable for the costs of defendingagainst the plaintiffs’ suit. AIC apparently contested Best Buy’sclaim for relief (the decision does not say on what basis) and alsomoved to hold All Cleaning liable for its legal costs and thosewhich AIC might owe to Best Buy.

Despite its finding of no negligence, the trial court grantedsummary judgment to both Best Buy and AIC. Accordingly, AICwas ordered to reimburse Best Buy’s legal costs and expenses andAll Cleaning was ordered to reimburse AIC for AIC’s cost ofdefense and also for the amount AIC owed to Best Buy.

In denying All Cleaning’s motion for reconsideration, thecourt made findings that indicated that it did not differentiatebetween the Best Buy/AIC indemnification agreement and theAIC/All Cleaning indemnification agreement. The court statedthat each agreement was a “standard contract for defense andindemnification” and that each required the indemnifying partyto indemnify and defend the indemnitee against “suits, causes ofaction, claims, demands” and other expenses and that both agree-ments were triggered by “claims,” such as the one brought byKieffer. The quoted language, however, was contained only in theBest Buy/AIC agreement.

The trial court never grappled with the actual language ofthe AIC/All Cleaning indemnity agreement. Indeed, because ofthe position taken by AIC in its initial successful pursuit ofreimbursement from All Cleaning, the court was never calledupon to consider whether the Best Buy/AIC indemnity agree-ment should have triggered a duty by AIC to reimburse BestBuy’s defense costs.

In an unpublished opinion, the Appellate Division affirmed.The appellate panel—like the trial court—mistakenly attributedthe language in the Best Buy/AIC indemnification agreement tothe AIC/All Cleaning agreement.

Strangely, both the trial court and appellate panel hadordered All Cleaning to reimburse the defense costs of Best Buyand AIC even though All Cleaning (just like Best Buy and AIC)had obtained summary judgment as to the plaintiffs’ claims andthat neither indemnification provided in explicit terms for defenseas to the indemnitee’s own alleged negligence.

The Supreme Court granted certification. In a unanimousdecision, it held that All Cleaning had no contractual obligationto indemnify AIC or Best Buy in the absence of a legal determi-nation that All Cleaning caused, by its “negligence, omission, orconduct,” the injuries suffered by the plaintiff. It focused uponthe language of the AIC/All Cleaning indemnification provi-sion—which had been somewhat lost in the shuffle by both thetrial court and the appellate panel.

Justice Albin, writing for the Court, noted, by way of a foot-note, that the Court was not disturbing the trial court’s findingthat, under the indemnification provision binding Best Buy andAIC, AIC was liable to reimburse Best Buy for its defense costs as

that issue was not before the Court.

The Court recognized that the objective in construing a contractual indemnity provision is to determine the intent of theparties, citing to Mantilla v. NC Mall Assocs., 167 N.J. 262, 272(2001). It cited the familiar concept that, if the meaning of anindemnity provision is ambiguous, it is strictly construed againstthe indemnitee because a party is ordinarily responsible for itsown negligence, thus express language is required to shift liabilityto another party, and each party is responsible for its ownattorney’s fees absent statutory or judicial authority or expresscontractual language to the contrary.

The Court rejected AIC’s argument that the language “con-nection with” and “arising out of” was a proxy for “claims” and“demands.”

All Cleaning’s indemnification obligations depended on ajudicial finding of “negligence, omission, or conduct” on AllCleaning’s part. The trial court found no evidence that any defen-dant exercised a lack of due care. There was essentially a judicialfinding that Kieffer’s injuries were not in “connection with any actof negligence, omission, or conduct arising out of the operationof [All Cleaning’s] business.” That finding, along with a plainreading of the AIC/All Cleaning indemnification provision, ledthe Court to the conclusion that All Cleaning was not contrac-tually responsible for paying AIC’s and Best Buy’s defense costs.

Based upon the Court’s ruling, All Cleaning owed no reim-bursement to AIC for either the defense costs of AIC or Best Buy,but AIC still owed reimbursement to Best Buy for Best Buy’sdefense costs.

How might the Court have ruled if AIC had asserted that itsagreement with Best Buy did not explicitly require AIC to defendor indemnify against Best Buy’s own alleged negligence and thatthe trial court’s finding of no negligence meant that neither AICnor All Cleaning had breached AIC’s cleaning services agreementwith Best Buy?

AIC might have asserted that the Best Buy indemnificationclause should not entitle Best Buy to either a defense or indemni-fication by AIC of a claim alleging Best Buy’s own negligencebecause the clause did not contain explicit language that AIC hadagreed to protect Best Buy against such claims. AIC could havealso argued that the clause should be deemed to require a show-ing of a breach of the cleaning services contract in order to triggera duty to reimburse Best Buy’s defense costs.

While the Court did not reach this issue, its comments aboutthe Best Buy/AIC indemnification clause, in comparing it favor-ably with the AIC/All Cleaning clause, suggest that the Courtmight have found that the Best Buy/AIC clause was sufficient totrigger a duty to reimburse notwithstanding the absence of a find-ing of a breach of contract or negligence by the contractor, or itssubcontractor.


THE DUTY TO DEFEND UNDER AN INDEMNIFICATION CLAUSE(continued from page 12)

Defense Digest


CASUALTY

Ralph Bocchino and Kaitlin DeCrescio (Philadelphia,PA) obtained a motion for summary judgment fromJudge Messiah-Jackson. The case involved an automobileaccident where the plaintiff allegedly suffered seriousinjuries, multiple herniations and radiculopathy as aresult of being rear-ended by another driver. The plain-tiff had stopped to buy a newspaper, and she alleged thatthe newspaper salesperson was distracting and one of thecauses of the accident. After extensive discovery, thenewspaper company was able to establish that the news-paper salesperson was not an employee, but an indepen-dent contractor. An independent contractor was suedseparately by the plaintiff and in a trial absentia, receiveda $1.5 million verdict from Judge Abramson. Followingthe newspaper’s bankruptcy, the newspaper sought sum-mary judgment on two issues—vicarious liability, i.e. thenewspaper salesperson was an independent contractorand that there was no agency implied in fact or ostensi-ble agency. In addition, the activity of selling newspaperswas not a proximate or legal cause of the accident. Theplaintiff filed extensive responses with expert reports, butto no avail. Judge Jackson agreed with the defendant’sposition and granted summary judgment. The plaintiffhad demanded $500,00 to settle the case.

Diane Magram (Cherry Hill, NJ) obtained a unanimousdefense verdict in an automobile negligence suit inwhich she intervened on behalf of the uninsuredmotorist carrier. The plaintiff was the front seat passengerof her husband’s vehicle. Her husband was attempting toexit a gas station parking lot. Both she and her husbandtestified that there was a driver who waved them throughthe line of stopped vehicles to enable the husband to exitthe parking lot and to make a left-hand turn. Before thehusband could being the left turn, a third vehicle travelingin the turn lane impacted the driver’s side front of theirvehicle. The husband was the primary defendant in thissuit, since the wife settled with the other driver. The jury

found that neither the driver husband nor the phantomdriver (the “waver”) were negligent. The matter wastried before the Honorable Louis Meloni in the SuperiorCourt of New Jersey, Camden County.

Mari Grimes (Cherry Hill, NJ) obtained a unanimousdefense verdict in favor of our client, an underinsuredmotorist carrier, in Atlantic County, New Jersey, beforethe Honorable Michael Winkelstein. The plaintiffalleged that the tortfeasor was solely liable for the acci-dent when he turned left in front of her vehicle. Thedefense, on behalf of the UIM carrier, proceeded in thename of the unavailable tortfeasor, who had previouslytendered the liability policy. Following testimony bythe plaintiff, her eyewitness and two eyewitnesses forthe defense, the jury found the plaintiff 100% liable forthe accident.

Samuel Casolari and Beau Hollowell (Cleveland, OH)obtained summary judgment on behalf of an apartmentcomplex on a claim for premises liability in the FranklinCounty, Ohio, Court of Common Pleas. The plaintiffleft her apartment and walked down a set of outsidestairs which were dark due to a light that was out. As shedescended the stairs, she stepped into darkness, stum-bled and fell, fracturing her foot. She also alleged that asa result of her fall, a previously unknown syndrome wasactivated, causing her blood clots. Relying on the step inthe dark doctrine, the court held that the apartmentcomplex owed no duty to the plaintiff as the conditionand darkness was open and obvious.

Judith Ring (Philadelphia, PA) obtained summary judg-ment in the Philadelphia Court of Common Pleas onbehalf of an ambulance manufacturer against claims thatthe ambulance was defective and caused permanent dis-abling injuries to an EMT because the ambulance’s litterretention system did not accept a litter being loadedonto the ambulance.

OnThePulse…IMPORTANT & INTERESTING LITIGATION ACHIEVEMENTS*...

We Are Proud Of Our Attorneys For Their Recent Victories

(continued on page 15)* Prior Results Do Not Guarantee A Similar Outcome

Defense Digest


OnThePulse… (continued from page 14)

HEALTH CARE

Jay Hamad (New York, NY II) obtained a defense verdictafter seven minutes of jury deliberations in a week-longmedical malpractice trial in Newark, New Jersey. Theplaintiff alleged multiple deviations from the standard ofcare against a defendant surgeon, including failing toreview his records from an earlier procedure prior to sub-jecting the patient to the same surgery several years later,and failing to order the recognized standard testing, ERCPand MRCP, prior to undertaking the second procedure.Although chances of success at trial were deemed to beminimal (no greater than 35%), the defendant surgeonrefused to consent to settle. After a week-long trial, whichincluded a successful cross examination of the plaintiff ’sexpert and direct examination of the defense expert, sum-mations were conducted. Within seven minutes of thecommencement of deliberations, the jury returned a unan-imous defense verdict (8-0).

PROFESSIONAL LIABILITY

Michael DeCandio (Jacksonville, FL) obtained summaryjudgment on behalf of an engineering firm supervisingbridge work on the I-10/I-95 interchange in Jacksonville,Florida. The claim was for wrongful death of a workerinvolved in sandblasting and repainting an existingbridge. While working in a containment system belowthe bridge, he stepped into a hole within the contain-ment platform, falling to his death. The defense waspredicated on the application of horizontal immunityunder the revised Florida workers’ compensation statute.The plaintiffs challenged both the constitutionality andinterpretation of the revised statute.

Gregory Kelley (King of Prussia, PA) obtained summaryjudgment in Lackawanna County, Pennsylvania, on behalfof an architect in a claim involving a restaurant employeewho sustained serious burns in an accident involvingkitchen equipment. Greg demonstrated that the architect’sscope of services for the restaurant construction did notinclude the design, selection or location of the kitchenequipment such that there was no evidence that any erroror omission by the architect could have been a cause of theaccident, resulting in dismissal of the architect.

Lauren Burnette (Harrisburg, PA) obtained dismissal of acomplaint filed against our client, an insurance agency, inthe Circuit Court for Baltimore City. After the plaintiffs’

building, located in Baltimore City, was damaged in afire, the plaintiffs filed a bad faith claim against their insur-ance company, which had a field office in Pennsylvania, inthe Court of Common Pleas of Philadelphia County. Theinsurance company joined our client as an additionaldefendant and immediately filed a petition to dismiss theplaintiffs’ claims for forum non conveniens. The courtgranted the insurance company’s motion, dismissing theplaintiffs’ claims with leave to re-file in Maryland. Theplaintiffs appealed, and the Superior Court eventuallyaffirmed the trial court’s ruling. The plaintiffs thereafterfiled suit against both the insurance company and ourclient in the Circuit Court for Baltimore City. We filed a motion to dismiss, arguing that the plaintiffs’ claims were time-barred. The plaintiffs argued that the statute oflimitations governing their claims was tolled during thependency of the Pennsylvania action pursuant to Mary-land’s limited equitable tolling doctrine. The Circuit Courtagreed that the tolling doctrine was inapplicable and dis-missed the plaintiffs’ claims with prejudice.

Jack Slimm (Cherry Hill, NJ) obtained a dismissal of alegal malpractice action filed in the U.S. District Courtfor the District of New Jersey. Jack argued that thedefendant attorney, who represented a judge and his wifein custody and visitation matters in Superior Court, wasnot a state actor for the purpose of jurisdiction in thefederal action. The district court judge entered an opinionand order finding that the court lacked jurisdiction overthe matter because the attorney and his former client, aretired judge, were not state actors and, therefore, couldnot have acted under color of state law. Also, the federalcourt found that the plaintiffs’ concerns about bias wereunfounded.

Patricia Monahan (Pittsburgh, PA) received a defenseverdict in the U.S. District Court for the Western Dis-trict of Pennsylvania on behalf of a police officer accusedof excessive use of force. The plaintiff, a 64-year-oldgrandmother, was restrained by a police officer when sheaggressively approached him and tried to get around himto intervene in the scene of a domestic dispute involvingher daughter and son-in-law. The plaintiff claimed thatshe injured her shoulder and required surgery as a resultof the incident. The jury agreed with the defense that theuse of force was reasonable.

* Prior Results Do Not Guarantee A Similar Outcome (continued on page 18)

Defense Digest

Vol. 17, No. 3 September, 2011

OFFICE LOCATIONS & CONTACT INFORMATION

PENNSYLVANIA

Philadelphia1845 Walnut StreetPhiladelphia, PA 19103215.575.2600 • Fax 215.575.0856 Thomas A. Brophy, Esq., President and CEO215.575.2748 • [email protected]

Bethlehem1495 Valley Center Parkway, Suite 350Bethlehem, PA 18017-2342484.895.2300 • Fax 484.895.0208 William Z. Scott, Esq., Managing Attorney 484.895.2306 • [email protected]

Doylestown10 N. Main Street, 2nd FloorDoylestown, PA 18901267.880.2020 • Fax 215.348.5439 R. Anthony Michetti, Esq., Managing Attorney267.880.2030 • [email protected]

Erie717 State Street, Suite 701Erie, PA 16501814.480.7800 • Fax 814.455.3603 G. Jay Habas, Esq., Managing Attorney814.480.7802 • [email protected]

Harrisburg4200 Crums Mill Road, Suite BHarrisburg, PA 17112717.651.3500 • Fax 717.651.9630 Timothy J. McMahon, Esq., Managing Attorney 717.651.3505 • [email protected]

King of Prussia620 Freedom Business Center, Suite 300King of Prussia, PA 19406610.354.8250 • Fax 610.354.8299 Wendy J. Bracaglia, Esq., Managing Attorney610.354.8256 • [email protected]

PittsburghU.S. Steel Tower, Suite 2900600 Grant Street, Pittsburgh, PA 15219412.803.1140 • Fax 412.803.1188Scott G. Dunlop, Esq., Managing Attorney 412.803.1144 • [email protected]

ScrantonP.O. Box 3118Scranton, PA 18505-3118570.496.4600 • Fax 570.496.0567Robin B. Snyder, Esq., Managing Attorney 570.496.4610 • [email protected]

WilliamsportP.O. Box 68Williamsport, PA 17703570.326.9091 • Fax 570.326.5507Robin B. Snyder, Esq., Managing Attorney570.496.4610 • [email protected]

NEW JERSEY

Cherry HillWoodland Falls Corporate Park200 Lake Drive East, Suite 300Cherry Hill, NJ 08002856.414.6000 • Fax 856.414.6077 Richard L. Goldstein, Esq., Managing Attorney856.414.6013 • [email protected]

Roseland425 Eagle Rock Avenue, Suite 302Roseland, NJ 07068973.618.4100 • Fax 973.618.0685Joseph A. Manning, Esq., Managing Attorney 973.618.4103 • [email protected]

Defense Digest

Vol. 17, No. 3 September, 2011

DELAWARE

Wilmington1220 N. Market Street, 5th FloorWilmington, DE 19801302.552.4300 • Fax 302.651.7905Kevin J. Connors, Esq., Managing Attorney 302.552.4302 • [email protected]

OHIO

Cleveland127 Public Square, Suite 3510Cleveland, OH 44114-1291216.912.3800 • Fax 216.344.9006 Samuel G. Casolari, Jr., Esq., Managing Attorney 216.912.3801 • [email protected]

FLORIDA

Ft. LauderdaleOne E. Broward Boulevard, Suite 500Ft. Lauderdale, FL 33301954.847.4920 • Fax 954.627.6640Craig S. Hudson, Esq., Managing Attorney 954.847.4955 • [email protected]

Jacksonville200 W. Forsyth Street, Suite 1400Jacksonville, FL 32202904.358.4200 • Fax 904.355.0019Martin Sitler, Esq., Managing Attorney 904.358.4234 • [email protected]

OrlandoLandmark Center One315 E. Robinson Street, Suite 550Orlando, FL 32801407.420.4380 • Fax 407.839.3008Cynthia Kohn, Esq., Managing Attorney 407.420.4388 • [email protected]

Tampa201 E. Kennedy Boulevard, Suite 1100Tampa, FL 33602813.472.7800 • Fax 813.472.7811Edward F. Gagain, III, Esq., Managing Attorney 813.472.7804 • [email protected]

NEW YORK

New York140 Broadway, 19th FloorNew York, NY 10005212.878.1700 • Fax 212.878.1701Jeffrey J. Imeri Esq., Managing Attorney 212.878.1708 • [email protected]

Wall Street Plaza, 88 Pine Street, 21st FloorNew York, NY 10005-1801212.376.6400 • Fax 212.376.6494Daniel G. McDermott, Esq., Managing Attorney 212.376.6432 • [email protected]

Long Island – Hauppauge888 Veterans Memorial Highway Suite 540Hauppauge, New York 11788631.232.6130 • Fax 631.232.6184Anna M. DiLonardo, Esq., Managing Attorney 631.232.6130 • [email protected]

Defense Digest


* Prior Results Do Not Guarantee A Similar Outcome

OnThePulse… (continued from page 15)

PROFESSIONAL LIABILITY (CONT.)Christopher Boyle (King of Prussia, PA) obtained sum-mary judgment in an excessive force/false arrest claim.The plaintiff, a convicted felon, was driving the wrongway on a busy highway and was arrested by our clientfor drug possession and DUI. He was sent back toprison for the remainder of a murder sentence. Theplaintiff argued that the search of his vehicle, incident tohis arrest, was illegal. Our client, a local municipalpolice officer, had asked the plaintiff for the location ofthe car’s registration and was directed to the glove boxby the plaintiff, who apparent-ly forgot that this is also wherehe kept his narcotics.

Thomas Specht and PatrickBoland (Scranton, PA)obtained judgment for a clientin the 3rd Circuit Court ofAppeals. The case involved 1st,4th and 14th Amendment claimsas well as a conspiracy claimagainst our client, a police offi-cer in the City of Carbondale,Pennsylvania, and PennDOTofficials after the plaintiff wasfired from his position at Penn-DOT. The plaintiff claimedthat our client violated his 4th

Amendment rights to unlawful search and seizure andparticipated in a conspiracy with officials from Penn-DOT to have him fired from his job. The case, from ourclient’s prospective, stemmed from a traffic stop afterthe plaintiff drove his PennDOT vehicle through a redlight in Carbondale. Following an award of summaryjudgment for our client at the U.S. District Court for theMiddle District of Pennsylvania, the plaintiff appealed tothe 3rd Circuit Court of Appeals, which recently upheldthe lower court’s decision in favor of our client.

Matthew Behr (Cherry Hill, NJ) obtained an orderdismissing all claims against a prosecutor’s office/prosecutor in the United States District Court of New

Jersey. Five City of Camden police officers werecharged with committing crimes while in their capacityas officers, three of which pled guilty to federalcharges, while two other officers await criminal trial.As a result of the indictments of the officers, the Pros-ecutor’s Office released approximately 210 persons inwhich these five officers were involved in their arrestsfor various drug offenses. At this time, over fifty plain-tiffs have filed complaints, while many more are antici-pated. The plaintiffs argued that the Prosecutor’sOffice is liable because the Prosecutor’s Office in 2003took over the management, administration and opera-

tion of the Police Depart-ment. Matthew successfullyargued by way of a motion todismiss in the early stages ofthe litigation that the Prosecu-tor’s Office was ordered totake over the Police Depart-ment by the Attorney Generalof the State of New Jersey,thus the Prosecutor’s Officewas performing prosecutorialfunctions as an arm of theState and entitled to sovereignimmunity under the EleventhAmendment.

WORKERS’ COMPENSATION

Tony Natale (Philadelphia, PA) won a case for aPhiladelphia-based university. The claimant filed aclaim petition alleging the occurrence of a work-relatedinjury to the neck, back and both lower extremitiesdue to a twisting accident at the university. Afterextensive cross examination of the claimant’s medicalexpert, it was determined that the treating doctor hadabsolutely no idea of the correct fact pattern and/ormechanism of injury. Thus, the judge held that theclaimant sustained the minor injuries found by theIME doctor and then terminated the claimant’s rightto any indemnity benefits. ★


www.marshalldennehey.com1-800-220-3308

DEFENSE L I T I GAT ION

STRATEGIC

ALLIANCES.

Defense Digest


Trial counsel Kate McGrath and Audrey Copeland,both of our King of Prussia, Pennsylvania, office,obtained the Superior Court’s affirmance of the trialcourt’s order denying post trial motions in a medicalmalpractice claim which Kate tried to a defense verdict.The primary issues related to the propriety of a chargeon the two schools of thought doctrine and use oflearned treatises during cross examination. The Superi-or Court rejected the plaintiffs’ contention that the twoschools of thought charge was in error because all par-ties agreed that administration of Heparin was the prop-er treatment and reasoned, instead, that it was the use ofHeparin and its dosage that constituted the treatmentupon which the two schools were divided. Barr v. Beck,et al., 1095 EDA 2009 (Pa. Super. , July 25, 2011).

In other King of Prussia office appellate news, trial coun-sel Chandler Hosmer, who obtained the defense verdict,and Audrey Copeland, acting as appellate counsel, con-vinced the Superior Court to affirm an order denyingpost trial motions. The medical malpractice case at issueinvolved allegations that the defendant hospital breachedthe standard of care relating to the consumption of excessfluids, including an alleged can of ginger ale, by the dece-dent, a gastric bypass patient. The court also rejectedassertions that the jury panel was polluted when a jurorwas not removed until deliberations, that the trial courtabused its discretion by disallowing double hearsay state-ments and regarding other evidence and as to the charge.Estate of Doyle v. Temple University Hospital, No. 783EDA 2010 (Pa. Super. May 24, 2010).

Trial counsel Steve Forry and Justin Conrad, both of ourPittsburgh, Pennsylvania office, and Audrey Copeland,of our King of Prussia office, persuaded the PennsylvaniaSupreme Court to affirm the decision of the Common-wealth Court ordering the MCARE Fund to pay Alleghe-ny General Hospital up to $1 million in indemnity forthe settlement of the underlying section 715 extended

claim without any reduction of amounts previously paidby MCARE to Allegheny General for the coverage year.MCARE’s obligation to pay section 715 extended cov-erage claims was held not to be subject to the aggregatelimit contained in section 712 in the absence of suchlanguage in section 715, which provides for a per occur-rence limit only. West Penn Allegheny Health System v.Medical Care Availability and Reduction of Error Fund,No. 8 WAP 2011 (Pa., July 19, 2011).

In another case from the Pittsburgh office, MichelePrimis and Audrey Copeland successfully obtained anaffirmance of the trial court’s grant of summary judg-ment in a dental malpractice case based upon the statuteof limitation. The record showed that the plaintiff hadsought numerous second opinions and wrote letters tothe dentist complaining of his problems and dissatisfac-tion, thus, he knew or should have known that he wasinjured and had a possible negligence claim at severaljunctures but failed to file suit within the two-yearstatute of limitations. Ruggiero v. DeFrancicis, No. 933WDA 2010 (Pa. Super., August 4, 2011)

Cynthia Kohn, of our Orlando, Florida office, and JimGicking, of our Philadelphia office, persuaded the Flori-da District Court of Appeals to affirm summary judg-ment entered on behalf of the defendant-owner andoperator of a Florida motocross track on a claim thatnegligent maintenance and design of a jump on thetrack caused the plaintiff, an experienced rider, to landhis motorcycle off the track, producing a catastrophicbrain injury. This was the second appeal from a sum-mary judgment in the case. In the previous appeal, theDistrict Court of Appeals reversed the summary judg-ment that had been entered for the defendant based onthe plaintiff ’s signing of a waiver of claims as a condi-tion of being allowed to ride on the track. Richard T.Cain v. Louis T. Banka, II and DGB Racing, Inc., No.5D09-3571 (5th DCA, September 13, 2011). ★


OnThePulse… MARSHALL DENNEHEY IS HAPPY

TO CELEBRATE OUR RECENT APPELLATE VICTORIES*

(continued from page 18)

Defense Digest


New Jersey has traditionallybeen viewed as a four corners juris-diction with respect to the duty todefend. The four corners doctrineessentially provides that the duty todefend is based upon the allega-tions contained within the com-plaint. Where the allegations in thecomplaint assert a potentially cov-

ered claim, the duty to defend exists. Where the allega-tions in the complaint do not assert a claim for whichthere is a potential duty to indemnify, no duty todefend exists.

In the case of Abouzaid v. Mansard Gardens Associ-ates, LLC., ___ N.J. _____ (2011), decided by the NewJersey Supreme Court on June 21, 2011, the courtbroadened the duty to defend in certain claims allegingemotional distress. In the underlying claim inAbouzaid, a mother asserted a claim for emotional dis-tress resulting from witnessing her three sons engulfedin flames following an explosion. The mother, who wasuninjured, asserted a claim for negligent infliction ofemotional distress. Such a claim was recognized in NewJersey in the case of Portee v. Jaffee, 84 N.J. 88 (1980)and requires the claimant alleging negligent inflictionof emotional distress to prove death or serious physicalinjury sustained by a person with whom they had amarital or intimate familial relationship, and that theclaimant observed the death or injury at the scene ofthe accident, resulting in severe emotional distress.

The underlying complaint in Abouzaid did notallege any physical manifestation as a result of thealleged emotional distress. Physical manifestation ofemotional distress is required to trigger coverage forbodily injury under most commercial general liabilitypolicies. The court departed from earlier cases whichsuggested that the duty to defend could be triggeredlater in the litigation if discovery discloses allegations ofphysical manifestation. The court, in essence, created alegal fiction which presumes that the “extraordinarylevel of emotional distress required to support a Porteeclaim . . . will in most cases, bear with it a physicalcomponent.” The court further reiterated that factsknown to the insurer or subsequently discovered out-side of the complaint can trigger a duty to defend.

The clear message from the court in this decisionis that the New Jersey courts will expansively interpretthe duty to defend. Where the complaint filed againstthe insured is ambiguous as to the theories of liability,the courts will be more likely to find a duty to defenduntil such time as the allegations against the insuredare clarified. ★

New Jersey—Insurance Coverage

NEW JERSEY SUPREME COURT BROADENED VIEW OF DUTYTO DEFEND A CLAIM FOR EMOTIONAL DISTRESS

By Steven J. Polansky, Esq.*

* Steve is a shareholder in our Cherry Hill, New Jersey, office who can be reached

at 856.414.6014 or [email protected].

● Potential expansion of duty to defend in New Jersey.

● Is the four corner rule in jeopardy?

KEY POINTS:

Steven J. Polansky

Defense Digest


In New Jersey workers’ compen-sation cases dealing with cardiovascu-lar injuries alleged to be related toemployment, N.J.S.A 34:15-7.2applies. Specifically, Section 7.2 states:In any claim for compensation forinjury or death from a cardiovas-cular or cerebral vascular causes,the claimant shall prove by a pre-ponderance of the credible evidence

that the injury or death was produced by thework effort or strain involving a substantialcondition, event or happening in excess of thewear and tear of the claimant’s daily living andin reasonable medical probability caused in amaterial degree the cardiovascular or cerebralvascular injury or death resulting therefrom.Material degree means an appreciable degree ora degree substantially greater than de minimus.

Perhaps the most typical case involving cardiovascularwork injuries is the petitioner who sustains a myocardialinfarction after working a strenuous heavy-duty job wherethere is testimony that those activities which caused the heartattack were in excess or more than their activities outside ofwork. Clearly, this is the kind of case that the Legislature wasconsidering when it contemplated and wrote Section 7.2.However, with the recent unpublished case of James Rennerv. AT&T, Docket No. A-2393-10T3, 2011 N.J. Super,Unpub. LEXIS 1668 (App. Div., Decided June 27, 2011),the court is moving toward a broader interpretation of §7.2

which may ultimately open up employers and their insur-ance carriers to much more exposure than they anticipatedfrom the plain language reading of this section.

The holding in Renner finds that not only areemployers and insurance carriers liable when the job activi-ties are more than the activities of a claimant’s daily livingbut also when the job activity is less than the claimant’sactivities outside of work.

In Renner, the workers’ compensation judge awardeddependency benefits to James Renner, husband to decedentand employee Cathleen Renner, who died of a pulmonaryembolism. This employee not only worked a 40-hour weekat the office, but she also worked from home, sometimesduring all hours of the day and night. The petitioner’s med-ical expert opined that sitting for an extended period of timeprecipitated stasis of blood flow that led to the formation ofblood clots and that her work effort of sitting at her desk forlong periods of time contributed to a material degree incausing her death, despite other risk factors, includingobesity. In addition, there was testimony that although thepetitioner led a sedentary life in and out of work, there wasadditional testimony that her work inactivity was greaterthan her non-work inactivity, or to put it more plainly, herwork activity was less than her home activity. The courtapplied § 7.2 and found this claim compensable.

This case raises questions and concerns. How will thisaffect future claims? How can less activity mean “in excess ofthe wear and tear of the claimant’s daily living”? Does “inexcess” mean more activity? Less activity? Or has it nowbeen interpreted to mean either? Do employers and insur-ance carriers now have to worry about jobs that are lessactive than the employee’s life outside of work?


New Jersey—Workers’ Compensation

CAN “EXCESS” MEAN LESS? A BROADER INTERPRETATIONIN CARDIOVASCULAR INJURIES

By Kristy N. Olivo, Esq.*

* Kristy, an associate who works in our Cherry Hill, New Jersey, office, can bereached at 856.414.6405 or [email protected].

● The court interprets N.J.S.A 34:15-7.2, dealing with cardiovascular claims and what “in excess ofthe wear and tear of the claimant’s daily living” means.

● Previously, it was held that a petitioner’s activity at work had to be in excess or more than his activityat home for a cardiovascular claim to be found compensable.

● According to newest case law, if a petitioner’s inactivity at work is greater than his or her activity athome, a workers’ compensation claim can also be found compensable.

KEY POINTS:

Kristy N. Olivo

Defense Digest


In Pennsylvania, there are fewcircumstances which give rise toclaims against attorneys brought bypersons who had not entered into aprofessional relationship with theattorney. Recognizing an attorney’sduty to his client, Pennsylvaniaappellate courts have restrictedattorney liability to third parties.Generally, when an attorney engages

in conduct that is motivated by malice, or commits anintentional tort, he has exceeded the scope of his repre-sentation and should be held liable to those harmed.“Such special circumstances exist where the attorney’s con-duct is motivated by malice or involves the commission ofan intentional tort.” First Options v. Wallenstein, 1994 U.S.Dist. LEXIS 7132 at 9 (E.D. Pa. May 24, 1994), citingPelagatti v. Cohen, 370 Pa. Super. 422, 536 A.2d 1337,1347 (Pa. Super. Ct. 1987). Other, less obvious, instancesin which attorneys can be held liable to third parties havebeen carved out by statute and have arisen under commonlaw. For example, attorneys can be held liable to third par-ties for wrongful use of civil proceedings pursuant to 42Pa. C. S. 8351, et seq, malicious prosecution relating to acriminal prosecution and common law abuse of process.Liability for aiding and abetting (offering substantial assis-tance) a breach of a fiduciary duty, however, has neverbeen imposed on an attorney in Pennsylvania who merelyprovided legal representation to his client. Nor have Penn-

sylvania courts expressly precluded such claims. Otherstates, however, have addressed this issue.

Texas courts have refused “to expand Texas law toallow a non-client to bring a cause of action for ‘aiding andabetting’ a breach of fiduciary duty, based upon the rendi-tion of legal advice to an alleged tortfeasor client.” Alpertv. Crain, Caton & James, P.C., 178 S.W.3d 398, 407 (Tex.App.--Houston [1st Dist.] 2005, pet. denied) (Plaintiff ’sbreach of fiduciary duty claim properly dismissed becausethe plaintiff did not allege the defendant “committed anyacts or misrepresentation, independent of its representa-tion of [its client], upon which he justifiably relied.”) InReynolds v. Schrock, 341 Ore. 338 (Or. 2006), the OregonSupreme Court held that a lawyer could not be held joint-ly liable with a client for the client’s breach of fiduciaryduty unless the third party showed that the lawyer was act-ing outside the scope of the lawyer-client relationship. InDurham v. Guest, 142 N.M. 817, 820 (N.M. Ct. App.2007), the New Mexico Court of Appeals ruled that inadversarial proceedings an attorney who is representing aclient “is not liable for aiding and abetting a breach of theclient’s fiduciary duty, unless the attorney acted outsidethe scope of representation, acted only in his or her ownself-interest and contrary to the client’s interest, or acted ina manner that would fall within the ‘crime or fraud’ excep-tion to the attorney-client privilege provided in the rulesof professional conduct.”

Other states have recognized claims against attorneysfor aiding and abetting their clients’ breach of a fiduciaryduty See, e.g., Rowen v. Le Mars Mut. Ins. Co., 282 N.W.2d


Pennsylvania—Attorney Liability

AN ARGUMENT AGAINST IMPOSING LIABILITY AGAINSTATTORNEYS FOR AIDING AND ABETTING THEIR CLIENT’S

BREACH OF FIDUCIARY DUTY UNDER PENNSYLVANIA LAWBy Aaron E. Moore, Esq.*

* Aaron is an associate in our Philadelphia, Pennsylvania, office and can bereached at 215.575.2899 or [email protected].

● Liability for aiding and abetting a breach of a fiduciary duty has never been imposed on an attor-ney in Pennsylvania who merely provided legal representation to his client.

● Pennsylvania courts have not expressly precluded such claims.● If liability for aiding and abetting a breach of fiduciary duty is sought by a non-client against an attor-

ney in Pennsylvania, the court’s analysis should include the requirement that there can be no suchliability unless the attorney’s conduct fell outside the scope of his representation of his client.

KEY POINTS:

Aaron E. Moore

Defense Digest


THE DUTY TO DEFEND UNDER AN INDEMNIFICATION CLAUSE(continued from page 13)

The Best Buy/AIC indemnification provisionreferred to claims by reason of or arising from breach ofthe cleaning services agreement. The Best Buy/AICindemnification provision did not contain language thatexpressly required AIC to defend and indemnify BestBuy for Best Buy’s own alleged negligence.

In Mantilla, a jury found both the indemnitee (themall) and the indemnitor (the contractor) to be negli-gent. As in Kieffer, the indemnification clause in Mantil-la did not explicitly provide for the mall to be defendedor indemnified against its own negligence. Mantilla cit-ed to Central Motor v. E.I. duPont deNemours & Co., 251N. J. Super. 5 (App. Div. 1991), as setting forth a defaultor common law rule when the indemnification agree-ment does not explicitly foresee or address all contingen-cies. Under this rule, the court employs an after-the-factanalysis. If the indemnitee is adjudicated to be free fromactive wrongdoing regarding a plaintiff ’s injury and hastendered the defense to the indemnitor at the start of thelitigation, the indemnitee can recover its defense costsand fees. Since the jury found the mall to be partially atfault, the Mantilla Court found that the mall was notentitled to reimbursement for its defense costs.

Central Motor dealt with a claim for common lawindemnification and reimbursement of defense costs by adistributor against paint manufacturers under circum-stances in which the distributor, being in the chain ofdistribution as to an allegedly defective product, claimedto be an innocent party, with potential liability only ona vicarious basis.

In Kieffer, was Best Buy, as a store owner whose busi-ness invitee claimed to have fallen in the aisle of the storeon a slippery condition, similarly situated to the paintdistributor in Central Motor? Was Best Buy’s alleged negli-gence solely vicarious? A business invitee such as plaintiffin Kieffer might be expected to claim not only defectivefloor application work by the contractor, but also negli-gence by the owner and its employees for failure toobserve and attend to the allegedly slippery floor area. Isthis the kind of alleged independent negligence whichwould defeat the Central Motor default rule?

Kieffer leaves open the issue of whether a clause pro-viding for defense and indemnification against “allclaims… resulting from or arising out of… breach of the contract work” is sufficient to require an indemnitorto provide reimbursement of defense costs to the indem-nitee any time the indemnitee is found to be free offault, provided only that the claim is related to the con-tractor’s work or, if the clause is deemed deficient,whether under Central Motor’s after-the fact approach,an owner and/or contractor found to be free of fault (bysummary judgment motion or verdict) who early in thecase demands indemnification from a subcontractorwould be entitled to reimbursement of defense costs,with the only required showing that the plaintiffs’ theo-ry of liability was the failure to properly perform thecontracted for work.

The purpose of this article is to note a question notanswered by the Kieffer Court and also the continuingcomplexity, for both the courts and counsel, in address-ing indemnification issues and whether the duty todefend by an indemnitor is triggered when the indemni-tee is also alleged to have been negligent and the indem-nification clause does not explicitly require defense of theindemnitee for such claims.

Since in matters I am currently handling I am deal-ing with clauses which are arguably similar to the BestBuy/AIC clause, I am exercising the prerogative of notoffering an opinion in this article as to what the KiefferCourt should have decided if it had been confrontedwith construing the Best Buy/AIC clause or consideringthe applicability of the Central Motor default rule. I willsay that I do not read the Kieffer decision as providingclear dicta that an indemnification clause which readslike the Best Buy/AIC clause will necessarily trigger aduty to reimburse defense costs every time the indemni-tee secures summary judgment or a defense verdict. Inmy judgment, that issue will still need to be determinedby our courts. ★

Defense Digest


In Sayler v. Skutches, 2011 Pa.D&C. LEXIS 59 (Lehigh CountyMarch 4, 2011), the Honorable CarolK. McGinley addressed the issue offirst impression regarding the pay-ment of the proportionate share ofcounsel fees on future medical dam-ages pursuant to Section 509 of theMedical Care Availability and

Reduction of Error (Mcare) Act. Sayler involved a medicalmalpractice case concerning an alleged failure to diagnoseand treat breast cancer. After trial in January 2008, thejury awarded a verdict in favor of the plaintiff, BarbaraGlasow, in the gross amount of $3,973,000. The juryfound 35% contributory negligence, which resulted in amolded verdict in damages totaling $2,582,450. The juryawarded $170,000 per year in future medical expensespayable over five years, for a total of $850,000. When thatamount was reduced by the 35% comparative negligence,the jury award for future medical expenses over the five-year period totaled $110,500 yearly to be paid in quarter-ly installments of $27,625. The plaintiff died on May 23,2009, prior to the expiration of the five-year period. Thetrial court ordered that the plaintiff was entitled to sixquarterly payments of future medical expenses, totaling$165,750, plus interest. Pursuant to the Mcare Act, theremaining obligation to pay future medical expenses, anamount of almost $385,000, terminated.

The plaintiffs assert that the statutory language of Sec-tion 509(b)(1) of the Mcare Act makes the defendant

medical providers responsible for the payment of counselfees. The defendant medical providers contend that thestatutory language does not provide for payment of coun-sel fees in addition to the award entered by the jury. ByOrder and Opinion dated March 4, 2011, Judge McGin-ley ruled that the defendants are not responsible for thepayment of attorney’s fees and costs in addition to themedical expenses awarded by the jury. The plaintiffs filedan appeal to the Pennsylvania Superior Court, which iscurrently pending.

Section 509(b)(1) of the Mcare Act provides that“future damages for medical and other related expensesshall be paid as periodic payments after payment of theproportionate share of counsel fees and costs based uponthe present value of the future damages awarded.” The tri-al court in Sayler ruled that under Pennsylvania law, therecan be no recovery for counsel fees from the adverse partyto a cause in the absence of expressed statutory allowanceof the same, or a clear agreement by the parties or someother established exception. The court stated that thestatutory language of §509(b)(1) does not provide that theadverse party is responsible for the payment of counsel feesas an additional recovery, but merely directs the manner inwhich the funds are to be distributed.

In the appeal, the plaintiffs argue that the trial courterred in denying payment of the proportionate share ofcounsel fees and costs based upon the present value of thefuture medical damages. The plaintiffs argue that thedefendant is required to pay, up front, that portion of thefuture medical expenses awarded by the jury which werecontractually earned by counsel. The plaintiffs further assertthat if the attorney’s fees and costs were to be deducted from


Pennsylvania—Health Care

COUNSEL FEES ON FUTURE MEDICAL DAMAGES IN MEDICALMALPRACTICE CASES: DO WE HAVE TO CUT ANOTHER CHECK?

By Edward M. Galang Esq.*

* Ed, a shareholder in our King of Prussia, Pennsylvania, office, can be reached at610.354.8268 or [email protected].

● A case of first impression regarding the payment of the proportionate share of counsel fees onfuture medical damages pursuant to Section 509 of Mcare Act.

● The Sayler Court determined that medical defendants are not responsible for payment of plaintiff’scounsel fees when there is an award of future medical damages.

KEY POINTS:

Edward M. Galang

Defense Digest


A recent Philadelphia Court ofCommon Pleas decision Fallon v.Hahnemann Hosp. Univ. Medivac,2011 Phila. Ct. Com. Pl. LEXIS 166(July 7, 2011) addresses who mayqualify as an appropriate licensedprofessional for the purposes of sub-mitting a certificate of merit in amedical malpractice claim. In Fallon,

the plaintiff ’s decedent underwent a splenectomy in 1995as treatment for hereditary shperocytosis. On December27, 2004, the decedent began to feel unwell. The nextevening she developed a rash and was immediately trans-ported to St. Mary Medical Center, where she was intu-bated at 11:40 p.m. At 1:15 a.m., the decedent was trans-ported by the defendant Hahnemann Medivac to Chil-dren’s Hospital of Pennsylvania, where she ultimately died.The plaintiff ’s decedent filed a medical malpractice claimagainst a number of defendants, including HahnemannUniversity Hospital Medivac. Plaintiff ’s counsel filed acertificate of merit affirming that an appropriate licensedprofessional had supplied a written statement that thedefendant, Hahnemann, deviated from the acceptableprofessional standard of care.

Subsequently, Hahnemann filed a motion for summa-ry judgment based on the plaintiff ’s failure to submit anexpert report against it. The plaintiff did not oppose themotion for summary judgment. Upon the grant of sum-mary judgment, Hahnemann exercised its right pursuant

to Pa. R.C.P. 1042.8(a) and requested a copy of the writtenstatement upon which the plaintiff ’s certificate of merit wasbased. The written statement was provided by a doctor,who was also a lawyer, and was titled “Confidential WorkProduct Re: Jenna Fallon.” Furthermore, the doctor’s cur-riculum vitae revealed that he did not possess an unre-stricted license to practice medicine and that he had notbeen in the active practice of medicine or teaching in a rel-evant field for over 20 years. Hahnemann then filed amotion for sanctions against plaintiff ’s counsel forimproperly certifying that an appropriately licensed pro-fessional supplied a written statement regarding the exis-tence of a reasonable probability that the standard of carewas violated by the defendant in question. The Court ofCommon Pleas found that plaintiff ’s counsel had improp-erly filed a certificate of merit and ordered him to pay thedefendant’s reasonable attorney’s fees and expenses.

In reaffirming its ruling, the Honorable AllenTereshko addressed a number of improprieties in the writ-ten statement obtained by the plaintiff. He first noted thedifference between a practicing attorney evaluating a caseon the legal merits, which would be protected by the workproduct privilege, and contrasted it with the discoverabil-ity of the written statement provided by an appropriatelylicensed professional, which is discoverable once all claimsagainst a defendant are dismissed or a verdict is entered.Judge Tereshko noted that, marking the written statement“Confidential Work Product” indicates a legal opinion,and, the mere fact that the author is also a doctor does notconvert the opinion into such.


Pennsylvania—Health Care Liability

CLARIFYING QUALIFICATIONS NECESSARY TO PROVIDE A WRITTEN STATEMENT IN SUPPORT OF A CERTIFICATE

OF MERITBy Elizabeth Underwood, Esq.*

* Elizabeth is an associate in our Philadelphia, Pennsylvania, office. She can bereached at 215.575.2599 or [email protected].

● Certification of merit filed by a non-practicing physician who is also an attorney is insufficient tomeet the standard.

● Certification by unqualified physician subject to sanctions.

KEY POINTS:

Elizabeth Underwood

Defense Digest


AN ARGUMENT AGAINST IMPOSING LIABILITY (continued from page 22)

639 (Iowa 1979) (Supreme Court of Iowa holding that acorporation’s attorney can be held liable for assisting in acorporate breach of fiduciary duties to shareholders); Hef-ferman v. Bass, 467 F.3d 596, 601 (7th Cir. 2006) (reversingRule 12(b)(6) dismissal of claim against lawyer for aidingand abetting a breach of fiduciary duty); Holmes v. Young,885 P.2d 305, 308-09 (Colo. Ct. App. 1994) (affirmingjudgment for lawyers following trial on claim for aidingand abetting a breach offiduciary duty).

It has been suggestedthat in order for a lawyerto be held liable for aidingand abetting his client, awrongful intent should beestablished. See Barksdale,58 Wash & Lee L Rev at601 (analogizing aidingand abetting breach offiduciary duty to advisingor assisting client to dis-solve a legal relationship,which requires the use ofwrongful means by thelawyer). See Restatement(Third) of Law GoverningLaw § 57(3). See also,Skarbrevik v. Cohen, Eng-land & Whitfield, 231 Cal.App. 3d 692, 282 Cal.Rptr.627, 639 (CalCtApp 1991)(Non-fiduciary attorneymust act in furtherance of own financial gain). “Californiacourts have generally held that, to hold a non-fiduciaryliable for aiding and abetting a fiduciary’s breach of hisduties, the non-fiduciary must have participated in thebreach for personal gain or in furtherance of its own finan-cial advantage.” Neilson v. Union Bank of Cal., N.A., 290F. Supp. 2d 1101, 1122 (C.D. Cal. 2003), citing Doctors’Co. v. Superior Court, 49 Cal. 3d 39, 47, 260 Cal.Rptr.183, 775 P.2d 508 (1989).

Although not formally adopted in Pennsylvania,Restatement (Third) of Law Governing Lawyers § 51 is

applicable to this issue. Section 51 specifically sets forththe circumstances in which a lawyer should be held liablefor aiding and abetting a breach of fiduciary duty and, inso doing, includes a carve out precluding claims “when theclient is a partner in a business partnership.” Restat 3d ofthe Law Governing Lawyers, § 51 (comment h). This isconsistent with the language in §57(3), with respect to theissue of attorneys’ liability to non-clients. “A lawyer who

advises or assists a clientto make or break a con-tract, to enter or dissolve alegal relationship, or toenter or not enter a con-tractual relation, is notliable to a non-client forinterference with contractor with prospective con-tractual relations or with alegal relationship, if thelawyer acts to advance theclient’s objectives withoutusing wrongful means.”

If liability for aidingand abetting a breach offiduciary duty is soughtby a non-client against anattorney in Pennsylvania,the court’s analysis shouldinclude the requirementthat there can be no suchliability unless the attor-ney’s conduct fell outside

the scope of his representation of his client. This wouldnot necessarily preclude all aiding and abetting claimsagainst attorneys, however, such claims would be limitedto circumstances in which the attorney participated inthe breach for personal gain or in furtherance of his own financial advantage, which would implicitly take the attorney outside the scope of his representation of his client. ★

The firm is pleased to announce the expansion of our asbestos litigation practice and the opening of

our Long Island office.

On October 1, 2011, six attorneys from the firm ofWeiner Lesniak LLP joined Marshall Dennehey toenhance the depth and geographic footprint of our

asbestos practice. One shareholder and one associatereside in our Roseland, NJ office; one shareholder, two

special counsel and one associate reside in our newLong Island office located in Hauppauge, New York.

Four administrative staff and eight paralegals have come onboard as well.

Please stay tuned for a follow-up story in our next issue.

www.marshalldennehey.com

On July 19, 2011, the Pennsyl-vania Supreme Court issued a deci-sion ordering the Workers’ Com-pensation Supersedeas Fund toreimburse employers and insurersfor medical benefits paid where thedate of the medical service occurredprior to the date supersedeas wasrequested. In the case of Depart-

ment of Labor and Industry, Bureau of Workers’ Compen-sation v. WCAB (Crawford & Co.), 965 A.2d 332 (PaSupreme Court, July 19. 2011), the Court held that the determinative date for Supersedeas Fund reimburse-ment is the date when medical bills are paid by theemployer or insurer, not the date that the medical treat-ment was rendered.

During the filing of a defense petition, an employeralmost always requests supersedeas. The first hearinggenerally serves as the supersedeas hearing. The judgesgenerally accept evidence and can deny the request orgrant a temporary order of partial or total suspension ofbenefits. If the request is denied, but the final decision ofthe judge is that compensation was not payable, theemployer/insurer may submit an application to theSupersedeas Fund requesting reimbursement for “over-payments” made following the initial denial.

The Pennsylvania Workers’ Compensation Act, sec-tion 443(a), 77 P.S. section 999, provides the criteria bywhich reimbursement from the Supersedeas Fund is tobe sought. The parties seeking reimbursement mustestablish that:

(a) A request for supersedeas was made in a pro-ceeding under Section 413 or Section 430;

(b) The request was denied;

(c) The payment of compensation continued dueto the denial of supersedeas; and

(d) A determination was made in the final out-come that the compensation was not, in fact,payable.

During the fiscal year of 2008/2009, the PennsylvaniaBureau of Workers’ Compensation assessed insurers/employers $18,054,158. These assessments serve as theaccount for the Supersedeas “Fund.” In 2008/2009, theBureau processed 516 claims and distributed paymentsof more than $12.5 million.

The pertinent facts of the Crawford & Company caseare that the claimant had suffered a work injury on July21, 1995, and he received benefits pursuant to a Noticeof Compensation Payable with the nature of injuryacknowledged as tendonitis of the right shoulder. OnMarch 16, 2004, the claimant attended an independentmedical examination. On June 1, 2004, the claimantunderwent surgery related to the work injury. The surgi-cal bill was $35,405.45.

As a result of the opinions rendered by the medicalexaminer, on July 19, 2004, the employer filed a petitionfor termination. At the time the petition was filed, super-sedeas was requested and ultimately denied.

The surgical bill from June 2004 was not submittedto the insurer until October of 2004. Payment was madein January 2005. The employer’s petition was ultimatelygranted in June 2005, and benefits were terminated.

Pennsylvania—Workers’ Compensation

A “SUPER” VICTORY FOR EMPLOYERSBy Lori O. Strauss, Esq.*

* Lori is a shareholder and works in our Philadelphia, Pennsylvania, office. She canbe reached at 215.575.2734 or [email protected].

● Court finds that the date medical bills are paid is not the date of service that controls for Super-sedeas Fund reimbursement.

● Insurers should provide proof of payment date and service date for each medical payment made.

● Bundling payments may lead to problems in recovering Supersedeas monies.

KEY POINTS:

Lori O. Strauss

Defense Digest



Defense Digest


COUNSEL FEES ON FUTURE MEDICAL DAMAGES (continued from page 24)

the periodic payments awarded by the jury, the injured par-ty would not receive the full amount of the awarded pay-ments and there would be no assurance that the awardwould be enough to cover the attorney’s fees and costs.

On the other hand, the defendant health care providersargue that under the longstanding “American Rule,” theplaintiffs are to bear their own litigation expenses. This well-settled legal principle can be abrogated only by express statu-tory language that is clear and unequivocal. The defendanthealth care providers argue that Section 509(b)(1) containsno such language of fee-shifting intent. Thus, because thestatutory language does not specifically contain languagerequiring health care providers to pay their adversaries’attorney fees, the defendants maintain that they are notrequired to do so.

Additionally, the defendant health care providersrelied on the overall legislative intent of the Mcare Act.The Pennsylvania Legislature passed the Mcare Act in2002 as part of comprehensive tort reform designed toreduce the impact of a severe medical malpractice insur-ance crisis on Pennsylvania health care providers. Thedefendants argue that every section of the Mcare Act isdesigned to reduce the burden on health care providersand it would defy logic to suggest that Section 509 standsalone in significantly increasing health care providers’ bur-den by subjecting them to payment of attorney’s fees inaddition to the payment of future medical damages.

The defendants further contend that, because thestatute does not obligate the health care providers to payattorney’s fees, the court need not even consider the addi-tional argument that such fees must be calculated on por-tions of the award for future damages that were negated asa matter of law by Glasow’s death. If the Superior Courtconsiders this argument, the defendants assert that itwould be simply unfair to permit plaintiffs’ attorneys toseek payment of fees on future damages that cannot berecovered due to Glasow’s death.

In conclusion, based upon the statutory language ofSection 509 of the Mcare Act, the trial court in Saylerdetermined that medical defendants are not responsiblefor payment of plaintiffs’ counsel fees when there is anaward of future medical damages. The defendant healthcare providers maintain that the overall legislative intent ofthe Mcare Act, which is to reduce, not increase, the bur-den of Pennsylvania health care providers and insurers,must be considered in determining this issue. We must becognizant of the Superior Court’s upcoming opinionregarding this issue. If the Superior Court reverses JudgeMcGinley, health care providers and insurers will be givenadditional responsibilities in medical malpractice casesthat involve an award of future medical damages. ★

CAN “EXCESS” MEAN LESS?(continued from page 21)

Wouldn’t this be every sedentary duty job? How will thisimpact employees who are obese or out of shape? For thesetype of conditions, the first thing that is recommended ismore exercise and more activity. So what is the outcome ofa case where an employee sits behind a desk all day? A deskjob by its very description is just that, a job that requiresyou to sit at a desk all day. It would be foreseeable that anexpert would testify that if the employee was more activeat work (taking into consideration that some employeescan spend an average of 40-50 hours a week working),then perhaps they would have been less obese or in bettershape and, therefore, it would have been less likely thatthey would have sustained the cardiovascular condition.

Are employers now supposed to make sure that theiremployees are just as active at work as they are at home?Do they need to go so far as to require some type of exer-cise, perhaps a gym-like class such as we once wererequired to take in high school? While this may seem likean overreaction or just plain silly, one still must ask thequestion: just how responsible are employers for the healthhabits of their employees? Just where is that line drawn?Employer’s must also be cautioned that this is a double-edged sword ,since based on this case, they can now bepenalized if the work activity is more than home activitiesor if the work activity is less than the activity at home. ★

Defense Digest


CLARIFYING QUALIFICATIONS NECESSARY TO PROVIDE A WRITTEN STATEMENT (continued from page 25)

Moreover, in addressing whether the doctor was prop-erly qualified to provide a written statement in support ofa certificate of merit, Judge Tereshko held that the authorof any statement propounded against an entity coveredunder Mcare must meet the expert qualification standardsof Mcare. Specifically, the Mcare Act Section 512(b), gov-erning medical testimony, including testimony as to thestandard of care, informed consent, causation and thenature and extent of an injury, states that the expert mustmeet the following qualifications to testify as an expert: (1)possess an unrestricted physician’s license to practice medi-cine in any state or District of Columbia; and (2) beengaged in or retired within the previous five years fromactive clinical practice or teaching. Further, an expert tes-tifying to the manner of care must also meet the followingqualification: he must be substantially with the “applicablestandard of care for the specific care at issue at the time ofthe alleged breach of the standard of care.” Section512(c)(1). The physician must “practice in the same sub-

specialty as the defendant physician, or in a subspecialtywhich has a substantially similar standard of care for thespecific care at issue.” Section 512(c)(3). Judge Tereshkonoted that the plaintiff ’s doctor did not have an unre-stricted license and had not practiced or taught in thesame field or specialty as the defendant in the precedingfive years and, thus, did not qualify to render an opinionas to Hahnemann. Therefore, the plaintiff ’s certificationthat an appropriately licensed professional provided awritten statement in support of a certificate of merit wasimproper and subject to sanctions.

As such, the more stringent Mcare expert qualifica-tion standards apply to licensed professionals providingwritten statements in support of a plaintiff ’s certificate ofmerit. These more stringent standards can provide a basisfor sanctions following the conclusion of the case, if thelicensed professional providing the statement in supportof the certificate of merit fails to qualify as an expert underthe Mcare Act, pursuant to Pa. R.C.P. 1042.8(b). ★

A “SUPER” VICTORY FOR EMPLOYERS(continued from page 27)

The insurer filed an application for SupersedeasFund reimbursement with the Bureau. The applicationwas assigned to a judge after the Bureau challenged therequest, and the Bureau argued that the claimant’ssurgery had occurred before the supersedeas request wasmade, such that the insurer was not entitled to reim-bursement. The judge awarded reimbursement, and boththe Workers’ Compensation Appeal Board and the Com-monwealth Court affirmed the judge’s initial ruling.

The Pennsylvania Supreme Court granted the appealto consider the issue of whether the Supersedeas Fundmay deny reimbursement of medical treatment renderedbefore an insurer requested supersedeas when the Penn-sylvania Workers’ Compensation Act only permits reim-bursement of amounts paid as a result of a denial ofsupersedeas. Ultimately, the Court stated that, since thebill was not received by the employer until after itsrequest for supersedeas had been made and denied, it wasnot determinative that the actual bill was for treatment

incurred prior to the request for supersedeas. If super-sedeas had been granted, payment would not have beenmade. Since supersedeas was not granted, the bill waspaid. Thus, the Court felt it was determinative that thepayment resulted from the denial.

This case is an important decision for employers andallows for additional monies to be recouped from theSupersedeas Fund. It is imperative that insurers be mind-ful of the fact that upon a favorable decision on a termi-nation/suspension/modification petition, the right torecoup funds from the Commonwealth is generally trig-gered. The application process requires proof of medical orindemnity payments. Particularly in light of Crawford &Co., the date of payment should be readily available andvisible as part of the evidentiary packet. Moreover, wherepossible, each date of service should show a separate pay-ment date. This will ensure success in all endeavors torecoup overpayments from the supersedeas fund. ★

Defense Digest


OnThePulse…OTHER NOTABLE ACHIEVEMENTS*

John Aponick (Scranton, PA) received the Pennsylva-nia Defense Institute’s Distinguished Service Awardon July 22, 2011, at the organization’s annual confer-ence. The award is given each year to a PDI memberwho has made substantial contributions of time andenergy to the organization and to the interests of thedefense bar. John was recognized during the businessmeeting, and he and his wife were the guests of hon-or at an evening reception. John is in his 50th year oflaw practice and is a former president of PDI.

Douglas Kent (Philadelphia) was the featured presen-ter to the Society of Registered Professional Adjustersin a webinar entitled “Bad Faith Set Up.” Doug spokeregarding attempts to set up insurance companies forbad faith.

Elizabeth Chang (Roseland, NJ) recently co-authored the article “Impacts of Bankruptcy on Self-Insurance,” which was published in Tort Source, apublication of the Tort Trial and Insurance PracticeSection of the American Bar Association. The articledealt with the general themes that can be implicatedwhen self-insureds become insolvent and there isanother layer of insurance available to potentiallyrespond to a claim.

Paul Krepps (Pittsburgh, PA) presented a seminarentitled “Reasonable Expectation of Privacy, the Dan-ger in Enforcing the Wiretap Act” to police officersfrom police departments in Beaver, Allegheny andButler Counties. Approximately 50 police officersfrom 16 municipalities attended the seminar at theCenter Township Municipal Building. Paul was askedto present this seminar as police officers are increas-

ingly the target of individuals who attempt to audioand videotape the officers in the performance of theirduties. The officers requested information on theapplication of criminal and civil law in this context.

Andrew Davitt (Philadelphia, PA) and JamesMcGovern (Pittsburgh, PA) were featured speakersat the Investors Capital Corporation (ICC) Nation-al Conference in Boston, Massachusetts. ICC is oneof the largest independent broker dealers in theUnited States, and Andy and Jamey have handled thedefense of all of its securities litigation throughoutthe country since 2004. The lively interactive pre-sentation before more than 500 financial advisorswas entitled “Tales from the Trenches and Perspec-tives of Outside Counsel.”

James Cole (Doylestown, PA) and Jeffrey Rapattoni(Cherry Hill, NJ) were featured speakers at the 26thAnnual IASIU Seminar & Expo on Insurance Fraud inSan Antonio, Texas, on the topic of “Hail Fraud.” Giv-en the state of a slowed economy, fraudulent claimreporting is on the rise, especially with homeownerand property claims. As a result, the insurance industrymust adjust to the fact that more claims contain someelement of exaggeration or falsity. The latest variant ofthis trend is false claims involving hail. Their presenta-tion focused on the growing problem and what thecarrier community can do in the wake of claims thatare increasing per capita. ★


Defense Digest


FIRM BACK GROUND AND STATE MENT OF PUR POSEMarshall, Dennehey, Warner, Coleman & Goggin, a professional corporation, was founded in 1962. Since that time, our

law firm has realized substantial growth in response to our continually expanding client base. We are exclusively a defensefirm, and our pro fes sion al practices encompass a wide spectrum of litigation matters. We apply business discipline to thepractice of law with resulting cost savings to our clients.

We are over 400 attorneys strong and have nineteen offices strategically located in Pennsylvania, New Jersey, Delaware,Ohio, Florida and New York. Devoted to defense alone, our firm consists of a number of litigation practice groups, including:

CASUALTY DEPARTMENTThomas A. Brophy, Esquire—Director1845 Walnut Street, Philadelphia, PA 19103215.575.2748 • Fax 215.575.0856email: [email protected], Sports & Entertainment Practice GroupAsbestos LitigationAutomobile Liability Practice GroupAviation and Complex Litigation Practice GroupConstruction Injury Practice GroupGeneral Liability Practice GroupHospitality Litigation Practice GroupMaritime Litigation Practice GroupMedical Devices & Phar ma ceu ti cal Prac tice GroupProduct Liability Practice GroupProduct Warranty Practice GroupProperty Litigation Practice GroupRetail Liability Practice GroupSpecial Investigation Litigation Practice GroupTrucking & Transportation Liability Practice Group

HEALTH CARE DEPARTMENTKathleen S. McGrath, Esquire—Director620 Freedom Business Center, Suite 300King of Prussia, PA 19406610.354.8255 • Fax 610.354.8299email: [email protected] Law Practice GroupHealth Care Liability Practice GroupLong-Term Care Practice Group

PROFESSIONAL LIABILITY DEPARTMENTPhilip B. Toran, Esquire—Director1845 Walnut Street, Philadelphia, PA 19103215.575.2813 • Fax 215.575.0856email: [email protected] Advocacy & Post-Trial Practice GroupArchitects & Engineers and Construction Defect Practice GroupClass Action Litigation Practice GroupCommercial Litigation Practice GroupConsumer & Credit Law Practice GroupEnvironmental & Toxic Torts Practice GroupInsurance Coverage & Bad Faith Practice GroupLife, Health & Disability Practice GroupPrivacy and Data Security Practice GroupProfessional Li a bil i ty Prac tice GroupPublic Entity & Civil Rights Litigation Prac tice GroupReal Estate E & O Practice GroupSecurities and Investments Practice GroupTechnology, Media & Intellectual Property Practice GroupWhite Collar Crime Practice Group

WORKERS’ COMPENSATION & EMPLOY-MENT PRACTICES DEPARTMENTPeter S. Miller, Esquire—Director1845 Walnut Street, Philadelphia, PA 19103215.575.2610 • Fax 215.575.0856email: [email protected] Law Practice GroupMedicare Set-Aside Practice GroupWorkers’ Compensation Practice Group

Surveys of the nation’s largest firms con sis tent ly show our firm to be a leader in mi nor i ty hiring and advancement.Our continued dynamic growth and the ex pan sion of our client base constitute the best evidence that we are

effectively meeting our cli ents’ business needs and ex pec ta tions. We are very proud of our success. We will strive tocontinue to be part of yours.

Defense Digest


ABOUT OUR PUBLICATION Our experience confirms that effective risk and claims management must be founded upon timely in for ma tion.

Our firm is dedicated to prompt, informative reporting to our clients.

This publication is offered to furnish our views on current court decisions and other matters that may be of in ter est to our clients on topics not spe cif i cal ly related to any particular claim. This publication is pro vid ed free of chargeand with out a pro fes sion al relationship to any particular person, entity or claim. The views ex pressed are those of theauthors and are not to be construed or used as professional advice.

Our firm welcomes inquiries, comments and suggestions regarding this publication or other ques tions, whichmay be directed to:

Peter S. Miller, Esquire Thomas A. Brophy, Esquire Philip B. Toran, EsquireChairman of the Board &COO President & CEO Chairman, Executive Committee1845 Walnut Street 1845 Walnut Street 1845 Walnut StreetPhiladelphia, PA 19103 Philadelphia, PA 19103 Philadelphia, PA 19103(215) 575-2610 (215) 575-2748 (215) 575-2813email: [email protected] email: [email protected] email: [email protected]

Defense Digest is also available online at www.marshalldennehey.com.

Our other newsletters, Law Alerts and What’s Hot in Workers’ Comp, are also available on the PublicationsPage on our web site.

If you would like to receive your copy of any of our newsletters via e-mail, or if you would like to beremoved from our mailing list, please contact Terré Montemuro at [email protected].

This newsletter is prepared by Marshall, Dennehey, Warner, Coleman & Goggin to provide information onrecent legal developments of interest to our readers. This publication is not intended to provide legal advicefor a specific situation or to create an attorney-client relationship. We would be pleased to provide such legalassistance as you require on these and other subjects when called upon.

Defense Digest is published by Marshall, Dennehey, Warner, Coleman & Goggin, a defense litigation law firm withover 400 attorneys in 19 offices in the Commonwealth of Pennsylvania and the states of New Jersey, Delaware,Ohio, Florida and New York. In some jurisdictions this publication may be considered attorney advertising.

Copyright © 2011 Marshall, Dennehey, Warner, Coleman & Goggin, all rights reserved. No part of thispublication may be reprinted without the express written permission of our firm.

MARSHALL, DENNEHEY, WARNER, COLEMAN GOGGIN&A DEFENSE LITIGATION LAW FIRM

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Defense Digest - Volume 17 No 4 (December 2011) Mar 08 Vol ... Digest V… · Vol. 17, No. 4...

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Transcript of Defense Digest - Volume 17 No 4 (December 2011) Mar 08 Vol ... Digest V… · Vol. 17, No. 4...