New Jersey Defines Duty Owed by Public Transit Systems to Their Passengers

Recently, the New Jersey Supreme Court clarified the duty owed to passengers travelling on the State’s public buses. Maison v. N.J. Transit Corp., 245 A.3d 536 (N.J. 2021). This case involved a twenty-year old female college student who boarded a bus operated by New Jersey Transit. Behind her on the bus were four to five male teenage passengers. Id. at 536. Not long after the bus was underway, the teenagers began verbally harassing the student, eventually throwing objects at her with one even brandishing a knife. Id. The student attempted to change seats, but the teens persisted in their harassment. Id. Before leaving the bus, one of the teens threw a bottle, hitting the student in the face and causing a severe injury to her forehead, which was described as permanent. Id.

One of the main issues analyzed by the Court was the duty of care owed by New Jersey Transit to its passengers. At common law, common carriers have traditionally been held to a higher standard of care than other tortfeasors in the realm of negligence. Maison, 245 A.3d at 536 (citing Schott v. Weiss, 105 A. 192, 193 (N.J. 1918)). The rationale for this was largely that such a carrier assumes the protection of its passengers who are, by virtue of their being passengers, largely restricted in how they may protect themselves. Id. (citing Derwort v. Loomer, 21 Conn. 245, 253 (1851). However, in New Jersey it was not entirely clear whether public transit systems would be subject to the heightened standard generally applicable to other such carriers. Id. (citing Lieberman v. Port Auth. of N.Y. & N.J., 622 A.2d 1295, 1300 (N.J. 1993)).

In Maison, unlike in its previous decisions such as Lieberman, the Court unambiguously addressed this issue, finding that, “the heightened common-carrier standard applies to public carriers like NJ Transit.” Id. The Court’s Opinion found support in caselaw from both the California and Texas Supreme Courts, which similarly hold public transit systems to a heightened standard. See Lopez v. Southern California Rapid Transit District, 221 Cal. Rptr. 840 (Cal. 1985); VIA Metro. Transit v. Meck, S.W.3d, 2020 Tex. LEXIS 613 (Tex. 2020).

Insofar as practical application of this standard and whether NJ Transit breached it, the Court found that the bus driver was under no obligation to intervene physically and end the behavior of the teenagers. In fact, the Court stated that per its understanding of the applicable regulations, a bus driver is not authorized to take such action. Maison, 245 A.3d at 536 (citing N.J.A.C. 16:83-1.6). However, the Court stated that a bus driver must at a minimum exercise “utmost caution” to satisfy the heightened standard, which on the facts presented would have included addressing the harassers directly, stopping the bus, or calling the police. Unfortunately for the student in Maison, the driver never took any of these actions until after she was struck with the bottle, and the teens who assaulted her were never apprehended by the police.

Hopefully, the Maison decision will deter would-be assailants from harassing passengers and bolster the safety of our public transportation.

If You Can Disclaim Coverage - Do Not Wait To Do So

The First Department recently reversed a New York County Supreme Court order, which had denied plaintiff's motion for summary judgment for a declaration of coverage and granted defendant's motion which sought a declaration that it is not obligated to defend or indemnify plaintiff. See ADD Plumbing, Inc. v Burlington Ins. Co., ___AD3d___, 2021 NY Slip Op 01498, *1 (2021). The court declared that the “defendant ha[d] a duty to defend and indemnify plaintiff in the underlying action.” See id.

The court explained that "a timely disclaimer pursuant to Insurance Law § 3420(d) is required when a claim falls within the coverage terms but is denied based on a policy exclusion" See id. (citing GHP Partners, LLC v American Home Assur. Co., 87 AD3d 843, 843 [1st Dept 2011]). The purpose of Insurance Law § 3420, as described by the First Department, “is to protect the insured, injured party, or any other claimant with an interest in the outcome, from prejudice based on a delayed denial of coverage.” See id.  (citing Admiral Ins. Co. v State Farm Fire & Cas. Co., 86 AD3d 486, 488 [1st Dept 2011]).

According to the First Department, the clock begins to run for an insurer to make a disclaimer once “the insurer first learns of the grounds for disclaimer of liability or denial of coverage." See id. (citing Country-Wide Ins. Co. v Preferred Trucking Servs. Corp., 22 NY3d 571, 575-576 [2014]). Whether the insurer disclaimed coverage as soon as reasonably possible after it first learns of the ground for disclaimer is a case-specific legal question. See id. The First Department acknowledged that “courts have found relatively short periods to be unreasonable as a matter of law" when there is no excuse or mitigating factor for the delay.  See id. (quoting Travelers Ins. Co. v Volmar Constr. Co., 300 AD2d 40, 43 [1st Dept 2002]).

In ADD, the defendant's disclaimer dated December 24, 2014 was “untimely as a matter of law” and their position that they only received plaintiff's claim on December 16, 2014” was deemed unpersuasive because the defendant had been on notice about the accident for several months before it disclaimed coverage and commenced an investigation. The First Department explained that the defendant was “sufficiently aware of the facts that would support a disclaimer but waited almost two months before disclaiming coverage.” (GHPPartners, LLC, 87 AD3d at 844).

Therefore, it is imperative that once an insurance carrier becomes aware of a claim, that it conducts an investigation and determines whether an exception in the insurance policy will entitle it to a disclaimer. Once the insurance carrier recognizes that it can make a disclaimer, it should do so immediately in order to avoid being deemed untimely, in light of the First Department deeming a two month delay as “unreasonable.”

Georgia Employers No Longer Automatically Entitled To Summary Judgement On Direct Claims Where Liability Is Admitted

Under Georgia’s former Respondeat Superior Rule, an employer was generally entitled to summary judgment on direct liability claims such as negligent hiring, retention, supervision, or entrustment where it had admitted its vicarious liability for the employee’s negligence. 116 Ga. App. 848, 853-686, reversed on other grounds, 224 Ga. 263 (1968).  Generally, when an employee causes an injury to another, the test to determine if the employer is liable is whether the employee was at the time of the injury acting within the scope of his employment and on the business of the employer. Accordingly, under Georgia’s long-standing Respondeat Superior Rule, Georgia courts held that where an employer admitted it was vicariously liable for its employee’s negligence, direct claims for negligent entrustment, hiring, training, and/or retention would not entitle a plaintiff to a greater recovery but would merely serve to prejudice the employer and potentially lead to double dipping.

In 2005, Georgia’s massive tort reform movement led to the enactment of the apportionment statute, codified at O.C.G.A. § 51-12-33.  Pursuant to the apportionment statute, a Georgia jury is required to apportion fault for an injury amongst all responsible parties and non-party tortfeasors pursuant to each’s percentage of fault. In November 2020, in Quynn v. Hulsey, et al. the Georgia Supreme Court considered whether the long-standing Respondent Superior Rule had been effectively abrogated by the apportionment statue.

Quynn involved a claim for wrongful death against Hulsey and his employer, TriEst, for the death of Brandon Lanier.  Hulsey was operating his employer’s vehicle when he struck and killed Lanier while Lanier crossed the road.  The trial court granted partial summary judgment to TriEst on the plaintiff’s direct liability claims for negligent entrustment, hiring, training, and supervision based upon the Respondeat Superior Rule.  TriEst did not dispute that it was vicariously liable for Hulsey’s negligence.  After trial on the negligence claims, the jury found Hulsey/TriEst to be 50% at fault and Lanier to be 50% at fault, with the result that the plaintiff was precluded from recovering any damages pursuant to O.C.G.A. § 51-12-33(g).

The Quynns appealed, claiming in part that the trial court’s grant of summary judgment to TriEst on the direct liability claims, pursuant to the Respondeat Superior Rule, was inconsistent with the apportionment statute because the jury was not permitted to apportion any fault to TriEst as an independent tortfeasor.  The Georgia Supreme Court agreed with the appellant.

The Georgia Supreme Court was clear that any fault apportioned to the employer would have to be for its own independent negligence and not for vicarious liability. With the elimination of the decisional Respondeat Superior Rule, employers that litigate in Georgia will no longer be able to automatically obtain summary judgment on direct liability claims where they have admitted vicarious liability for an employee’s negligence.  We anticipate seeing an increase in discovery regarding an employer’s hiring, supervision, and training practices, even in straight-forward admitted liability matters. 

Plaintiff’s Activities Not Subject to Protection Under Labor Law §241(6)

In an action to recover damages for personal injuries, the plaintiff filed an Appeal from a Judgment of the Supreme Court, Westchester County, dated March 28, 2019. The Judgment was granted following entry of an Order, which granted the defendants' Motion for Summary Judgment dismissing the cause of action as to the alleged violation of Labor Law §241(6), granting the defendants' Motion for Summary Judgment, and against the plaintiff, dismissing that cause of action.

The plaintiff was employed by non-party, Skanska E.C.C.O. III, a general contractor hired by the defendant Metro-North Railroad for the Harmon Shop Replacement Project (hereinafter “the project”). The project involved the construction of two two-story buildings. On August 19, 2016, the plaintiff was working on the premises of the subject project location, performing welding work on one of the partially completed buildings. On that date, the plaintiff used an aerial lift to ascend to the second floor of the building and perform work on the roof. The plaintiff finished his work for the day at 3:00 p.m., descended to the ground floor, and put away his equipment. After realizing that he left his car keys on the second floor of the building, the plaintiff used the aerial lift to ascend to the second floor, retrieved his keys, and got back into the lift. However, when the plaintiff attempted to use the lift to descend to the ground floor, the lift "release[d]" and the plaintiff's head "slammed" into the railing of the lift's basket, which caused plaintiff to allegedly sustain injuries as a result thereof.

Thereafter, in February 2017, the plaintiff commenced an action to recover damages for personal injuries against the defendants, alleging, inter alia, a violation of Labor Law §241(6). In August 2018, the defendants moved for summary judgment dismissing the complaint, and the plaintiff opposed the defendants' motion.  In an order dated January 15, 2019, the Supreme Court, among other things, granted that branch of the defendants' Motion for Summary Judgment dismissing the Labor Law §241(6) cause of action. The court subsequently issued a Judgment dated March 28, 2019, in favor of the defendants and against the plaintiff dismissing the complaint. The plaintiff Appealed the Court’s Judgment as it relates to the dismissed cause of action under Labor Law §241(6).

On Appeal, the Appellate Division, in the Second Judicial Department, affirmed the Supreme Court’s Judgment, holding that the defendants established, prima facie, that the plaintiff was not engaged in any of [*2] the enumerated activities protected by Labor Law §241(6) at the time of his accident because the defendants presented competent evidence that the subject accident occurred after the plaintiff and his coworker had completed the entirety of their work for the day (see Feinberg v Sanz, 115 AD3d 705, 706; Simon v Granite Bldg. 2, LLC, 114 AD3d 749, 753; see also Robinson v National Grid Energy Mgt., LLC, 150 AD3d 910, 913; Ferenczi v Port Auth. of N.Y. & N.J., 34 AD3d 722). Moreover, plaintiff failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324). Therefore, the Supreme Court properly granted that branch of the defendants' Motion for Summary Judgment dismissing the Labor Law § 241(6) cause of action.

The Best Affirmative Defense for Summary Judgement, is a Strong Offense

The Second Judicial Department for the Supreme Court of the State of New York, Appellate Division, recently addressed the burden of proof a plaintiff must show for a Motion for Summary Judgment on the issue of liability and to dismiss a defendant’s affirmative defenses that allege plaintiff’s comparative negligence or plaintiff’s liability. See Joann Sapienza v. Rebecca Harrison, ___ A.D.3d ___, 2021 N.Y. Slip Op. 08210 (2d Dept. 2021). Simply, if a defendant merely argues that a plaintiff’s Motion for Summary Judgment is “premature” without raising triable issues of fact, the court will likely grant a plaintiff’s Motion. 

In Sapienza, the plaintiff allegedly sustained personal injuries in a motor vehicle accident that occurred in Brooklyn, New York, when the defendant’s vehicle struck plaintiff’s vehicle.  Prior to depositions, the plaintiff moved for Summary Judgment on the issue of liability and to dismiss the defendant’s affirmative defenses relating to the plaintiff’s liability and plaintiff’s comparative negligence. 

Plaintiff’s Motion for Summary Judgment contended that the defendant failed to yield the right of way when turning left (see N.Y.C. Vehicle & Traffic Law, §1141) and was the sole proximate cause of the accident which caused the plaintiff to sustain personal injuries.  In support of plaintiff’s Motion for Summary Judgment, plaintiff submitted an affidavit indicating that the intersection’s traffic light was in her favor when the defendant’s vehicle failed to signal and, without warning, made a left-hand turn directly in front of plaintiff’s vehicle. Further, the plaintiff’s affidavit established that she had no comparative fault or liability for the subject accident. The defendant’s opposition neither included an affidavit disputing plaintiff’s affidavit nor raised any issues of triable fact; the opposition merely stated that the plaintiff’s Motion for Summary Judgment was premature and should be denied.

The Trial Court denied the plaintiff’s Motion for Summary Judgment as “premature” for which the plaintiff appealed.  Ultimately, the Second Judicial Department reversed the Trial Court’s order and granted the plaintiff’s Motion for Summary Judgment on the issue of liability and to dismiss defendant’s affirmative defenses for plaintiff’s liability and comparative negligence.

The Second Judicial Department found that plaintiff’s undisputed affidavit established her entitlement to Summary Judgment on the issue of liability as the affidavit detailed the defendant’s violation of the applicable traffic laws and that defendant was the sole proximate cause of the accident.  Additionally, the Court found that defendant’s contentions that this Motion was premature failed “to demonstrate that discovery might lead to relevant evidence or [failed to indicate] that the facts essential to justify opposition to the motion were exclusively within the knowledge and control of the movant.”  Further, the Court held that “the mere hope or speculation that evidence may be uncovered during the discovery process is insufficient to deny the motion.” 

From a defense perspective, Sapienza teaches us that simply opposing a Motion for Summary Judgment on the issue of liability by claiming its “premature” without any support of triable issues of fact, even if significant discovery is outstanding, will not be enough to defeat the motion.  Sapienza also shows the importance of obtaining an affidavit of a defendant tortfeasor to rebut the accident dynamics submitted in a plaintiff’s affidavit.  Further, the defendant’s affidavit will assist in maintaining a defendant’s affirmative defenses on a plaintiff’s liability and comparative negligence.  Therefore, the best affirmative defense to defeat a plaintiff’s premature Motion for Summary Judgment on liability, is a strong offensive approach in rebutting plaintiff’s view as to the accident dynamics and the potential liability for the accident.

Combating Insurance Fraud in Florida

Property insurance fraud and abusive practices have set the cost of homeowner’s insurance rates in Florida on a skyward trajectory over the past few years. This is due to an increasing number of lawyers, contractors, and unlicensed claims adjusters posing as insurance specialists and targeting homeowners who suffer damages in an effort to get them to execute an assignment of benefits. Once the assignment of benefits is executed, inflated claims are filed to the insurer. If the insurer pays the inflated claim, it contributes to higher rates for all policyholders. If the insurer does not pay, it gets caught up in costly litigation, which also contributes to higher rates. According to the Insurance Information Institute, 45,000 lawsuits were filed in Florida against insurers in 2018. That number doubled to 92,000 in 2019, more than tripled to 150,000 in 2020, and is projected to surpass 200,000 in 2021. As a result, insurers are requesting legislative intervention to avoid bankruptcy. Moreover, fewer carriers are writing new policies in Florida.

In response, the Florida Senate Banking and Insurance Committee approved bill SB 76 (2021). The bill mandates that policies adjust roof claims according to a roof surface reimbursement schedule. As per the schedule, insurers will: (1) provide reimbursement for repair, replacement, and installation based on the annual age of a roof surface type; (2) provide full replacement coverage for any roof surface type less than 10 years old; and (3) unless otherwise demonstrated to the office to be actuarially justified, provide for reimbursement amounts of no less than:

a. Seventy percent for a metal roof type.

b. Forty percent for a concrete tile and clay tile roof type.

c. Forty percent for a wood shake and wood shingle roof type.

d. Twenty-five percent for all other roof types.

 This section is meant to discourage, and limit, inflated claims after hurricane damage. In addition, the bill provides that there is a strong presumption that a lodestar fee is sufficient and reasonable when awarding attorney fees for a claim arising under a property insurance policy. Under the loadstar method, attorney fees are calculated using the number of hours reasonably expended on the matter multiplied by a reasonable hourly rate. Currently, trial courts adjust the lodestar amount for property claims by applying a multiplier from 1.5 to 3.0 based on the likelihood of success at the outset of the case. The fee multiplier was meant to encourage attorneys to represent homeowners with relatively low resources on a contingency fee basis. However, the bill proposes a stark departure from the multiplier method in order to put an end to abusive practices and protracted litigation. The bill also proposes to change the amount of time policyholders have to file a claim after damages from three years to two years. Additionally, it will require policyholders to provide notice to insurers at least 60 days before filing lawsuits. 

The bill is drawing support from insurance companies and strong opposition by plaintiffs’ attorneys. As a result, we expect to see a lobbying war during the legislative session that will start on March 2, 2021. Regardless of the outcome of the bill one thing is clear, insurance reform is a priority for the 2021 legislative session in Florida.

Callahan & Fusco will continue to monitor the progress of this proposed legislation.