Shifting the Burden of Proof: "Storm in Progress"

The Appellate Court of Connecticut, last month, weighed in on the question of burden shifting as it applies to the “ongoing storm doctrine” (limiting liability to landowners as to potential hazards caused and injuries sustained therefrom) when plaintiff made an appeal as to the lower court’s decision to grant summary judgment to defendants. Belevich v. Renaissance I, LLC, 207 Conn. App. 119 (2021)

In this matter, plaintiff, Robert Belevich and Yale University sought damages that were the result of an alleged trip and fall from untreated ice on the premises. The lower court granted summary judgment to defendants, pursuant to the “ongoing storm doctrine.”  On appeal, the plaintiffs claimed that the lower court improperly granted summary judgment in favor of the defendants on the basis of the ongoing storm doctrine because (1) the defendants did not establish the absence of a genuine issue of material fact as to the applicability of the doctrine, and (2) the court improperly, albeit implicitly, shifted the burden to the plaintiffs to negate the applicability of the doctrine, contending that the defendants should have been required to demonstrate that the ongoing storm produced the black ice on which the plaintiff allegedly fell. Id.

Plaintiff’s deposition unequivocally stated that it was snowing when he arrived at the premises and that it continued snowing throughout the day, including at the time of his alleged fall.  Further, plaintiff testified that there were several inches of snow on the ground and that a snowplow was contemporaneously working to clear the premises.  Defendants used plaintiff’s testimony to bolster their motion for summary judgment.

In its analysis the Court, sought guidance from its sister, the State of New York, as the issue had been well litigated as to burden-shifting.  According to this approach, the New York courts found that once a defendant proved a storm in progress, the plaintiff is required “to raise a triable issue of fact as to whether the accident was caused by a slippery condition at the location where the plaintiff fell that existed prior to the storm, as opposed to precipitation from the storm in progress, and that the defendant had actual or constructive notice of the pre-existing condition…” See Meyers v. Big Six Towers, Inc., 85 App. Div. 3d 877, 925 N.Y.S.2d 607 (2011).  The Court was persuaded by this reasoning and expressly adopted it as a matter of Connecticut Common law.

Further, according to the Court, even evidence that there was ice in the general vicinity of the accident prior to the storm is insufficient to raise a triable issue of fact as to whether the defendant had actual or constructive notice of the condition of the specific area where the plaintiff fell. See Belevich v. Renaissance I, LLC, 207 Conn. App. 119 (2021)(internal citations omitted).

In interpreting the Court’s ruling, once a defendant meets their burden of proving there was an ongoing storm at the time of injury whether with climatological evidence or as in this case, the plaintiff’s own testimony, the burden is shifted.  The plaintiff then must prove that the hazard or condition pre-existed the storm and that the defendant had actual or constructive notice of same.  This ruling therefore sets forth how Connecticut’s courts will procedurally determine the applicability of summary judgment in cases where the Ongoing Storm Doctrine is at issue.

Second Circuit Determines Indemnity Agreements Take Priority in Coverage Disputes Under New York Law

The Second Circuit recently held that, under New York law, the indemnity agreement in a contract between a contractor and subcontractor governs the priority of coverage for the contractor as an additional insured on the subcontractor’s commercial general liability policy, rather than the “Other Insurance” clause of the policy. Century Sur. Co. v Metro. Tr. Auth., 20-1474-cv, 2021 U.S. App. LEXIS (2nd Cir. Oct. 5, 2021). 

At issue in Century was a contract between defendant Long Island Railroad (“LIRR”) and Rukh Enterprises (“Rukh”) to remove lead paint. Rukh contractually agreed to indemnify LIRR against liabilities arising out of the project and named LIRR as an additional insured on its insurance policies. Rukh then hired a non-party subcontractor to perform the lead-related work.  As the result of an accident that occurred while working on the project, an employee of the subcontractor brought an action against Rukh and LIRR in State court.

Century Surety Company (“Century"), the excess liability insurer for Rukh, filed a complaint in Federal court, Southern District of New York, seeking a declaratory judgment that it had no duty to defend or indemnify any party in the State court action. Admiral Insurance Company (“Admiral”), the protective liability insurer of LIRR, filed a separate suit against Century seeking a declaratory judgment that Century was obligated to defend and indemnify LIRR and that Century’s policy must exhaust before Admiral’s policy would respond. The cases were consolidated, and all parties moved for summary judgment. The district court found that the language in the “Other Insurance” provision of the Century policy was a “true excess policy,” so Century was not liable to contribute until all available insurance policies, including Admiral’s, had been exhausted. The district court found Century was not obligated to provide insurance coverage for the underlying case. This decision was appealed. 

On appeal, the Second Circuit concluded that the indemnity agreement in the contract controlled and that even if the contractor’s insurance was excess to the owner’s insurance, the owner was entitled to indemnification from the contractor because the owner’s liability would pass through to the contractor and its insurers. In making this decision, the Second Circuit rejected the traditional procedural formalities which called for a separate action to enforce the indemnity agreement, reasoning that even if the “Other Insurance” clause might not require an indemnitee’s insurer to pay in the first instance, the indemnity agreement ultimately could require the insurer to pay, such that both obligations should be determined in one action. 

Therefore, parties entering into contracting relationships should reevaluate indemnity portions of their contracts moving forward as the Second Circuit has found New York case law supports finding an indemnity agreement to supersede “Other Insurance” clauses of an insurance policy even when a “true excess policy” is involved, which can result in excess insurance policies taking on more liability than anticipated if the underlying contracts include agreements to indemnify parties against liabilities arising out of the work being performed anticipated by the contracts.

Homeowner Emergency Measures

The number of homeowner insurance policies containing a Reasonable Emergency Measure clause has significantly grown over the last several years.  Under many of these policies, insureds are provided additional coverage for emergency services furnished to protect the insured property from further damage. Customarily, these clauses provide for a coverage limit and, consequently, any amount incurred above this threshold requires written authorization and approval from the insurer for the additional coverage to be extended.

In All Insurance Restoration Services, Inc. a/a/o Miguel Cediel and Mariela Cediel v. Citizens Property Insurance Corporation, 46 Fla. L. Weekly D2193a (Fla. 3rd DCA 2021). Florida’s Third District Court of Appeal recently affirmed summary judgment for a defendant insurer where the damages sought by the restoration company that provided the emergency services exceeded the limits of the homeowner’s insurance policy and no prior approval was obtained before the emergency services were provided.  

The pertinent facts of the opinion were as follows.  On October 22, 2017, the home of the policyholders, Miguel and Mariela Cediel, sustained water damage when the plumbing source in their refrigerator leaked.  Four days later, the Cediels hired All Insurance Restoration Services, Inc. (“AIRS”) to perform water mitigation services and assigned their benefits under the homeowners’ policy to AIRS.  AIRS completed the remediation services a little over one week later, on October 30, 2017.  On that same day, the Cediels, through their attorney, notified their homeowners’ insurer, Citizens Property Insurance Corporation, of their claim.  Citizens inspected the property on November 17, 2017.  On November 29, 2017, AIRS sent Citizens an invoice for $7,238.75 for the water mitigation services.  Prior to submitting this invoice, neither AIRS nor the Cediels requested prior approval from Citizens to exceed the $3,000 limit for reasonable emergency measures.  On December 2, 2017, Citizens sent a letter to AIRS, enclosing a $3,000 check “towards reasonable emergency measures limit of liability portion of the loss.”

AIRS deposited the $3,000 check and proceeded to file a complaint against Citizens for the balance of the invoice.  AIRS alleged, as assignee of the Cediels, that Citizens breached the insurance contract by failing to completely pay AIRS for the emergency water mitigation services rendered to the Insureds.  Citizens moved for summary judgment against AIRS and the trial court granted the motion, ruling that there was no record evidence that neither AIRS nor the insureds requested approval to perform work in excess of $3,000, and that the plain and ordinary meaning of the policy did require such prior request and approval.  The Third DCA affirmed the trial court’s ruling and held that if the “language in an insurance contract is plain and unambiguous, a court must interpret the policy in accordance with the plain meaning so as to give effect to the policy as written.”  Id. (quoting Washington Nat'l Ins. Corp. v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013)).

Policy limitations should be considered in direct and assignee claims for remediation services, like those involved in All Ins. Restoration Servs.Callahan and Fusco will continue to monitor court decisions on this issue.

N.J. Supreme Court Expands Scope and Permits Greater Disclosure Under OPRA

In Bozzi v. City of Jersey City, the New Jersey Supreme Court held that citizens of the State of New Jersey do not have a reasonable expectation of privacy concerning dog ownership, as owning a dog is a “substantially public endeavor.” 2021 N.J. LEXIS 885, at *9 (Sep. 20, 2021). The underlying facts of the case involved a Plaintiff/licensed home improvement contractor who sought copies of dog license records from Jersey City pursuant to the common law right of access and the Open Public Records Act (OPRA), N.J.S.A. 47:1A-1 to -13. Specifically, Plaintiff requested the dog owners’ names and addresses to advertise his invisible fence installation services. Bozzi, N.J. LEXIS 885, at *9.

The Plaintiff’s request raised privacy concerns, with the city arguing against disclosure, highlighting inherent concerns such as (1) residents not listed as dog owners might be perceived as more vulnerable to burglary, (2) the revelation of the addresses of those targeted by stalking/threats, and (3) knowing dog-owners’ addresses might encourage would-be burglars to bring a weapon. Id. at 11.  Nevertheless, after analyzing OPRA, the Court sided with the Plaintiff.

The Court focused on the fact that OPRA contains twenty-three enumerated exceptions from disclosure, which include the names and addresses of those on record as having a license to hunt with a firearm. Id. at 17. Absent from these specifically enumerated exceptions was dog ownership, or according to the Court, any apparent overarching legislative intent directed at the nondisclosure of names or home addresses. Id. at 18. Moreover, the Court explained that even where information is not listed in the enumerated exceptions, its disclosure can still be prevented per OPRA’s privacy clause. Id. at 19. This clause focuses on a person’s, “objectively reasonable expectation of privacy,” with this expectation determined primarily by a focus on information typically kept private versus information extended to the public. Id.

However, the Court viewed the situation in Bozzi as failing to trigger the protection of the privacy clause. Relying on past precedent as set forth in Brennan v. Bergen Cty. Prosecutor's Office, 233 N.J. 330 (2018), the Court found that there is no uniform prohibition on the disclosure of names and addresses, so their analytical focus must be targeted at, “the ownership and licensing of a dog.” The Court was not persuaded that dog ownership and licensure warranted the protection of the privacy clause, describing dog ownership as an “inherently public endeavor.” Id. at 21. Specifically, the Court described dog owners as being, “regularly exposed to the public during daily walks, grooming sessions, and veterinarian visits.” Id. The Court also highlighted the fact that many dog owners share their pet on social media and through other public platforms. Id. at 21.

Though, the Court did limit the disclosure, finding that sharing information as to dog breed or purpose must be kept confidential for the health and safety of the public. Id. at 22. The Court rationalized that certain high-value dog breeds might attract unwanted attention and that a dog’s purpose such as for service or law enforcement should also remain private. Nevertheless, the effect of the Court’s ruling remains the same. If you are a licensed dog owner in New Jersey, your name and address can now be disclosed under OPRA.

Florida Extends the “Apex Doctrine,” Providing New Protections from Discovery Abuses for High-Level Corporate Officers

The Florida Supreme Court, in a six to one decision, ruled that the “Apex Doctrine,” which historically only applied only to high-level government officers, will now also apply to high-level business officers.

Traditionally, the apex doctrine was framed to balance the competing goals of limiting potential discovery abuse and ensuring litigants’ access to necessary information. Properly applied, the doctrine “will prevent undue harassment and oppression of high-level [government] officials while still providing a [party] with several less-intrusive mechanisms to obtain the necessary discovery, and allowing for the possibility of conducting the high-level deposition if warranted.”  

The Court’s August 26, 2021 decision to codify the apex doctrine arose from a certiorari appeal from a split decision by the First District Court of Appeal in Suzuki Motor Corp. v. Winckler, 284 So. 3d 1107 (Fla. 1st DCA 2019).  Winckler raised the question of whether the apex doctrine should be applied to governmental agencies, but not corporations.  The Court dismissed Winckler and addressed the issues with a rules opinion, amending Florida Rule of Civil Procedure 1.280(h) and incorporating the Apex Doctrine into it. 

Suzuki Motor Corp. v. Winckler was a product liability case in which the plaintiff sued the Suzuki Motor Corp. alleging that the brakes failed on his GSX-R series Suzuki motorcycle while he was riding it, resulting in a crash that left the plaintiff paralyzed from the waist down.  In the course of discovery, the plaintiff sought a letter rogatory from the trial court seeking to take the examination of Mr. Osamu Suzuki, the Chairman of the Board of Suzuki Motor Corporation, in Japan.  The plaintiff claimed that Mr. Suzuki “possesses unique knowledge about specific facts relevant to [the] allegations,” citing the Chairman's involvement with a document addressing the brake issue and a related email, and the trial court ultimately allowed the deposition.  A split decision in the First District Court of Appeal resulted in the case going to the Florida Supreme Court on certiorari review.

In its recent rules opinion, the Florida Supreme Court stated: “We believe that it is in Florida’s best interests to codify the apex doctrine in our rules of civil procedure and to apply the doctrine to both private and government officers. Making this change as a rule amendment allows us to ensure consistency across the two contexts and to define and explain the apex doctrine as clearly as possible.”

New Florida Rule of Civil Procedure 1.280(h) reads: “Apex Doctrine.  A current or former high-level government or corporate officer may seek an order preventing the officer from being subject to a deposition. The motion, whether by a party or by the person of whom the deposition is sought, must be accompanied by an affidavit or declaration of the officer explaining that the officer lacks unique, personal knowledge of the issues being litigated. If the officer meets this burden of production, the court shall issue an order preventing the deposition, unless the party seeking the deposition demonstrates that it has exhausted other discovery, that such discovery is inadequate, and that the officer has unique, personal knowledge of discoverable information. The court may vacate or modify the order if, after additional discovery, the party seeking the deposition can meet its burden of persuasion under this rule. The burden to persuade the court that the officer is high-level for purposes of this rule lies with the person or party opposing the deposition.”

This rule change will surely play a critical role in the future of discovery, as the focus will now be on determining who exactly is “high-level” and what exactly is “unique, personal knowledge.”  While the Civil Procedure Rules Committee continues to review the ruling in consideration of offering a comment on the rule amendment, it seems that Florida has entered into a new era of protections for corporations and their officers. 

Exit Strategies to Consider in Homeowners Insurance Cases

Two new cases were published on August 18, 2021, granting summary judgment for insurers, which identify a few paths toward a viable summary judgment argument.  In Nembhard v. Universal Property and Casualty Insurance Co., the Third DCA granted summary judgment based on misrepresentations or omissions made by the homeowners when applying for insurance with UPCI. Nembhard v. Universal Property and Casualty Insurance Co., 46 Fla. L. Weekly D1869b (Fla. 3d DCA 2021).  The Court held, an insurance company has the right to rely on an applicant’s representations in an application for insurance and is under no duty to inquire further unless it has actual or constructive knowledge that such representations are incorrect or untrue. Id.  This holding applies to instances when the homeowner makes a non-intentional misstatement in an application. Id.  The insurer does not need to establish the misrepresentation was intentional. Id.  Additionally, the Court held, an insurer has the right to unilaterally rescind an insurance policy on the basis of misrepresentation in the application for insurance. Id. 

Nembhard identifies that consideration should be given to pursuing early summary judgment if it can be shown that the homeowners made misrepresentations during the application process.  If this misrepresentation affected the insurer’s risk or would have led to non-issuance of the policy, then the misrepresentation is likely material.  Making a showing of detrimental reliance by the insurer should lead to a favorable outcome on a Motion for Summary Judgment.

In Certified Priority Restoration v. Universal Insurance Company of North America, summary judgment was granted based on the insurer paying the maximum due under the policy.  Certified Priority Restoration v. Universal Insurance Company of North America, 26 Fla. L. Weekly D1865a (Fla. 4th DCA 2021).  In Certified Priority Restoration, the homeowners had water damage repairs completed by Certified Priority Restoration.  The homeowners assigned the right to recover insurance benefits under the homeowner’s policy to CPR.   The insurer moved for summary judgment based on its defense that it paid the maximum amount due under the policy.  CPR did not request the insurer, by the manner prescribed in the policy, to allow it to exceed the allowable limit before undertaking the repairs.  As such the insurer only paid the allowable limit. 

Certified Priority Restoration identifies that one of resolution strategy should be early summary judgment if there is a viable defense that the insurer paid the maximum due under any given policy.  Rather than costly lengthy litigation, attempting an early summary judgment motion, under this defense, may be an efficient and successful resolution method.