Employee Spotlight: Women's History Month with Chelsea Novelli

Chelsea S. Novelli is an Associate in the New Jersey and Massachusetts offices of Callahan & Fusco. Ms. Novelli is licensed to practice in Massachusetts, New Jersey, and New York, specializing in premises liability, transportation, construction, and other general liability matters. Throughout her career, she has successfully and effectively represented large trucking companies, independent contractors, small businesses, and community associations in New Jersey, Massachusetts, and New York. 

What are your favorite aspects of C&F?

My favorite aspects of C&F are my colleagues and the diversity of matters we litigate. The partners, associates, and support staff are friendly, inviting, and always willing to help one another. C&F provides a supportive learning environment and the ability to develop, individually, within this ever-changing field.

How has C&F helped develop you professionally?

Through hands-on training, continuing education, and client development opportunities. 

What would you like to accomplish in your future at the firm?

In the future, I would like to become a partner and lead a litigation team in a new practice group. 

What was your motivation for going into the law industry?

I chose a career in legal industry because I enjoy the art of an argument. As cliché as it may seem, litigation is like a puzzle, you find and put the pieces together for the full picture, ultimately allowing your client to show their side of the case. 

What advice would you give for women starting their careers in law?

The biggest piece of advice is to get involved and not be afraid of any legal area that is “male dominated”. In the same vein, understanding the legal community is small and the relationships you build can ultimately set the trajectory of your career.

Florida’s Civil Remedies Bill: Major Tort Reform Legislation Signed Into Law Today

Florida Governor Ron DeSantis, signed into law a major legislative tort reform package this afternoon.  While DeSantis had from today, March 24, 2023, when he was presented House Bill 837 (companion to Senate Bill 236), until March 31st, to sign it, he immediately signed into law.

Civil Remedies, as the bill has been referred to: changes the pure comparative negligence framework to a contributory fault system; standardizes the evidentiary threshold necessary to prove damages for medical expenses in certain civil actions; imposes requirements for certain disclosures with respect to claims for medical expenses for treatment rendered under letters of protection; reduces the statute of limitations for negligence actions; levels the playing field for insurers in bad faith actions; and grants property owners a presumption against liability in certain negligent security matters.  

Tens of thousands of new negligence lawsuits were filed throughout Florida’s courts over the past week ahead of the signing of the law, since it was drafted to take effect immediately.

Some of the more significant changes under the new law are discussed below.   

Florida will now move from a pure comparative negligence system to a modified comparative negligence system. Under the current pure comparative negligence framework, a claimant’s recovery is reduced in proportion to the percentage of fault, if any, that his or her actions or inactions contributed to the damages or injuries sustained.  Additionally, a defendant can further diminish its liability to the claimant based on the comparative fault of others.  Under the new contributory fault system, a plaintiff found to be greater than 50 percent at fault for his or her own harm may not recover any damages (except in an action for damages for personal injury or wrongful death arising out of medical negligence).  

The statute of limitations in negligence actions has now been shortened from four (4) years to two (2) years.

The new law also broadens what evidence is admissible at trial to prove the reasonableness of medical treatment and expenses. Evidence offered to prove the amount necessary to satisfy unpaid charges will be limited to the amount the health care provider is obligated to pay should the claimant have health care coverage other than Medicare or Medicaid.  

• If a claimant has health care coverage and receives treatment under a letter of protection, the claimant will only be able to board the amount the claimant’s health care coverage would pay the medical provider to satisfy the past unpaid charges under the insurance contract or applicable regulation.

• If the claimant does not have health care coverage or maintains health care through Medicare or Medicaid, evidence offered at trial will be limited to one-hundred and twenty percent (120%) of the Medicare reimbursement rate in effect on the date of the incurred treatment or one-hundred and seventy percent (170%) of the applicate state Medicaid rate.

• Further, in personal injury actions and wrongful death actions, as a condition precedent to asserting any claim for medical expenses rendered under a letter of protection, the claimant must disclose the letter of protection and an itemized billing ledger for the claimant’s medical expenses.

Florida’s bad faith law has also undergone significant changes.  HB 837 mandates that mere negligence alone is insufficient to constitute bad faith in both statutory and common-law actions. Moreover, it imposes a duty on the claimant and the claimant’s attorney to act in good faith when furnishing information regarding the claim, issuing demands, setting deadlines, and attempting to settle with an insurer.  HB 837 also creates an immunity defense in bad faith actions where the insurance carrier tenders either the lesser of the policy limits or the amount demanded by the claimant within ninety (90) days after receiving actual notice of a claim that is accompanied by evidence to support the amount at issue.  Finally, HB 837 creates a mechanism for the distribution of insurance proceeds when two (2) or more claimants make competing claims stemming from a single occurrence and the amount sought exceeds the available limits. In the aforementioned situation, the carrier can file an interpleader action or enter binding arbitration.

Lastly, HB 837 provides apartment and other multi-family housing property owners a presumption against liability when a plainitff is injured in connection with certain criminal acts that occur on the premises, if the property owner takes certain precautions, such as having video monitoring, lighting, entry FOBs, and other security measures.

We anticipate many challenges to this new law in the Courts over the coming months, and will continue to provide updates as to how this legislative change impacts claims and litigation in Florida.

Callahan & Fusco’s attorney team is prepared to answer any questions you may have about the changes brought on by this new law and Florida matters in general. 

Emotional Distress Claims no Longer Require Extreme and Outrageous Conduct

New York’s Appellate Division, First Department recently issued an opinion holding that “extreme and outrageous conduct is no longer an essential element of a cause of action to recover damages for negligent infliction of emotional distress.” See Mabel Johanna Brown et al., Plaintiffs-Respondents-Appellants v. New York Design Center, Inc., Defendant-Appellant-Respondent, Newark Knight Frank Global Management Services, LLC et al., New York State Law Reporting Bureau, (App. Div. March 9, 2023). This decision now follows the recent decisions of the Second, Third and Fourth Departments.

This case arises out of an incident that occurred to Plaintiffs employed in a building owned by the Defendant, New York Design Center (NYDC). In April 2014, an electrician using the men’s restroom noticed a recording camera pointed through the wall and into a stall of the women’s restroom. Graphic videos of women using the bathroom were discovered on the device. Plaintiffs initiated a lawsuit arguing claims of negligence, intentional infliction of emotional distress, negligent infliction of emotional distress and negligent hiring. Several of them testified that they had previously seen the hole prior to the camera’s discovery. A few of them testified that they had complained about the state of the bathroom, including the hole behind the toilet.

The Defendant moved for summary judgment to dismiss the complaint, arguing that the Plaintiffs did not show that the Defendant was on notice of the camera, and they did not suffer any legally compensable injuries. Defendant also argued that its conduct was not outrageous, and Plaintiffs did not fear for their safety.  The Plaintiffs opposed, arguing that NYDC had actual and constructive notice of the hole, and that they testified to “paranoia and/or hypervigilance, many engaging in behavior such as habitually checking vents or looking for other spaces where cameras could be hidden, especially in public restrooms, dressing rooms and hotel rooms.”

On March 22, 2022, the Supreme Court in New York County granted Defendant NYDC’s motion for summary judgment dismissing the negligent infliction of emotional distress claim and denied the motion as to the negligence claim.

On Appeal, the Court revisited prior decisions regarding the showing necessary to sustain a cause of action for negligent infliction of emotional distress. The Court held that contrary to the Defendant’s argument, the Plaintiffs sustained emotional injuries which are a direct result of the breach of duty owed. The direct result of injury here was that the Plaintiffs were humiliated, embarrassed, felt violated, and paranoid which the Court saw as “reasonable fears given that it is not know whether additional videos exist and may be posted on the internet.” The Court reviewed Sheila v. Povich, (11 AD3d 120, 130-131 [1st Dept 2004]) and found that it and other authorities “all rely either directly or indirectly on cases that deal exclusively with intentional infliction of emotional distress or where there are allegations of both.” The Court now holds that “extreme and outrageous conduct is not an essential element of a cause of action to recover damages for negligent infliction of emotional distress.” Moreover, the Court holds that a breach of duty of care resulting directly in emotional harm is compensable when there is a direct emotional injury as a result of the breach, even when there is no physical injury.  

Callahan & Fusco Obtains Venue Transfer in New Jersey

The Superior Court of Middlesex County, New Jersey recently granted a Motion to Transfer Venue brought by Callahan & Fusco on behalf of their client, a Community Association, transferring the underlying matter from the venue where the matter was filed to the venue where the underlying accident occurred. See Appelgate, et al. v. Legacy at Mansfield Meadows Homeowners’ Association, et al.

The underlying personal injury suit arises from an accident that occurred in November 2021, when a female tripped and fell on the curb of a sidewalk within her age-restricted community located in Warren County, New Jersey. As a result of the accident, the female sustained serious and severe injuries. In August 2022, suit was filed in the Superior Court of Middlesex, New Jersey, on behalf of the female against the community association, the property developer, and the property management alleging claims of negligence resulting from the defendants’ failure to properly maintain the exterior concrete sidewalk where the female allegedly fell.

Upon receipt of the Complaint, Callahan & Fusco, on behalf of their client, the Community Association, filed a pre-answer motion requesting the Court to transfer venue in the action from Middlesex County to Warren County.  Pursuant to New Jersey R. 4:3-2(a), venue shall be laid by the plaintiff in the county in which the cause of action arose, or in which any party to the action resides at the time of its commencement. In New Jersey, a plaintiff’s choice of venue is generally not disturbed absent a showing of a compelling reason.

In support of their motion, the Association argued that R. 4:3-2(a) was designed to place litigation at a location convenient to parties and witnesses. (See Doyley v. Schroeter, 191 N.J. Super. 120, 124-26 (Law Div. 1983)). Specifically, to this point, the Association asserted that the action must be transferred to Warren County in the interest of justice as the cause of action arose in Warren County. Moreover, the Association emphasized the fact that a majority of the defendants, including the Association, reside in Warren County, while pointing out that, notwithstanding residency of a co-defendant, the pending action has no nexus to Middlesex County and none of the issues related to the underlying action arose in Middlesex County. The Association further argued that the pending action will require lengthy discovery that may involve relevant witnesses and experts who may be called on to provide testimony as to the alleged accident or condition of the premise, and these witnesses and experts would be inconvenienced if required to travel to Middlesex County from Warren County.

After review of the motion, the Court ruled in favor of the Association, granting their motion, and transferring the underlying action from Middlesex County to Warren County. The Court reasoned that the mere fact that one party to the action resides in Middlesex County was not enough to outweigh the fact that the accident occurred in Warren County and the rest of the other parties, including plaintiff, reside in Warren County. The Court further reasoned that it would go against the best interest of justice to obligate the parties and expert witnesses to travel back and forth between Warren and Middlesex County. Accordingly, the action was transferred to Warren County.

From a defense perspective, Appelgate, teaches us the importance of establishing a strong defensive foundation to handle and manage future litigation strategies that may arise. In New Jersey, like many other states, a motion to transfer the venue of an action is only permitted at the early stages of litigation and before the parties engage in discovery. Therefore, prior to engaging in potentially long discovery, it is crucial to select an experienced defense counsel with a keen eye to the factual details of a claim to be proactive and in a position to handle a claim in the best interest of their client.

Legal Malpractice Model Jury Charges Receive Needed Update in New Jersey

For the first time in 25 years, the New Jersey Supreme Court Committee on Model Civil Jury Charges announced updates to a number of model jury charges, including revisions to the legal malpractice jury charges, see Model Jury Charges (Civil) 5.51A and 5.51B.

In essence, the Model Civil Jury Charges sets the framework to craft jury instructions. Every case brings their own unique facts that both courts and litigants must tailor the model charges to conform to those facts. Accordingly, these Model Civil Jury Charges are only just a starting point of the process of constructing an appropriate charge that adequately explains that law to the jury in the context of the material facts of the case being tried.

But what if that framework is outdated and not aligned with recent case law? The Committee on Model Civil Jury Charges sought to answer this question with an announcement that Legal Malpractice charge 5.51A will undergo significant revisions to include recent case law and additional instructions on duty and negligence. This charge now sets forth the standard of care for attorneys in New Jersey providing services, including attorneys holding themselves out as a specialist or who have been designated by the New Jersey Supreme Court as a “certified attorney” in civil trial law, among other areas. Additionally, this charge addresses the New Jersey Rules of Professional Conduct, guarantees or promises of results by attorneys, and reasonable legal strategies in the context of legal malpractice.

However, practicing attorneys will not see abrupt changes as judges have already been incorporating the latest case law into the instructions they provide to jurors. However, these changes will provide more clarification to trial courts and create a rubric for judges to apply when laying the ground for jury instructions. Issues related to attorney malpractice cases such as the standard of care for lawyers offering themselves as specialists, the role of the Rules of Professional Conduct, promises of results, and reasonable legal strategies, were formerly left to the court to align with case law and explain to jurors, but have now been directly addressed with these changes.

Moreover, the Committee revised and updated the Proximate Cause in Legal Malpractice 5.51B involving Inadequate or Incomplete Legal Advice, a charge that has not seen any updates since January 1997. Specifically, the update now includes recent case law and additional instruction on Proximate Cause in Legal Malpractice. Prior to the revisions, the charge stated that an attorney’s negligence must have been a substantial factor in bringing about harm to the plaintiff and that some harm was foreseeable. These changes come in light of the decision in Gilbert v. Stewart, 247 N.J. 421 (2021). In Gilbert, a plaintiff filed a legal malpractice claim against a defendant attorney for failing to advise of certain risks associated with a plea agreement to outstanding traffic tickets in municipal court. Under those circumstances, the Supreme Court concluded a reasonable jury could find that defendants breach of his professional duty was a substantial factor and thus a proximate cause of plaintiff’s harm. Subsequently, the Committee revised the charge, providing a definition to explaining foreseeability means whether a “similarly situated attorney would anticipate the risk that the attorney’s conduct would cause injury or harm to the attorney’s client.”  

The changes to the malpractice jury charges were just one part of a broader effort to update model jury charges across the board. In the same announcement, charges for violations of New Jersey’s Law Against Discrimination and New Jersey Pregnant Workers Fairness Act were updated to reflect recent changes to case law. It is the expectation and hope that these changes will streamline and modernize the way jury charges work and provide clarity to practitioners.

Vermont Supreme Court Brings a Shipbuilder's COVID-19 Coverage Suit Back to the Surface

The Vermont Supreme Court recently issued an opinion reversing the dismissal of insurance claims seeking coverage for damage the insured argued was caused by COVID-19. See Huntington Ingalls Indus., Inc. et al. v. Ace American Ins. Co. et al., No. 2021-173, 2022 VT 45. The September 2022 ruling goes against the majority of cases in other state and federal courts findings that insureds have failed to adequately allege that COVID-19 can cause direct physical damage or loss that is covered by property insurance policies.
 
Huntington Ingalls Industries, the insured in this case, is the largest military shipbuilder in the United States employing more than 42,000 employees. Huntington purchased an “all risk” property insurance policy in March 2020 from its insurance subsidiary, Huntington Ingalls Industries Risk Management, LLC, which in turn purchased policies from multiple reinsurers to cover its obligations. The subject policy covered all real and personal property “against all risks of direct physical loss or damage to property” and contained a business interruption clause covering “loss due to the necessary interruption of business conducted, whether total or partial caused by physical loss or damage insured herein.” Of note, the policy, however, did not include the standard-form virus exclusion that has been available in the insurance industry since 2006.
 
Not long after the insured purchased the policy, the very first COVID-19 case arose among Huntington’s employees. By September 2020, more than 1,000 employees were infected, and by April 2021, more than 6,000 employees were infected. As a result, Huntington sought coverage from the reinsurers under the reinsurance policies for property damages, business interruption, and other losses suffered as a result of COVID-19, but coverage was denied.
 
Following the coverage denial, Huntington filed suit in the Vermont Superior Court seeking declaratory judgment that they were entitled to coverage under its purchased policy. The Superior Court concluded that Huntington failed to allege facts to support a viable claim for coverage and entered judgment on the pleadings in favor of the reinsurers.
 
Plaintiff, Huntington, then appealed the dismissal to the Vermont Supreme Court. The Supreme Court recognized that the key issues to decide were the interpretation of the phrase “direct physical loss or damage to property” and whether plaintiffs’ facts were sufficient to state a claim for physical loss or damage. The Court found that plaintiffs sufficiently alleged a claim that, if ultimately proven before a trier of fact, would demonstrate coverage under the policy.
 
The Vermont Supreme Court’s decision in this matter is not the first in the U.S. to conclude that COVID-19 business interruption lawsuits should not be dismissed without the development of further evidence, but it is the first decision by a state’s highest court. This decision is a reminder that the liberal pleading standard remains alive and well in Vermont. The decision also paves the way for similar COVID-related claims, especially in Vermont, to advance into discovery, expert witness, and summary judgment stages, which leads to the ramping up of litigation costs. However, it still remains unknown whether the insureds will be able to prove that COVID-19 actually caused “direct physical loss or damage to property,” ultimately triggering coverage.