Court of Appeals Expands the Scope of the Industrial Code as Applied to Slipping Hazards

We recently litigated in the New York Court of Appeals in the matter.  Plaintiff was a painter and was allegedly injured while painting around an escalator.  Heavy-duty plastic sheeting had been placed on the steps of the escalator to protect it from paint.  Plaintiff allegedly slipped on the plastic sheeting and he pursued various Labor Law causes of action against the contractors and owner.

The parties filed summary judgment and the Supreme Court granted Plaintiff’s § 241(6) motion based on violations of two Industrial Code regulations: (1) Section 23-1.7(d) which states (“[e]mployers shall not suffer or permit any employee to use a floor, passageway, walkway, scaffold, platform or other elevated working surface which is in a slippery condition. Ice, snow, water, grease and any other foreign substance which may cause slippery footing shall be removed, sanded or covered to provide safe footing”); and (2) Section 23-1.7(e)(1), which states, (“[a]ll passageways shall be kept free from accumulations of dirt and debris and from any other obstructions or conditions which could cause tripping.”)

The Appellate Division, First Department reversed and found that Plaintiff could not recover under Industrial Code § 23-1.7(d), prohibiting slipping hazards, because the plastic sheeting “does not constitute a foreign substance under the regulation.... Sensibly interpreted, the heavy-duty plastic covering is not similar in nature to the foreign substances listed in the regulation, i.e., ice, snow, water or grease.... Further, it is not disputed that the covering was intentionally placed on the escalator to protect it from paint. In other words, the covering was part of the staging conditions of the area plaintiff was tasked with painting, making it integral to his work.”  The First Department found the defendants were not liable for a tripping hazard under section 23-1.7(e)(1) for the same reason, “namely that the plastic covering was an integral part of the work being performed,” and also because “the escalator was not serving as a ‘passageway’ but rather was a work area.”

The Court of Appeals reversed the First Department and found that Plaintiff satisfied the “textual” requirements of 23-1.7 (d): the escalator is clearly the type of work surface enumerated.  Plaintiff also established that the plastic covering was not part of the escalator and this foreign substance created a slippery condition.  The Court observed that the Appellate Division erred because the plastic covering was not a component of the escalator and was not necessary to the escalator’s functionality.  Therefore, it was, by definition a substance foreign to the escalator.   Thus, the use of some cover was integral to Plaintiffs’ assignment to paint around the escalator but that does not mean that any cover used—even one that was inherently slippery—was necessarily “integral,” particularly where a safer alternative would have accomplished the same goal.

This opinion signals that New York Courts will read the Industrial Code broadly at least as it pertains to “foreign substances” beyond “ice, snow, water or grease.”  This decision also hints that courts may review whether a safer alternative would have accomplished the same goal at a construction site.

Pennsylvania Superior Court Ruling in Watson v. Baby Trend, Inc. Opens an Avenue for Certain Businesses to Challenge Venue

Appellants’ infant daughter died of asphyxiation while sleeping in a car seat manufactured by Baby Trend, Inc. Appellants reside in Bucks County and the cause of action arose there. Baby Trend is a California-based corporation with no registered offices in Pennsylvania.

On October 12, 2021, Appellants filed an Amended Complaint in the Philadelphia Court of Common Pleas asserting products liability/strict liability, negligence and breach of warranty claims against Baby Trend. Subsequently, Baby Trend filed preliminary objections on the basis of improper venue. On August 3, 2022, the trial court sustained Baby Trend’s preliminary objections and transferred this matter to Bucks County.

On appeal to the Pennsylvania Superior Court, Appellants argue that the trial court abused its discretion when it concluded that Baby Trend does not regularly conduct business in Philadelphia County. In particular, Appellants argue that Baby Trend’s sales to big-box retailers in Philadelphia County and direct to Philadelphia County consumers through Baby Trend’s website satisfy the “quality” prong of the venue test because those sales are not “merely incidental.”

On January 12, 2024, the Pennsylvania Superior Court affirmed the trial court’s decision to transfer this case to Bucks County. As to the “quality” of Baby Trend’s contacts, the evidence of record confirms the trial court’s finding that Baby Trend’s direct website sales to consumers in Philadelphia County, comprising less than one percent of its total sales, is de minimis and purely incidental. Those sales are not essential to Baby Trend’s business objective of serving as a wholesaler of juvenile items to retail chains.

Additionally, Pennsylvania Superior Court held that the trial court correctly refused to impute the business activities of a separate and distinct business onto the business activities of Baby Trend. Once Baby Trend sells its products to big-box retailers, it has no control over where the retailers sell the products. Thus, it is the big-box retailer, and not Baby Trend, who is engaged in the act of selling the product to customers.

As to the “quantity” prong of the “regularly-conducts-business analysis,” the Pennsylvania Superior Court identified Baby Trend’s lack of business activity in Philadelphia in the following areas: 1) does not own any real estate in Philadelphia; 2) does not maintain any place of business in Philadelphia; 3) does not employ any sales representative in Philadelphia; and 4) is not registered as a foreign corporation for the purposes of doing business in Philadelphia. In conclusion, given the complete absence of any physical presence in Philadelphia through which Baby Trend conducts business activity essential to its business objective, there is no evidence demonstrating that Baby Trend's contacts with Philadelphia County are continuous, habitual, or regular. 

Validity of Joint Proposal for Settlement in Florida: Analysis of SDG Dadeland Associates, Inc. v. Arias

The Third District Court of Appeal for Florida in SDG Dadeland Associates, Inc., v. Keyna Arias, reversed the Circuit Court of the Eleventh Circuit's denial of Defendant's motion for attorney's fees based on a joint proposal for settlement under section 768.89 of the Florida Statutes. The Third District Court held that the Joint Proposal for Settlement was valid as it accurately reflected the joint offer and allocation of payments, despite the indemnified offeror not monetarily contributing to the joint Proposal.

The Plaintiff, Kenya Arias, slipped and fell in a mall operated by Defendant, Dadeland Associates, Inc. (“Dadeland”), and maintained by Co-Defendant, Nationwide Janitorial Services, Inc. (“Nationwide”) (collectively “Defendants”). Nationwide’s service contract with Dadeland contained an indemnification provision agreeing to defend, indemnify, and hold Dadeland harmless from third-party claims resulting from Nationwide’s Janitorial services. Defendants filed a Joint Proposal for Settlement. The Joint Proposal for Settlement noted that Nationwide would contribute $5,000, while Dadeland would contribute $0.00. The Proposal for Settlement was rejected by the Plaintiff.

After a jury trial resulted in a verdict in favor of the Defendants, they moved for attorney's fees under section 768.79. The trial court denied the motion, finding that the Proposal for Settlement was invalid due to its ambiguity, particularly, Dadeland’s failure to contribute to the offer. On appeal, the Plaintiff argued that Dadeland's status as a defendant would be in question as per the terms of the Proposal for Settlement. However, the Third District Court of Appeals found this argument meritless, stating that the Proposal clearly conditioned acceptance by requiring a dismissal as to all defendants.

Secondarily, Plaintiff argued that the Joint Proposal was ambiguous as it was an illusory offer with no consideration from Dadeland. The Third District Court rejected this argument, noting out that Florida Rule of Civil Procedure 1.442 expressly allows co-defendants to make joint settlement proposals as long as the proposal states the amount and terms attributable to each party. The Court ruled that the Proposal was compliant with Florida rules and that the allocation of payments was sensible considering the indemnity agreement between the parties.

The Third DCA concluded that indemnified parties do not have to waive their entitlement to indemnification to avail themselves of the substantive rights provided under 768.79.

New York’s “Grieving Families Act” Vetoed for a Second Time

As many are aware, the current wrongful death law in New York states that if a loved one is killed in an accident, the family can only recover for the conscious pain and suffering that their loved one endured before their death, which must be proven. Furthermore, they can also recover for the economic loss to the family, but in the case of a child, elderly parent, or unemployed adult, there would be no recovery for the emotional loss and grief of the loss of their loved one. The statute of limitations for wrongful death in New York is two years from the death of a loved one.

The Grieving Families Act was a bill introduced in the New York State Senate in January 2021 to expand the types of damages that may be awarded to the persons for whose benefit an action for wrongful death is brought. This bill allowed loved ones to sue for emotional loss, including grief, anguish, and loss of companionship, in addition to the deceased person’s potential future income. The bill was also to extend the statute of limitations for such lawsuits and applied to all cases pending at the time it became law.

Governor Kathy Hochul first vetoed the bill in January 2023, reasoning that it was overbroad with potential to spike insurance premiums. She stated that the bill was passed without a serious evaluation of the impact of the massive changes it would make to the economy, small businesses, individuals, and the State’s complex healthcare system. Governor Hochul also mentioned that the Legislature declined the counterproposal she presented allowing parents to seek damages in the wrongful deaths of their children under 18.

The Grieving Families Act was then reintroduced in May 2023 with changes to the time to bring a wrongful death action to only three years after a close family member’s death. This meant that it would only apply to causes of action that arose on or after July 1, 2018. It narrowed the definition of who was eligible to recover damages and limited eligibility to those that have a legal relationship with the decedent, including spouses, domestic partners, children, parents, grandparents, siblings, stepchildren, stepsiblings, and individuals who stood in loco parentis to the deceased. However, even with these revisions, business groups opposed the legislation, arguing that the changing law would place new financial burdens on small businesses and increase healthcare premiums.

On December 29, 2023, Governor Hochul vetoed the Grieving Families Act for a second time, stating that the Legislature had again passed a bill that did not create the required balance and again introduced the potential for significant consequences. The Governor had concerns that the legislation would result in increased insurance premiums for most people and risk the financial well-being of health care facilities in the state.

At this time then, the Legislature’s response could be to either reach a compromise with the governor or potentially override the veto, requiring a two-third majority of lawmakers in each House to approve.

Callahan & Fusco will of course continue to monitor the status of the Act and any corresponding court decisions on this issue as they develop.

Pennsylvania’s High Standards for Punitive Damages Results in Dismissal Of Interdependent Claims of Punitive Damages and Direct Liability Against Trucking Company

In the case of Villagran v. Freightbull, Inc., No. 22-CV-2159 (E.D. Pa. Oct. 12, 2023 McHugh, J.), the United States District Court for the Eastern District of Pennsylvania granted Defendant trucking company’s motion for summary judgment to dismiss punitive damages claims and the claims of direct liability relative to allegations of negligent hiring and supervision. Previously in Guy v. Eliwa, No. 4:23-CV-00472 (M.D. Pa. Sept. 11, 2023 Brann, C.J.), a Middle District of Pennsylvania case held that Plaintiff’s recklessness and punitive damages are enough to survive a Motion to Dismiss.  The decision in Villagran affords defendants another opportunity to dismiss punitive damages with the help of relevant evidence.

The Court found that Plaintiff did not present any evidence to satisfy Pennsylvania’s high standards for punitive damages despite the matter arising from a fatal trucking accident. Defendant trucking company conceded that the truck driver was acting within the scope of his employment at the time of the accident and stipulated its vicarious liability for the actions of the driver.

Pennsylvania is a fact-pleading state and that, therefore, in order to proceed on a punitive damages claims, a plaintiff must aver that a defendant’s conduct was outrageous or was intentional, willful, wanton, or reckless. The Court reiterated the settled law that an entitlement to punitive damages requires that conduct go beyond gross negligence. The law also required that the defendant have a subjective appreciation for the relevant risk.

The Court noted, the defendant truck driver’s misjudgment of the proximity and speed of Plaintiff’s vehicle was not beyond gross negligence. As for the punitive damages claim against the trucking company, Plaintiff argued Defendant safety director’s lack of qualifications, the safety director’s familial relationship to the company, combined with the trucking company’s failure to provide training in trip planning amounted to conduct rising to the punitive damages standard.   The Court stated that any conduct supporting a claim for punitive damages must have a direct role in causing Plaintiff’s injuries. The Safety Director’s qualifications/familial relationship to the company and the company’s lack of trip planning training is not factually relevant to support a claim for punitive damages.

A dashcam video of the accident depicts defendant’s tractor trailer pulling out into the highway at nighttime, stopping for a moment, and turning on its left signal light before crossing to lanes of traffic to make a left turn. Before the tractor trailer completed the turn, Plaintiff’s vehicle crashed into the side of the trailer close to the rear. Plaintiff’s argument of Defendant Trucking Company’s failure to train the driver was irrelevant since trip planning had nothing to do with the accident. The dashcam video ultimately revealed no basis for punitive damages.

The Pennsylvania Supreme Court has not yet addressed the issue.  In the absence of a controlling decision from the Pennsylvania Supreme Court, federal district courts in Pennsylvania seem to have dismissed claims for negligent supervision, hiring, retention, and entrustment when the defendant-employer admits that the defendant-employee was acting within the scope of employment and there is no viable claim for punitive damages.

Callahan & Fusco Ends 2023 with Dismissals for Both Landlord and Tenant

Callahan & Fusco was recently granted summary judgment on behalf of two clients, a landlord and a tenant, with the New York Supreme Court, Bronx County granting two separate motions for summary judgment and dismissing the plaintiff’s action against each of them on different grounds. See Juan Henriquez Vasquez v. Mosholu Petrol Realty LLC, et al.

Plaintiff’s Complaint arose from an alleged trip-and-fall accident on the sidewalk abutting the client landlord’s property, which consisted of a gas station and commercial building on the premises, leased to two separate tenants. While the client tenant leased a portion of the interior of the building to operate a Dunkin’ Donuts franchise, the majority of the property, including the exterior, was leased to the co-defendant to operate a gas station and minimart on the premises. Notably, this contract with the co-defendant gas station was a “triple net lease,” wherein that tenant was responsible for paying not only rent, but also all expenses related to insurance, maintenance, and taxes, and the landlord not retaining any right of reentry. Following plaintiff’s alleged trip-and-fall, he commenced this personal injury action against the landlord and both tenants.

After the exchange of written discovery, C&F filed two motions for summary judgment to dismiss the Complaint: the first to dismiss the defendant landlord as an out-of-possession landlord under New York law, and the second to dismiss the defendant tenant based on the interior nature of their leased portion of the property.  In support of these motions, the defendants submitted their respective lease agreements and heavily emphasized for the Court the language contained within, detailing the obligations of each party on the involved premises.  It was also crucial to wait for plaintiff’s initial discovery responses, which included photographs of the specific area where the plaintiff allegedly fell, negating any arguments with respect to prematurity, as there could be no dispute as to the specific area in question once the photographs were disclosed.

Despite plaintiff’s various opposing arguments, the Court agreed with the defendants and granted both motions on the grounds that neither client had any responsibility for the area where the plaintiff allegedly fell.  In the lengthy Decision and Order, the Court referenced the triple net lease with the co-defendant tenant, and held that the lease required the co-defendant’s responsibility for the sidewalks, curbs, drives and pathways on the property and all paved areas. The Court further referenced the defendant tenant’s lease, specifically a clause providing that the lease is exclusively for use of the building and for no other purpose.  While plaintiff argued that the motions were premature ahead of party depositions, the Court found that the plaintiff failed to demonstrate that further discovery might lead to relevant evidence or facts essential to justify opposition, as the mere hope that such evidence may be uncovered during discovery is insufficient. Ultimately, the Court held that the moving defendants established, prima facie, that they had no duties or responsibilities with respect to the sidewalk upon which plaintiff allegedly fell, as the lease was unambiguous in its terms, and plaintiff’s counsel could not dispute it.

From a defense perspective, these motions demonstrate the importance of carefully reviewing extensive lease agreements in order to seize the opportunities presented within them. While indemnification terms were also present in the involved agreements, tender demands went unanswered, and it was thus decided to test the strength of these leases before the Court.  In future cases of a similar nature, it may thus be recommendable to attempt an early motion for summary judgment like this, in lieu of the further delays and expenses that come along with party depositions or other unnecessary discovery.