Passenger in stolen vehicle is 'covered'

Passengers in stolen cars who are unaware the vehicles are being driven without the owner’s permission may collect PIP and UIM insurance if they’re injured in an automobile accident, the Appellate Division has ruled. In Hardy v. Abdul-Martin, the appeals court reversed a grant of summary judgment to an insurance company that denied coverage in such a circumstance under an exclusion in the insurance contract. The court said, “A passenger cannot be expected to inquire upon entry into a vehicle, as to the status of the car and driver, unless existing facts place the passenger on notice that the use of the car is questionable.”

No bootstrapping: MRI evidence must be introduced by qualifed doctor

In Agha v. Feiner, decided by the Appellate Division on December 18, 2007, a jury verdict following a trial on damages only in an automobile negligence action was reversed and remanded for the entry of a judgment for the defendants based on a violation of the principles set forth in Brun v. Cardoso . Neither of the plaintiff’s two expert witnesses (anesthesiologist and chiropractor) was qualified to read MRI films, but both testified about whether the plaintiff had a herniation; this was “a classic case of bootstrapping otherwise inadmissible MRI reports into evidence”; furthermore, this case “starkly presents the need for cross-examination of the doctor who read the MRI.” This case again highlights the importance of retaining a qualified physician to testify concerning objective testing results, and will apply equally to defendants who fail to retain a radiologist or similarly competent expert.

D'uh! Explicit warnings shield manufacturer from liability when ATV operator ignores warnings

In Koruba v. American Honda Motor Co., Inc., an Appellate court affirmed dismissal on summary judgment the plaintiff’s product liability failure-to-warn lawsuit where, despite an ATV manufacturer’s warnings in the owner’s manual and oral warnings by the retailer seller at the time of sale, the plaintiff attempted an extreme jump and sustained serious injury. The court found that the plaintiff’s expert opinion on the need for on-product labeling was a net opinion on neither epidemiological data or empirical research linking such need to the magnitude of risk associated with jumping. The court also found no basis for the expert’s other opinion that Honda’s promotional marketing of its ATV sent a mixed message to consumers, resulting in their failure to heed warnings actually given.

New Jersey courts invalidate another CGL exclusion

In American Wrecking Corp. v. Burlington Ins. Co., et al., the fundamental issue was the impact of a “Cross Liability Exclusion” which was added, at the time of renewal, to the liability insurance policy purchased by plaintiff American Wrecking (AW), and provided by defendant Burlington. The question, decided November 29, 2007, was triggered by the filing of certain construction worksite personal injury claims, thus requiring the court to determine whether a fair interpretation of the Exclusion compelled indemnification or supports disclaiming. The court recites the history of the claims and the pertinent policy language and concludes that it would be against public policy and the law as the court understands it to uphold the Exclusion here. The construction contract between Roche, as owner, and plaintiff AW, as contractor, clearly provided that the owner was to be indemnified by AW, and AW’s plight, in turn, was to seek relevant insurance coverage. The original 2002 policy undisputedly provided liability coverage for AW and its additional insureds. In the more costly 2003 renewal policy, however, Burlington inserted the Exclusion, eliminating coverage for “any insured.” Thus, the Exclusion effectively eliminated liability coverage for AW and any entities listed as additional insureds under the policy. This result is fundamentally inconsistent with commercially reasonable standards. While the Exclusion is not ambiguous, clarity of meaning does not defeat the need to ensure that the policy language conforms to public expectations and commercially reasonable standards.

BUSINESS IMPACT:
This decision further demonstrates New Jersey courts’ willingness to overlook unambiguous policy language in favor of obtaining a result in the best interest of the insured. Carriers must be careful not to include exclusionary provisions, even if clearly drafted, which can be seen as effectively excluding the main operations for which the insurance is purchased.

Contributed by: Joseph K. Cobuzio and Jared DuVoisin

Workplace injuries – Exclusive remedies applies despite contract violation

In a case currently being considered for publication, Janela v. Roman Asphalt Co., the issue of dual employment arose in the context of a government construction contract. The employer/paving company, Raebeck Construction won a contract for paving at Newark Liberty International Airport, which called for it to exercise direct control over the project and to certify that it did not share staff with any other company. On the date of the accident, an employee was struck in the head by a compressor and killed. His estate was paid dependency benefits by Raebeck. However, the estate also brought suit against another company, Roman, who actually did the paving work. It was revealed that contrary to the contract, Raebeck had no role in the job and essentially leased all workers from Roman. Raebeck did actually pay all of the workers, however. Roman moved for summary judgment on the exclusivity provisions of the Workers Compensation Act. The Appellate Division upheld the dismissal of Roman using a five part fact sensitive test focusing on the control exercised over the employees, to determine whether Roman was also an employer. It found that even though Raebeck violated specific government contract provisions to avoid this precise employment situation, bidding qualifications and contract requirements did not negate the legal rules governing workers’ compensation.

Application:

When analyzing a new claim involving dual employment, an immediate and comprehensive investigation of the employment relationship is essential. Obtaining documentation such as contracts, job descriptions, employment handbooks, payroll records, and even incorporation documents is an essential strategy in evaluating the claim. Also, early identification and interviews of the owners, managers and contractors can further assist in determining the degree of control each entity had over the injured worker.

New Jersey Doctors get temporary relief from PIP Fee Schedule

A coalition of medical groups led by the Medical Society of New Jersey has succeeded in getting a temporary delay in the enforcement of a new list of fee limits for treatment of injured motorists under personal injury protection (PIP) coverage. Not surprisingly, the doctors have the support of the Association of Trial Lawyers of America-New Jersey. The significantly reduced fees were to take effect Monday October 1st, but the Appellate Division last Friday granted the stay pending arguments in Alliance for Quality Care v. New Jersey Department of Banking and Insurance. Doctors complained last year when the Department of Banking and Insurance (DOBI) proposed a fee schedule that for the most part used Medicare figures rather than “the reasonable and prevailing fees of 75 percent of practitioners within the region” as stated in the statute. DOBI officials said they used the Medicare figures because they couldn’t find out doctors’ current charges; it remains to be seen whether the courts – or the legislature – will accept that explanation.

Tompkins McGuire will keep you updated as this important case makes its way through the courts.

Defending Employers