HKMP E-Letter

December 2019
On October 24, 2019, the Court of Appeals issued its opinion in Xiang Fu He v. Troon Mgmn., Inc. holding that a New York City Administrative Code provision requiring abutting landowners to maintain city sidewalks applies to out-of-possession landlords, even in cases where a tenant is contractually obligated under a lease to remove snow and ice and otherwise maintain the sidewalks. 

The plaintiff, who was employed by a non-party lessee of the building on the property, claimed to have slipped and fell on ice accumulated on an abutting sidewalk owned by the City. NYC Administrative Code §7-210(b) imposes a duty on certain property owners to maintain abutting City-owned sidewalks in a reasonably safe condition.  The Code provision has no exception for out-of-possession landlords yet there was a split among lower courts as to the applicability of the provision to such landlords. 

The Court of Appeals held that out-of-possession landlords are subject to the non-delegable duty imposed by §7-210(b), exposing such landlords to potential liability for injuries due to the negligent failure to remove snow and ice from abutting sidewalks. The Court rejected the landlord’s argument that it could avoid liability pursuant to a provision in a lease that required the tenant-in-possession to clear all snow and ice from the abutting sidewalk, noting that while the landlord can shift to the tenant (or to a snow removal contractor) the work of removing snow and ice, it cannot shift the duty imposed by §7-210 or liability for injuries caused by the negligent failure to remove snow and ice from the sidewalk.
HKMP partner Paul Daly recently tried the matter of Hodge v. Fedele, a matter arising from a prototypical bar fight scenario.

The plaintiff was a patron at a bar with his girlfriend. An altercation ensued with another group of patrons which resulted in the plaintiff being knocked unconscious. As is typical of these cases, there was conflicting evidence on virtually every relevant issue.
The plaintiff’s girlfriend testified that HKMP’s client kicked and beat the plaintiff while the plaintiff was unconscious on the ground. The plaintiff alleged injuries including an aggravation of a pre-existing neck injury, which required a cervical fusion, and also five broken ribs.

Although the co-defendant tavern owner made several settlement offers, the remaining defendants, including HKMP’s client, were all being defended under a reservation of rights and made no settlement offers. As the trial progressed, all parties attempted to focus liability on the tavern. There was evidence that the group of people that included the defendants was served a copious amount of alcohol and that some of them were visibly intoxicated. In addition, there was evidence that the altercation was broken
broken up and the parties separated before there were any injuries, and the tavern employees then allowed the parties into the same area again, allowing the altercation to flare up a second time.

It was virtually undisputed that co-defendant Francis McDonald delivered the blow that knocked the plaintiff unconscious. However, echoing the plaintiff’s girlfriend, the bar manager offered a description of the person who kicked the plaintiff when he was unconscious that matched HKMP’s client. HKMP’s client acknowledged being in the melee but denied ever striking or harming the plaintiff in any way.

The jury returned a verdict for the plaintiff in the amount of $400,000 which was reduced by 20% for the plaintiff’s comparative fault. McDonald, the individual who delivered the knock out strike, was found 60% at fault. The tavern was found only 10% at fault and HKMP’s client also was found only 10% at fault. HKMP’s client settled for a compromised amount after the verdict. The verdict was far below plaintiff's pre-trial demands.
HKMP routinely handles matters of hospitality, alcohol service and negligent security. 
In the New Jersey Appellate Division case of Nesby v. Fleurmond, decided on November 18, 2019, the court addressed the issue of whether a plaintiff somehow can seek PIP coverage for his unpaid medical expenses under policies issued to the tortfeasor’s resident relatives, covering vehicles that were not involved in the accident - - after the plaintiff settled with the tortfeasor.

The plaintiff was injured when the car he was driving was rear-ended by a vehicle driven by defendant Fleurmond, owned by defendant Decaro, and insured by Progressive. Fleurmond did not own a vehicle or have her own automobile insurance policy. Fleurmond lived with her sister and mother. GEICO issued a policy to Fleurmond’s sister and AAA MAIC issued a policy to her mother but neither of those vehicles was involved in the accident.

The plaintiff tendered his personal injury claim to Progressive, which offered him the full policy limit, and in exchange the plaintiff agreed to release Fleurmond and Decaro. Before signing the release, the plaintiff’s counsel sent a Longworth letter to GEICO and AAA MAIC. According to the plaintiff, neither carrier objected to the proposed settlement. 

On the PIP side, the plaintiff’s own $15,000 in coverage was exhausted. The remainder of his alleged $400,000 in medical bills was paid by his personal health insurance carrier.

After filing a complaint against Fleurmond and Decaro, the plaintiff moved for declaratory judgment against GEICO and AAA MAIC seeking coverage for PIP under the policies issues to Fleurmond’s sister and mother. GEICO and AAA MAIC cross moved for a declaration of no coverage. The trial judge found the plaintiff settled his claims with Fleurmond and Decaro and that he had no relationship with GEICO and AAA MAIC that would otherwise entitle him to coverage under their policies. Because the plaintiff was seeking PIP rather than UIM coverage, the trial judge determined Longworth was inapplicable and granted summary judgment to GEICO and AAA MAIC. The plaintiff appealed.

The Appellate Division was unpersuaded by the plaintiff’s argument that New Jersey permits “stacking of policies” for PIP benefits, noting N.J.S.A. 39:6A-4.2 expressly prohibits an insured from recovering PIP benefits from multiple policies. The Appellate Division also rejected the plaintiff’s contention that a policy in the driver’s household will cover the driver where the tortfeasor driver is uninsured. The court remarked that even if the plaintiff could have sought coverage under the GEICO or AAA MAIC policies, he settled his claims with Fleurmond and Decaro. 

The Appellate Division ultimately affirmed the trial court’s decision concluding that none of the plaintiff's attempts to extend well-settled principles of insurance law was availing. It held the plaintiff was not a named insured under the GEICO or AAA MAIC policies, did not reside with the named insured, did not occupy a vehicle insured under those policies, and had released the tortfeasor from any and all claims arising from the accident.
In Rowe v. Bell & Gossett Co., the New Jersey Supreme Court determined both that the trial court properly admitted into evidence certain statements made during discovery proceedings by several defendants who reached a settlement with the plaintiffs prior to trial and that the trial court properly allowed the jury to allocate fault to those settling defendants based on such evidence, in combination with other evidence presented at trial.

The plaintiffs filed an asbestos product liability action. Defendant Universal asserted against all other defendants crossclaims for contribution and common-law indemnification. The parties conducted discovery. The plaintiffs settled their claims with eight defendants shortly before trial. When the trial commenced, Universal was the only defendant remaining.

After the settling defendants indicated their representatives were out of state or otherwise would not be produced at trial, Universal moved to admit excerpts from the settling defendants’ answers to interrogatories and the deposition testimony of their corporate representatives. Over the plaintiff’s objections, the trial court admitted certain of the proffered evidence by citing to several hearsay exceptions. Universal’s counsel then read to the jury the admitted excerpts from the settling defendants’ interrogatory answers and the deposition testimony of
the corporate representatives as
affirmative support for Universal’s position that the jury should allocate fault to the settling defendants. The jury returned a verdict in plaintiffs’ favor but allocated only 20% of the fault to Universal, attributing the remainder of liability to the eight settling defendants.

After the Appellate Division found the disputed statements inadmissible and reversed and remanded for a new trial on the apportionment of fault, the case went to the Supreme Court. The parties agreed that each of the disputed statements constituted hearsay. The questions for the Court were whether any hearsay exception applied and whether the evidence supported an apportionment of fault against the settling defendants. 

The Supreme Court held that the excerpts from the settling defendants’ interrogatory answers and corporate representative depositions were properly admissible under N.J.R.E. 803(c)(25) as statements that, when made, were against the declarant’s interest. The Court found that the statements in question, which addressed issues including corporate successor liability, whether the settling defendants manufactured asbestos-containing products to which the plaintiff might have been exposed, and whether such products contained warnings about the dangers of asbestos, were “so far contrary” to the defendants’ interests, and “so far tended to subject” them to civil liability, that a “reasonable person” in their position would not have made the statements unless that person believed them to be true, satisfying the requirements of N.J.R.E. 803(c)(25). The Court did not reach the potential admissibility of the statements under other hearsay exceptions. 

After finding the trial court properly allowed Universal to present its proofs in support of apportionment of fault to the settling defendants, the Court noted that it was the jury’s province to accept or reject those proofs. The Supreme Court therefore left the jury’s verdict undisturbed, reversing the Appellate Division and reinstating the trial court’s judgment.
On October 22, 2019, the Appellate Division, First Department in New York issued its opinion in Topoli v. 77 Bleecker St Corp., et al. holding that a plaintiff who was injured while installing window shades in the interior of an apartment after the conclusion of a larger construction project was not engaged in “altering” for purposes of liability under Labor Law § 240(1), necessitating the dismissal of that claim against the earlier project’s general contractor and co-op corporation.

The apartment owners had modified the general contract so as to delete from the scope of work the provision regarding installation of window treatments. They then separately contracted directly with the plaintiff’s employer for installation of the window treatments after the construction work was completed and they occupied the unit. 
The Court found that installation of the window treatments was separate and distinct from the larger construction work that was subject to the general contract and that plaintiff’s Labor Law § 241(6) claim therefore should have been dismissed as well.  

Finally, the Court found that the Labor Law § 200 and common law claims against the general contractor and co-op should have been dismissed as well due to plaintiff’s failure to establish  prima facie negligence by them. 
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