Summer 2014
Quarterly Update
Issue 2
honored with 
Martindale Hubbell's highest attorney rating, 

AV-Preeminent �

 
New Office In WV 
In July 2014, MG will open its second WV office, this one located in Weirton.
New Partner
MG announces Michael Markins as our newest Partner
QUICK LINKS

PRIOR NEWSLETTER

Who is Mannion Gray? First and foremost, we are problem solvers and trial lawyers. We use a proactive, results-driven, team-oriented approach to put you in the best position to resolve or try the case. We will go to battle on your highest exposure cases in the most feared venues. Our trial record of obtaining defense verdicts in difficult liability and catastrophic injury cases speaks for itselfMG website click here

FOCUS ON KENTUCKY/CINCINNATI OFFICE
 
As many of you know, Mannion Gray has offices in Ohio, Kentucky, West Virginia, Pennsylvania, Indiana and Virginia. In this edition, we feature our Kentucky/Cincinnati office, with many of the substantive contributions being made from members of that office, which opened in 2007. Judd Uhl is the Managing Partner of this strategically located office. The office is just across the river from Cincinnati, within 1 hour of all major cities in Kentucky and within 2 hours of Indianapolis and Columbus. 
 
 

 

In addition to Judd Uhl, the Kentucky/Cincinnati office includes Founding PartnersTodd Gray and Ryan Rubin, along with Associates Kate Kennedy and Morgan Salisbury work along-side these three partners. Each of these attorneys are licensed in multiple States, allowing them to serve our client needs in Indiana, Kentucky, Ohio, and Pennsylvania.  

 

     

  


 

KENTUCKY COURT OF APPEALS CONSIDERS THE INSURANCE CRIMINAL ACTS EXCLUSION

 

 


The Kentucky Court of Appeals has recently addressed the "criminal acts" exclusion as applied to commercial insurance policies.  In Neighborhood Investments, LLC v. Ky. Farm Bureau Mut. Ins. Co., 2014 Ky. App. LEXIS 54, a landlord filed a breach of contract and DJ action against its insurer, Kentucky Farm Bureau ("KFB"), for a determination of whether the terms of its policy covered decontamination expenses arising from a tenant's production of methamphetamine on the leased premises.  The tenant's illegal activities apparently rendered the premises uninhabitable.     

  

KFB's policy excluded coverage for loss or damage caused by dishonest or criminal acts by "anyone to whom you entrust the property for any purpose."  In an issue of first impression in Kentucky, the Court of Appeals was charged with determining whether the tenant qualified as "anyone" the landlord "entrusted" with "the property for any purpose."    

The landlord contended that he did not "entrust" the demised premises to the tenant, and that the word "lease" is not synonymous with the word "entrust."  The policy did not define "entrust."  Giving the word its common and ordinary meaning, the Court determined that "entrust" conveys the idea of "the delivery or surrender of possession of property by one to another with a certain confidence regarding the other's care, use or disposal of the property."

 

Using this definition, the Court held that the word "entrust" encompasses a lessor-lessee relationship, and determined that the trial court correctly granted summary judgment in favor of KFB and that there was no coverage under the policy.  The Court also found that the use of the word "anyone" was not ambiguous and included tenants.  The Court further held that the use of the word "property" encompassed real property, and not simply personal property. 


CONTINUED MEDICAL MALPRACTICE TRIAL SUCCESS IN WEST VIRGINIA 

No informed consent signed at the office.  Allegedly no discussion of the risks of surgery.  No operative report prepared by the surgeon.  No post-operative care office records.  No memory of the surgery by the surgeon.  And no support by the subsequent treating physicians, who testified against our Defendant physician's interests.  No problem for the Mannion Gray defense team. 

 

These were just a few of the hurdles that Tom Mannion and Tim Yianne overcame when they defended a retired plastic surgeon in Southeastern West Virginia last month.  The Plaintiff claimed permanent disfigurement and scarring, along with the need for multiple corrective surgeries, following a breast reduction surgery performed in 2009.  The surgeon took a one-hour lunch break during surgery, which the Plaintiff claimed led to an infection and resulting decreased vascularity. 

 

After several post-operative visits, for which the physician did not record his findings, the physician suffered a serious and unexpected medical emergency, resulting in a 4-month ICU stay, after which he closed his office.  The Plaintiff sought treatment from another plastic surgeon, who documented that the surgeon resected too much breast tissue and otherwise caused the Plaintiff's alleged problems.  Several corrective procedures were performed, and future augmentation and corrective surgery were recommended.  Along with negative testimony from the subsequent treating plastic surgeon, the defense was hindered by the lack of documentation and lack of memory of the informed consent discussion and surgery.

 

Mannion Gray's defense team obtained multiple admissions on the cross-examination of the Plaintiff's expert, resulting in a directed verdict on multiple claims.  The Court threw out the Plaintiff's claims that the lunch break was a contributing cause to the injury, that an infection was present, that the Plaintiff had a permanent disfigurement, and that the Plaintiff suffered from asymmetry following surgery. The remaining claims were effectively handled on the direct examination of the surgeon, the Defendant's expert, and closing argument. In addition, Mannion Gray utilized numerous hospital employees and other sources to build enough evidence from which the jury could infer proper conduct of the physician during the surgery.


MSJ & SANCTIONS IN FAVOR OF THE DEFENSE? 
Cuyahoga County Judge Dismisses A Discrimination Case And Orders Plaintiff's Counsel To  Pay ALL Defense Fees And Expenses.
 
Ryan Rubin's aggressive representation of a Mannion Gray client resulted in an award of defense costs and fees after prevailing on his dispositive motion. The Court was neither impressed nor swayed by Plaintiff counselor's self-promotion as a law school professor and Director & Chief Counsel of Housing Advocates Inc., a federally funded housing organization he founded in 1975.

Rubin represented an apartment complex that evicted a longstanding tenant after learning that the tenant's lease application failed to disclose a 27-year-old conviction for aggravated assault. The Plaintiff alleged he did not personally fill-out the application, that he was an outstanding tenant, and that the conviction was remote. The Plaintiff alleged that the eviction was based upon a discriminatory Policy against renting to those with a criminal conviction. 

The Plaintiff pursued numerous alleged violations of Ohio and Federal Fair Housing Acts. The Plaintiff claimed that the apartment complex's alleged Policy against renting to those with convictions resulted in disparate impact and disparate treatment against black males, because as the Plaintiff asserted, black males were statistically more likely to have convictions.

Rubin and the apartment complex denied the existence of any such Policy and denied all allegations of discriminatory conduct. The eviction was based upon falsification of the executed rental application. 

The Cuyahoga County Court of Common Pleas Judge reviewed extensive briefing and GRANTED Rubin's Motion for Summary Judgment. The Court did not stop there...

The Court GRANTED Rubin's Motion for Sanctions and ORDERED a trial on Rubin's fees and expenses. Rubin found himself on the other side of the question for the first time. Allison Hayes of MG joined Rubin for the trial, and she conducted a direct examination of Rubin as to the reasonableness of his fees and expenses. Rubin and Hayes prevailed, and the Court Ordered a FULL reimbursement of ALL attorney's fees and expenses incurred by the Defense.

The Court Orders for Summary Judgment and Sanctions were not Appealed.

 

 
PROTECTING FREIGHT BROKER'S FROM
LIABILITY



Plaintiffs increasing pursuit of transportation broker liability where alleged damages exceed the trucker's policy limits.

 

We have all seen it before--when a small motor carrier is involved in a catastrophic loss, plaintiffs' lawyers start looking for a theory, any theory, to pursue third parties with deeper pockets. One increasingly popular scenario is to pursue liability against brokers.

 

In holding brokers liable, plaintiffs generally employ two alternative liability theories. The typical approach first involves an attempt to establish the traditional elements of agency to trigger vicarious liability-asserting that the broker exercised enough control over the contracted motor carrier that an employment or agency relationship existed--which is made is even murkier where the broker also is a registered motor carrier and transports non-brokered loads. If the facts and elements of the relationship/transaction between the broker and carrier clearly define the carrier as an independent contractor, then plaintiffs' lawyers alternatively argue that the broker negligently selected an unsafe carrier by criticizing the broker's selection practices.

 

In analyzing the first theory, the critical issue is whether the person or entity (the carrier) is acting as an agent or an employee of the principal (the broker) or whether the relationship is that of an independent contractor in which the principal (the broker) would not be subject to liability. This is important because if the broker is not tied to the carrier, it is considered a "shipper" under the federal regulations and generally liability will not attach for any loss at the hands of the carrier. See, 49 U.S.C. �13102 (13); 49 C.F.R. 390.3 (a); and 49 C.F.R. �390.5. Under most broker-carrier agreements, the licensed motor carrier will be listed as an independent contractor responsible for its own drivers and equipment. Despite the fact that the transportation broker may arrange the dates and the times of pickup, where the broker's activities are directed "toward the incidental details to accomplish the ultimate purpose for which the transportation broker had been hired..." the transportation broker will not be held to be vicariously liable. See, Jones v. C.H. Robinson Worldwide, Inc., 558 F. Supp 2d 630 (W.D. Va. 2008).

 

The leading ways for a broker to lessen the risk of this sort of vicarious liability are to avoid insisting on certain drivers, avoid setting the carrier's routes or directing the manner or method of transport, ensure that the broker is not listed on the bill of lading or invoices, and avoid all reference to having control over all operations. Perhaps most important, however, is to have a carefully crafted contract with the carrier that outlines the roles and obligations of the two parties, while clearly stating that, as broker, the company will not be liable for any losses because the carrier is not an employee or agent. Moreover, avoid using pronouns like "we" or "us" or any other casual references that could be construed as a team effort or joint venture.

 

As referenced earlier, doing all this may not be enough to shield a broker from liability if the broker's practice of selecting carriers is not appropriate or documented. In Smith, the Court considered the plaintiff's theory that the broker was negligent in selecting or training the carrier. The Northern District of Ohio rejected the argument and found that the carrier was both certified and qualified to provide motor carrier service. In addition, the carrier maintained a CSA "satisfactory" rating with the DOT, carried the necessary insurance coverage, and had driver hiring and training programs certified by an independent organization. See, Smith v. Spring Hill Integrated Logistics Mgmt. Inc. 2005 WL 2469689 (N.D. Ohio).

 

This case illustrates the importance of the general rule that a broker should use reasonable care in selecting truckers it maintains in its stable of carriers. Schramm v. Foster, 341 F.Supp.2d 536 (D.Md.2004). To best limit exposure to liability in this regard, brokers must be sure to have an express policy that is used in selecting carriers, and must follow that policy. At a minimum, such written policies should require and confirm that the carrier has a valid federal carrier's authority, and has cargo and liability insurance. While debatable, the broker may also want to ensure that the carrier has a satisfactory safety rating. See, https://safer.fmcsa.dot.gov/.  Contained within that policy should be a provision that requires a periodic check to ensure that a frequently contracted carrier has maintained all of these requirements. For example, one of our broker clients maintains a "carrier package" for each carrier that includes signed and initialed Broker/Carrier Agreement, copy of Contract Carrier Authority, Certificate of Insurance, W-9 Form, and a Carrier Profile, which is periodically updated.  A more extreme, but certainly advantageous measure where a broker may also serve as carrier of its own non-brokered loads, may be for that company to separately incorporate those portions of its business. 

 

Overall, in transportation broker liability cases, the issue ultimately becomes the amount of control exercised by the freight broker. However, with more and more brokers facing claims involving negligent hiring or selection, it is necessary for freight brokers to be aware of the current state of the law and perform thorough background research on the safety history and qualifications of their carriers. 


YIANNE WINS CIVIL RIGHTS DEFENSE VERDICT FOR CORRECTIONAL OFFICER

Tim Yianne, a Partner in the West Virginia office, recently defended a correctional officer at trial who was accused by five female inmates of violating their civil rights while they were incarcerated at a jail facility.  The inmates alleged that the correctional officer forced them to bark like dogs during a search for contraband in their cells.  Several of the inmates also alleged they were thrown to the ground, kicked, and sprayed with excessive amounts of pepper spray.  They sought compensatory and punitive damages against the correctional officer.  After Tim exposed the inmates' lack of credibility on cross-examination, the jury returned a complete defense verdict in favor of the correctional officer as to all five inmates.



 

"INNOCENT CO-INSUREDS" IN INDIANA MAY NOT DEFEAT POLICY'S INTENTIONAL LOSS EXCLUSION--FOR NOW...

 

Callie Deeter set her own home on fire when she heard her husband, Rick Deeter, was cheating.  Because Callie and Rick were covered under the same home insurance policy, and as a result, Rick was denied coverage based upon the policy's intentional loss exclusion.  The trial court granted summary judgment to the insurer based upon the exclusion.  Rick argued, on appeal, that he was an "innocent co-insured spouse." Previously, the Indiana court of appeals had held that, where there is no exclusion for intentional loss by a co-insured, an innocent spouse may recover.  See Fuston v. National Mut. Ins. Co., 440 N.E.2d 751, 754 (Ind. Ct. App. 1982).  Nevertheless, the appellate court was unconvinced and affirmed summary judgment for Rick's insurer.  See Deeter v. Ind. Farmers Mut. Ins. Co., 999 N.E.2d 82 (Ind. Ct. App. 2013).  The Deeter decision makes clear that an intentional loss exclusion prevents even an "innocent co-insured" from recovering after an intentional loss.

In 2013, Indiana state Senator Michael Crider authored SB 170, which would have prohibited insurers from denying coverage to "innocent co-insureds" like Rick Deeter.  The bill did not make it out of committee, but the issue remains at the forefront of legislative issues in Indiana and is of particular interest to advocates against domestic violence.

 


 

"BRIGHT LINE" PROTECTING ALL ATTORNEY-EXPERT COMMUNICATIONS IN PENNSYLVANIA  

 

--By: Donald Smith

In Barrick vs. Holy Spirit Hospital of the Sisters of Christian Charity, 2014 Pa. LEXIS 1111 (decided April 29, 2014) the Pennsylvania Supreme Court specifically addressed Pa.R.C.P. 4003.3 regarding the scope of discovery and the attorney work-product doctrine; and Pa.R.C.P. 4003.5 governing disclosures related to expert witnesses.  The Court created "a bright-line rule denying discovery of communications between attorneys and expert witnesses." 

 

Barrick arose out of an accident which occurred at Holy Spirit Hospital where Carl Barrick fell off of a chair in the cafeteria.  The Defendant subpoenaed the records of one of his treating physicians. The treating physician withheld some records at the advice of the Plaintiff's counsel who claimed they "were not created for treatment purposes."  The Plaintiff had designated the treating physician as an expert witness, and counsel consequently contended that all communications between him and the physician were privileged material pursuant to Pa.R.C.P. 4003.3 and 4003.5. 

 

The Supreme Court reviewed the Superior Court's interpretation of Pa.R.C.P. �4003.3, with attention to whether there should be absolute work-product protection to all communications between a party's counsel and a trial expert. The Supreme Court was evenly divided and, hence, the Superior Court's en banc ruling that all attorney-expert communications are protected from discovery was affirmed. The Supreme Court concluded that attorney-expert communications would consist of a mixture of pure attorney work-product and related facts which triggered the attorney's work-product; and that trying to separate the two by in camera review would add unnecessary difficulty and delay to the discovery process.  The Court determined that it was preferable to err on the side of protecting the attorney's work-product by providing a bright-line rule barring discovery of all attorney-expert communications.  

Mannion Gray | (216) 344-9422 | www.manniongray.com |

� 2014 Mannion & Gray Co. L.P.A.

This Is An Advertisement

The content of this Mannion Gray communication is for general information purposes only. It does not constitute legal advice or create an attorney-client relationship. Any use of this newsletter is for personal use only. All other uses are prohibited. All rights reserved. To obtain permission to reprint articles contained within this newsletter, contact Angela Incorvaia at (216) 344-9422.