.

Defense Digest

On the Pulse…Marshall Dennehey Is Happy to Celebrate Our Recent Appellate Victories*

Defense Digest, Vol. 27, No. 4, September 2021

September 1, 2021

Kimberly Berman (Fort Lauderdale, FL) succeeded in obtaining a dismissal by the Fourth District Court of Appeal of an appeal of an order denying emergency relief in our client’s action to foreclose a claim of lien and for damages and breach of contract against a former condominium unit owner. The appellant attempted to revive an untimely appeal of a prior order by obtaining a new order to the same effect, but the appellate court dismissed the appeal and granted the association its motion for entitlement to appellate attorney’s fees. Sawyers v. Lakeside Manor North Association, No. 4D21-225 (Fla. 4th DCA Apr. 7, 2021).

Kimberly, Shaggy Nowroozpour and Michael Packer (Fort Lauderdale, FL) obtained an affirmance by the Fourth District Court of Appeal of a final judgment entered for an insurance carrier. The case involved an alleged assignment of benefits for a water loss, where the county court found the plaintiff lacked standing to sue. Empire v. United Property & Casualty Company, No. 4D21-65 (Fla. 4th DCA Apr. 14, 2021).

Kimberly and Craig Hudson (Fort Lauderdale, FL) succeeded in the Fourth District Court of Appeal. In this case, the court affirmed a final dismissal order of third-party claims for tortious interference with an advantageous business relationship, civil conspiracy to commit tortious interference with a contract, aiding and abetting tortious interference with a contract, and vicarious liability against a law firm and its lawyers who filed the underlying lawsuit against the appellant. Jallali v. Zhou, 4D20-5 (Fla. 4th DCA Apr. 22, 2021).

Kimberly and Stephen Poljak (Fort Lauderdale, FL) obtained the Fourth District Court of Appeal’s affirmance of a final judgment in favor of an insurance carrier in an insurance coverage dispute. The trial court found that there was no coverage under a CGL policy for the vicarious liability of an insured when its employee had committed an intentional act in the course and scope of his/her employment; the Fourth District agreed. Slocomb v. Old Dominion Insurance Company, 4D20-1515 (Fla. 4th DCA May 6, 2021).

Kimberly, James Hanratty and Robert Williams (Jacksonville, FL) convinced the First District Court of Appeal to affirm a final summary judgment for a restaurant/bar owner in a slip and fall case. The appellant argued that a restaurant/bar owner should have warned a patron about the barstool being a dangerous condition and of the slippery dance floor, but presented no evidence that the owner was in a superior condition than the appellant. Aljuni v. Blackfinn Jax, LLC, No. 1D20-946 (Fla. 1st DCA Apr. 20, 2021).

Kimberly and Ryan Burns (Fort Lauderdale, FL) persuaded the Fifth District Court of Appeal to affirm a final dismissal order of a wrongful death product liability action. The Estate had filed the lawsuit two years after the statute of limitations expired. The Estate claimed the limitations period was tolled due to the alleged adverse interest of the child’s mother, who had been abused by the deceased prior to the accident on an agricultural production site. The trial court dismissed the case, with prejudice, after giving the Estate five attempts to amend. The Fifth District affirmed the dismissal and dispensed with oral argument that same day. Rude v. Morbark, Inc., Case No. 5D20-976 (Fla. 5th DCA Apr. 20, 2021).

Audrey Copeland (King of Prussia, PA) persuaded the Commonwealth Court to dismiss the claimant’s untimely appeal where the claimant did not allege any basis for relief nunc pro tunc. King v. Olympic Tool and Machine Corp. (WCAB), No. 48 CD 2021 (Pa. Cmwlth., May 18, 2021).

Audrey and Estelle McGrath (Pittsburgh, PA) won an appeal where the Pennsylvania Supreme Court denied a newspaper delivery person’s petition for allowance of appeal on March 30, 2021. The claimant had filed a claim petition in 2018, alleging that he suffered serious injuries to his right leg after slipping and falling on ice when he was delivering newspapers. The newspaper asserted the claimant was an independent contractor. The case was bifurcated to determine whether the claimant was an employee. After fully litigating the issue, the Workers’ Compensation Judge found in favor of the newspaper and found that the case was not so different than the seminal case of Johnson v. WCAB (DuBois Courier Express), 631 A.2d 693 (Pa. Cmwlth. 1993). The Johnson court had held that a newspaper carrier was an independent contractor because the newspaper did not exercise substantial control over his activities. The claimant appealed to the Workers’ Compensation Appeal Board. After hearing argument and reviewing the parties’ briefs, the Board affirmed the judge’s decision and order. The claimant appealed to the Commonwealth Court, urging the court to consider the evolving nature of the newspaper delivery business in rendering its decision. The court refused to do so and highlighted the lack of control by the newspaper because there was no prohibition on delivering competing newspapers or enlisting a substitute without prior notice or permission. The Commonwealth Court’s decision, which was issued as a non-precedential opinion, is the latest in an unbroken line of similar cases holding that newspaper carriers are independent contractors. The claimant’s suit ended when the Pennsylvania Supreme Court denied the petition for allowance of appeal.

Walter Kawalec (Mount Laurel, NJ), of our appellate group, and Leonard Leicht and Michelle Michael (Roseland, NJ) were successful before the the New Jersey Appellate Division. The plaintiff filed suit against her employer, a governmental agency, alleging she was subject to discrimination under the New Jersey Law Against Discrimination based upon her disability and that she was subject to retaliation for filing a previous discrimination suit. She further asserted aiding-and-abetting claims against fellow employees. The case was dismissed via summary judgment, and the plaintiff appealed. The Appellate Division accepted our argument that the failure to move the plaintiff to a position she desired did not constitute an adverse employment action or failure to accommodate as she suffered no adverse effect on her salary or benefits, and did not materially alter her working conditions. Further, the court addressed the concerns plaintiff’s physician had expressed when she sought the accommodation, even though she was not transferred to a position in which she preferred to work, and agreed these claims were properly rejected by the trial Judge.

Walt, Howard Mankoff and Michelle Michael (Roseland, NJ) were successful before the New Jersey Appellate Division. The plaintiff is a former employee of a non-profit agency that provides services to disabled individuals. She filed suit against her former employer and its manager, alleging gender discrimination and retaliation for filing a workers’ compensation claim. As discovery progressed, thousands of pages of discovery were exchanged, which demonstrated that legitimate, long-standing performance deficiencies were the actual basis for her termination. The defendants filed for summary judgment prior to the end of the discovery period, and the Law Division granted the motion, finding no reason not to grant the immediate dismissal, especially as the plaintiff failed to even respond to the statement of material facts. On appeal to the Appellate Division, the court affirmed the dismissal, rejecting the plaintiff’s arguments that the motion judge engaged in a subjective analysis of the facts and thereby made factual findings on disputed issues, and that the motion judge erred by granting the motion before discovery was complete. The court found that the plaintiff failed to demonstrate, with any degree of particularity, that further discovery would supply the missing elements to her cause of action. The court further found that the plaintiff failed to demonstrate a prima facie case of gender discrimination or workers’ compensation retaliation given the unrebutted facts provided by the defendants.

Walt and Lynne Nahmani (Mount Laurel, NJ) successfully obtained a reversal of a trial court’s denial of our motion to file a third-party action. We represented a nursing home who is alleged to have caused significant injury to a former patient, and we sought to bring a third-party action against other medical providers who could potentially be liable for the alleged injury. The trial judge rejected the motion on the grounds that it should have been brought earlier and that the third-party action would cause a delay in the litigation. On an interlocutory appeal granted by the Appellate Division, the appellate court reversed. It held that because the COVID-19 pandemic caused a closure of the courts and created a massive backlog of cases, the delay was inevitable, so it could not support a denial of the request to add the third parties to the action. As such, the Appellate Division found an abuse of discretion and remanded with instructions to permit the third-party action.

Walt and Walter Klekotka (Mount Laurel, NJ) successfully obtained and affirmance in the Appellate Division of a grant of summary judgment. The case involved a plaintiff who, on a dark and rainy night, slipped and allegedly injured himself while walking quickly on a grassy alleyway between two buildings toward the entrance to his apartment. Our clients were a construction company and its owner who were doing work in one of the buildings. In his answers to interrogatories and depositions, the plaintiff failed to identify anything that caused the slip other than wet grass. On the motion for summary judgment, the plaintiff sought to introduce an affidavit that placed blame for the fall on an unidentified “tar-like substance” and construction debris. The Law Division judge disregarded the affidavit based on the “sham affidavit” doctrine and found no basis to find liability against any defendant because the plaintiff failed to identify the cause of his alleged fall. The Appellate Division affirmed the Law Division judge’s decision, finding no error in the analysis or in rejecting the plaintiff’s affidavit.

Karen Grethlein and Shane Haselbarth (Philadelphia, PA) obtained a dismissal of a consumer fraud class action. Our clients, a national firm and its principal, specialize in identifying and reclaiming lost property for consumers who are unaware that such lost property exists. The plaintiff brought claims under the Pennsylvania Unfair Trade Practices Consumer Protection Law (UTPCPL) and for fraudulent inducement, arguing that the business model was deceptive because consumers could recover their own property without paying for the ease and convenience of having the defendant business work on their behalf. Not surprisingly, the district court found that the plaintiff’s serial complaints failed to allege anything “more than Defendants’ expertise,” and that there was no factual basis to support the notion that consumers are unduly influenced or misled. On appeal, the Third Circuit affirmed the dismissal, expressly noting that the defendants made no misrepresentation at any time, and the UTPCPL and fraud claims were dismissed without merit. DeSimone v. U.S. Claims Servs., Inc., 2020 WL 2556949 (E.D. Pa. May 20, 2020), aff’d 2021 WL 1662779 (3d Cir. Apr. 28, 2021).

 

Defense Digest, Vol. 27, No. 4, September 2021 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2021 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

Firm Highlights

Thought Leadership

Florida Supreme Court Rules Florida Statute §627.70152 Does not Apply Retroactively

In a decision that resolves years of appellate uncertainty and confirms that insurers and insureds alike can rely on the legal framework in place when a policy is issued, the Supreme Court of Florida last week found that Florida Statute §627.70152, which involves an insured’s requirement to provide an insurer with pre-suit notice before filing a suit, cannot be applied retroactively. In Universal Property & Casualty Insurance Company v. Hughes, the Court was presented with the issue of whether the statutory pre-suit notice requirement applied retroactively and whether it would apply to a breach of contract of an insurance policy that was issued before the statute went into effect. Before the Court was an appeal from a homeowner, Ms. Hughes, who sued her insurance carrier, Universal Property & Casualty Insurance Company (Universal) for breach of contract under an insurance policy that was in effect from April 24, 2019 through April 24, 2020. During the policy period, Ms. Hughes suffered a loss and, on May 29, 2019, made a claim for water damage. The carrier investigated the loss and issued payment; Ms. Hughes disputed the payment, finding the amount insufficient for repairs. On July 1, 2021, Florida Statute §627.70152 went into effect, which required insureds to provide notice of intent to initiate litigation against the carrier prior to filing a lawsuit; if an insured filed the lawsuit without complying with §627.70152, a court must dismiss the case without prejudice. On August 4, 2021, Ms. Hughes filed her lawsuit against Universal for breach of contract. Universal moved to dismiss based on her failure to comply with §627.70152. Ms. Hughes contended the notice requirement could not be applied retroactively. The trial court disagreed and dismissed the lawsuit without prejudice, and Ms. Hughes appealed. During the appeal, the Fourth District Court of Appeal, in Cole v. Universal Property & Casualty, 363 So. 3d 1089 (Fla. 4th DCA 2023), ruled that Florida Statute §627.70152 did apply retroactively to policies issued before the effective date of §627.70152. However, the Sixth District Court agreed with Ms. Hughes and overturned the trial court’s ruling, finding the statute could not retroactively apply to policies issued prior to the statute effective date. Thereafter, the other district courts weighed in, with the Third District Court agreeing with the Fourth District Court, and the First, Second and Fifth District Courts agreeing with the Sixth District Court. In resolving the conflict amongst the district courts, the Supreme Court advised “as a general rule, ‘the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.’ Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996). The Court applied the two-step test when deciding whether a statute has retroactive application: “First, the Court must ascertain whether the Legislature intended for the statute to apply retroactively. Second, if such an intent is clearly expressed, the Court must determine whether retroactive application would violate any constitutional principles.” Menendez v. Progressive Exp. Ins. Co., 35 So. 3d 873, 877 (Fla. 2010). In analyzing the Legislature’s intent, the Court must determine whether the Legislature has manifested a clear command for retroactivity in the statutory text.  In review of the statutory text, the Court found nothing in the language of the statute to indicate that the phrase “all suits” was serving another purpose of expanding its reach to suits based on policies that both predate and postdate the enactment of the statute. Buis v. Universal Prop. & Cas. Ins. Co., 394 So. 3d 738, 741 (Fla. 2d DCA 2024). Further, the Court noted the statute has an effective date, which has long been considered to be evidence against retroactive application of a statute. The Court concluded that, on its face, no provision of §627.70152 speaks to application of the statute to insurance policies issued before the statute’s effective date and therefore, the Legislature did not clearly command retroactivity of the statute to include insurance policies issued prior to the enactment of the statute. The Court briefly reviewed Universal’s argument that the presuit notice requirement was procedural, not substantive, and therefore should be applied retroactively; however, the Court agreed with the Sixth District Court’s finding that, in its entirety, §627.70152 transformed an insured’s ability to sue an insurance company under a property insurance policy and an insurer’s obligations to respond to and pay insurance claims, thus making the requirement a substantive change. The Court thereby upheld the decision of the Sixth District and disapproved the decision of the Fourth District in Cole.

Thought Leadership

Commonwealth Court Reaffirms the Constitutionality of Act 111's IRE Provisions

In this case, the claimant sustained a work injury of January 6, 1994, which was acknowledged by Notice of Compensation Payable (NCP). After the claimant’s receipt of 104 weeks of temporary total disability benefits, the employer filed a Request for an Impairment Rating Examination (IRE). The IRE was performed in May 2023 and the IRE physician found that the claimant had a 5% whole person impairment, under the AMA Guides. The employer filed a Petition based on the IRE results, and the Petition was granted by the WCJ. During litigation, the claimant argued that the IRE provisions of Act 111 (Section 306(a.3) of the Act) were not applicable to her injury, since it predated June 24, 1996, the date Act 57 went into effect, and that the IRE provisions were unconstitutional. The Workers’ Compensation Judge (WCJ)) granted the Petition and the Board affirmed. On appeal to the Commonwealth Court, the claimant argued that Act 111 violated the nondelegation doctrine and that its retroactive application to the claimant’s injury was unconstitutional. The court rejected the arguments on the basis that they had already found the same arguments without merit in multiple, prior cases. The court also addressed an argument made by the claimant that Act 111 was procedurally defective under the Pennsylvania Constitution because it was only considered on two days in each House after having undergone amendments and reassignments. The court noted that the Pennsylvania Constitution requires every bill to be considered on three different days in each House. The claimant maintained that, according to the legislative history, the bill did not receive three separate days of consideration from each House when it was assigned a new bill number. The court pointed out, however, that the bill number, H.B. 1840 remained constant and was considered on three occasions by the House. Further, the court concluded that minor amendments to the bill were germane to its original subject, which was to modify the Act’s IRE process, in accordance with Protz II.

Thought Leadership

WCJ Improperly Refused to Conduct C&R Hearing and Erroneously Required Settlement of All Pending Petitions

In this case, the claimant sustained injuries in the course and scope of her employment as a registered nurse. The employer acknowledged the injury by a Notice of Compensation Payable (NCP).  Subsequently, a Workers’ Compensation Judge (WCJ) expanded the description of injury. The employer then filed a Termination Petition, alleging the claimant was fully recovered from the injuries. Providers filed Utilization Review (UR) Petitions, challenging UR determinations finding their chiropractic treatment to be not reasonable and necessary. A settlement of the claim was eventually reached, and the employer filed a Petition to Seek Approval of a Compromise and Release (C&R) Agreement. The C&R outlined that the agreement fully resolved all future workers’ compensation claims except for the termination and UR Petitions. Briefs were filed and one day later, the WCJ issued an Interlocutory Order which stated if instructions were not followed regarding filing of a C&R, a settlement hearing date would not be given. The employer complied with the order, and filed the C&R. Subsequently, the WCJ notified the parties that the C&R must resolve all issues in the petitions, or would not be entertained. A settlement hearing was never held, and the WCJ then issued a decision, granting the Termination Petition and dismissing the UR Petitions. The WCJ also said that the Petition for Approval of a C&R was dismissed without prejudice, as the issues in the Termination and UR Petitions went to a decision. The claimant appealed to the Workers’ Compensation Appeal Board (Board). The Board granted the claimant’s appeal, finding that the WCJ violated the requirement of Section 449 that an expedited hearing be held when a Petition for Approval of a C&R is filed.  The Board further held that it was legally incorrect for the WCJ to insist that the C&R resolve all issues raised by the pending Petitions. The Board remanded the case to a new WCJ, and Employer appealed to the Commonwealth Court. The court affirmed the Board and held that the WCJ erred, as a matter of law, by refusing to hold an expedited hearing within 30 days, once the Petition for Approval of a C&R was filed.  The court noted that the language of Section 449(b) is mandatory, and a settlement hearing is not discretionary or dependent on a party’s separate request for a stay, or whether the record has been closed. The court further rejected Employer’s argument that the case should not be remanded to a new WCJ for a new decision on the termination and and UR Petitions, as the Board passed no judgment on whether the C&R Agreement resolved the termination and UR Petitions, and left it for the WCJ to decide in connection with the Petition for Approval of a C&R.