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Defense Digest

On the Pulse…Recent Appellate Victories*

Defense Digest, Vol. 30, No. 2, June 2024

June 1, 2024

Walter Kawalec (Mount Laurel, NJ) succeeded in obtaining a reversal by a panel of the New Jersey Superior Court, Appellate Division, on an interlocutory appeal. We sought review of an order granting discovery sanctions and denying reconsideration of that sanction’s order. The plaintiff claimed to have been injured in a hole in the parking lot at his work. His employer leased the location under a triple-net lease, which placed on the employer full responsibility for property maintenance and repair. The plaintiff sought in discovery to obtain tax return documents from the owner, among additional documents, which he hoped in vain would demonstrate some retained duty by the owner. When the plaintiff was dissatisfied with the answers to the discovery requests, he sought sanctions, which the trial judge granted. We successfully argued that this was an abuse of discretion (as was the denial of reconsideration) because the tax documents had to be first reviewed in camera; because we had fully answered the plaintiff’s discovery requests, although he was dissatisfied with the answers; and because the production of other documents merely needed a confidentiality agreement. The Appellate Division reversed the sanction order and remanded for further proceedings. Moore v. RE Associates, LLC, 2024 WL 1161734 (App. Div. Mar. 19, 2024)

Walter Kawalec (Mount Laurel, NJ) obtained an affirmance by a panel of the New Jersey Superior Court, Appellate Division, of the dismissal of a complaint, seeking insurance coverage for damage to an in-ground swimming pool after a storm. The plaintiffs had sought coverage for damage to their roof and the partial collapse of the pool. The carrier’s engineering inspection disclosed that the cause of the pool collapse was excessive hydrostatic pressure from the rainfall during the storm. The claim for the pool was therefore denied because the policy did not provide coverage for damage caused by ground water. The carrier paid on the claim for the roof damage in October 2020. Because the policy contained a provision requiring that suit must be brought within 12 months of the loss (although tolled during the coverage investigation), the carrier sought to dismiss the plaintiffs’ subsequent compliant, which alleged breach of contract and bad faith for the denial of the pool claim because it was brought more than 12 months after the carrier disclaimed coverage for the pool damage. The Appellate Division affirmed the dismissal of the claim as time barred, rejecting the plaintiff’s arguments for extending the time to file the complaint. Drevs v. Metro. Pro. & Cas. Ins. Co., 2024 WL 1461740 (App. Div. Apr. 4, 2024).

Kimberly Berman (Fort Lauderdale, FL) succeeded in obtaining a per curiam affirmance in the Fifth District Court of Appeal of an order declaring the children dependent due to their father’s drug use and overdose in front of his children. Kimberly served as pro bono counsel for the statewide Guardian ad Litem program and represented the interests of the child as part of the Defending Best Interests Project. S.M. v. Dep’t of Children & Families, 5D23-3142 (Fla. 5th DCA Feb. 1, 2024).

Kimberly Berman (Fort Lauderdale, FL) succeeded in convincing the Fifth District Court of Appeal to quash an amended discovery order to compel a church to identify church members and produce membership lists in a suit for exploitation, theft, conversion, declaratory relief, and other causes of action brought by a church member against the church. The court agreed with Kimberly’s arguments that the trial court’s order was deficient in that it failed to address the church’s claims of associational privilege under the First Amendment and that there was a disputed issue below as it related to the incorporation status of the church. St. Paul’s Catholic Church v. Hilt, 380 So.3d 1270 (Fla. 5th DCA Mar. 1, 2024).

Audrey Copeland (King of Prussia, PA) persuaded the Third Circuit to affirm the Pennsylvania district court’s grant of summary judgment as to various claims by the plaintiff, a former chief deputy sheriff, alleging retaliation and discrimination based upon sex, political beliefs and the First Amendment, in favor of our firm’s clients. Because the plaintiff failed to allege causation and to show that reconsideration was warranted, the district court’s dismissal of her First Amendment claim and denial of her motion for reconsideration were affirmed. The Third Circuit affirmed the district court’s disposition of the remaining claims because, even assuming the plaintiff established a prima facie case, the defendants provided a legitimate reason for her termination, which the plaintiff failed to show was pretextual. Fritz v. County of Westmoreland, et al., 2024 WL 808970 (3d Cir. Feb. 27, 2024) 

Ralph Bocchino and Shane Haselbarth (both of Philadelphia, PA) were successful in obtaining an order to move a very volatile case out of Philadelphia. This was a sexual assault case where, at first, the venue appeared prima facie good for Philadelphia until Ralph and Shane did a deep dive into the service and found one defendant (the one holding the case in the City) was never served and could not be found. As a result, the case is being transferred to Lackawanna County. Ralph and Shane were also successful in obtaining an order to move another case out of Philadelphia, in a a wrongful death and survival action that was filed in Lackawanna County for discovery before a complaint was filed in Philadelphia. The plaintiff had sustained very severe injuries in a head-on car crash with a tractor trailer that led to his death. Shane filed a motion to consolidate and transfer the case based on Rule 213, which Judge Bright of the Philadelphia County Court of Common Pleas granted. 

Elizabeth Driscoll (New York, NY) secured a victory in the New York Appellate Division, First Department. Following oral arguments, the court unanimously affirmed the lower court’s decision, which denied a medical provider’s Article 75 petition to vacate a master arbitration award. The court held that the Supreme Court correctly denied the petition to vacate the master arbitration award, as neither the lower arbitration award nor the master arbitration award were irrational and neither contained errors of law or fact.

*Results do not guarantee a similar result. 

 

Defense Digest, Vol. 30, No. 2, June 2024, is prepared by Marshall Dennehey 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. © 2024 Marshall Dennehey. 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

Bret E. Dubbert Joins Marshall Dennehey’s Orlando Office as Special Counsel in the Casualty Department

News

Bret E. Dubbert Joins Marshall Dennehey’s Orlando Office as Special Counsel in the Casualty Department

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.

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.

Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

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Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

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Marshall Dennehey Announces 2027 New Jersey Super Lawyers And Rising Stars

Defense Victory Obtained in Workers’ Compensation Case

Result

Defense Victory Obtained in Workers’ Compensation Case

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.

Complete Victory Obtained in a Workers’ Compensation Matter

Result

Complete Victory Obtained in a Workers’ Compensation Matter

business meeting photo

Result

Summary Judgment Obtained in Insurance Coverage Case

Event

CLM 2026 Focus Conference

Allison joins three insurance industry leaders to discuss how cyber coverage disputes, the growing impact of social inflation on bodily injury claim valuation, and the use of artificial intelligence are reshaping the bad faith landscape. The panel will examine emerging sources of extra-contractual exposure, including evolving cyber insurance coverage issues and the challenges of accurately valuing bodily injury claims. Practical approaches to claim evaluation using AI, along with defense strategies designed to help prevent or successfully defend against bad faith litigation, will also be addressed.