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Defense Digest

On the Pulse…Recent Appellate Victories*

Defense Digest, Vol. 30, No. 4, December 2024

December 1, 2024

Kimberly Berman (Fort Lauderdale, FL) and Mark McCulloch (Orlando, FL) succeeded in obtaining a per curiam affirmance in the First District Court of Appeal of a final order dismissing the plaintiff’s fire-loss subrogation claim against our client, a tenant in a leased property it insured. The First District affirmed the trial court’s finding that the specific fire-loss provisions in the lease between our client and the landlord shifted the risk of loss to the landlord; thus, our client was a co-insured under the policy, and an insurance company cannot sue its own insured. 

Kimberly Berman also succeeded in obtaining a per curiam affirmance in the Fifth District Court of Appeal of a final order of dismissal. Kimberly represented an international not-for-profit private membership organization in an action by a former member for the alleged violation of his membership in said organization. The plaintiff attempted to use a settlement agreement from a prior case to show he was in compliance with the organization’s membership requirements. The plaintiff also argued that the requirement to be a member of an underlying organization was unconstitutional because of an antiquated Florida law. Kimberly argued that: a settlement agreement could not be enforced against a third party with no privity or connection to a settlement agreement; the plaintiff failed to follow the procedural requirements to challenge the statute and, even if he did, the law was wholly inapplicable to our client; claim and issue preclusion were appropriate because the plaintiff had incorporated the issues and claims into his complaint, which demonstrated that the same set of operative facts and issues were being litigated for a third time; and the plaintiff failed to state a cause of action under the Florida Declaratory Judgment Act because the elements were not met and the court did not have jurisdiction under the Declaratory Judgment Act. The trial judge dismissed with prejudice. After dispensing with oral argument, the Fifth District affirmed the dismissal. 

Audrey Copeland (King of Prussia, PA) convinced the Pennsylvania Commonwealth Court to affirm the decisions of the Workers’ Compensation Appeal Board and a workers’ compensation judge denying penalties. The claimant alleged the employer failed to pay for medications and that the workers’ compensation judge did not properly credit Letters of Medical Necessity. Although the employer unilaterally ceased to pay the bills for the medications, the judge had found they were not causally related to claimant’s work injury. Therefore, the Commonwealth Court found the claimant was not entitled to penalties under the Act and that the judge issued a reasoned decision by adequately explaining why she rejected the Letters. 

Carol VanderWoude (Philadelphia, PA) obtained a reversal in the Pennsylvania Superior Court of the trial court’s denial of preliminary objections to venue. She successfully moved in the trial court for certification of the ruling pursuant to Pa.R.A.P. 311(b) so that an immediate appeal from the interlocutory ruling could be taken, and she subsequently prevailed on appeal. The litigation arose from a helicopter accident that occurred in Afghanistan. Both plaintiffs, husband and wife, resided in Arizona. Carol’s client is a Delaware corporation located in Bucks County, Pennsylvania, that refurbished the helicopter in Bucks County. The codefendant corporation leased the helicopter to the plaintiff-husband’s employer, which was organized and principally operates in Montana. The plaintiffs’ primary focus in seeking to establish venue was on Carol’s client and, in particular, on the fact that it purchased two fabric interiors from a Philadelphia vendor. One of the interiors was installed on the helicopter. In reversing the trial court, the Superior Court emphasized that the relevant time period for assessing a defendant’s acts in Philadelphia County is at the time a lawsuit is filed, the limited amount of purchases in the relevant time frame and the lack of any evidence to show an ongoing business relationship. The Superior Court determined that the business dealings of Carol’s client did not constitute actual business conducted in Philadelphia County. It stressed that “doing business with a Philadelphia County company does not amount to doing business in Philadelphia County if the obtained goods, services, or personnel are utilized elsewhere to further the defendant’s business activities.” Moreover, the Superior Court noted that our appellate courts have held that purchasing supplies from a vendor in Philadelphia County is not sufficient to confer venue. As to the codefendant, the Superior Court concluded the limited venue evidence pointed to a separate but related corporate entity, and that the evidence failed to show the co-defendant regularly conducts business in Philadelphia County. Because there was no evidence to support the imputation of a separate entity’s contacts with Philadelphia on the co-defendant, venue as to the co-defendant was also improper. 

Carol VanderWoude also successfully defended on appeal the trial court’s grant of compulsory nonsuit in a legal malpractice action following the trial court’s rulings on various motions in limine. The trial court granted our clients’ motions in limine to preclude the plaintiff from introducing into evidence that its attorney sued the wrong parties, that its attorney obtained an uncollectable judgment, and that the plaintiff would have prevailed in a lawsuit against other parties. Following the motion in limine rulings, trial counsel moved for nonsuit—arguing the plaintiff could not carry its burden of proof without the precluded evidence. On appeal, the plaintiff argued the trial court’s evidentiary rulings violated the law of the case set forth in the Superior Court’s decision reversing the trial court’s order sustaining our clients’ preliminary objections and dismissing the amended complaint, and that the trial court erred in granting the motions in limine. The Superior Court rejected both arguments and affirmed the trial court’s denial of the plaintiff’s motion to remove compulsory nonsuit. The Superior Court held that the trial court did not abuse its discretion in granting the motions and that it properly concluded the plaintiff failed to present evidence to meet its burden of proof.

Christopher Woodward (Harrisburg, PA) and Thomas Specht (Scranton, PA) secured the Third Circuit Court of Appeal’s affirmation of a district court’s grant of summary judgment in favor of our client. The Third Circuit agreed with our arguments that regular use exclusions in UIM policies do not act as de facto waivers of stacked coverage and, thus, do not violate Section 1738 of the Motor Vehicle Financial Responsibility Law.

*Results do not guarantee a similar result. 


 

Defense Digest, Vol. 30, No. 4, December 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

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

The Tolling Trap: Filing Alone Will Not Toll the Statute Without Good-Faith Service

The Eastern District of Pennsylvania recently reinforced a critical limitation on bad faith claims, holding that a timely filing alone will not preserve a cause of action absent a good-faith effort to serve the original process. The plaintiff had presented a claim for underinsured motorist benefits to his auto insurer. The insurer evaluated the claim and determined that the plaintiff’s accident-related damages did not exceed the bodily injury liability insurance limits of the at-fault driver and denied his claim. Among other claims, the plaintiff sought to present a claim for insurance bad faith under 42 Pa. C.S.A. § 8371, to which a two year statute of limitation applies. He first filed a praecipe for writ of summons before the expiration of the statute of limitation. However, the plaintiff did not attempt to serve the praecipe or writ until after the statute of limitations had expired. Additionally, the service failed as the plaintiff had mailed the original process to an incorrect address. Despite receipt of the Postal Service’s failure to deliver the original process, the plaintiff did not attempt to re-serve the writ. Two months later, the plaintiff filed a complaint and then successfully served that complaint. The insurer sought to dismiss the plaintiff’s bad faith claim as time-barred by the statute of limitations. The district court agreed. Though the plaintiff had filed a praecipe for a writ of summons prior to the expiration of the statute of limitations, the statute is only tolled if there is a good faith effort to serve that original process. In this case, the court determined that the plaintiff had failed to perform a “good faith effort to serve the original process”. Additionally, though the filing and service of a complaint can serve as alternative original process when the lawsuit is commenced by the filing of a praecipe for a writ of summons, the plaintiff filed his complaint after the statute of limitations had expired. The plaintiff’s bad faith claim was therefore determined to be barred by the statute of limitations and dismissed by the court, with prejudice. A key takeaway for the defense is not to assume that the statute of limitations has been successfully tolled by a plaintiff merely because a praecipe for a writ of summons or complaint has been filed prior to the expiration of the statute. A filed complaint or writ is only part of the equation. The defense should carefully review the docket and filings to confirm that the plaintiff also performed the requisite good faith effort to serve that original process. A thorough review of the docket may reveal that the plaintiff failed to make the good-faith service efforts necessary to toll the statute of limitations.

Thought Leadership

New Jersey Appellate Division Affirms Recreational Immunity for County Under Landowners' Liability Act

In a recent unpublished decision in Matthew Kuzma, etc. v. Middlesex County Parks Department, et al., the New Jersey Appellate Division affirmed summary judgment in favor of Middlesex County Parks Department, holding that the county was immune from liability under New Jersey's Landowners' Liability Act (LLA), notwithstanding its failure to plead the immunity as an affirmative defense in its answer to the Complaint. The case arose from injuries sustained by fourteen-year-old plaintiff, Matthew Kuzma, while playing basketball at Spring Lake Park in South Plainfield on August 23, 2019. The plaintiff observed a crack in the basketball court before beginning to play but did not consider it dangerous. During the game, his foot became caught in the crack, causing him to fall and suffer a significant ankle injury. The plaintiff alleged that the injury resulted in ongoing physical limitations and deprived him of the opportunity to play collegiate basketball. The plaintiff filed suit alleging that the defendants negligently maintained the basketball court. Although the county did not assert LLA immunity as an affirmative defense in its answers, it later moved for summary judgment on that basis. The plaintiff opposed the motion, arguing that the county had waived the defense by failing to plead it. The county maintained that the plaintiff had received sufficient notice of its intent to rely on the LLA through discovery and therefore suffered no unfair surprise or prejudice. The trial court agreed and granted summary judgment, concluding that the county should be permitted to invoke statutory immunity notwithstanding its failure to formally plead the defense. Relying heavily on the New Jersey Supreme Court's guidance in Arias v. Cnty. of Bergen, holding a county park was subject to the immunity of the LLA, the Appellate Division affirmed, holding that the county's failure to plead LLA immunity did not preclude reliance on the defense under the circumstances presented. The court determined that the plaintiff had received adequate notice of the immunity claim through discovery and that permitting the defense furthered the public-policy objectives embodied in the LLA. In affirming dismissal, the Appellate Division acknowledged the seriousness of the plaintiff's injury and the general societal interest in maintaining parks and recreational facilities in a safe condition. However, the court emphasized that both the legislature and the New Jersey Supreme Court have expressed a clear policy choice to limit liability for public and private landowners who make recreational property available for public use. The decision reinforces the courts' continuing adherence to the Landowners' Liability Act and the principle that recreational lands and facilities should be broadly protected from liability exposure, even in cases involving significant personal injuries.