The Role Of Proposals For Settlement In Florida Cases Involving Commercial Auto Policies and Vicarious Liability

By:  William P. Dilley, Esq.

Florida Statutes Section 768.79(1) allows attorneys’ fees and costs to be awarded against a defendant when a plaintiff files a demand for judgment or “proposal for settlement” which is not accepted by the defendant and the plaintiff recovers a judgment in an amount at least 25% greater than the offer. Florida statute does not explicitly discuss the complexities that arise in multiparty lawsuits. However, it uses the terms “a plaintiff,” “the plaintiff,” “a defendant,” and “the defendant” in a manner that would allow a plaintiff to make an offer to a specific defendant. Section 768.79(2) describes the content of an offer and requires that the offer “[n]ame the party making it and the party to whom it is being made.”  Further, nothing in the statute or corresponding Rule of Civil Procedure 1.442 requires that a proposal settle all claims between all parties, or even all claims between the party to the proposal.

Consider the following fact pattern:

[P]laintiff files suit against trucking company and insured driver for injuries sustained when insured driver caused an auto accident in the course and scope of her employment.  Plaintiff files a two-count complaint, one count against insured driver for negligence, and one count against trucking company for vicarious liability for insured driver’s negligence.  Plaintiff serves a proposal for settlement to insured driver in the amount of $200,000, in exchange for a dismissal with prejudice against insured driver, only.  Insured driver rejects the proposal, and Plaintiff obtains a net judgment in the amount of $875,000 at trial against both defendants. 

The above fact pattern is derived from a Florida case, McGregor v. Molnar.  In McGregor, the trial judge denied Plaintiff’s motion for attorneys’ fees and costs finding that the proposal for settlement was not made in good faith.  The reasons the trial court gave for this finding were that the offer was not intended to conclude the litigation because all claims against the trucking company remained, and further stated that if Plaintiff’s offer was accepted, it would merely provide funds for Plaintiff to proceed with the litigation against trucking company.

On appeal, the trial court’s order was reversed.  The Second District Court of Appeals cited an earlier decision, Hess v. Walton, involving a medical malpractice case against a physician and a vicariously liable entity.  In that decision, the Court suggested that, absent allegations of bad faith, there may be valid, strategic reasons for an offeror to submit differentiated offers to separate parties:

“It forces one defendant to settle.  The plaintiff obtains money that can be used to further prosecute the lawsuit or which can be safeguarded from the risk of a future judgment if the defendants obtain the right to a judgment for their fees.  The plaintiff can eliminate the defendant for whom the jury may have sympathy, or the defendant who may be on the brink of bankruptcy.  If more than one lawyer is involved, the plaintiff can remove the defendant with the best lawyer.”  Hess at 1051.

Insurers and counsel defending cases like the above fact pattern should be wary. Proposals for settlement to one of multiple defendants insured by a single carrier should be carefully considered as the above scenario presents the possibility for a Plaintiff to recover an extensive award for attorneys’ fees, even after achieving a less than ideal result on the underlying claim.  To attempt and combat this strategy, defense counsel should strongly consider serving a “best dollar” counter proposal.  Such a counter proposal should be served no later than 45 days prior to the first day of the trial docket on which the case is set for trial pursuant to Rule 1.442.

Can Auto-Pilot Change The Look Of The Auto Insurance Market?

By:  Jacob L. Johnson, Esq.

Though the future of self-driving insurance aspects is mostly unknown, the advent of crash avoidance technology may soon mean less claims for driver negligence and more products liability claims aimed at manufacturers for computer flaws. 
 
The Federal Government has made it clear that self-driving vehicles are the next level in safety.  Jeffrey Zients, director of the Economic Council, recently gave the agency approval by stating that “[W]e envision in the future, you can take your hands off the wheel, and your commute becomes restful or productive instead of frustrating and exhausting,” and added that highly automated vehicles “will save, time, money and lives.”
 
If humans are no longer driving vehicles, do they need insurance policies? And, if so, what would the limits of those policies be? For now, self-driving automakers require drivers to maintain attentiveness at all times to ensure that they are able to take over control of the vehicle should any problems arise.  However, this requirement may be quickly dissipating.  In December of 2016, Michigan passed legislation that would lift this requirement and added that in the event of an accident, the “driving system or any remote or expert-controlled assist activity” shall be the “driver” for the purposes of determining whether or not the vehicle is conforming to local laws.  Furthermore, the law requires that the manufacturer assumes liability for each incident in which the automated system is at fault.  For now, the Michigan statute is aimed at producers like Google, that are placing fleets of self-driving vehicles on the road.  As more data comes in and more driverless cars are put on the roads, these laws and new policies should start to take a more generalized and permanent shape nation-wide.  Until then carriers should keep an eye on this quickly evolving sector. 
 

Clear Law on New Jersey Choice of Law

By:  Lisa M. Coutu, Esq.

 

The New Jersey Supreme Court recently issued an opinion clarifying New Jersey’s choice of law rules for determining the applicable statute of limitations in tort actions.  In McCarrell v. Hoffman-La Roche, plaintiff, an Alabama resident, filed a products-liability action against defendants Hoffmann-La Roche alleging defendants’ failed to adequately warn of their drug’s potential side effects.  Plaintiff was prescribed and took the medication in Alabama, and was treated for medication’s side effects in Alabama.  Defendants were both New Jersey corporations, who designed, manufactured, labeled, and distributed the medication in New Jersey. 
 
Plaintiff timely filed the products-liability action under New Jersey’s statute of limitations, but not under Alabama’s statute of limitations.  Defendants argued that under the Supreme Court’s prior decision in P.V. ex rel. T.V. v. Camp Jaycee, the Second Restatement’s most-significant-relationship test was the proper analytical tool for deciding choice-of-law issues, and that in this instance, Alabama had the most significant relationship to the litigation, and therefore Alabama’s statute of limitations rule should apply.
 
The Supreme Court disagreed.  While the Camp Jaycee decision remains good law, the Court relied upon the most-significant-relationship test in Sections 145 and 146 of the Restatement, which only applies to resolve conflicts of substantive law in tort actions, not choice-of-law for statutes of limitations issues.  This is because “the essential purpose of substantive tort law is to provide a remedy to a party who has been wronged, whereas the essential purpose of a statute of limitations is to encourage litigants to file timely claims and to bar the litigation of stale claims.” Instead, for statute of limitations issues, Section 142 of the Restatement applies, which dictates that “the statute of limitations of the forum state generally applies whenever the state has a substantial interest in the maintenance of the claim.”  It is only if the forum state has “no substantial interest” in the maintenance of the claim does a court consider whether the claim would be barred under the statute of limitations of a state having a more significant relationship to the litigation.  In this instance, as New Jersey “has a substantial interest in deterring its manufacturers from developing, making and distributing unsafe products, including inadequately labeled prescription drugs,” therefore New Jersey’s statute of limitations applied, and the plaintiff could proceed. 

“Symptom Magnification:” New Jersey Appellate Division Adopts Federal Standard for Expert Testimony

By:  Ryan P. Heller, Esq.

The Superior Court of New Jersey, Appellate Division recently seized an opportunity to adopt an Eighth Circuit standard precluding defense experts from offering opinions on “symptom magnification, malingering, or other equivalent concepts in civil jury cases.”  Despite the Eighth Circuit’s location in St. Louis, Missouri, and no New Jersey precedent in the matter, the Appellate Division held in Rodriguez v. Wal-Mart Stores, Inc. that such expert testimony had invaded “the exclusive province of the jury to determine the credibility of the testimony of a witness.”

Plaintiff Alexandra Rodriguez had appealed a Gloucester County jury’s “no-cause” defense verdict rendered after the defense expert, a neurologist, had opined that his observations of the Plaintiff during an independent medical examination were consistent with “somatization,” a process where an individual describes subjective symptoms that are not consistent with objective findings, and that she was instead “magnifying her symptoms.”  Despite the physician’s numerous qualifications in neurology, internal medicine, and electrical brain studies, as well as his experience in treatment of patients with psychological disorders, he was unable to formally diagnose a somatoform disorder, and conceded on the record that a psychiatrist would need to confirm such a diagnosis.  Objections from Plaintiff’s counsel prior to the testimony had led to a N.J. R. Evid. 104 hearing during trial in the matter, after which the trial court allowed the above testimony, with the admonishment to refrain from judgments as to the Plaintiff’s credibility.  Following the conclusion of proof, the jury returned a verdict against the Plaintiff and in favor of the Defendant.

Issuing a lengthy opinion to overturn the jury verdict and order a new trial, New Jersey’s Appellate Division elected to adopt the Eighth Circuit standard established in Nichols v. American National Insurance Company, which Plaintiff’s counsel had cited in a pretrial motion during Rodriguez.  Specifically, the Court took issue with the defense expert’s answering of a question ultimately reserved for the jury alone, holding that “[w]eighing evidence and determining credibility are tasks exclusive to the jury, and an expert should not offer an opinion about the truthfulness of witness testimony” (citing Nichols).  The Court clarified that a qualified defense expert is not precluded from testifying about observations as to the Plaintiff’s movements, or from testifying that subjective complaints appear to be inconsistent with objective medical tests.  However, an expert must refrain from stating before the jury the opinion that the Plaintiff is magnifying or exaggerating symptoms, which the Appellate Division considers to be a “thinly veiled comment on a witness’s credibility.”

Where testifying experts could previously use their expertise in neurology or orthopedics to conclude that a Plaintiff appeared motivated by exaggeration or secondary gain factors, a line must now be drawn to instead allow jurors to make that conclusion on their own, “based on ordinary experiences of life and common knowledge about human nature.”  If an examining doctor observes a Plaintiff with an alleged shoulder injury reaching for her coat as she exits, the observation is admissible, but any opinion on that action must be formed by the jury “without any pejorative labeling or credibility opinions from the defense expert.”

Falling out of a Bucket Does Not Guarantee Success under the New York Labor Laws

By:  Christopher L. Parisi, Esq.

In Joseph Robinson v. National Grid Energy Management LLC, et al., plaintiff fell from an aerial bucket lift and filed suit against the defendants, alleging his injuries arose from defendants’ violations of the New York Labor Laws. 

Plaintiff Joseph Robinson was employed as an electrical foreman for a company hired by one of the defendants.  On the date of the accident, plaintiff was directed to assist in the installation of an antenna located atop a utility pole.  However, after plaintiff climbed into the lift bucket, which was located on top of a truck, the lift mechanism failed and the bucket remained stuck on top of the truck.  When plaintiff realized he was unable to raise the lift, he attempted to climb out of the bucket. While exiting the bucket, plaintiff’s foot became stuck in a part of the bucket, causing him to slip and fall approximately twelve to fifteen feet.  Plaintiff testified, at his deposition, that the part of the bucket in which his foot became stuck was typically covered by a “dielectric liner.”

At the close of discovery, the defendants moved for summary judgment, and the Court granted dismissal of plaintiff’s claims for violations of New York Labor Law §§ 240(1) and 241(6); plaintiff appealed.  Labor Law § 240(1) requires contractors, owners, and their agents to provide adequate safety protection and safety devices, to their workers, for height-related risks.  Labor Law § 241(6) requires that contractors, owners, and their agents provide adequate protection and safety in all worksite areas affected by construction-related work.

In upholding the dismissal of plaintiff’s Labor Law § 240(1) claim, the Second Department reasoned that: (1) the bucket truck from which the injured plaintiff fell was not defective or inadequate insofar as it related to providing him with fall protection, and (2) the “dielectric liner”, which was missing from the bucket, was designed to protect against electric shocks, and not falls from the bucket.  The dismissal of plaintiff’s Labor Law § 241(6) claim was upheld because the Court determined that the work plaintiff was performing at the time of his accident did not involve construction, demolition, or excavation.

As such, the Second Department has reminded us that not all worksite, height-related falls are entitled to a Labor Law § 240(1) claim, and further, that all claims pursuant to Labor Law § 241(6) must arise from a construction-related task, and not routine maintenance or routine installations.
 

Medical Marijuana Covered Under Workers’ Compensation

By:  Ryan D. Lang, Esq.

 

A New Jersey Administrative Law Judge recently held that an employer’s workers’ compensation carrier was required to pay for an injured worker’s medical marijuana.   That worker, Andrew Watson, a 39-year-old man from Manahawkin, New Jersey, injured his hand while using a power saw in 2008 at an 84 Lumber outlet.  As a result of the accident, Mr. Watson suffered lingering neuropathic pain in his hand, which he treated using opioids.   In 2014, Andrew Watson enrolled in New Jersey’s medical marijuana program.  Mr. Watson’s medical marijuana treatment had been helping to relieve his pain, and was helping him to avoid dangerous opioid use, but he could not afford to pay for the marijuana necessary for his treatment.  The cost of marijuana was approximately $475 an ounce, and Mr. Watson’s employer’s workers’ compensation carrier refused to pay for the treatment, and as such, he stopped using it.  Mr. Watson then sought legal action to be reimbursed for his prescription costs, as well as to gain insurance coverage for future prescriptions as part of his enrollment in New Jersey’s medical marijuana program.

The attorney for the employer’s workers’ compensation carrier argued that Mr. Watson’s ailment did not qualify for medical marijuana under the state program and that the doctor who prescribed the marijuana for Mr. Watson was not his treating physician. 

New Jersey Administrative Law Judge Ingrid L. French found that Watson’s ailment, that is, intractable neuropathic pain, is a qualifying condition under the state program and that the prescribing doctor was a partner of Mr. Watson’s treating physician, and was therefore eligible to assess his condition.  Judge French’s decision stated that she found Mr. Watson to be a credible witness, finding that “[h]e testified that the effects of the marijuana, in many ways, is not as debilitating as the effects of Percocet…. Ultimately, the petitioner was able to reduce his use of oral narcotic medication… The court found the petitioner’s approach to his pain management needs has been cautious, mature, and overall, he is exceptionally conscientious in managing his pain.” 
        
Mr. Watson also had an expert witness, a psychiatrist, Edward H. Tobe, who testified about the risks associated with taking opioids, as well as the benefits cannabis medicine has provided, and will continue to provide, to Mr. Watson.  He testified that marijuana helped reduce Mr. Watson’s use of opioids and would likely help him “achieve better function” in his hand. 
        
Ultimately, Judge French held that “the petitioner’s ‘trial’ use of medicinal marijuana has been successful.  While the court is sensitive to the controversy surrounding the medical use of marijuana, whether or not it should be prescribed for a patient in a state where it is legal to prescribe is a medical decision that is within the boundaries of the law in the state.”  Judge French ruled in favor of Mr. Watson, finding that his use of medical marijuana was “reasonable and necessary.” 
        
While this decision was not appealed, and therefore does not set a precedent in the State of New Jersey, it is persuasive.  Accordingly, workers’ compensation carriers in New Jersey, and in other states where medical marijuana has been legalized, have been put on notice that courts have and likely will continue to rule that medical marijuana can be covered under insurance programs.  

New Jersey Appellate Division Clarifies an Insurer’s Duty to Defend and Indemnify

By:  Ethan R. Buttner, Esq.

The New Jersey Appellate Division recently issued an opinion reinforcing an insurer’s duty to defend and indemnify an insured under a liability policy.  In its decision, the Appellate Division ruled that an insurer was required to reimburse the expenses incurred by its insured in defending itself against cross-claims for defense and indemnification.
 
In this matter, plaintiff filed a complaint alleging that she was injured when she slipped and fell on ice in a parking lot.  Company A, which owned the parking lot, entered into a contract with Company B, wherein Company B agreed to plow and salt the subject parking lot.  Company B plowed and salted the subject parking lot one day prior to the plaintiff’s alleged slip and fall.  The services agreement provided that Company B would indemnify and hold Company A harmless for any injuries sustained arising out of or relating to Company B’s performance of its services. 
 
In the course of the underlying litigation, Company A filed cross-claims for defense and indemnification against Company B.  Company B’s insurer denied coverage to Company B as to the cross-claims for defense and indemnification, and recommended Company B secure personal counsel at its own expense to defend against the cross-claims.  At trial, the jury found that Company B bore no liability for plaintiff’s accident.
 
On appeal, the Appellate Division affirmed that Company B’s insurer was required to defend Company B against Company A’s cross-claims and reimburse Company B its defense expenses. The Appellate Division reasoned that Company B agreed to indemnify and defend Company A for injuries sustained by any third person arising out of or relating to Company B’s services, regardless of whether Company A was negligent.  The Appellate Division also provided that the insurer’s policy provided Company B with coverage in the event Company B had to indemnify Company A.  Due to the jury’s determination that plaintiff’s injuries did not arise out of nor relate to the services provided by Company B, Company A was not entitled to a defense and indemnification.  However, the Appellate Division noted that, during the pendency of the underlying litigation, the question of B’s liability was unresolved.  As a result, A’s cross-claims against B were viable, and B’s insurer was obligated to provide B with a defense in connection to the cross-claims against it.  The Appellate Division explained that, under New Jersey law, an insurer is contractually obliged to provide the insured with a defense against all actions covered by the insurance policy, and that the duty to defend is triggered by the filing of a complaint alleging a covered claim.  As a result, B’s insurer was required by its policy to defend B against A’s cross-claims. 
 
The Appellate Division’s decision in this matter enforces New Jersey’s jurisprudence providing that an insurer is obligated to provide its insured with a defense to a complaint which merely alleges facts within the policy’s coverage.  As a result, New Jersey insurers are exposed to potential liability for its insured’s legal expenses where a complaint merely alleges facts that fall within the policy’s coverage, even if the allegations are meritless or frivolous.

Florida Reverting To Frye?

By: William P. Dilley, Esq.

On February 16, 2017, the Florida Supreme Court issued a decision rejecting the Daubert standard for introduction of expert testimony, to the extent it is “procedural.”  For years, Florida Courts followed the Frye standard for the admission of expert testimony.  Under the Frye standard, the proponent of expert testimony need only establish that the theory was “generally accepted within the expert’s field.”

Back in 2013, the legislature passed HB 7015, effectively codifying the Daubert standard by amending Florida Statute 90.702, titled “Testimony by Experts.”  The Daubert standard, intends to ensure reliability of expert testimony by placing the burden on the offering party to meet the following requirements:  A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if (a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case. 

As stated above, the Frye standard permits expert opinion as long as the testimony is generally accepted in the particular field.  Daubert requires the trial judge to act as a “gatekeeper” by ruling on the “reliability” of expert testimony before it can be presented to the jury.  This process often requires a “trial within a trial” before a jury is ever impaneled.  The Court “decline[d] to adoptDaubert to the extent that it is procedural, due to the constitutional concerns raised,” which include “undermining the right to a jury trial and denying access to courts.”

The Florida Supreme Court left open the question of constitutionality of Daubert until a “proper case and controversy” is before it, as well as the question of whether the application of Frye orDaubert is substantive or procedural in nature.  Until such a question is before the Court, it is unclear the effect this decision will have on Florida attorneys and their clients.

No Recovery For Worker Injured While Remedying Dangerous Condition, Says New York’s First Department

By:  Christopher L. Parisi

Should a maintenance worker hired to clean a dangerous condition be able to recover for injuries suffered while cleaning or removing that dangerous condition?  The answer is no, according to New York’s First Department.
 
In Black v. Wallace Church Association, plaintiff Calvin Black had been hired as a janitor for the defendant.  As a janitor, plaintiff’s duties included cleaning the building, which included the bathrooms. Plaintiff alleged that he was injured when he slipped and fell on pebbles while cleaning the bathroom floor.  However, plaintiff testified that while cleaning the bathroom previously, he often removed pebbles from the bathroom floor.
 
In upholding the trial court’s order granting defendant summary judgment, the First Department held, “It is well established that a maintenance or cleaning worker has no claim at law for injury suffered from a dangerous condition that he was hired to remedy”.  In reaching their decision, the Court cited Jackson v. Board of Education of the City of New York. 
 
In Jackson, plaintiff alleged injuries following a slip and fall on a piece of lettuce.  At the time of the accident, plaintiff Roosevelt Jackson was employed by Aramark and worked in the school in which he fell; his duties included sweeping the area of his alleged accident.  The Court in Jackson upheld the dismissal of plaintiff’s Complaint, and reasoned: “Given that there is no evidence even remotely suggesting that anyone connected with defendants created the condition complained of, the lack of actual or constructive notice of its existence on the part of any of the defendants serves to relieve all of them of any liability for plaintiff's accident. Moreover, since it was plaintiff's job to clean the floor of the type of foreign substance (vegetable matter) that he slipped on, FIT [the school] owed him no duty to keep the floor clean of such material.  FIT “could not have provided plaintiff with a work place that was safe from the defect that his employer was engaged to eliminate.”
 
As such, a plaintiff hired to clean, or remedy, some type of dangerous condition cannot recover for injuries suffered due to that specific dangerous condition.  Therefore, in premises liability cases brought by maintenance and cleaning workers of the premises, it should always be investigated whether the plaintiff’s injuries were caused by a dangerous condition for which they were hired to remedy.

New Jersey Appellate Division Rules that the Right to Attorneys’ Fees Can Be Waived High-Low Agreement

By: Christopher J. Cerullo

A high-low agreement can protect defendants from excessive attorneys’ fees otherwise recoverable under the Offer of Judgment Rule. In Serico v. Rothberg, M.D., the New Jersey Appellate Division ruled that, absent an express reservation of rights, a party abandons its claim for attorneys' fees after entering a high-low agreement.
 
Pursuant to New Jersey Court Rule 4:58, a plaintiff-offeror is entitled to attorneys’ fees after obtaining a verdict that is 120% or greater than a prior offer that was not accepted; a defendant-offeror is entitled to attorneys’ fees on a verdict that is 80% or less than a prior offer that was not accepted. A high-low agreement is a commonly used method for the parties to control damages in negligence cases. The defendant agrees to pay the plaintiff a minimum sum in exchange for the plaintiff’s agreement to accept a maximum sum, regardless of the verdict.
           
In Serico, the plaintiff made a pre-trial offer to the defendant seeking $750,000.00 to settle the matter. The offer was never accepted and the case proceeded to trial. During jury deliberations, the parties entered into a high-low agreement, setting the “low” at $300,000.00 and the “high” at $1,000,000.00. The jury returned a $6,000,000.00 verdict in favor of plaintiff. Pursuant to Rule4:58, the plaintiff contended that she was entitled to attorneys’ fees because the verdict was more than 120% in excess of her previous unaccepted offer. The trial court denied the plaintiff’s application, ruling that the custom and usage of high-low agreements in New Jersey required plaintiffs to reserve their right to recover attorneys' fees or they would be waived.
 
On appeal, the plaintiff argued that attorneys’ fees were mandatory under Rule 4:58 and that, absent an express waiver, a high-low agreement is a contract that does not extinguish this right. The Appellate Division disagreed. While the Appellate Division agreed that a high-low agreement is a contract, it held that the contract must be enforced as written. As such, the Appellate Division reasoned that the high-low agreement contracts for a maximum recovery to plaintiff that cannot be exceeded absent an express provision to the contrary.
 
The Appellate Division’s ruling in Serico highlights one available defense to defendants against excessive attorneys’ fees. By contracting for a fixed ceiling on judgments, defendants can save some money by contractually bypassing the Offer of Judgment Rule and other fee-shifting provisions.