SteveK September 14th, 2009

In Kolokowski v. Crown Equipment, U.S. District Court in New Jersey recently confirmed that the duty to train employees rests with the employer, not the manufacturer.

The case involved a claim for injuries sustained by plaintiff while operating a walkie rider pallet truck.  In a decision granting summary judgment to the defendant, the Court first addressed whether the plaintiff’s expert was qualified to render an opinion on whether the product was defectively designed. The Court conducted a Daubert hearing, and after extensive analysis, concluded that the expert’s opinion did not satisfy the trilogy of restrictions on the admissibility of an expert: whether the expert is qualified, whether the methods employed in developing the opinion are reliable, and whether the proffered expert testimony fits with the facts of the case. The plaintiff, therefore, was unable to sustain its burden of proof on its design defect claim.

The plaintiffs also asserted a failure to warn claim, asserting that the defendant manufacturer had an obligation to provide training. The Court rejected this argument finding substantial support to the contrary in New Jersey. The Court relied upon Grier v. Cochran Western Corp. 308 N.J. Super 308 (App. Div. 1998) in which the obligation was placed squarely on the employer. The Court also noted that OSHA specifically places the duty to train operators of powered industrial trucks on the employer. 29 CFR Sec. 1910.178. The Court also countered the contention that employers lack the incentive to train employees by stating that the goals of an employer for increased productivity affecting the bottom line is a significant incentive and, further, that employers are better situated to conduct such training since they can discipline employees for failure to attend training coupled with the employers having more credibility with their employees than a “remote product manufacturer.” This, along with the plaintiff’s admissions that training would not have helped him avoid the accident, left no room for the claim of plaintiffs to be sustained. The Court therefore, dismissed all claims of plaintiffs.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of companies in defense of products liability claims. For additional information about the matters in this bulletin or in the firm’s Products Liability Practice, please contact Stephen O. Davis, Esq.

Tags: Products Liability Defense

• Bodily Injury Defense , Defense Litigation , Products Liability
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SteveK September 14th, 2009

The New Jersey Appellate Division, in Crum & Forster v. Mecca & Sons Trucking, (unreported), affirmed the denial of coverage for a fire loss based, primarily, upon the vacancy exclusion contained in the policy. The Court reviewed the evidence as the use and operations on the premises and considered those facts in light of the policy terms which a building is stated to be “vacant when it does not contain enough business personal property to conduct customary operations.” The building was found to have, at best, some documents of Mecca and purportedly subleased to a landscaper to store some equipment.  In addition, the customary use of the building was precluded due to the current zoning.  The Court held that the storage of trailers by Mecca, a lessee, was an unauthorized or unlawful use of the premises and could not be considered a “customary operation,” therefore the property must be considered to have been vacant.

The Court also addressed the exclusion for loss due to vandalism where the property is vacant for more than 90 days. The court considered vandalism as being undefined as a question of fact. The Court therefore considered the experts for the parties as to the cause of the fire. The insured’s expert considered the cause to be “undetermined” because the state of the building did not permit a determination. The insurer’s expert did, however, conduct building inspections both inside and outside and interviewed witnesses, which supported the opinion that the fire was set, a result of vandalism. Since the report of the insured’s expert did not advance a determination based upon facts, it did not create a genuine issue of material fact precluding summary judgment in favor of the insurer.

The Court addressed whether there was any value to the loss, since the building could not be used for any discernable purpose, thus the building was a liability (the cost of removal) and the value was solely based on vacant land. The insured focused on the policy as an Agreed Value Policy. The Court concluded, however, that the language of the policy made agreed value an upper limit rather than a liquidated damage. Since this was no longer a needed determination, the Court did not address the issue further.

Although the Court was able to dispose of the case based upon the vacancy and vandalism issues, it also reviewed a number of other issues. One issue was whether the failure to have a sprinkler system, contrary to representations in the policy application, constituted an increased of hazard. Since there was no such system in place, there was no change in the use.  The Court considered this to be a different from Dynasty v. Princeton Ins. Co. 165 N.J. 9 (2000) in which the sprinkler system existed, but had been disabled;  justifying a determination of an “increase-in-hazard.” The Court here noted that the issue was not one of increased hazard but a claim for rescission due to a misrepresentation in the policy. On this issue, the Court questioned whether the misrepresentation was made by the insured or the broker. The Court stated that there was a question of fact as to whether the statements could be attributed to the insured. Since, however, there were other grounds to find no coverage there was no need to remand the case for a further determination of facts. Of course this is an important issue to be kept in mind in a case dealing with alleged misrepresentations in the policy; who made the statements and are the statements of the broker attributable to the entity actually applying for the coverage.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of insurance companies in coverage matters. For additional information about the matters in this bulletin or in the firm’s Insurance Coverage Practice, please contact Steven A. Kunzman, Esq. 

Tags: insurance law new jersey

• Insurance Law
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SteveK September 10th, 2009

      In a recent unreported decision, Rodriguez v. New Jersey Underwriting Ass’n, the New Jersey Appellate Division affirmed a decision reforming a homeowner’s insurance policy on equitable grounds. In the case, Diomedes Gonzales deeded his home to his former non-marital partner, Rosa Rodriguez. Prior to the transfer, Gonzalez had purchased insurance from NJUIA.  Although neither the mortgage holder nor the insurer were informed of the transfer, all payments were made on both from February 2000 until the time of an accidental fire which destroyed the house on September 2004.  NJUIA denied coverage on the basis that Gonzalez did not have an insurable interest in the home. Plaintiffs, Gonzalez and Rodriguez, instituted a declaratory judgment action seeking reformation of the policy and payment of the loss. The trial judge held that reformation was appropriate on equitable grounds, finding that NJUIA’s collection of premiums coupled with its failure to refund the premiums after declining the claim made it an appropriate case for policy reformation. The Court also justified the decision by concluding that NJUIA’s actions constituted unjust enrichment, and that there was no “gamesmanship” or fraud by the plaintiffs.

       After the trial and award of coverage, plaintiffs filed a motion to be able to assert a claim against NJUIA for breach of the covenant of good faith and fair dealing. In affirming the denial of the motion, the Court restated the reasoning of  Picket v. Lloyds, 131 N.J. 457, 67 (1993) that a finding of bad faith requires there to be no “fairly debatable” reason for denial  of a claim or where there is an unreasonable delay in processing a claim. Since the decision of NJUIA to deny the claim was “fairly debatable” there was no basis for a claim of bad faith to be sustained; therefore the denial of the motion was affirmed.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of insurance companies in coverage matters. For additional information about the matters in this bulletin or in the firm’s Insurance Coverage Practice, please contact Steven A. Kunzman, Esq. 

Tags: insurance law new jersey, insurance law NJ, New Jersey insurance law, NJ insurance law

• Insurance Law
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SteveK September 10th, 2009

         On September 3, 2009, in County of Warren v. State of New Jersey , the Appellate Division upheld the validity of the master plan adopted by the Highlands Water Protection and Planning Council against an argument by farmers that the council lost its authority to adopt the plan by failing to do so within the time set forth in Highlands Preservation Act. The Court also rejected constitutional challenges to the Highlands Act based on equal protection arguments, including a claimed constitutional right to farm and the claim of unequal treatment to property owners with larger tracts of land. 

         The plaintiffs were farmers owning tracts of land ranging in size from 18 to 150 acres in the preservation area created by the Highlands Act. (The County of Warren did not participate in the appeal.)   The Court affirmed the dismissal of the challenge on the pleadings, noting that the New Jersey Supreme Court in OFP, L.L.C. v. State, 395 N.J. Super 571 (App. Div. 2007), aff’d o.b., 197 N.J. 418 (2008), had upheld the general constitutionality of the Act. The Appellate Court held that the failure of the Council to adopt a regional master plan within the time frame provided by the Act, was not fatal since the date provided was a “directory, rather than …a mandatory deadline that would invalidate a subsequent adoption of the plan.”  The Court also rejected the equal protection arguments finding that there is no fundamental right to farming; therefore, the state only needs to demonstrate a rational basis to satisfy equal protection requirements. The Court also reviewed the Right to Farm Act, which was specifically referenced in the Highlands Act, concluding that it did not create a fundamental right to farm, but rather provided protection to farmers from land use control by local and county authorities and nuisance suits by neighbors. The “rational basis test” also precluded the claim of unequal treatment of owners of larger parcels of property. Finally, the Court rejected the claims that there was no scientific basis for the “preservation zone” due to hydrogeologic conditions. The Court deferred to the legislative findings that focused on “other exceptional natural resources such as clean air, contiguous forest lands, wetlands, pristine watersheds, and habitat for fauna and flora” in addition to “sites of historic significance.” The Court concluded that it would not second-guess the determination of Legislature in creating boundaries relating to the overall goals of the Act. Accordingly, the Court dismissed another challenge the Highlands Protection Act, allowing the Highlands Council to proceed to regulate and control development in the environmentally sensitive Highlands region of New Jersey.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contact Steven A. Kunzman, Esq. who heads our Environmental Department. 

Tags: Environmental Law, Land Use Law, Local Government Law

• Environmental Law
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