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Vol. 16, No. 1 March, 2010

PROFILE OF OUR ERIE, PA OFFICEBy G. Jay Habas, Esq.*

The City and County of Erie sit onthe southeastern shore of Lake Erie and anchor the thirteen-county north-western corner of Pennsylvania. Thename “Erie” derives from the warringNative American Indian tribe known asthe “Eries” or “Eriez” that first inhabitedthe territory. French explorers later settledthe key outpost on the Great Lakes andnamed the lake and surrounding area

“Erie.” The British obtained control of the region not longafter an expedition there in 1754 led by General George Wash-ington. Erie became known as the “Flagship City” after theship that led the famous Battle of Lake Erie during the War of1812 that finally wrestled control of the area for our newnation from the British. Erie is now home to Marshall, Den-nehey, Warner, Coleman & Goggin’s northernmost office,which is situated conveniently between Cleveland, Pittsburgh,and Buffalo.

The firm’s Erie office opened in 1996. Since then, theattorneys of the firm have represented local hospitals andphysicians, long term care facilities, financial and educationalinstitutions, insurance companies and agencies, manufacturers,retail establishments, the City and County of Erie, and otherlocal municipalities in major litigation matters.

The Erie office is capably staffed by four experiencedlawyers, each of whom brings unique talents to their represen-tation of clients in litigation.

Jay Habas is a shareholder in the firm and manages theErie office. A graduate of the University of Notre Dame LawSchool, he works primarily with employers on employmentand workers’ compensation cases, along with defending pro-fessional and general liability claims. Jay has enjoyed success

(continued on page 4)

* Jay, a shareholder and managing attorney of our Erie, Pennsylvania, office, can bereached at (814) 480-7802 or [email protected].

* Michael is a shareholder in the Fort Lauderdale, Florida, office. He can be con-tacted at (954) 847-4921 or [email protected].

Volume 16 • No. 1 • March 2010

OnThePulse…

DEFECTIVE DRYWALL LITIGATION PRACTICE GROUP PROFILE

By Michael A. Packer, Esq.*

Once it became clear that claimsrelated to defective drywall manufacturedin China were going to be filed at a nearepidemic level, the leadership of Marshall,Dennehey, Warner, Coleman & Gogginrecognized its clients would be drasticallyaffected and would need representation.They swiftly acted and put together a teamof attorneys geographically located acrossthe state of Florida with experience repre-senting builders and general contractors in

construction defect claims; manufacturers and distributors inproducts liability claims; homeowner associations and real estate pro-fessionals; and insurance companies in first and third party coverageclaims; as well as defending mass tort and class action litigation.

2010: A Chinese Drywall Odyssey

In 2009, we faced many questions: “What is Chinese Dry-wall?”; “What’s wrong with it?”; “What’s it doing to our insureds’homes?”; “How many homes are really affected?”; “Is it reallymaking people sick?”; “Is there coverage for this claim?”; “Whois responsible?”; “Does a CGL policy provide coverage for defec-tive drywall?”; “Does the carrier owe its insured defense ‘and’indemnity for a defective drywall claim?”; “Who is going to payfor this?”

Most of these questions remain unanswered a year later. Asthe scientific community and the government begin to formu-late a consensus and trials take place in federal and state courts,many of the above questions will be answered in 2010. Ofcourse, some will not!

Nationwide, there are more than 500 lawsuits pending,with approximately two-thirds in federal court (and subject tothe MDL) and the rest in state courts. Of those pending in statecourts, the majority are pending in Florida.


DEFENSE DEFENSE DDiiggeesstt

G. Jay Habas

Michael A. Packer

Employment/Civil RightsCongress Seeks To Overturn SupremeCourt Decisions Favorable To Employers . . . . . . . . . . . 5

SecuritiesFINRA Rule Update: Motions to DismissIneligible Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

AmusementsTwo Recent Defense “Wins” Prove The Benefits Of Video Surveillance In Amusement Facilities . . . . . . 7

Indemnification & ContributionIndemnification and Contribution: AvoidingThe Expense Of An Affidavit Of Merit In Third Party Actions . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Workers’ CompensationLife Is About Choices—So Too Is New JerseyWorkers’ Compensation Law When Addressing An Employers’ Section 40 Lien Against A Pennsylvania Motor Vehicle Insurance Policy . . . . . . . 11

DamagesPlaintiffs Strike Out On Damage Caps. . . . . . . . . . . . 22

AutoForum The Bell Tolls: Plaintiffs Lose Challenge To Validity Of Forum SelectionClause In Their Auto Insurance Policy . . . . . . . . . . . . 23

Bad FaithAre Damages For Emotional Distress Recoverable In A Pennsylvania Bad Faith Lawsuit Even Though The Bad Faith Statute Does Not Provide For Such Damages? . . . . . . . . . . . . 24

Medical MalpracticeForm Versus Substance: An Analysis OfThe Pennsylvania Supreme Court’s Decision In Stimmler v. Chestnut Hill Hospital. . . . . . . . . . . . . . 25

Medical MalpracticeIt Is Now Possible For Medical Malpractice Plaintiff To Release A Vicariously Liable Principal And Reserve The Right To Pursue Plaintiff ’s Case Against The Agent . . . . . . . . . . . . . . . 27

Product LiabilityAddressing Malfunction Theory For First Time In 20 Years: Pennsylvania Supreme Court Clarifies Burden Of Proof In Product Liability Case Based Upon Malfunction Theory. . . . . . . . . . . . . 29

UIM/SettlementsSet-Offs And Settlements: Tortfeasor Defendants Now Entitled To A Credit For Amount Of UIM Proceeds Obtained By Plaintiffs Prior To Conclusion Of Third-Party Litigation. . . . . . . . . . . 30

Workers’ CompensationImportant Victory: “The Employer, Armed With A Solid IME, Defeats The Injured Worker Who Underwent Surgery To HisLower Back After Positive Special StudiesTest Results Revealed Abnormality” . . . . . . . . . . . . . . . 31

Defense Digest Page 3

Vol. 16, No. 1 March, 2010

Defense Digest

Vol. 16, No. 1 March, 2010

On The Pulse…

Profile Of Our Erie, PA Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Defective Drywall Litigation Practice Group Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Message From The Executive Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

On The Pulse…

Our Litigation Achievements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Our Recent Appellate Victories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Other Notable Achievements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Firm Background and Statement of Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

IN THIS ISSUE As I sit at my desk this first

work day of a new decade, theretruly is only one topic which comesto mind for this article: that is tothank the readers of this Digest, ourloyal clients.

Undoubtedly, everyone is famil-iar with the difficult economic timeswe as a society have been experienc-ing. While the financial system andhousing industries have been most discussed, it has been difficulttimes for law firms. One of the great legal institutions in Philadel-phia literally went out of business. But for a limited few, most largelaw firms had significant layoffs, income freezes or reductions, andthere was despair amongst most lawyers.

While Marshall, Dennehey was not exempt from theworldwide economic slow down, we have been blessed in thatwe did not have any layoffs. We implemented as many cost saving measures as possible, hopefully, without affecting thelawyering or servicing to our clients. To be sure, we continuallycounseled our lawyers to have their practices at their most efficient state of their careers. We believe we succeeded in ourefforts to reduce expenses, remain efficient, and continue to service and perform at a high level. Because of these efficienciesand the dedication of our employees, I am pleased to advise thatwe were able to hire a new class of lawyers who joined the firmin or around September 2009. Specifically, these lawyers andtheir locations are as follows:

At the firm’s annual share-holder meeting conducted inDecember 2009, I am pleased toadvise that 15 associates wereelected to shareholder status.These 15 individuals’ elevationwas motivated by, of course, theirown hard work, but also becausemany of you commented on theirlawyering skills and positive influ-

ences they had with your insureds or companies. Our newshareholders are as follows:

Finally, I am pleased to advise that on January 1, 2010,nine lawyers from the New York firm of McDermott andRadzik, including principals Dan McDermott and EdRadzik, joined Marshall, Dennehey, Warner, Coleman &Goggin. These lawyers concentrate their practice in maritime law, which is a constant with the firm’s growthmodel of adding new practice groups within our litigationstructure. The law firm of McDermott & Radzik transferredall of its pending matters to Marshall, Dennehey on January1, 2010. We will now have two New York, New York, officesuntil these offices are merged.

At a time when many large law firms have struggled, thepositive achievements of Marshall, Dennehey would nothave been possible with the continued support of you, ourloyal clients. So on behalf of everyone at our firm, thank youfor your continued support and best wishes for a Happy,Healthy and Prosperous 2010. ★

MESSAGEfrom theEXECUTIVECOMMITTEEBy Philip B. Toran, Esq.Chairman of the Executive Committee

David Blake, Esquire

Jennifer Branch, Esquire

Jaimee Burchard, Esquire

Allison Domday, Esquire

Sharon Duncan, Esquire

Shamrock Kennedy, Esquire

Matthew Loesberg, Esquire

Wendy Leavitt, Esquire

Geoffrey Lutz, Esquire

Joseph Mendelsohn, Esquire

Crystal Moroney, Esquire

Nicholas Bowers, Esquire

Angeline Panepresso, Esquire

Aaron Purser, Esquire

Jason Shrive, Esquire

Robert Stanko, Esquire

Ashley Toth, Esquire

Pauline Tutelo, Esquire

Timothy Welbeck, Esquire

Cherry Hill, NJ office

Philadelphia, PA office

Tampa, FL office

Harrisburg, PA office

Orlando, FL office

King of Prussia, PA office

New York, NY office

Fort Lauderdale, FL office

Jacksonville, FL office

Fort Lauderdale, FL office

New York, NY office




Scranton, PA office



Roseland, NJ office


Jason Banonis, Esquire

Gregory Bartley, Esquire

Eric Brown, Esquire

Laurianne Falcone, Esquire

Robert Fitzgerald, Esquire

Hillary Fraenkel, Esquire

Timothy Hartigan, Esquire

Howard Hopson, Esquire

Gregory Kelley, Esquire

Matthew Keris, Esquire

Christian Marquis, Esquire

Bruce Seidman, Esquire

Joseph (Scott) Shannon, Esquire

Martin Sitler, Esquire

John Viggiani, Esquire

Bethlehem, PA office

Roseland, NJ office




Roseland, NJ office




Scranton, PA office

Pittsburgh, PA office

Roseland, NJ office

Wilmington, DE office

Akron, OH office

Jacksonville, FL office

(cont.)

PROFILE OF OUR ERIE, PA OFFICE(continued from page 1)

both as a civil trial lawyer and in administrative proceedingswith his zealous advocacy. He is involved in civic activities, thelocal bar association, and insurance associations.

Thomas Lent is a shareholder who concentrates in thedefense of healthcare cases. He has successfully tried to verdict dozens of medical negligence lawsuits throughoutnorthwestern Pennsylvania on behalf of physicians and otherhealthcare professionals over a quarter century as a local attor-ney. Thom, a graduate of Ohio Northern Law School, is wellrespected in the medical and legal communities for his skills inadvocacy and working with healthcare professionals. He alsohas taught medical jurisprudence to students at the Lake ErieCollege of Osteopathic Medicine.

Patrick Carey is an experienced trial lawyer, having triedmore than 80 cases to jury verdict. These talents have enabledhim to obtain favorable results for his clients in several high-

profile cases, including the defense of a local police officer in acivil rights trial. Pat is a shareholder in the firm who practicesin all areas of general litigation, including vehicle and premisesliability, civil rights, and municipality defense. He also gradu-ated Ohio Northern Law School.

Jennifer Martin Singh is an associate in the firm’s Health-care Practice Group, who also defends employment andpremises liability cases. Jennifer earned a Masters in Pharma-cology and Toxicology at the University of Arizona beforegraduating from the University of California, Hastings Collegeof Law. She joined the firm in 2006 and has handled cases instate and federal courts and in administrative proceedings.

The Erie office, with its experienced, responsive, and ener-getic attorneys and capable staff, is building on its historicalroots in this key geographic area to provide top notch service toclients of Marshall, Dennehey, Warner, Coleman & Goggin. ★

Initial estimates suggested defective Chinese Drywall hadbeen installed in as many as 100,000 homes nationwide.Those numbers have now been drastically reduced and willlikely fall between 25,000 and 50,000 homes nationwide.

Federal Court

In early 2010, we expect the first “bellwether” trials totake place in New Orleans. Depositions began in late fall ‘09,and Judge Fallon, who presides over the MDL, directed theparties to select “property damage only/lone defendant” casesto be tried at that time.

In addition to the MDL litigation, the first coverageaction is presently pending in the United States DistrictCourt for the Southern District of Florida. In that case, Gen-eral Fidelity Insurance Company v. Foster, et al., (Case No.9:09-cv-80743-KMM), General Fidelity seeks to have thecourt determine it owes no duty to defend or indemnify itsinsured for claims of defective Chinese Drywall under theterms, conditions and exclusions in a CGL policy. OnDecember 4, 2009, the MDL found the coverage action topresent different questions or facts and law, rejected transferof this coverage case, and returned the case to the SouthernDistrict of Florida to be decided separate and apart from theproceedings of the MDL.

State Court

As Florida, and Miami-Dade County in particular, dominatethe state court actions, we expect the first state court trials totake place in Miami-Dade Circuit Court sometime in spring2010. The state court actions have abided by and followed

Judge Fallon’s MDL Pre-Trial Orders. By all accounts, JudgeFallon has been in contact with Florida Circuit Court Judgespresiding over Chinese Drywall cases and has even participatedin hearings on significant legal and evidentiary issues.Accordingly, we can expect the outcome of the state courtproceedings to be consistent with that of the MDL and federal court proceedings.

Once the trials have taken place and judgments entered,the focus will turn to “is there coverage for these claims?” and“who is going to pay the judgments?”

What’s Ahead for Chinese Drywall Litigation

In that judgments in favor of homeowners for the propertydamage claims is an almost certainty, a number of questionswill likely remain as 2010 turns to 2011: Is the defective dry-wall also causing “bodily injury”?; How many homes are reallyaffected?; Will the government issue a recall?; What is the truecapital exposure?; Does a CGL policy provide coverage forthese claims? If not, who will pay the claims?; Will the “pollu-tion” exclusion be treated differently from state-to-state?; WillChinese manufacturers abide by the verdicts and pay judg-ments? If not, then what?; As these cases proceed to trial instate and federal courts, what appellate issues will arise?

The Marshall Dennehey Defective Drywall LitigationPractice Group

Marshall Dennehey’s Defective Drywall Litigation Prac-tice Group consists of attorneys in its Ft. Lauderdale, Orlando,


DEFECTIVE DRYWALL LITIGATION PRACTICE GROUP PROFILE(continued from page 1)


Vol. 16, No. 1 March, 2010

Page 4 Defense Digest

Vol. 16, No. 1 March, 2010

DEFECTIVE DRYWALL LITIGATION (continued from page 4)

Jacksonville and Tampa offices with considerable experience inall areas of the law affected by the onslaught of Chinese Dry-wall claims and lawsuits. In addition to Florida, team membersare also licensed to practice in the state and federal courtslocated in Mississippi, Louisiana, and Michigan, as well as thefederal appellate courts. We are also fortunate enough to havethe support of our colleagues in the firm’s other 18 offices.

Our Defective Drywall Litigation attorneys are currentlyrepresenting defendants in both state and federal districtcourts, as well as class action litigation in the bankruptcy courtfor the United States District Court of Delaware (with assis-tance from our Wilmington, Delaware, office). In addition tospeaking at nationwide conferences on various issues facingdrywall litigation, group members provide clients with regularupdates on the latest developments on such key topics as: the

state of the ongoing MDL in New Orleans; CPSC bulletinsand reports; coverage decisions which may effect drywallclaims; new lawsuits being filed which may substantially effectthe landscape of future claims and litigation; scientific studiesof the health effects related to defective drywall; and remedia-tion protocols as they are developed.

We welcome the opportunity to work with you in evalu-ating and defending your Chinese Drywall claims, lawsuits,and class action litigation. Consistent with our firm’s proactiveapproach and philosophy, we welcome the opportunity toadvise you on all aspects of these claims, whether it be the science, potential health risks, array of legal liabilities, and coverage issues for property damage and bodily injury in bothfirst and third party claims. ★

In 2009, the United States SupremeCourt issued two decisions that makepleading and proof requirements morestringent for plaintiffs in civil rights andemployment discrimination claims withthe cases of Ashcroft v. Iqbal, 129 S.Ct.1937 and Gross v. FBL Financial Services,129 S.Ct. 2343. Legislators now seek tooverturn both decisions with the Open

Access to Courts Act of 2009 and the Protecting Older WorkersAgainst Discrimination Act.

Ashcroft v. Iqbal and the Open Access to Courts Act of 2009

Ashcroft v. Iqbal and Its Impact

In the Ashcroft case, the U.S. Supreme Court addressedwhether conclusory allegations were sufficient to state a claimfor unlawful discrimination. The Court found that conclusoryallegations and mere recitals of the elements of a cause ofaction in a complaint would not suffice.


Federal – Employment/Civil Rights

CONGRESS SEEKS TO OVERTURN SUPREME COURT DECISIONS FAVORABLE TO EMPLOYERS

By Deirdre E. Collins, Esq.*

* Deirdre is an associate in our King of Prussia, Pennsylvania, office. She can bereached at (610) 354-8497 or [email protected].

● In May 2009, the U.S. Supreme Court decided Ashcroft v. Iqbal, making pleading standards morestringent for plaintiffs in civil rights, employment and other civil claims, when faced with a Rule12(b)(6) Motion to Dismiss the Complaint.

● In June 2009, the U.S. Supreme Court decided Gross v. FBL Financial Services, Inc., holding that aplaintiff in an age discrimination claim under the Age Discrimination in Employment Act must provethe age was the “but-for” or deciding factor in the adverse employment decision, rather than just oneof the motivating factors in the decision-making process.

● In late 2009, lawmakers introduced legislation in Congress, which seeks to overturn both the Ashcroftand Gross decisions, with the Open Access to Courts Act of 2009 and the Protecting Older WorkersAgainst Discrimination Act.

KEY POINTS:

Deirdre E. Collins


Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

The Financial Industry RegulatoryAuthority (“FINRA”) recently revisedits rules to significantly limit the abilityof a party to file a Motion to Dismissthe Statement of Claim at FINRA arbi-tration. However, one of the bases to filea Motion to Dismiss is that the claimsare not eligible for arbitration. A claimis ineligible for arbitration when theevent or occurrence which provides the

basis for the action occurred in excess of six years prior to thefiling of the Statement of Claim. FINRA has also set forth veryspecific procedural rules with respect to how such a Motionmust be presented.

For example, a Motion to Dismiss based on eligibility mayonly be filed after the Preliminary Answer has been filed, itmust be filed within 60 days prior to the first arbitration dateand the opposing party must have 45 days within which torespond. Furthermore, there must be an oral argument in frontof the full panel, which is recorded and transcribed. The oralargument can be done over the telephone, but there is still therequirement for a transcription of the oral argument. The arbi-trators’ decision with respect to the Motion must be unani-mous. Significantly, the relevant case law from the SupremeCourt of the United States provides that in the event that apanel was to grant a Motion to Dismiss on the basis that thearbitration claims are ineligible, then the claimant is free topursue these claims in the applicable court of law.

Clients must be counseled that even if their Motion toDismiss based upon lack of eligibility is successful, they maystill face a claim in state or federal court, but the defendantwould still have the defense of the statute of limitations. How-ever, it is typically more expensive to litigate a claim in courtversus arbitration, and the client may find that it was moreexpensive and much less efficient to litigate the matter in courtif the Motion to Dismiss was granted. Another potential

pitfall with respect to the Motion to Dismiss for eligibility isthat we are seeing that arbitration panels deny the Motionswithout prejudice with the right to the moving party to re-raisethe Motion at the conclusion of the claimant’s case-in-chief.Essentially, a claimant’s counsel argues that there needs to beadditional evidence presented to the panel outside of thepleadings in order for the panel to properly determine aMotion to Dismiss for eligibility. However, if the panel were torequire the respondents to prepare for and attend theclaimant’s case-in-chief before granting the Motion, then thiswould essentially require that the respondents litigate the claimtwice. They would first have to litigate the claim over thecourse of a number of days at arbitration and also subsequentlyre-litigate the claim in court. Again, this type of ruling is sig-nificantly more costly to the client than simply litigating theentire case at arbitration.

Claimant’s counsel also argues that there were ongoingmisrepresentations or omissions after the initial investmentdate and that such ongoing misrepresentations or omissionsconstitute the event upon which the Statement of Claim isbased and that such claims are eligible for arbitration. These“misrepresentations” often relate to alleged statements of therepresentative to “hold the course” and not sell the investmentswhich later decline and lead to losses in the account. In fact,there are some cases that claimants invariably cite which standfor the proposition that such claims are independent and eligi-ble. However, there are other cases which stand for the propo-sition that the event or occurrence is the actual purchase dateand not any subsequent alleged misrepresentations or omis-sions. Once this issue is fully briefed before the panel, the pan-el is left to make a decision based upon the pleadings and thecase law presented. Arbitration panels often determine that thepurchase date event is the event or occurrence and, thus,claims based upon the purchase date are ineligible for arbitra-tion but subsequent misrepresentations are eligible for arbitra-tion. These decisions essentially bifurcate the claim, andclaimants often protest the inefficiencies of such a bifurcation.


Federal—Securities

FINRA RULE UPDATE: MOTIONS TO DISMISS INELIGIBLECLAIMS

By Denis C. Dice, Esq.*

* Denis is a shareholder in our Philadelphia, Pennsylvania, office who can bereached at (215) 575-2779 or [email protected].

The use of video surveillance cam-eras in roller skating rinks, bowling centers, water parks and other amuse-ment facilities can be very useful indefending and defeating liability lawsuitsbrought by injured patrons. Two recentcases prove this point. In the first case, aplaintiff ’s attorney voluntarily dismissedhis client’s roller skating complaint,before an answer was even filed, after the

plaintiff learned that his “accident” was on video. In the secondcase, a video of the plaintiff ’s roller skating accident convinced aSuperior Court Arbitration Panel to find for the defendant in adefective roller skate case.

Case Number 1 – The Case of the “Leaky Roof”

This case began when a woman walked into my client’sskating rink to report an accident that had happened three daysbefore. The woman reported that her husband had fallen afterhe skated through a puddle of water on the floor that was causedby a leak in the roof. Her husband left without reporting theaccident. She wanted to file a report because her husband hadbroken his ankle in the fall and now required surgery.

The manager taking this report had been working on theday of the accident, and she was aware of the roof leak and thewater on the floor. However, she also knew that immediatelyafter the leak was discovered, her staff cleaned the floor and tooksteps to keep patrons away from the area. She was not aware ofany accidents that occurred during that skating session, so sheturned to the video to find out what really happened.

Reviewing the video of the skating session, the manager sawa young patron skate over to a floor guard to report the water onthe floor located near the center of the rink. The skate guardquickly located the water and stood over the area to keep patrons

away. Within the next minute, rink employees placed a largebucket on the floor under the leak along with six orange trafficcones to keep patrons out of the area.

To the manager’s observation, no one had fallen in the areaof the water either before or after it was reported to the floorguard. However, 10 minutes after the bucket and cones were inplace, a heavyset male skater wearing a Reggie White Philadel-phia Eagles jersey lost his balance and fell as he was entering theskating rink floor, about 60 feet from where the leak hadoccurred. From what the manager could see on the video, theleak from the roof had nothing to do with the patron’s fall.

After the claim was denied, a lawsuit was filed alleging thatthe skating rink was responsible for the plaintiff ’s injury basedon allegations of negligent inspection and maintenance of thefacility. After I was assigned to defend the claim, I went to therink to view the video with the manager. After reviewing thevideo, I concluded that if the plaintiff was wearing a ReggieWhite Eagles jersey on the day of the accident, he was going tohave a great deal of explaining to do.

I called the plaintiff ’s attorney to ask him what his client waswearing on the day of the accident. When he told me that hisclient was wearing an Eagles jersey, I told him what I had seen onthe video. One week after this initial phone call, the plaintiff ’sattorney called to tell me that his client had instructed him to dropthe claim; he explained that his client had returned to work andwas “too busy” to pursue this lawsuit. As a result, the attorney fileda voluntary dismissal of the complaint with prejudice, and I wasable to close my file just 15 days after it was opened.

Case Number 2 – The Case of the “Defective” Skate

The second case involves a roller skating patron who claimedthat he lost his balance and fell due to a defective wheel on a rentalskate. The plaintiff claimed that after skating for 15 minutes, thefront wheel on his right skate suddenly jammed, causing him tofall backwards onto his elbow. He sustained an elbow fractureand underwent an open reduction and internal fixation.


New Jersey—Amusements

TWO RECENT DEFENSE “WINS” PROVE THE BENEFITS OFVIDEO SURVEILLANCE IN AMUSEMENT FACILITIES

By Lary I. Zucker, Esq.*

● Motion to Dismiss based upon eligibility is permitted under FINRA rules.● Motions to Dismiss must be filed after Answer and 60 days before hearing. ● On-going misrepresentation claims may not be eligible if within six years.

KEY POINTS:● A modern digital camera system can be very useful in disproving bogus liability claims in roller

skating rinks or any facility where sports or recreation activities are conducted.● Video cameras can help improve a client’s defense position by allowing an expert to analyze the

plaintiff ’s movements before during and after a fall. ● Strategically placed video surveillance cameras are a valuable risk management tool that can help

defend lawsuits and prevent other types of economic losses.

KEY POINTS:

Denis C. Dice

Lary I. Zucker

* Lary is a shareholder and Co-Chair of the firm’s Amusements, Sports & Enter-tainment Litigation Practice Group. He works in our Cherry Hill, New Jersey, officeand can be reached at (856) 414-6001 or [email protected].

Javaid Iqbal was arrested in New York in November2001 after being charged with conspiracy to defraud theUnited States. Iqbal was released in 2003, after serving aprison term, and subsequently filed a civil complaint againstthe United States and government defendants, alleging viola-tion of his First, Fourth, Fifth, Sixth, and Eight Amend-ment rights, violation of the Federal Tort Claims Act, andother statutory claims. Iqbal claimed that during his deten-tion, he was physically assaulted by prison guards withoutprovocation, denied medical care, subjected to unjustifiedstrip searches, verbally berated, prevented from engagingin religious study, and denied access to legal counsel dueto a condoned practice of dis-criminating against Arab immi-grant detainees solely due to their race, religion, and/ornational origin following theattacks of September 11, 2001.Iqbal argued that FBI DirectorRobert Mueller and AttorneyGeneral John Ashcroft personallycondoned the decision to detainhim and others and to subjectthem to harsh conditions becausethey were Arab immigrants.

Following a Motion to Dis-miss by the defendants, the DistrictCourt found that the facts allegedin Iqbal’s complaint were suffi-cient. The Second Circuit Court ofAppeals affirmed that decision,concluding that the allegations asplead were sufficiently plausible to survive a Rule 12(b)(6)motion to dismiss. The U.S. Supreme Court granted certio-rari, in part to address “whether conclusory allegations thathigh-level government officials had knowledge of allegedwrongdoing by subordinate officials are sufficient to survivea motion to dismiss in an action brought under Bivens.”

In a 5 to 4 decision, the Supreme Court reversed the Second Circuit and held that Iqbal’s complaint failed toplead sufficient facts to state a claim for purposeful andunlawful discrimination. The Court acknowledged thatunder Federal Rule of Civil Procedure 8(a)(2), a complaintmust contain a “short and plain statement of the claim show-ing that the pleader is entitled to relief ” and “detailed factu-al allegations” are not required, citing to Bell Atlantic Corp. v.Twombly, 550 U.S. 544, 555 (2007). However, the com-plaint must still contain sufficient factual allegations to statea claim to relief that is plausible on its face. In reviewing the

facts in a complaint, the court must be able to draw the reasonable inference that the defendant is liable for the misconduct alleged.

The Court held that Iqbal’s pleadings did not complywith Rule 8 under the holding in Twombly. The Courtfound that several of his allegations were conclusory andnot entitled to a presumption of truth, including allega-tions that the defendants agreed to subject Iqbal to harshconditions of confinement pursuant to a policy based ondiscriminatory reasons alone and that Ashcroft was thepolicy’s principal architect.

The impact of this case on employment and other civilclaims is that it makes it more difficult for plaintiffs to rest theircomplaints on mere speculationand conclusory allegations. Thiscase makes the pleading standard in federal civil claims even morestringent with regard to factualsupport and plausibility of liability.

The Proposed Legislation to Over-turn Ashcroft v. Iqbal

In November 2009, proposedlegislation was introduced in theHouse of Representatives thatwould overturn Ashcroft. The OpenAccess to Courts Act of 2009 fol-lowed a proposed bill in the Senatewith the same purpose, the NoticePleading Restoration Act of 2009.The proposed legislation seeks to

overturn Ashcroft v. Iqbal, and its predecessor Bell Atlantic v.Twombly, and to restore less stringent requirements as to factualspecificity in a complaint. The House would add to Chapter131 of Title 28, United States Code, in part:

Sec. 2078. Limitation on dismissal of complaints(a) A court shall not dismiss a complaint under subdi-

vision (b)(6), (c) or (e) of Rule 12 of the FederalRules of Civil Procedure unless it appears beyonddoubt that the plaintiff can prove no set of facts in support of the claim which would entitle theplaintiff to relief. A court shall not dismiss acomplaint under one of those subdivisions on thebasis of a determination by the judge that the fac-tual contents of the complaint do not show theplaintiff ’s claim to be plausible or are insufficientto warrant a reasonable inference that the defen-dant is liable for the misconduct alleged.



Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

Gross v. FBL Financial and the Protecting Older WorkersAgainst Discrimination Act

Gross v. FBL and its Impact

In Gross, the Supreme Court held that employees mustprove by a preponderance of the evidence that age was the “butfor” or deciding factor in the employer’s adverse employmentdecision. Under Gross, an employer does not have to establishthat it would have made the same decision regardless of ageeven if the employee produced some evidence that age biasplayed a role in the adverse employment decision. The mixedmotive definition was first expressed in 1989, in the U.S.Supreme Court case of Price Waterhouse v. Hopkins. In this gen-der discrimination case, the Court ruled that where a person’sprotected class, such as sex, age or race, played some role in theadverse employment decision, an employer could avoid TitleVII liability by showing that it would have made the samedecision even absent the employee’s protected class.

In Gross, the plaintiff Jack Gross alleged that he was reas-signed to a less favorable position due in part to his age. TheSupreme Court held that unlike Title VII, the ADEA does notrequire a mixed motive analysis. The Court held that under the

ADEA, the plaintiff must show that age was the deciding factor in the employment decision rather than simply one component in the decision-making process.

The Proposed Legislation to Overturn Gross v. FBL

In October 2009, four lawmakers introduced legislationin both houses of Congress, the Protecting Older WorkersAgainst Discrimination Act, which would overturn the Grossdecision. The Act would allow a plaintiff to succeed on anage discrimination claim by showing only that age discrimi-nation was a one motivating factor behind the adverseemployment decision. In addition, the legislation would clarifythat this “motivating factor” analysis applies to all anti-discrimination laws.

Conclusion

Despite efforts by the United States Supreme Court tohold plaintiffs in employment and other civil cases to a morestringent standard of proof, lawmakers continue to seek toundermine the Court. As of now, the holdings in Ashcroft andGross are the law of the land, but STAY TUNED… ★

CONGRESS SEEKS TO OVERTURN SUPREME COURT DECISIONS(continued from page 8)

CONGRESS SEEKS TO OVERTURN SUPREME COURT DECISIONS(continued from page 5)

FINRA RULE UPDATE(continued from page 6)

However, respondents have been successful on Motionsto Dismiss on the basis of ineligibility, and there have been situations where claimants have foregone their claims afterthey are dismissed from arbitration. Based upon the instancesof claimants abandoning their claims, it is recommended thatclients file Motions to Dismiss on eligibility.

Even if an arbitration panel were to deny a respondent’sMotion to Dismiss for Eligibility, it is still highly likely that thepanel would consider the staleness of the claim in rendering afinal award. Furthermore, respondents can exploit the stalenessof the claim by pointing to some type of prejudice which wouldprevent them from fairly defending the claim. For example, ifcertain documents are no longer in existence because the claimwas filed at such a late date, then respondents can point to theunavailability of such documentation and state that this impairstheir ability to fairly defend the claim.

In the situation where the claimant complains about thesuitability of investments purchased in excess of six years

prior to the filing of the Statement of Claim, it is conceivablethat account statements from other accounts predating thecomplained of transactions would be unavailable since bro-ker-dealers are not required to maintain account statements inexcess of six years from the date that the account was closed.To the extent that the respondent is not able to explore theclaimant’s relevant investment experience, this clearly under-mines the ability of the respondent to defend the case. Again,such prejudice would likely affect the arbitrator’s ultimatedecision regarding the eligibility for arbitration of the allega-tions pled in the Statement of Claim.

Motions to Dismiss on Eligibility are clearly warrantedunder the FINRA arbitration rules and should be pursued byrespondents. There are many benefits with respect to filingsuch a Motion, the most of important of which is having thematter dismissed from arbitration and litigated in court wherea judge would apply the applicable statute of limitationswhich would possibly bar all claims. ★

www.marshalldennehey.com1-800-220-3308

DEFENSE L I T I GAT ION

WE LISTEN.


Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

Can a New Jersey employer place alien on a Pennsylvania resident’s personalmotor vehicle uninsured motorist recoveryfor New Jersey workers’ compensationbenefits? The Appellate Division has preliminary addressed the standard toresolve the issue in an unreported case,Terrence Johnson v. State of New Jersey,Docket No. A-3202-07T3 (November20, 2009).

In Johnson, the petitioner, a New Jersey Department ofCorrections’ employee, was injured while driving a state-owned work vehicle that was struck by an uninsured motoristin New Jersey. The petitioner was a Pennsylvania resident andowned a personal vehicle covered by a Pennsylvania automo-bile policy. The State provided the petitioner with New Jerseyworkers’ compensation benefits but denied his UM claimbecause the State is exempt from this type of UM claim. Thepetitioner then filed a UM claim under his own personalPennsylvania motor vehicle insurance policy.

The State wrote to the petitioner’s attorney, stating, “Weare advised that your office is handling a THIRD PARTYaction for petitioner, and asserting a workers’ compensationlien of $26,769.99 for temporary compensation and med-icals.” See Midland Ins. Co. v. Colatrella, 102 N.J. 612 (1986)(holding that UM proceeds constitute a third party recoveryunder N.J.S.A. 34:15-40, upon which a workers’ compensa-tion lien attaches). The petitioner’s attorney responded thatthere was no third-party claim, just the UM claim against the

petitioner’s own policy, and that under that policy and Penn-sylvania law, there is no right to assert a workers’ compensationlien in a UM claim. See American Red Cross v. Workers’ Comp.Appeal Board (Romano), 745 A.2d 78, 81 (Pa. Cmwlth. 2000)(where a claimant receives monies from a policy purchased andpaid for by the claimant for his own benefit, be it UM orunderinsured provisions of that policy, the employer does notpossess a subrogation right), aff ’d per curiam, 766 A.2d 328(Pa. 2001).

Thereafter, the petitioner’s insurance company sent aletter to the petitioner’s attorney regarding the UM claim,which was referenced by the court:

Your correspondence also indicates a workers’compensation lien of $12,628.20. As I’msure you are aware, the carrier has no right toassert a lien in a UM claim; however, youshould also be aware that your client has aright to prove, plead and recover the amountof their payment. In this case, my file reflects atotal Workers’ Compensation payment ofapproximately $27,000, which has alreadybeen factored into my evaluation of theclaim…Incidentally, since it appears we willnot be able to settle the claim for my initialoffer amount of $52,000, I will be for-warding that amount to you under separatecover in the near future. It is State Farm’s pro-cedure to do this as we believe that is theminimum amount your client will be entitledto receive. The claim will of course remainopen and we are not asking Mr. Johnson tosign any sort of Release. [Emphasis added.]


New Jersey—Workers’ Compensation

LIFE IS ABOUT CHOICES—SO TOO IS NEW JERSEY WORKERS’COMPENSATION LAW WHEN ADDRESSING AN EMPLOYER’S

SECTION 40 LIEN AGAINST A PENNSYLVANIA MOTOR VEHICLE INSURANCE POLICY

By Robert J. Fitzgerald, Esq.*

* Bob is a shareholder in our Cherry Hill, New Jersey, office who can be reached at(609) 414-6009 or [email protected].

● New Jersey workers’ compensation law prevents double recoveries by petitioners who pursue third-party claims in conjunction with a work injury.

● New Jersey workers’ compensation law may now require conflict-of-law analysis when employers attempt tosubrogate against out-of-state insurance settlements.

● Employers should always thoroughly investigate for possible subrogation sources to minimize overallexposure of claim.

KEY POINTS:

Robert J. Fitzgerald

A recent New Jersey Supreme Courtcase has firmly established that third party claims for indemnification and con-tribution do not require the third partyplaintiff to serve an Affidavit of Merit,pursuant to the Affidavit of Merit Statute,N.J.S.A. 2A:53A-27. In addition, theSupreme Court, citing the Entire Contro-versy Doctrine, rejected the notion thatthe third party action should be filed afterconclusion of the initial lawsuit.

In Highland Lakes Country Club and Community Associa-tion v. Nicastro, Supreme Court of New Jersey, A-10-09, September Term 2009, the plaintiff, Highland Lakes CountryClub, sought to resolve a boundary dispute concerning a lineseparating the parties’ lots. In 2004, the defendant, the Nicas-tros, hired Suburban Consulting Engineers, Inc. and MartinSikorski to survey and prepare a metes and bounds descriptionof their property in connection with the construction of a newresidence. Approximately two years later, while the Nicastroswere excavating the land, Highland Lakes notified them that itbelieved they were excavating on Highland Lakes’ property. In response, the Nicastros produced the survey prepared by Suburban and Sikorski.

In 2007, Highland Lakes filed a litigation against theNicastros demanding to establish the boundary line. HighlandLakes also requested damages, restitution, and injunctive reliefas a result of the Nicastros’ alleged trespass. Highland Lakes alsoasserted that the Nicastros’ conduct was willful, malicious, wan-ton, and a reckless disregard of its rights. The complaint did notallege any direct claims against Suburban or Sikorski as a resultof their survey of the subject property. However, HighlandLakes’ claim was predicated on a discrepancy between the sur-vey prepared by Suburban and Sikorski and a 1999 subdivision

plat and 2006 sketch prepared by Dana J. Behre, P.L.S., as wellas a letter expressing Mr. Behre’s confidence in the accuracy ofhis 1999 subdivision plat.

Shortly after the complaint was filed, the Nicastros filed athird party complaint against Suburban and Sikorski. Thethird party complaint did not allege professional negligence,but asserted that any liability the Nicastros had to HighlandLakes was “secondary and vicarious” to the primary liability ofSuburban and Sikorski. In other words, the Nicastros soughtindemnification and contribution pursuant to the ComparativeNegligence Act, N.J.S.A. 2A:15-5.1, and the Joint TortfeasorContribution Law, N.J.S.A.2A:53A-1. Although Suburbanand Sikorski filed answers to the third party complaint in2007, the Nicastros did not file an Affidavit of Merit pursuantto N.J.S.A.2A:53A-26. The Affidavit of Merit Statute states inrelevant part:

In any action for damages for personalinjuries, wrongful death or property damageresulting from an alleged act of malpractice ornegligence by a licensed person in his profes-sion or occupation, the plaintiff shall, within60 days following the date of filing of theanswer to the complaint by the defendant,provide each defendant with an affidavit ofan appropriate licensed person that thereexists a reasonable probability that the care,skill or knowledge exercised or exhibited inthe treatment, practice or work that is thesubject of the complaint, fell outsideacceptable professional or occupationalstandards or treatment practices.

After the Affidavit of Merit deadline, but before anyexpert report was issued, Suburban and Sikorski filed a motionto dismiss the third party complaint, contending that the thirdparty complaint failed to state a cause of action because noAffidavit of Merit was filed. The Nicastros argued, pursuant to


New Jersey—Indemnification & Contribution

INDEMNIFICATION AND CONTRIBUTION: AVOIDINGTHE EXPENSE OF AN AFFIDAVIT OF MERIT IN THIRD

PARTY ACTIONSBy Alicia L. Calaf, Esq.*

* Alicia is an associate in our Roseland, New Jersey, office and can be reached at(973) 618-4165 or [email protected].

● Supreme Court’s ruling underscores importance that parties avoid piecemeal litigation.● Keep an eye on potential third party claims for contribution and indemnification. Failure to assert them in

underlying litigation could result in dismissal of subsequent litigation under Entire Controversy Doctrine.● Nature of third party claims should be closely reviewed to avoid cost of Affidavit of Merit when it

may not be required.

KEY POINTS:

Alicia L. Calaf


Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

LIFE IS ABOUT CHOICES(continued from page 11)

There was no additional language indicating as to why orhow the worker’s compensation lien was “factored” into theUM carrier’s “evaluation” or settlement offer. The petitioner’sattorney and the State continued to dispute whether the Statewas entitled to subrogation of its workers’ compensation lien.The State then filed a motion in the New Jersey workers’ com-pensation court to set the lien, arguing that the petitioner wasbound by New Jersey workers’ compensation law. The peti-tioner opposed the motion on the basis that, under a conflictof law analysis, Pennsylvania law should control. In January2008, the Judge set theamount of the lien at$17,646.67 pursuant to Sec-tion 40, N.J.S.A. 34:15-40.Thereafter, the parties settledthe petitioner’s New Jerseypermanency claim.

In November 2008, theJudge issued a written opinionconcluding that the petitionerwas required to reimbursethe State for the lien. TheJudge found that once thepetitioner elected to receivecompensation benefits pur-suant to New Jersey law, hetriggered the statutory subro-gation rights of the compen-sation carrier under Section40. The Judge found Mid-land to be decisive, con-cluding that denying theState’s right to subrogationwould result in a doublerecovery for the petitioner,contrary to the legislativeintent of Section 40.

The petitioner appealed,arguing that the Judge failedto conclude that Pennsylvanialaw should apply after con-ducting a choice-of-lawanalysis. Specifically, the peti-tioner argued that Pennsylvania’s interest in assuring full and faircompensation for its residents who are involved in motor vehi-cle accidents in accordance with the statutory scheme estab-lished by Pennsylvania’s Legislature is more significant than NewJersey’s interest in avoiding a double recovery.

The Appellate Division concluded that New Jersey’schoice-of-law rule applies a “flexible governmental-interest”standard, which requires application of the law of the statewith the greatest interest in resolving the particular issue that

is raised in the underlying litigation. Gantes v. Kason Corp., 145N.J. 478, 484 (1996). See also Lieberman v. Port Authority, 132N.J. 76, 84 (1993).

Ultimately, the Appellate Division reversed and remandedthe case back to the Workers’ Compensation Judge for furtherproceedings and testimony to address a conflict of laws analysis.The Appellate Division also went further and made someinteresting comments, addressing the UM settlement offer:

The record in this case suggests that petitioner may not,in fact, receive a “double recovery” if Pennsylvania law

were applied and the Statewas not permitted toassert a compensation lienagainst petitioner’s UMproceeds. According toState Farm’s letter of Feb-ruary 8, 2007, the claimrepresentative “factored”the workers’ compensa-tion payment “into [his]evaluation of the claim.”Whether or not petitionerreceived a double recoveryis an important factor toconsider in evaluating thegovernmental-intereststandard in this case. The record is unclear as to the extent to which itwas “factored in” andwhether petitioner ulti-mately resolved his UMclaim for more than theinitial offer of $52,000.

For now, New Jerseyemployers can continue to relyon Section 40 in subrogatingagainst third-party types ofrecoveries when issuingworkers’ compensation bene-fits. Both at the outset andthroughout the life of theclaim, employers should thor-

oughly investigate when there is a potential for a third-partyrecovery. Moreover, employers should assert their Section 40rights as early on as possible. Further, employers can and shouldtake over pursuit of third-party claims in those rare instanceswhere petitioners fail to on their own behalf. Finally, althoughoften asked, Section 40 does not require the employer to com-promise or lower its lien amount at any time. By pursuing subro-gation under Section 40, employers can continue to control costsand keep the New Jersey workers’ compensation system viable. ★

INDEMNIFICATION AND CONTRIBUTION:(continued from page 10)

New Jersey law, that their claims for indemnification andcontribution do not accrue until an error in the survey isestablished. The trial court agreed with the Nicastros anddenied the motion to dismiss. The trial court concluded thatthe Nicastros should not be compelled to make the plaintiff ’scase while they defended the accuracy of the third partydefendants’ survey.

Suburban and Sikorski filed an appeal, and the AppellateDivision affirmed the ruling of the trial court, finding that theapplication of the Affidavit of Merit Statute to the instant matter would be inconsistent with its overall purpose. Specifi-cally, the goal of the Affidavit of Merit Statute is to weed outfrivolous lawsuits in the early stages of litigation, while simul-taneously ensuring that meritorious claims proceed to trial. Inthe present matter, because there were no direct claims of pro-fessional negligence against Suburban and Sikorski, the thirdparty complaint is correctly viewed as an effort to avoid futurelitigation over an error in the survey. Further, since no expertreports had been produced by any party, claims for professionalnegligence had not yet properly ripened.

Suburban and Sikorski filed a Motion for Certification tothe New Jersey Supreme Court, and that motion was granted.The Supreme Court affirmed, substantially for the reasonsasserted by the Appellate Division. The Supreme Court alsoaddressed claims from Suburban and Sikorski that the third

party complaint should have been deferred until the conclusionof the underlying action. The Supreme Court relied on theEntire Controversy Doctrine to reject that assertion. TheEntire Controversy Doctrine “embodies the principle that theadjudication of a legal controversy should occur in one litiga-tion and only in one court; accordingly, all parties involved ina litigation, should at the very least, present in that proceedingall of their claims and defenses that are related to the underlyingcontroversy.” Cogdell v. Hosp. Ctr. at Orange, 116, N.J. 7, 15(1989).

In essence, the Supreme Court ruled that claims forindemnification and contribution should be instituted in theunderlying litigation, although they do not technically accrueuntil liability has been established.

The New Jersey Supreme Court’s ruling in Highland Lakesunderscores the importance that parties avoid piecemeal litiga-tion. A close eye should be kept on all potential third partyclaims for contribution and indemnification because a failure toassert them in an underlying litigation could result in the dismissal of subsequent litigation under the Entire ControversyDoctrine. This procedure would also result in a significant savings of litigation costs. Finally, the nature of third partyclaims should be closely reviewed to avoid the cost of an Affi-davit of Merit when it may not be required. ★

TWO RECENT DEFENSE “WINS” (continued from page 7)

After the plaintiff ’s accident, his rental skates wereinspected and found to be in good working order. They weretagged and bagged and retained in the office in accordancewith Roller Skating Association Risk Management Guide-lines. More importantly, the plaintiff ’s accident was filmed bytwo surveillance cameras in the rink, and his actions beforeand after the fall could be analyzed.

By slowing the speed of the video, I determined thatmoments before the plaintiff lost his balance and fell, heturned slightly to his right to wave to his daughter who wasstanding off to the side of the rink. After waving, he shiftedhis upper body forward, and this movement caused him tolose his balance, and his feet flew out in front of him, as if hehad slipped on a banana peel.

Defense expert Bill Carlson explained that the plaintiff ’sfall as seen on the video was inconsistent with his claim thata wheel jammed on one of his skates. Carlson explained thatif a skate stopped for any reason while the skater was moving,the skater’s momentum would cause him to fall forward, not

backward. Also, Carlson noted that after the plaintiff fell, hewas able to skate off the rink without any difficulty.

After proceeding through discovery, the case was submit-ted to mandatory non-binding arbitration in the SuperiorCourt of New Jersey, Middlesex County. After I played thevideo for the arbitration panel, they agreed that the happen-ing of the accident was inconsistent with the plaintiff ’s story.As a result, the arbitrators returned an award for the defen-dant, and the plaintiff did not appeal.

I have long advocated the use of surveillance video cam-eras as a risk management tool in amusement facilities. In aroller skating rink, videos can prove many disputed factualissues, such as whether a skate room attendant checked thewheels on a rental skate before handing them to a patron orthe number and location of skate guards on a rink floor at anygiven time. In a bowling center case, video surveillance cam-eras can prove whether a bowler crossed the foul line beforefalling and whether a spill or a foreign substance on theapproach was present long enough to provide constructivenotice for the rink. ★

www.marshalldennehey.com1-800-220-3308

We are very proud to announce the expansion of our Maritime Litigation Practice Group

with the hiring of nine lawyers from the firm of McDermott & Radzik, L.L.P. We welcome aboard:

Daniel G. McDermott, Esquire, ShareholderEdward C. Radzik, Esquire, Shareholder

William R. Connor III, Esquire, Of CounselJames J. Ruddy, Esquire, Of Counsel

Matthew T. Loesberg, Esquire, AssociateLori J. Quinn, Esquire, Associate

Crystal G. Moroney, Esquire, AssociateTammy Fastman, Esquire, AssociateLaura V. Block, Esquire, Associate

These attorneys are located at:Wall Street Plaza 88 Pine Street 21st Floor

New York, NY 10005-1801Phone: (212) 376-6400 Fax: (212) 376-6494

Defense Digest Page 15Page 14 Defense Digest

Vol. 16, No. 1 March, 2010Vol. 16, No. 1 March, 2010

CASUALTY

Thomas Brophy (Philadelphia, PA) obtained a defense verdict in a case in which he represented a national entertain-ment corporation. The plaintiff was a seven-year-old girl whohad sustained a two-inch facial laceration with scarring revisedby plastic surgery that resulted in a residual scar. The plaintiffsalleged that a particular water attraction at the defendant’s chil-dren’s theme park was defectively designed and maintained andinadequately supervised. The jury deliberated approximatelyone hour before returning with a unanimous defense verdict.

Mari Grimes (Cherry Hill, NJ) obtained a defense verdictin a five-day auto negligence trial in Camden County, NewJersey, before the Honorable Michele M. Fox. The plaintiffwas a passenger in the defendant’s vehicle when it wasinvolved in a collision with the co-defendant’s vehicle. Theplaintiff alleged permanent injuries as a result of the acci-dent, including a herniated disc at C6-7, radiculopathy andcarpal tunnel syndrome. In addition to testimony from allparties, the plaintiff presented two eyewitnesses and anorthopedic expert, and the defense jointly presented anorthopedic expert. Mari argued and the jury found that theco-defendant was solely responsible for the accident andthat the plaintiff failed to overcome the tort threshold.

Alicia Schweyer (Scranton, PA) successfully defended ourclient’s insured at trial. The jury came back in 20 minuteswith a verdict of zero damages. Liability for the motor vehi-cle accident had been admitted. The plaintiff had somecomplaints and treatment the day following the accident,but six months later, an MRI and an EMG resulted in nor-mal findings. The plaintiff, through the use of medicalexperts (a physiatrist and a neurosurgeon), attempted todispute that the findings were normal and attempted toshow that an abnormal MRI and abnormal EMG threeyears later were the result of latent defects from the accidentthat did not show by the time of the first images and tests.The case was defended by dispute of the medical evidencethrough testimony of an orthopedic surgeon and by disputeof the plaintiff ’s credibility.

Paul Laughlin and Mark Royster (Bethlehem, PA)obtained a defense jury verdict in favor of a concrete company in a Monroe County breach of contract actionalleging that a foundation in a home failed to meet specifi-cations, resulting in essentially a total loss of the home andcontents during a flood.

Jason Banonis (Bethlehem, PA) obtained a dismissal of atree service via summary judgment in the Monroe CountyCourt of Common Pleas. The plaintiffs alleged damagesresulting from five maple trees being cut down on theirneighboring lot. The plaintiffs failed to identify the tree service as a defendant until more than one year after theexpiration of the statute of limitations. The plaintiffs alsofailed to identify any evidence implicating liability or thecorrect measure of damages (i.e. the decline in value of theland, not the cost to replace the trees and restore the prop-erty to its original condition).

EMPLOYMENT LAW

Sharon O’Donnell and Sunshine Miller (Harrisburg, PA)obtained summary judgment in the U.S. District Court forthe Middle District of Pennsylvania in connection with anemployee’s claims of racial harassment and discriminationagainst our client, his employer. Despite finding that theplaintiff had established a prima facie case of a hostile workenvironment due to a joke containing a racial epithet sent tohim via text message by a supervisor and other racially offen-sive comments made by supervisors and coworkers, thecourt held that the employer had conducted an appropriateinternal investigation into the employee’s complaints andhad taken steps reasonably calculated to remedy the harass-ment. In so holding, the court also denied the plaintiff ’srequest for leave to amend the Complaint to include anadditional claim of retaliation due to the prejudice thatwould result to the employer, as well as the fact that theclaim for retaliation was known prior to the filing of theComplaint and the employee had been represented by coun-sel throughout the course of litigation.

OnThePulse…IMPORTANT & INTERESTING LITIGATION ACHIEVEMENTS*...

We Are Proud Of Our Attorneys For Their Recent Victories

(continued on page 15)* Prior Results Do Not Guarantee A Similar Outcome

OnThePulse… (continued from page 14)

HEALTH CARE

Eric Grogan (Roseland, NJ) obtained a defense verdict in amedical malpractice case in Essex County, New Jersey. Afterlacerating his index finger at work at a grocery store, theplaintiff presented to the Emergency Room, where he wastreated by our client, the ER physician. Treatment includedthe provision of antibiotics and the bandaging of the finger.That night, the plaintiff had complaints of severe pain. Twodays later the bandage was removed by a plastic surgeon,who stated that the bandage appeared tight. The next daythe plaintiff returned to the plastic surgeon with a swollen,blistered and ischemic finger, which necessitated fasciotomysurgery with permanent impairment of the finger. Theplaintiff alleged that the injury was caused by a too-tightbandage. The defense position was that the bandage wasappropriately applied and the injury was the sequella of theinitial laceration. After one-and-one-half weeks of trial, thejury returned with its defense verdict.

Paul Laughlin (Bethlehem, PA) secured a defense verdict ina Lehigh County jury trial on behalf of two neurosurgeons,a neurologist, and a hospital in a medical malpractice caseinvolving the death of a 22-year-old man from an undiag-nosed ruptured cerebral aneurysm.

Chandler Hosmer (King of Prussia, PA) received a defenseverdict in Philadelphia Court of Common Pleas on behalf ofa hospital and a health system on October 16, 2009. Theplaintiff filed a medical malpractice claim arguing that thehospital negligently delivered fluids and soda to a post-gastricbypass patient and told her that she could drink it. The plain-tiff claimed that the patient was not coherent followingsurgery, drank the excess fluids and soda, and consequentlydeveloped complications. The plaintiff further claimed thatthe hospital destroyed records that could have helped provethe plaintiff ’s case. The decedent died nine days after surgeryat the age of 53. On behalf of his clients, Mr. Hosmer arguedthat the decedent had received extensive literature and educa-tion before and after surgery regarding her post-surgery diet;that she was coherent following surgery; that there was no evi-dence soda was delivered to the decedent by the hospital staff;and that even if soda was delivered and consumed, it did notcause her post-surgical complications.

PROFESSIONAL LIABILITY

Christopher Santoro, John Hare and Carol Vander-Woude (Philadelphia, PA) obtained consecutive defenseverdicts in two jury trials in Philadelphia in defending theWelding Rod Defense Group. The first case was tried beforeJudge Eugene Maier and involved a 63-year-old mechanicwho contended that he developed lung cancer and died as aresult of working with welding rods which containedasbestos. The defense contended that the lung cancer wascaused by the decedent’s long history of smoking, includingcontinuing to smoke after he was diagnosed with the lungcancer. The case was tried reverse bifurcated, and after 40minutes the jury returned a verdict for the defense after thefirst phase of the case. The second case, tried before JudgeGeorge Overton, involved a 71-year-old gentleman whoworked as a plumber and auto mechanic and who did weld-ing several hours a week over a 25-year period. He contend-ed that he developed mesothelioma and died as result of hiswork with welding rods containing asbestos. Again, the casewas tried reverse bifurcated, and the defense did not disputethat the mesothelioma was caused by asbestos in the firstphase of the case. The jury returned a damage verdict of$365,000. In the liability phase of the trial, the welding roddefendants were the only defendants that chose to defendtheir product and contended that welding rods do notrelease asbestos fibers that are respirable and the mesothe-lioma was caused by extensive exposure to asbestos insula-tion products and not welding rods. Both phases of the casetook two weeks to try. At the conclusion of the second phaseof the case, the jury returned a defense verdict after deliber-ating just 30 minutes.

Steven Polansky and Michael Gorokhovich (Cherry Hill,NJ) successfully obtained a reversal of a trial court decisiondeclaring that the claimant was entitled to $1 million in coverage under a policy of insurance. The insurance policycontained a step-down provision, reducing the coverage avail-able from $1 million to $15,000. The plaintiff argued thatthe Scutari Gill Amendment enacted by the New Jersey Leg-islature was entitled to retroactive effect, thereby precludingenforcement of the step-down provision. The appellatecourt disagreed, concluding that the step-down provisioncould not be given retroactive effect.

* Prior Results Do Not Guarantee A Similar Outcome (continued on page 16)


Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010


Alan Johnson and Scott Dunlop (Pittsburgh, PA) obtained aFed. R. Civ. P. 12(b)(6) dismissal of a case involving the appli-cation of Kelo v. City of New London, 545 U.S. 469 (2005).Scott and Alan represented a nonprofit economic developmentcorporation, its president, and its executive director who hadbeen involved in events leading up to an eminent domain pro-ceeding against two sets of residential homeowners. The pur-pose of the condemnation was to make way for an industrialpark. The court ordered the case to ADR proceedings on threeseparate occasions, during the last of which the plaintiffs repeat-edly turned down very substantial settlement offers. Since theUnited States District Court ordered the many sets of defen-dants to file motions jointly, Alan prepared a joint Rule12(b)(6) motion and associated briefs on behalf of all defen-dants. The court authored a 52-page opinion in support of itsorder dismissing all federal constitutional claims with prejudiceand declining supplemental jurisdiction over the state claims.

Christian Marquis (Pittsburgh, PA) obtained a defense verdicton behalf of the Borough of Kittanning in Armstrong County.The plaintiff alleged that she sustained a broken heel when she fell as a result of stepping off of a curb and into a potholewithin a Borough street. The jury returned a unanimous verdictfinding that the Borough was not negligent.

Michael Decandio (Jacksonville, FL) obtained dismissal of awrongful death action filed against an engineering firm per-forming construction engineering inspections on an Interstateroadway project for the Florida Department of Transportation.Citing Florida statutory law regarding immunity of State agen-cies and agency law as applied to the engineering firm, thedefense argued that the client was entitled to complete immu-nity and that suit against the Department of Transportation wasthe sole remedy afforded claimant. In a second claim by thedecedent’s personal representative on the same project, a dis-missal was obtained after summary judgment was filedasserting that the second insured, an engineering firm that pre-pared the Technical Special Provisions for the project, was notlegally or factually liable for the injury and death of the decedent.

Aaron Moore (Philadelphia, PA) was successful in a casewhere the plaintiffs, dissatisfied home buyers, sued the seller,their realtor, their lender, and the property appraiser, seekingin excess of $200,000 in damages. The plaintiffs alleged thatour client, the appraiser, conspired with the co-defendantsto appraise the property at a value greater than the property

was actually worth. The plaintiffs eventually settled the casefor $10,000 with no contribution from the appraiser.Nonetheless, the plaintiffs ended their suit in its entirety.

Terry Lefco and Aaron Moore (Philadelphia, PA) obtaineda defense verdict on all claims after a 36-day, non-jury trialon legal malpractice claims in federal court. The most seriousclaims were for aiding and abetting the client’s breach offiduciary duty owed to his minority shareholders. The courtfound that the client did indeed breach such duties but misled the lawyers who could rely on his factual statementsand who were unable independently to verify the factsbecause the plaintiffs had concealed the key documents.

Terry Lefco and Aaron Moore (Philadelphia, PA) obtainedsummary judgment in a legal malpractice matter. The plain-tiff alleged that our client, the plaintiff ’s workers’ compen-sation attorney, failed to timely file his compensation claim,which resulted in the dismissal of that claim. Ironically, theplaintiff failed to file his legal malpractice claim in a timelymanner; thus, it was barred pursuant to the applicablestatutes of limitation.

Jack Slimm (Cherry Hill, NJ) obtained a dismissal of alegal malpractice action which was filed against an attor-ney for an estate. In the probate action, the recalcitrantbeneficiaries argued that the attorney did not move quicklyto file the tax returns, which resulted in tax liabilities in thehundreds of thousands of dollars. While it was true thatthe returns were not timely filed, Jack was able to demon-strate that the attorney was not responsible for the late filing. Rather, the Executrix simply was not responding tothe attorney’s requests in connection with the preparationand filing of the returns. Next, Jack also successfullyargued that the attorney owed no duty to the beneficiariesand that they were not in a position to bring the action.Therefore, their complaint against the attorney did notstate a claim. The case will now proceed against theExecutrix, now represented by separate counsel.

Gerry Kowalski and Kimberly Wong (Philadelphia, PA)obtained a FINRA arbitration award in favor of our client,a broker-dealer, in the amount of $1.17 million. Our clientsought to enforce the terms of a Promissory Note and LoanAgreement with a former affiliate. The funds were lent tothe affiliate by the broker-dealer to allow the affiliate to satisfy a disgorgement order issued by the Securities and

* Prior Results Do Not Guarantee A Similar Outcome * Prior Results Do Not Guarantee A Similar Outcome

OnThePulse…MARSHALL DENNEHEY IS HAPPY

TO CELEBRATE OUR RECENT APPELLATE VICTORIES*Chuck Craven (Philadelphia, PA) succeeded in obtainingan affirmance of a defense medical malpractice judgment infavor of a defendant emergency room physician from aunanimous three-judge panel of the Pennsylvania SuperiorCourt (Judges Musmanno and Kelly and President JudgeEmeritus McEwen). Our client, the defendant emergencyroom physician, successfully stopped the bleeding of andcleansed a contaminated leg wound of a patient. While inthe ER, the patient was seen by her family physician, whohappened to be making his rounds in the hospital at thetime of treatment. Both physicians agreed that the familydoctor would prescribe an antibiotic for the patient afterreviewing her extensive chart, given her complicated medicalconditions and her prior adverse reactions to certain antibi-otics. Plaintiff contended, however, that both doctors werenegligent for not administering an antibiotic before thepatient was discharged from the ER and for not conductingcertain tests and consulting an infectious disease specialist.On the following day, the patient developed an infectionfrom which she eventually died. The jury found that thedoctors had not been negligent, and plaintiff asserted on

appeal that the trial court erred in charging the jury on the“two schools of thought” doctrine and in not permittingcross-examination of a defense expert on the absence of anentry in a pharmacy’s records confirming that the familydoctor’s office had called in a prescription for an antibiotic.The Superior Court panel rejected plaintiff ’s contentionsand accepted the defense arguments that the jury instruc-tion was proper and that there was no abuse of discretion inlimiting cross-examination. The “two schools of thought”instruction was supported by the testimony of medicalexperts on both sides and explained to the jury that the doc-trine applied only to the plaintiff ’s claim that a prophylacticantibiotic should have been administered and not to anyother claim. The cross-examination was limited because theplaintiff never established that the pharmacy records actuallyshowed prescription call-ins. Smith v. Isaac, No. 3554 EDA2008 (Pa. Super., December 21, 2009).

Kim Boyer-Cohen (Philadelphia, PA) successfully had theSuperior Court vacate the jury verdict, which awarded theplaintiff $50,000 in compensatory damages and $350,000in punitive damages, on an invasion of privacy claim. The


Exchange Commission. The affiliate maintained that hisdecision to transfer his affiliation to another broker-dealerwas not an event of default under the terms of the LoanAgreement, and he asked the arbitration panel to allow himto continue to make periodic payments on the Loan. Theaffiliate also maintained that the signature appearing on thePromissory Note was a forgery. A three-member, all-industryFINRA arbitration panel held that the respondent was indefault on the Agreement and ordered that he pay the out-standing principal balance on the loan within 30 days.

William Waldron (Roseland, NJ) obtained a summaryjudgment on behalf of our client, a safety consultant for a

water treatment plant. Will successfully argued that hisclient’s only obligation was to make recommendations tothe water commission/property owner and it was theresponsibility of the commission to act on those recommen-dations. The facts of the case involve a murder mystery. Theplaintiff ’s decedent, who had been responsible for moni-toring water quality at the plant, was found dead in anunderground water tank, the victim of an apparent strangu-lation. The estate filed a wrongful death suit seeking $15million in damages, alleging the plant had insufficient safetyprocedures and had violated industry standards. ★

(continued on page 20)(continued on page 17)


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Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

* Prior Results Do Not Guarantee A Similar Outcome

Matthew Keris (Scranton, PA) was a featured speakeron behalf of the MCARE Fund at its November 2009 con-ference on Minimizing Medical Professional Liability RisksAssociated with Selection/Implementation of Electronic HealthRecord Systems. Matthew will give an encore presentation ofthis seminar at the Pennsylvania Osteopathic Medical Soci-ety’s annual clinical assembly on Saturday, May 1, 2010.

Niki Ingram (Philadelphia, PA) was a speaker at theUnique Workers’ Compensation Aspects of Independent Contrac-tors and Traveling Employees teleconference on January 13,2010, which was presented by Lorman Educational Services.

William Scott (Bethlehem, PA) was named one ofChartis’s top ten attorneys of 2009 at their Annual PanelCounsel Meeting in Chicago in conjunction with theAnnual DRI meeting.

Jeffrey Rapattoni (Cherry Hill, NJU) was the recipi-ent of the New Jersey Special Investigator Association’s2009 President’s Award for excellence and commitment tocombating insurance fraud in New Jersey.

Christopher Boyle (King of Prussia, PA) presented a seminar to the Delaware Valley Insurance Trust on Legal Updates for 2009 in Municipal Liability. The yearlypresentation is attended by representatives from 74 member municipalities.

Michael Packer (Fort Lauderdale, FL) was a speaker atthe HB Conferences’ (formerly Mealey’s) teleconferenceChinese Drywall Insurance: Exclusions, Triggers & MultipleClaims.

Robert Schenk (Philadelphia, PA) and Kacey Wiedt(Harrisburg, PA) were asked by Roofers Insurance Ltd. togive the presentation Mock IME: Controlling & LimitingExposure to Liability for W.C. Claims.

Lary Zucker (Cherry Hill, NJ) was asked by theWorld Waterpark Association to speak at its 29th AnnualSymposium and Trade Show. Lary presented on Managingthe Issues of Unique Guests. Lary also presented the semi-nar New Legislation, Regulation, And Recent Case LawThat May Effect The Amusement Industry on behalf of theInternational Association of Amusement Parks at itsannual convention.

Jack Slimm (Cherry Hill, NJ) gave a presentation,Defense Perspective of Civil Practice Under the Rules of Court,on behalf of the Camden County Civil Practice Committeeof the Camden County Bar Association.

John Hare (Philadelphia, PA) presented a seminar,Appellate Mediation in Pennsylvania, on behalf of the Penn-sylvania Bar Institute. ★

OnThePulse…OTHER NOTABLE ACHIEVEMENTS*

MARSHALL DENNEHEY IS HAPPYTO CELEBRATE OUR RECENT APPELLATE VICTORIES*

case involved the attempted unionization of medical/surgicalnurses, and during hearings held before the NLRB, thedefendant hospital introduced employment records of vari-ous members of the defendant’s staff in order to show that aspecific nursing position was supervisory and should beexcluded from the proposed bargaining unit. One of thedocuments introduced related to the job performance of theplaintiff, who was a member of the union organizing com-mittee. After allegedly being informed by a co-worker thatthe defendant had used a document from her personnel fileat the NLRB hearing, the plaintiff filed a complaint againstthe defendant claiming invasion of privacy due to the defen-dant’s dissemination of a document from her confidentialpersonnel file. In its decision, the Superior Court concludedthat because the NLRB hearing constitutes a judicial or quasi-judicial proceeding, the defendant’s disclosure wasabsolutely privileged as a matter of law and there was no evidence of abuse of that privilege. The court further deter-mined that the trial court improperly submitted the issue ofpunitive damages to the jury because the plaintiff did notpresent evidence of intentional, willful, wanton or recklessconduct. As a result, the Superior Court remanded the casefor entry of JNOV in favor of the defendant. Doe v.Wyoming Valley Health Care System, Inc., 1390 MDA 2008.

Eric Brown and John Hare (Philadelphia, PA) secured areversal in the Third Circuit Court of Appeals of a DistrictCourt ruling that State Farm had a duty to defend, under an“accident” insurance policy, a lawsuit claiming that theintoxicated insured assaulted and attempted to kill theplaintiff before taking his own life. In its precedential deci-sion, the court addressed “tension” in the case law regardingwhether and to what extent allegations of intoxication canconvert otherwise intentional conduct into an accident forpurposes of securing insurance coverage. In reconciling thetwo conflicting lines of cases, the court explained that it isagainst public policy to extend insurance coverage to obvi-ously intentional conduct, and it held that allegations of

intoxication can create a duty to defend only when the alle-gations suggest that the insured was so intoxicated that helacked conscious awareness of his actions or lacked the abilityto form intent. State Farm Fire & Casualty Co v. The Estateof Thomas Mehlman, Nos. 08-2220, 08-2261, and 08-2262(3d Cir., December 16, 2009).

Kim Boyer-Cohen (Philadelphia, PA) succeeded in havingthe Pennsylvania Superior Court affirm the imposition ofsanctions and dismissal of the plaintiff ’s complaint. Afterthe pro se plaintiff ’s prior suit against the defendants hadbeen dismissed with prejudice for failure to plead a propercause of action, the plaintiff filed a separate action assertingthe same claims against essentially the same defendants. Asa result, the defendants filed motions for sanctions, whichthe trial court granted and dismissed the plaintiff ’s com-plaint with prejudice. On appeal, the Superior Court foundthat the trial court had authority to dismiss the plaintiff ’scomplaint as a sanction under the circumstances andaffirmed the dismissal of the complaint. Saterstad v. Stover,1884 MDA 2008 (Pa. Super., October 20, 2009).

Kim Boyer-Cohen (Philadelphia, PA) also succeeded inhaving the Pennsylvania Superior Court quash an appeal intwo separate cases. In both cases, the Superior Court deter-mined that the respective plaintiff ’s brief failed to conformto the Pennsylvania Rules of Appellate Procedure and was sodefective as to preclude meaningful appellate review. Mur-phy v. Jokelson, 1673 EDA 2007 (Pa. Super., September 11,2009) and Vonson v. Martin, 195 EDA 2009 (Pa. Super.,December 2, 2009).

Audrey Copeland (King of Prussia, PA) was successful inobtaining the Superior Court’s affirmance of the trial court’sdetermination denying the motion to amend the complaintand motion in limine to include punitive damages, whichwere filed after the expiration of the two-year statute of lim-itations. The Superior Court reasoned that the complaintalleged insufficient operative facts and the addition of puni-

MARSHALL DENNEHEY IS HAPPYTO CELEBRATE OUR RECENT APPELLATE VICTORIES*

tive damages would constitute a new, time-barred cause ofaction and that another trial judge had previously deniedamendment and nothing new had occurred; also, expert testimony regarding recklessness and an indemnity agree-

ment was properly precluded as lacking foundation. AntennaCorporation v. Pulse Technologies, 2434 EDA 2007 (Pa.Super., October 16, 2009). ★

OnThePulse… (continued from page 17) OnThePulse… (continued from page 20)

* Prior Results Do Not Guarantee A Similar Outcome (continued on page 21)


Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

Take me out to the ball game,

Take me out with the crowd.

Buy me some peanuts andcracker jack,

I don’t care if I never get back,

Let me root, root, root for thehome team,

If they don’t win it’s a shame.

For it’s one, two, three strikes,you’re out,

At the old ball game.

– From ‘Take Me Out to the Ballgame’ by Jack Norworth

No doubt Don Krieger, Clifton Oliver, and AndrewMendez sang ‘Take Me Out to the Ballgame,’ the traditional farefor the Seventh Inning Stretch in ballparks across America, atCleveland’s Jacobs Field on June 11, 2002. After all, the Cleve-land Indians were beating the Philadelphia Phillies and looked tobe on their way back to a .500 record after an early season skid.Unfortunately for Krieger, Oliver, and Mendez, they are lesslikely to remember that day’s Indians starter (Bartolo Colon)than they are the litigation that was born on that summer day.

Krieger, Oliver, and Mendez were part of a group attendingthe game; the group’s seats were in the upper deck in right field,but Krieger and Oliver left Mendez and moved to some openseats in the lower deck. Near the conclusion of the game, anexplosive device was dropped from the upper deck and detonatedat ground level. When Krieger and Oliver returned to the upperdeck, they observed Mendez being interrogated by police andstadium security. After identifying themselves as Mendez’sfriends and submitting to a search and questioning, Krieger andOliver lodged a protest with stadium officials about how theyand Mendez were treated. Krieger and Oliver were arrested.

Krieger and Oliver were each charged with three counts ofaggravated arson and felonious assault and held in jail for fourdays. During that time they were given only paper jumpsuitsto wear, placed in cockroach-infested cells without a cot, mat-tress or blanket, were not allowed to shower or brush theirteeth, and were subjected to verbal threats, harassment, andsleep deprivation by corrections officers.

Prior to their bond hearing, the Cleveland police officer incharge of the case, Detective Ralph Peachman, told Krieger’sand Oliver’s attorneys that he knew they had nothing to dowith the explosion and said charges against them would bedropped if they implicated Mendez. Krieger and Oliverrefused. The felony charges against them remained in place forseven months and were finally dismissed by the prosecutor’soffice in January 2003. Mendez was subsequently convicted.

In June of 2003, Krieger and Oliver filed separate civillawsuits, later consolidated, alleging false imprisonment, mali-cious prosecution, and intentional infliction of emotional distress (Oliver v. Cleveland Indians Baseball Co., Ltd., (2009),2009-Ohio-5030, 915 N.E.2d 1205). A jury returned judg-ment against the City of Cleveland on all claims and awardedeach plaintiff $400,000 in compensatory damages, $600,000in punitive damages, and reasonable attorney’s fees. On post-verdict motions, the trial court vacated the punitive damageawards on the basis that such damages were not authorizedagainst a political subdivision, but refused to apply the non-economic damage cap set forth in R.C. §2744.05(C)(1) toreduce compensatory damages to $250,000 for each plaintiff.

Revised Code §2744.05(C)(1) places a $250,000 limit ondamages that “do not represent the actual loss of the person whois awarded the damages.” Actual losses include wages and com-pensation, medical expenses, expenses to repair or replace dam-aged property, and other expenses the court might determinerepresent an actual loss incurred by the plaintiff. Actual losses donot include attorney fees, pain and suffering, loss of consortium,mental anguish, or any other similar intangible loss.


Ohio—Damages

PLAINTIFFS STRIKE OUT ON DAMAGE CAPSBy John M. Heffernan, Esq.*

● Ohio Supreme Court upheld constitutionality of caps on non-economic compensatory damagesagainst political subdivisions.

● In holding that caps on non-economic compensatory damages against political subdivisions were constitutional, Ohio Supreme Court relied heavily on an earlier case upholding similar caps in a caseinvolving private litigants.

● Ohio Supreme Court reviewed caps on non-economic compensatory damages against political subdivi-sions on a rational basis standard and not a strict scrutiny standard.

KEY POINTS:

* John is an associate in the firm’s Akron, Ohio, office. He can be reached at (330)255-0042 or [email protected].

John M. Heffernan

In O’Hara v. First Liberty Ins. Corp.,2009 Pa. Super. 214 (2009), the Pennsyl-vania Superior Court considered a claimbrought by “forum shopping” plaintiffs torecover underinsured motorist (“UIM”)benefits against the First Liberty Insur-ance Corporation (“Liberty”), their auto-mobile insurance carrier.

The plaintiffs lived in DelawareCounty, Pennsylvania. On March 29,

2007, plaintiff Diane O’Hara was involved in a motor vehicleaccident in Delaware County. At the time of the accident, theplaintiffs were insured under a policy issued by Liberty. Thepolicy included UIM coverage and contained a clause providingthat if plaintiffs elected to bring suit against Liberty, the suit“must be brought in a court of competent jurisdiction in thecounty and state of your legal domicile at the time of the acci-dent.” After receiving the maximum liability amount availableto her from the other driver’s insurance company, Ms. O’Harasubmitted a UIM claim to Liberty, which was denied.

Despite the forum selection clause contained in their policy,the plaintiffs filed suit against Liberty in Philadelphia County forbreach of contract and loss of consortium. Liberty responded tothe complaint by preliminary objection, arguing that Philadel-phia County was not the proper venue for the plaintiffs’ suit.The trial court agreed, sustained Liberty’s preliminary objection,and transferred the matter to Delaware County. The plaintiffsappealed, contending the trial court committed an error of lawin transferring the matter to Delaware County on the basis of theforum selection clause in their policy.

In its analysis of the plaintiffs’ primary legal argument,the Superior Court first noted the well settled, general propo-sition that when the language of a contract (including aninsurance contract) is clear and unambiguous, a court isrequired to give effect to that language. Applying this propo-sition, the Superior Court concluded that the forum selec-tion clause in the plaintiffs’ policy “clearly and unambigu-ously” stated that any lawsuit against Liberty had to bebrought in the county and state of the insured’s “legal domicile,” in this case Delaware County. The court, thus,concluded that because the forum selection clause was clearand unambiguous, it was required to give effect to the lan-guage and enforce the provision.

The Superior Court also considered the plaintiffs’ alter-native argument that the forum selection clause was unen-forceable as a matter of public policy because Pennsylvaniahas a strong policy in allowing a plaintiff his choice of forum.The court noted that, although a plaintiff ’s choice of forumis to be given great weight, and the party challenging thechoice of forum has the burden to demonstrate the choicewas improper, a plaintiff ’s choice of forum is not absolute,and if there exists any proper basis for a court’s decision totransfer venue, the decision must stand. The court furthernoted that to be contrary to public policy, a contract musttend to injure the public or be against the public good, or itmust be inconsistent with good morals, and that only in theclearest of cases may a court declare a contract void as againstpublic policy. In rejecting the plaintiffs’ argument, the Supe-rior Court concluded that the plaintiffs failed to demonstratethat requiring them to litigate their lawsuit in the county inwhich they lived and in which the accident occurred wouldbe contrary to public policy.


Pennsylvania—Auto

FORUM THE BELL TOLLS: PLAINTIFFS LOSE CHALLENGE TOVALIDITY OF FORUM SELECTION CLAUSE IN THEIR AUTO

INSURANCE POLICYBy Christopher J. Conrad, Esq.*

* Chris is an associate in the firm’s Harrisburg, Pennsylvania, office who can bereached at (717) 651-3531 or [email protected].

● When the language of an insurance contract is clear and unambiguous, courts will give effect tothat language.

● Forum selection clause in plaintiffs’ auto insurance policy was clear and unambiguous and, thus, wasenforceable as a matter of law.

● Forum selection clause also was not void as a matter of public policy under the circumstances asplaintiffs failed to demonstrate that having to litigate their UIM claim in their county of residenceand also in which the underlying auto accident occurred was against public policy.

KEY POINTS:

Christopher J. Conrad

Defense Digest

Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

The Pennsylvania Supreme Courthas permitted recovery of compensatorydamages in a bad faith lawsuit arisingout of a carrier’s defense of an insured ina third party claim against the insured.Birth Ctr. v. The St. Paul Cos. Inc., 787A.2d 376 (Pa. 2001). In Birth Center,Lindsey Norris’ parents filed a lawsuitagainst St. Paul’s insured for negligenceduring Lindsey’s birth that caused her

to suffer severe physical injuries and brain damage. A verdictwas entered against the insured in the amount of $4,317,743,which was in excess of the insured’s $1 million policy limits. Inspite of St. Paul’s payment of the excess verdict, the Pennsylva-nia Supreme Court upheld a $700,000 bad faith verdictagainst St. Paul, representing compensation for damage to theBirth Center’s business, reputation, and credit. Although com-pensatory damages are not one of the enumerated types ofdamages in 42 Pa.C.S. Section 8371, the Supreme Court inBirth Center recognized a common law contractual cause ofaction for breach of the implied covenant of good faith and fairdealing. It recognized such a common law cause of actiondespite its prior landmark decision in D’Ambrosio v. Pennsylva-nia National Mut. Cas. Ins. Co., 431 A.2d 966 (Pa. 1981), thatno common law cause of action for bad faith existed. BirthCenter limited the D’Ambrosio holding to common law badfaith actions sounding in tort. It noted that D’Ambrosio didnot preclude the possibility that emotional distress damagesmay be recoverable in a contract action where the breach wasof such a kind that serious emotional distress was a particularlylikely result. Birth Center at 385. The Court did not offer anyexample of what type of a breach of what kind of a contract ithad in mind when it made its observation.

Since Birth Center, no reported Pennsylvania appellatecourt has addressed whether emotional distress damages arerecoverable in a breach of contractual duty of good faith andfair dealing arising out of a first party claim against a carrier, asopposed to a third party cause of action like Birth Center. Eventhe verdict that was the subject of the Birth Center decision didnot involve damages for emotional distress. See, Kakule v. Pro-gressive Casualty Ins., 2007 U.S. Dist. LEXIS 44942. In thatcase, the Honorable Robert R. Kelly, writing for the EasternDistrict of Pennsylvania, observed the oddity that the BirthCenter opinion states that damages for emotional distresscould be recoverable pursuant to the theory of breach of thecontractual duty of good faith and fair dealing since emotionaldistress damages were not involved in Birth Center, and theinsured plaintiff in that case was a corporation.

Nevertheless, several recent federal court decisions havepermitted plaintiffs to plead damages for emotional distressin claims against their carriers for breach of the contractualduty of good faith and fair dealing, over and above the statutory damages recoverable under 42 Pa.C.S. Section8371. In Kakule, Judge Kelly noted that the Pennsylvaniacourts have not yet ruled on whether the Birth Centerholding applies to all insurance claims or whether it is limitedto those bad faith claims arising out of the carrier’s breach offiduciary duty in defending an insured in a third party claim.Judge Kelly predicted that the Pennsylvania Supreme Courtwould apply Birth Center to all insurance claims, whether ornot they arose out of the first or third party context. Also see, Amitia v. Nationwide Mut. Ins. Co., 2009 U.S. Dist.LEXIS 2840, CRS Auto Parts, Inc. v. National Grange Mut.Ins. Co., 2009 U.S. Dist. LEXIS 7763, and Millwood v. StateFarm Mut. Automobile Ins. Co., 2009 U.S. Dist. LEXIS 8415.


Pennsylvania—Bad Faith

ARE DAMAGES FOR EMOTIONAL DISTRESS RECOVERABLE IN APENNSYLVANIA BAD FAITH LAWSUIT EVEN THOUGH THE BAD

FAITH STATUTE DOES NOT PROVIDE FOR SUCH DAMAGES?By Patricia A. Monahan, Esq.*

* Patricia is a shareholder in our Pittsburgh, Pennsylvania, office and can bereached at (412) 803-1151 or [email protected].

● Compensatory damages are available in lawsuit for bad faith arising out of insurer’s defense of aninsured in third party action.

● Federal courts have permitted plaintiffs to plead entitlement to compensatory damages, including damagesfor emotional distress, in bad faith claims for breach of the contractual duty of good faith and fair dealing.

● Pennsylvania courts have not yet addressed whether damages for emotional distress are available to plaintiffalleging breach of contractual duty of good faith and fair dealing in cases arising out of first party claims.

KEY POINTS:

Patricia A. Monahan

On September 30, 2009, thePennsylvania Supreme Court rendereda decision in Stimmler v. Chestnut HillHospital, 981 A.2d 145 (Pa. Sept. 30,2009), a medical malpractice case thatprovides clarification on the Court’sview on requests for admissions andthe level of expert opinion needed tosurpass the summary judgment phase.This article will offer a synopsis of the

case’s factual and procedural history and will then provide ananalysis of the case’s impact upon medical malpractice law.

In Stimmler, the plaintiff was initially admitted to the hos-pital for labor and delivery. Shortly following the delivery of herchild, the plaintiff developed peripheral circulatory failure. As aresult, the plaintiff underwent an atecubital cutdown of bothelbows. Two weeks later, she was discharged in stable condition.

Over the next 36 years, the plaintiff experienced circula-tory and respiratory problems. Although she sought treatmentwith various doctors to determine the cause of her condition,the source of her complaints remained a mystery until threeconsecutive echocardiograms, performed between Decem-ber 1999 and February 2000, revealed the presence of a 12-to 18-inch catheter coiled in the right atrium of her heart.As a result of the finding, the plaintiff filed suit against thehospital and the various individual physicians involved inthe cutdown procedure.

On March 24, 2004, during the course of discovery, coun-sel for one of the physicians served a request for admissionsupon the plaintiff. The request asked the plaintiff to admit thatshe had undergone 16 subsequent procedures between 1965

and 1999 that involved catheter devices and that the plaintiffhad no other information indicating that the foreign objectlodged in her body was a piece of the catheter from the 1965cutdown procedure. Forty-seven days later, the plaintiff servedher response denying the aforementioned admissions.

Shortly after receiving the plaintiff ’s response and afterreceiving her expert reports, several defendants filed motionsfor summary judgment, which were granted by the Philadel-phia Court of Common Pleas. The plaintiff filed a timelyappeal to the Pennsylvania Superior Court. In granting themotions for summary judgment, the trial court ruled that the plaintiff ’s experts’ reports, taken as a whole, failed toestablish to the requisite degree of medical certainty that thecatheter used during the 1965 cutdown procedure was thecatheter found on the 1999-2000 echocardiograms and wasthe cause of the plaintiff ’s injuries.

On appeal, the Pennsylvania Superior Court affirmedthe trial court’s ruling. The Superior Court concluded thatdue to the plaintiff ’s failure to file timely responses to thedefendants’ request for admissions, the plaintiff admittedthat she underwent the 16 subsequent catheterizations and,therefore, could not establish that the 1965 cutdown proce-dure was the cause of her injuries. The Superior Court reliedupon Pennsylvania Rule of Civil Procedure 4014, whichstates that the request is deemed admitted if the opposingparty fails to timely respond.

The plaintiff then appealed to the Pennsylvania SupremeCourt. In reversing the prior courts’ rulings and remanding, theSupreme Court initially found that the plaintiff ’s experts’reports met the requisite degree of medical certainty. The Courtnoted that the reports must be taken as whole. Although one ofthe experts stated that he could not precisely say how thecatheter came to reside in that portion of the plaintiff ’s heart,


Pennsylvania—Medical Malpractice

FORM VERSUS SUBSTANCE: AN ANALYSIS OF THE PENNSYLVANIA SUPREME COURT’S DECISION IN

STIMMLER V. CHESTNUT HILL HOSPITALBy Samantha L. Kane, Esq.*

* Samantha is an associate in our Philadelphia, Pennsylvania, office. She can bereached at (215) 575-3569 or [email protected].

● Request for admissions, especially if addressing a key aspect of the case, should be drafted asspecifically as possible.

● If a response to a request for admissions is untimely filed, the responding party should follow therules of civil procedure by taking the necessary remedial measures to strike the deemed admission.

● The Pennsylvania Supreme Court is reluctant to rule on motions for summary judgment and wouldrather leave any perceived issues to the determination of the jury.

KEY POINTS:

Samantha L. Kane

In Maloney v. Valley Medical Facilities, Inc., d/b/a The Medical Center, et al., the plaintiff, Max C.Maloney (“Maloney”), initiated a pro-fessional malpractice cause of actionalleging medical negligence for the failure to timely diagnose and treat hiswife’s osteosarcoma. Maloney’s claimsconsisted of direct liability againstmultiple individual medical providers

and vicarious liability claims against the corporate entitiesassociated with those same individual medical providers.

Maloney entered into a Joint Tortfeasor Release(“Release”) with defendant, Dr. Brennan; his primary insurer,the Medical Care Availability and Reduction of Error Fund;the institutional defendants associated with Dr. Brennan;and the institutional defendants associated with anotherdefendant, Dr. Prendergast. However, Dr. Prendergast him-self was not a party to the Release. In fact, the terms of theRelease explicitly reserved Maloney’s right to pursue hisclaims against Dr. Prendergast.

Following the execution of the Release, Dr. Prendergastand his affiliated institutional defendants (“Prendergastdefendants”) moved for Summary Judgment. Their argu-ment was that, based on the common law governing releasesand vicarious liability, Maloney had forfeited his right to pursue any and all claims against Dr. Prendergast (“agent”)when he agreed to dismiss all claims against the Prendergastinstitutional defendants (“principals”). In support of theirargument, the Prendergast defendants cited the holdings ofMamalis v. Atlas Van Lines, Inc., 522 Pa. 214, 560 A.2d 1380

(1989) (the release of an agent creates the automatic releaseof the principal for all vicarious liability claims regardless ofany reservation of rights) and Pallante v. Harcourt BraceJovanovich, Inc., 427 Pa. Super. 371, 629 A.2d 146 (1993)(extended the holding of Mamalis to allow for the release ofan agent upon the release of the principal).

The Court of Common Pleas ruled in favor of the Pren-dergast defendants. On appeal, the Superior Court disagreed,holding that traditional contract principles should apply andthe specific language of the Release should be interpreted asbeing the true intention of the parties. Furthermore, theSuperior Court distinguished Pallante by noting that Pallanteinvolved one instance of negligence, as opposed to the pre-sent matter, which involved multiple instances of negligence.

The Prendergast defendants instantly appealed to thePennsylvania Supreme Court, primarily arguing that theSuperior Court’s decision ignored the holding of Mamalisand the extension of Mamalis by Pallante. Maloney arguedthat the specific terms of the Release should be honored,thereby allowing him to pursue his claims against Dr. Pren-dergast, despite the release of the Prendergast principals.Maloney argued that Pallante was distinguishable from theinstant matter because (1) Pallante involved only oneinstance of negligence, whereas multiple instances of negli-gence were alleged against Dr. Prendergast, and (2) there wasno indication in the Pallante opinion that the release in ques-tion contained a specific reservation of rights clause.

Justice Saylor, for the Majority, noted that the purpose of the review was to determine whether the Pallante holding was valid, i.e., whether the common lawrule which effectuated the release of a principal upon the release of an agent also applied in the reverse situation.



Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

PLAINTIFFS STRIKE OUT ON DAMAGE CAPS(continued from page 22)

The Eighth District Court of Appeals affirmed the trialcourt’s decision and held the statute unconstitutional becauseit violated a plaintiff ’s right to a jury trial under the OhioConstitution and the Equal Protection Clause of the UnitedStates Constitution. The Ohio Supreme Court reversed thejudgment of the Court of Appeals and found the statute con-stitutional. In so doing, the Supreme Court relied heavily onits decision in Arbino v. Johnson & Johnson, (2007), 116 OhioSt.3d 468, 2007-Ohio-6948, 880 N.E.2d 420, where it hadpreviously upheld the constitutionality of a similar statutelimiting non-economic compensatory damages in lawsuitsbetween private litigants.

As in Arbino, the Supreme Court noted that the fact-findingrole of a jury is “inviolate for those causes for which the right ispreserved,” but went on to state that “while a jury determinesthe amount of damages as a matter of fact, the actual awardmay be reduced by the application of a statute as a matter of law….” Thus, as the statutory limits are applied as a matter of law,they do not intrude upon the fact-finding function of the juryand do not usurp the role of the jury in contravention of eitherthe Ohio or United States Constitutions.

The Supreme Court next swung away at the plaintiffs’equal protection argument. Finding that no fundamentalright or protected class was at issue, the Supreme Courtreviewed the statute on a rational basis standard. TheSupreme Court concluded that the statute’s $250,000 limitwas rationally related to preserving the financial integrity ofpolitical subdivisions. Further, the Court noted that becauseit had already held that the General Assembly could haveprohibited all tort actions against political subdivisions inMenefee v. Queen City Metro, (1990), 49 Ohio St.3d 27, 29, it was not arbitrary or unreasonable for the GeneralAssembly to allow limited recovery in tort actions.

Oliver represents a rare “three up, three down” strike outfor the plaintiff ’s bar. Strike one: no violation of the OhioConstitution; strike two: no violation of the United StatesConstitution; and strike three: an affirmation of the SupremeCourt’s prior decision upholding non-economic compen-satory caps in lawsuits between private litigants. All in all, apretty good day at the ballpark. ★

FORUM THE BELL TOLLS(continued from page 23)

Although the Superior Court did not specifically considerthe reasons why the plaintiffs in O’Hara brought suit inPhiladelphia County, the plaintiffs undoubtedly were “shop-ping” for a more plaintiff-friendly forum. They likely werehoping to present their case to a more potentially favorablejury than what they might have encountered in DelawareCounty, a generally more conservative forum, or, at least, theywere attempting to leverage a more sizable settlement fromtheir insurance carrier, being cognizant that PhiladelphiaCounty juries are well known for awarding substantial plain-tiffs’ verdicts. From a defense perspective, fortunately, the trialcourt (and the Superior Court on appeal) recognized that theforum selection clause in the plaintiffs’ policy was clear and

unambiguous and enforceable as a matter of law. The SuperiorCourt also appropriately recognized there was no sound public policy reason for allowing the plaintiffs to litigate theirclaim in Philadelphia County rather than in their home countywhere the accident occurred.

O’Hara bodes well for the enforceability of similarly writtenforum selection clauses in other auto insurance policies, as wellas in policies for other lines of insurance. Further, the O’Haradecision now provides appellate level legal precedent to chal-lenge preliminarily future claims brought by other “forumshopping” plaintiffs who likewise may seek to bring suit in amore plaintiff-friendly venue. ★

Pennsylvania—Medical Malpractice

IT IS NOW POSSIBLE FOR MEDICAL MALPRACTICE PLAINTIFFTO RELEASE A VICARIOUSLY LIABLE PRINCIPAL AND RESERVETHE RIGHT TO PURSUE PLAINTIFF’S CASE AGAINST THE AGENT

By Jason W. Bialker, Esq.*

* Jason is an associate in our Philadelphia, Pennsylvania, office and can be direct-ly contacted at (215) 575-2698 or by email at [email protected].

● Joint Tortfeasor Releases should be interpreted by basic contract principles, i.e., the languageof the release should be interpreted as being the true intent of the parties.

● The holding of Mamalis, establishing the common law rule allowing for the automatic release ofthe principal as a matter of law upon the release of the agent, is still valid.

● However, the common law rule of Pallante, allowing for the extension of the Mamalis rule to applyin the reverse scenario in a matter involving medical malpractice, i.e., the agent is automaticallyreleased as a matter of law upon the release of a principal, is no longer valid.

KEY POINTS:

Jason W. Bialker

ARE DAMAGES FOR EMOTIONAL DISTRESS RECOVERABLE(continued from page 24)

Accordingly, at least through the pleadings, a Section 8371claimant may be able to circumvent the fact that compensatorydamages are not recoverable under the statute. See Millwood,where the court struck a claim for compensatory damagesunder Section 8371 but noted that would have little practicaleffect on damages awarded at trial since compensatory dam-ages, including those for emotional distress, are available undera breach of contract theory.

The potential consequences of this new line of cases thatseem to ignore the Supreme Court’s decision in D’Ambrosioare multi-faceted. Not only can a bad faith plaintiff pleadaround the fact that compensatory damages are not availableunder the statute, but this alleged contractual theory of badfaith could also put at risk the two-year statue of limitations



Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

The Pennsylvania Supreme Courtadopted the malfunction theory ofproduct liability in Rogers v. Johnson &Johnson Products, Inc., 565 A.2d 751 (Pa.1989). Addressing the malfunction theo-ry for the first time since Rogers, thePennsylvania Supreme Court decision in Barnish v. KWI Bldg. Co., 980 A.2d535 (Pa. 2009) clarifies the effect of aproduct’s prior successful use on a plain-

tiff ’s ability to withstand summary judgment in a strict liabilityproduct liability action based upon the malfunction theory.

In Barnish, the plaintiffs filed suit against various defen-dants, including the manufacturer of a spark detection system,following a explosion and fire in 2001 at a particleboard man-ufacturing plant that killed several employees and severelyinjured several others. The spark detection system wasdesigned “with multiple sensors to detect sparks along a con-veyor belt system carrying combustible raw materials.” Theplaintiffs settled their claims against all the defendants otherthan the spark detection manufacturer. The plaintiffs’ claimsagainst the manufacturer sounded in strict liability based onallegations that the system’s sensors were defective. However,because the sensors were lost after the explosion and fire, theplaintiffs could not present any direct evidence of a defect inthe sensors and, thus, proceeded under the malfunction theory,“which allows for proof of strict product liability claimsthrough circumstantial evidence.” Nonetheless, a plaintiff pro-ceeding under the malfunction theory must still establish therequired elements of Section 402A of the Restatement (Sec-ond) of Torts and demonstrate, inter alia, that the product was

defective, that the defect caused the plaintiff ’s injuries, andthat the defect existed at the time the product left the manu-facturer’s control.

The manufacturer moved for summary judgment andasserted that the plaintiffs failed to make out a prima facie caseof strict product liability based, in part, on the plaintiffs’ failure to produce any evidence that the sensors were defectivewhen the spark detection system was sold in 1991. In responseto the motion, the plaintiffs admitted that the spark detectionsystem had functioned properly during the ten years prior tothe 2001 explosion and fire. The trial court granted summaryjudgment in favor of the manufacturer and reasoned that theplaintiffs could not make out a prima facie strict products lia-bility case under Section 402A because they failed “to presentevidence from which a reasonable jury could conclude that theunspecified defect existed when they stipulated that the sensorsfunctioned properly for 10 years.” (Emphasis added.) In reachingits decision, the trial court relied on the Pennsylvania SupremeCourt’s plurality decision in Kuisis v. Baldwin-Lima-HamiltonCorp., 319 A.2d 914 (Pa. 1974), and the quote by ProfessorProsser that “continued use [of a product] usually prevents theinference that the thing was more probably than not defec-tive.” Thus, in granting summary judgment, the trial courtheld that “the continued use of the sensors for ten years pre-cludes a reasonable inference the sensors were defective” whenthey left the manufacturer’s control.

A three-judge panel of the Superior Court affirmed thetrial court’s decision. The Superior Court relied upon Kuisisfor the proposition the “a jury could not find a product defec-tive at the time of delivery if the product functioned properlyprior to the alleged malfunction.”


Pennsylvania—Product Liability

ADDRESSING MALFUNCTION THEORY FOR FIRST TIME IN 20 YEARS: PENNSYLVANIA SUPREME COURT CLARIFIES

BURDEN OF PROOF IN PRODUCT LIABILITY CASE BASEDUPON MALFUNCTION THEORY

By Carol VanderWoude, Esq.*

* Carol is an associate who works in our Philadelphia, Pennsylvania, office. Shecan be reached directly at (215) 575-2643 or [email protected].

● To make out a prima facie case under the malfunction theory where a product has performed successfully in the years leading up to the alleged “malfunction,” a plaintiff must adduce some evidence, direct or circumstantial, to explain how the product could function properly and yet stillbe defective at the time of delivery.

● In the absence of such evidence, a plaintiff cannot meet the required element of a strict liability claim that theproduct was defective when it left the manufacturer’s control, and the defendant manufacturer is entitled toentry of judgment as a matter of law.

KEY POINTS:

Carol VanderWoude

ARE DAMAGES FOR EMOTIONAL DISTRESS RECOVERABLE(continued from page 26)

and clear and convincing burden of proof that have beensolidified in Section 8371 claims. The Honorable Ronald L.Buckwalter recently discussed in CRS that a four-year statuteof limitations generally applies to contract claims and thatnegligence or unreasonable conduct may be all that will berequired to prove a common law contractual bad faith claim.Additionally, given that emotional distress can possibly beawarded if a plaintiff proves that it was reasonably foreseeableat the time of the contract, it is unlikely that a plaintiff willhave to prove said damages with expert testimony. There areno parameters or guidelines on the amount of an award fordamages for emotional distress, other than the customaryrequirement that a verdict must be supported by the evidenceand it must not shock the conscience. Of course, a commonlaw breach of contract theory cannot be used to recover puni-tive damages. The statutory elements will still have to be metto support any award for punitive damages.

Our opinion is that the Birth Center holding is and shouldbe limited to bad faith claims arising out of a carrier’s defenseof an insured in a third party action. Pennsylvania courts haveconsistently held that common law remedies are not availableto bad faith claimants in a first party setting. See, Williams v.Nationwide Mut. Ins. Co., 750 A.2d 881 (Pa. Super. 2000). Incases where the insurer assumes the defense of an insured in athird party claim, a fiduciary duty is owed; in first partyclaims, a fiduciary duty is not owed. Condio v. Erie Ins. Exch.,

899 A.2d 1136 (Pa. Super. 2006). There is no separate breachof the contractual duty of good faith and fair dealing where aplaintiff alleges that he or she was denied benefits under aninsurance policy. In that situation, the claim is subsumed bythe plaintiff ’s breach of contract claim premised upon thesame conduct. Smith v. Lincoln Benefit Life Co., 2009 U.S.Dist. LEXIS 24941. Recognition of a contractual bad faithcause of action in a third party context (i.e. bad faith failure orrefusal to settle a liability claim within the insured’s policy lim-its, leading to an excess verdict) pre-existed the enactment ofSection 8371. See, Cowden v. Aetna Cas. And Sur. Co., 134A.2d 223 (Pa. 1951). Pennsylvania courts have yet to recognizea contractual bad faith cause of action in a first party context.The Supreme Court of Pennsylvania in D’Ambrosio expresslydeclined the opportunity to do so. Our cases have evolvedaccordingly, and, to date, no state appellate court has recog-nized a first party bad faith claimant’s recovery of damages foremotional distress. The potential for punitive damages is obvi-ously the most prominent concern in defending an insurerfrom a bad faith claim. However, the opportunity exists for usto present cogent arguments to our courts that well-establishedprecedent and the history behind Section 8371 would seem tocompel the conclusion that there is no statutory of commonlaw remedy of emotional distress damages for a first party badfaith claimant. ★

FORM VERSUS SUBSTANCE(continued from page 25)

the Court found it sufficient that the plaintiff ’s experts reasonedthat within a reasonable degree of medical certainty the 1965 cut-down procedure was the most likely culprit or had the “highestlikelihood” of such a catheter being inserted. Based upon theplaintiff ’s experts’ reports, and other records indicating thatcatheters used in cutdown procedures resembled the catheterfound in the plaintiff, the Court further found that even if therequest for admissions was deemed admitted, the admissions didnot refute the findings of the experts. Although the Court brieflycautioned against disregarding Pa.R.C.P. 4014, the plaintiff ’s failureto timely respond and failure to file a motion to withdraw thedeemed admission had no bearing on the Court’s ultimate ruling.

After review of the Stimmler opinion, there are severallessons to be gained for those attorneys defending medicalmalpractice claims and those insurance professionals handlingsuch claims. First, be as specific as possible when draftingrequest for admissions. The court specifically noted there wasno request regarding the size of subsequent catheters thatcould match the catheter found in the plaintiff. Such a requestwould have been more effective in combating the plaintiff ’sexperts’ findings; as the court noted in certain circumstances,

deemed admissions may provide sufficient basis for summaryjudgment. Imprecise requests for admissions, as drafted by the Stimmler defendant, will most likely highlight issues of fact within the case. As Stimmler demonstrates, the SupremeCourt is reluctant to rule upon motions for summary judg-ment and prefers to leave any perceived issues of fact to thejury’s determination.

Additionally, do not assume an untimely response to arequest for admission is automatically deemed admitted. If theopposing party’s admission is contradicted by its expert testimony,then the admission will most likely be deemed a nullity and willnot be considered sufficient basis for granting summary judg-ment. Lastly, the Stimmler Court essentially threw a bone to theplaintiff, as the concurring opinion cautioned against disregardingthe rules of civil procedure and noted that plaintiff ’s counselshould have moved for relief from the admission.

In conclusion, relying upon deemed admissions as yourbasis for summary judgment, failing to timely respond torequest for admissions, and failing to take the appropriate reme-dial steps for an untimely response are all risky bets on whetherthe court will accept form over substance, or vice versa. ★


Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

Under the recent Pennsylvania Supe-rior Court case Pusl v. Means and G&JWelding & Machine Co., 2009 Pa. Super.192; 982 A.2d 550 (2009), third-partydefendants are now entitled to a “credit”or “set-off” for underinsurance motorist(“UIM”) benefits paid to plaintiffs priorto conclusion of the third party action.

Although counterintuitive, Pennsyl-vania law permits auto accident plaintiffs

to simultaneously pursue claims against parties allegedly respon-sible for the accident and the plaintiffs’ own insurers for UIMbenefits in those cases where the damages sustained by injuredparties supposedly exceed the total amount of liability limitsheld by the tortfeasor under his auto policy. By “putting the cartbefore the horse,” so to speak, and settling with the UIM carrierwell before completion of the third-party litigation, counsel forplaintiffs have in many instances netted significantly more fortheir clients than if they had litigated the third-party case beforea jury prior to initiating the UIM claim.

In Pusl, Amanda Pusl made claim for personal injuriesallegedly arising out of an auto accident occurring in 2002. At some point prior to trial against the defendants, Pusl settledwith her own insurer for the UIM policy limits of $75,000. Puslsubsequently secured a $100,000 jury verdict against the defen-dants. Even though the defendants did not raise the UIM set-tlement “credit” as a defense in any fashion prior to the jury verdict, the lower court granted the defendants’ motions to addthe settlement defense as a new matter and to mold the verdictto reduce the award from $100,000 to $25,000 because of the$75,000 in UIM benefits already received by Pusl.

On appeal, Pusl maintained that the defendants failed totimely and appropriately raise the “set-off” defense of UIM settle-ment, thereby causing surprise and prejudice. Pusl also arguedthat UIM benefits are collateral source benefits that do not affectthe tortfeasor’s liability. By giving a set-off to the tortfeasor, thetortfeasor is effectively relieved of his responsibility for the wrongin violation of public policy. The Superior Court rejected outrightPusl’s arguments of surprise and prejudice and noted that theappellee-defendants’ post-trial motions to add the “set-off”defense and reduce the award to prevent a double recovery wereappropriate because the defendants could not have known whatthe award would be and were, therefore, not in a position beforethe trial to foresee that Pusl would receive a double recovery.

In upholding the lower court’s decision, the Superior Courtopined that Pusl’s UIM benefits fall within Section 1722 of thePennsylvania Motor Vehicle Financial Responsibility Law(“MVFRL”). Section 1722 of the MVFRL was enacted to pre-vent double recovery and ensure that injured parties receive onlyone satisfaction. The court reasoned that the jury’s verdict indi-cated an intent to provide Pusl a total compensation of$100,000. The receipt of a full jury award and pre-trial UIMbenefits, as held by the court, would constitute a double recovery,which the MVFRL was specifically designed to prevent.

Defendants are well advised to take advantage of this “set-off” or “credit” and determine whether and for how muchplaintiffs have settled a UIM claim prior to the conclusion of the third-party litigation. This is especially significant in olderfiles where UIM settlement is more likely to have occurred.Third-party defendants should obtain settlement informationinformally from counsel through subpoenas to UIM carriers orthrough specific discovery requests, requiring the identification ofall settlements arising from or in any way related to the accident.


Pennsylvania—UIM/Settlements

SET-OFFS AND SETTLEMENTS: TORTFEASOR DEFENDANTSNOW ENTITLED TO A CREDIT FOR AMOUNT OF UIM

PROCEEDS OBTAINED BY PLAINTIFFS PRIOR TO CONCLUSION OF THIRD-PARTY LITIGATION

By Jason P. McNicholl, Esq.*

* Jason is an associate in our Harrisburg, Pennsylvania, office and can be reacheddirectly at (717) 651-3510 or [email protected].

● Tortfeasor defendants in auto accident cases are now entitled to a “credit” or “set-off ” for UIM settlement proceeds received by plaintiffs prior to conclusion of third-party case.

● Tortfeasor defendants are well advised to determine when and for how much plaintiffs have settled UIMclaim, especially in older files where UIM settlement is more likely to have occurred.

● In cases where early UIM settlement occurs, “credit” or “set-off” should be raised by tortfeasordefendants during settlement negotiations, as the settlement may significantly reduce total potentialrecovery in third-party case.

KEY POINTS:

Jason P. McNicholl

The employer’s often one-timemedical evaluation of the employee islabeled an independent medical exami-nation (“IME”) and remains the mostimportant action that the employerundertakes in order to pursue a changein the employee’s status, despite theemployee’s and his counsel’s often sar-castic criticism of the examination astotally devoid of impartiality. As a result

of its medical expert’s evaluation of the employee, the employeroften files with the Bureau its Petition for Termination. Everyyear, the Commonwealth Court of Pennsylvania issues dozensof opinions and orders in which it addresses the issues that theparties raise through their litigation of the employer’s Petitionfor Termination.

Just a few months ago, the Commonwealth Court of Penn-sylvania issued its opinion and order in the case of Michel v.W.C.A.B. (United States Steel Corp.), 966 A.2d 643 (Pa. Cmwlth.2009). In our firm’s publication What’s Hot in Workers’ Compen-sation, my learned colleagues G. Jay Habas, Esquire and FrancisX. Wickersham, Esquire rated the Commonwealth Court’sMichel opinion as the third most important opinion that theCommonwealth Court issued in 2009. Given the frequency atwhich we pursue Petitions for Terminations against injuredworkers, Mssrs. Habas’ and Wickersham’s assessment of theCommonwealth Court’s opinion and order is accurate.

In Michel, the Commonwealth Court addressed the issueas to the competency of the employer’s medical expert’s fullrecovery opinion for the injured worker in the face of a positive,“objective” special studies test result for the injured worker thatallegedly supported his continuing complaints and disability.

It is worth examining the facts of the Michel case, many ofwhich will sound all too familiar.

On June 18, 2003, Mr. Michel sustained a work-relatedinjury to his lower back when a brace bar struck him. U.S. Steelrecognized Mr. Michel’s work injury to his lower back. U.S. Steeloffered to Mr. Michel a sedentary duty job, which he accepted.Thus, U.S. Steel reduced Mr. Michel’s weekly total temporary disability benefits rate to a weekly partial disability benefits rate.

On September 30, 2003, just three months after his workincident, U.S. Steel’s medical expert, the board certified orthope-dic surgeon Michael Seel, M.D., evaluated Mr. Michel. As part ofhis evaluation of Mr. Michel, Dr. Seel reviewed the results of theMRI, bone scan, and CT myelogram studies that Mr. Michelunderwent to his lumbar spine. Dr. Seel found that the results ofthe studies of Mr. Michel’s lumbar spine were normal, and Dr.Seel concluded that as of September 30, 2003, Mr. Michel hadrecovered completely from the work-related strain to his lumbarspine. Based upon Dr. Seel’s conclusions, U.S. Steel filed with theBureau its Petition for Termination against Mr. Michel.

Of course, Mr. Michel begged to differ, and in defense of U.S.Steel’s Petition for Termination, Mr. Michel presented the boardcertified physiatrist Hong Shi, M.D. Dr. Shi testified that Mr.Michel suffered from left sacroiliac dysfunction and chronic backpain, and Dr. Shi offered that Mr. Michel cannot return to work.


Pennsylvania—Workers’ Compensation

IMPORTANT VICTORY: “THE EMPLOYER, ARMED WITH A SOLIDIME, DEFEATS THE INJURED WORKER WHO UNDERWENTSURGERY TO HIS LOWER BACK AFTER POSITIVE SPECIAL

STUDIES TEST RESULTS REVEALED ABNORMALITY”By Lisa D. Eldridge, Esq.*

* Lisa is a shareholder and works in our Philadelphia, Pennsylvania, office. Shecan be reached at (215) 575-2701 or [email protected].

● The Commonwealth Court of Pennsylvania assesses, again, an Employer’s burden of proof for itspetition for termination against its injured employee.

● The Commonwealth Court believes that the WCJ can accept the opinion of the employer’s expertorthopedic surgeon that the employee has recovered completely from his work-related injury to hislower back over the opinion of the employee’s expert neurosurgeon, who operated on the employee’slower back two times, based upon the employee’s positive discogram tests results, related the employee’scondition to his work incident, and disabled the employee.

● The Commonwealth Court holds that positive special studies tests results for an employee do notrender automatically the employer’s medical expert’s opinion incompetent and that the WCJ remainsfree to resolve evidentiary and factual issues.

KEY POINTS:

Lisa D. Eldridge


Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

IT IS NOW POSSIBLE(continued from page 27)

In summary, Justice Saylor and the majority of the SupremeCourt affirmed the decision of the Superior Court. (The lone dissenter, Justice Greenspan, concurred with the ultimate decisionof the Majority, but not their reasoning.)

The Supreme Court held that the parties to a Release agreement should be able to express their true intent within thelanguage of the Release itself and effectuate the language in theRelease, whether that Release involved joint tortfeasors or principals/agents, thus disapproving of the holding in Pallante.The Majority minimized the difference between joint andseveral liability and vicarious liability, noting that with eitherform of liability, any one defendant (whether a joint tortfeasor,principal, or agent) could be held responsible for 100 percent ofthe damages awarded by way of legal imputation. This weakenedthe Mamalis opinion by demonstrating that there was littlereason to distinguish joint and several liability and vicariousliability in the settlement context.

The Supreme Court further reasoned that each judicialopinion should be interpreted based upon the specific facts ofthat case. Therefore, the Mamalis opinion, involving one agent

and one principal, did not constitute controlling authority to themore complex situation involving the release of a principal andan express reservation of rights clause to pursue claims againstthe agent in a medical malpractice case with multiple agents andprincipals. Matters of medical malpractice, as noted by theSupreme Court, often involve multiple agents, principals, pri-vate and governmental organizations, as well as issues of seriousbodily injury and death. Therefore, rigidly enforcing the Mamalisopinion in these complex medical malpractice cases does notserve the interest of justice. This is especially so when, as in thepresent matter, the party to be released as a matter of law is notthe party alleged to have been directly negligent. Furthermore,the Supreme Court agreed with Maloney that enforcing such arigid rule would impede settlements and undermine public policy which favors the voluntary compromise of claims, anddisagreed with Dr. Prendergast’s argument that such a rulingwould expose him to excessive liability. The Majority noted thatother provisions in the Release itself, including the primary-limits, pro-rata carve out, and hold-harmless provisions, actuallyinsulated Dr. Prendergast from undue exposure and granted himcredit for the amount of his principal’s settlement. ★

ADDRESSING MALFUNCTION THEORY (continued from page 29)

The Pennsylvania Supreme Court granted review in Barnish toaddress the issue left unresolved by the plurality in Kuisis regardingthe significance of a product’s prior successful use on a plaintiff ’sability to withstand summary judgment in a malfunction theorycase. The Barnish Court explained that, in a case proceeding underthe malfunction theory, “a plaintiff ’s acknowledgment of prior suc-cessful use undermines the inference that the product was defectivewhen it left the manufacturer’s control.” The Court refused to con-clude, however, “that the prior successful use of the product, in anof itself, dooms a plaintiff ’s ability to present a prima facie case forstrict product liability under the malfunction theory” and, instead,recognized that “a product can perform successfully for years andyet still be defective.” In order to survive summary judgment, “aplaintiff who admits that the product functioned properly in thepast must present some evidence explaining how the product couldbe defective when it left the manufacturer’s control and yet stillfunction properly for a period of time.” In the underlying case, forexample, the Court noted that the plaintiffs could have suggested

that, while other sensors in the system had functioned properly inthe past, the sensors at issue in the 2001 fire had never been calledinto action. Or, a plaintiff could present evidence of a defect at thetime of delivery by “demonstrating that the product at issue failedbefore the expiration of its expected lifespan.” Because no such evi-dence was presented in the Barnish case, the Court affirmed thedecision of the Superior Court, which affirmed the trial court’sgrant of summary judgment to the spark detection manufacturer.

In short, to make out a prima facie case under the mal-function theory where a product has performed successfully inthe years leading up to the alleged “malfunction,” a plaintiffmust adduce some evidence, direct or circumstantial, toexplain how the product could function properly and yet stillbe defective at the time of delivery. In the absence of such evi-dence, a plaintiff cannot meet the required element of a strictliability claim that the product was defective when it left themanufacturer’s control, and the defendant manufacturer isentitled to entry of judgment as a matter of law. ★

SET-OFFS AND SETTLEMENTS (continued from page 30)

Defendants may also consider asserting as new matter anaverment that any damages award be reduced by any UIM settle-ment amount. In those cases where early UIM settlement occurs,this UIM “credit” should be raised during settlement negotiationsas the UIM settlement may greatly reduce a plaintiff ’s potential

recovery against the tortfeasor defendant.Amanda Pusl filed a Petition for Allowance of Appeal with

the Pennsylvania Supreme Court on October 23, 2009. Thepetition remains pending as of the date of this publication. ★

IMPORTANT VICTORY(continued from page 31)

The Workers’ Compensation Judge granted U.S. Steel’sPetition for Termination.

Mr. Michel filed with the Workers’ Compensation AppealBoard (“Appeal Board”) his Appeal of the Workers’ Compen-sation Judge’s Decision and his request for a re-hearing so thathe could present to the Workers’ Compensation Judge “after-acquired” evidence in the form of information that his neurosurgeon, Peter Gerszten, M.D., operated upon his lumbarspine six months after the Workers’ Compensation Judgeissued his decision and order.

The Appeal Board vacatedthe Workers’ CompensationJudge’s decision and returnedto the Workers’ Compensa-tion Judge U.S. Steel’s Peti-tion for Termination. TheAppeal Board instructed theWorkers’ Compensation Judgeto accept Mr. Michel’s addi-tional evidence and to acceptany evidence that U.S. Steeldesired to present to counter Mr. Michel’s addi-tional evidence.

At this juncture, itappears that U.S. Steel wouldhave a difficult time success-fully pursuing a second timeits Petition for Terminationagainst Mr. Michel. We haveall experienced the devastat-ing effects that an injuredworker undergoing surgeryhas upon the employer’s Peti-tion for Termination.

Certainly, the additionalfacts that Mr. Michel presented to the Workers’ Compensa-tion Judge boded in his favor. Mr. Michel testified, again,before the Workers’ Compensation Judge and presented Dr.Gerszten, his neurosurgeon. Dr. Gerszten indicated thatbecause a June 14, 2004, discogram of Mr. Michel’s lumbarspine was positive for annular tears at L4-5 and L5-S1, heoperated upon Mr. Michel’s lumbar spine on January 18,2005, (intradiscal electrothermy) and on July 5, 2005 (spinalfusion). Dr. Gerszten related the presence of the angular tearsin Mr. Michel’s lumbar spine to his June 18, 2003, workincident, and Dr. Gerszten did not clear Mr. Michel toreturn to work.

Mr. Michel presented to the Workers’ CompensationJudge an additional medical witness, but the June 14, 2004,

discogram’s results and Dr. Gerszten’s testimony representedthe main thrust of Mr. Michel’s defense to U.S. Steel’s Peti-tion for Termination.

U.S. Steel called, again, Dr. Seel who re-evaluated Mr.Michel and reviewed all of his updated medical records andspecial studies reports. Dr. Seel reiterated that on June 18,2003, Mr. Michel sustained a strain to his lumbar spine andemphasized that the annular tears that the discogramrevealed were present in Mr. Michel’s lumbar spine and thesubsequent procedures that Dr. Gerszten performed upon

Mr. Michel’s lumbar spinewere not related to Mr.Michel’s June 18, 2003,work incident. Dr. Seel saidthat the subsequent proce-dures that Dr. Gerszten per-formed upon Mr. Michel’slumbar spine did notimprove Mr. Michel’s condi-tion, thus, demonstratingthat Mr. Michel suffers froma non-organic problem.

On cross-examination,Dr. Seel expressed that hebelieves that a discogram,even when performed prop-erly, is a subjective testbecause the patient stateswhen he experiences anincrease or decrease in painand whether he experiencespain concordant with hiswork injury symptoms.

Again, at this point, wepause for a brief moment toobserve that on many occa-

sions, the employer has lost its Petition for Termination oncepositive special studies test results are generated for the injuredworker and the injured worker undergoes surgery to an affectedarea in response to the positive special studies test results.

However, for Michel, the Workers’ Compensation Judgegranted U.S. Steel’s Petition for Termination. The Workers’Compensation Judge noted that Dr. Seel examined Mr.Michel three months after his work incident and that fromhis examination of Mr. Michel, Dr. Seel could not find anyobjective evidence to support Mr. Michel’s complaints. TheWorkers’ Compensation Judge commented that Dr. Seel noted that Mr. Michel responded non-anatomically to distractive maneuvers. Finally, the Workers’ Compensation Judge


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Vol. 16, No. 1 March, 2010


Vol. 16, No. 1 March, 2010

recognized that Mr. Michel has not improved, despite under-going two operations to his lumbar spine, and that the Worker-s’ Compensation Judge felt that this fact supports Dr. Seel’sopinion that a non-organic source causes Mr. Michel’s pain.

The Appeal Board affirmed the Workers’ CompensationJudge, thus, Mr. Michel filed with the CommonwealthCourt his Petition for Review.

Mr. Michel argued to the Commonwealth Court thatthe positive discogram study result for his lumbar spine, anobjective test, supported his complaints and undermined Dr.Seel’s opinions, rendering Dr. Seel’s opinions incompetent.

Before reviewing the case before it, the CommonwealthCourt repeated its holding from its 1997 opinion and orderfor Udvari v. WCAB (US Air, Inc.), 705 A.2d 1290 (Pa.Cmwlth. 1997), “For a termination proceeding, the burdenof proof is on the employer to establish that the claimant’swork-related injury has ceased. The employer meets this burden when its medical expert unequivocally testifies that inhis opinion, within a reasonable degree of medical certainty,the claimant is fully recovered, can return to work withoutrestrictions, and that there are no objective medical findingswhich either substantiate the claims of pain or connect themto the work injury.”

The Commonwealth Court then went on to examinethe Pennsylvania and out-of-state case law that Mr. Michelcited to support his contention that Dr. Seel could not haveprovided persuasive testimony in light of his positivediscogram findings.

The Commonwealth Court summarized the issue forthis matter as a dispute about the significance of Mr. Michel’sdiscogram findings. The Commonwealth Court commentedthat Dr. Gerszten attributed to Mr. Michel’s discogram resulta great amount of weight, while Dr. Seel did not. The Commonwealth Court acknowledged that it believes that, inpart, the discogram is an objective test, but the Common-wealth Court also acknowledged that it accepted Dr. Seel’sexplanation as to why a discogram is a subjective test (depen-dent upon when the patient states when he is in pain andwhen the pain is concordant his work injury symptoms). The Commonwealth Court said that it agreed with Dr. Seel’s explanation and accepted that, in part, a discogram is asubjective test.

The Commonwealth Court found that Dr. Seel’s opinionabout the condition of Mr. Michel is not based on inaccu-rate or false information, thus, the Workers’ CompensationJudge could explain why he accepted Dr. Seel over Dr.Gerszten in order to grant U.S. Steel’s Petition for Termi-nation. The Commonwealth Court found that the Michel

case turns, ultimately, on the Workers’ CompensationJudge resolving a factual issue and resolving conflicts in the evidence.

The Commonwealth Court’s opinion and order forMichel offers to defense practitioners guidance as to themanner by which we must proceed with our Petitions forTermination when encountering an injured worker whoallegedly has positive special studies test results to supporthis ongoing complaints. Obviously, the key element for theemployer’s successful pursuit of its Petition for Terminationis the quality of its independent medical evaluation of theinjured worker.

The employer should arrange for its IME of the injuredworker with the appropriate board certified specialist as soonas it is practically possible. For Michel, Dr. Seel evaluated Mr.Michel within three months of the date of his work incident.Dr. Seel actually conducted his initial evaluation of Mr.Michel well before Mr. Michel’s expert, Dr. Gerszten, evalu-ated him for the first time.

The employer must send to its IME physician all of theinjured worker’s medical records and special studies testsresults and instruct its IME physician to address their con-tent and how their content relates to the injured worker’swork incident, injuries, and complaints. For Michel, Dr.Seel reviewed thoroughly all of Mr. Michel’s records, accu-mulated both before and after the Appeal Board’s remandto the Workers’ Compensation Judge of U.S. Steel’s Petitionfor Termination. Dr. Seel described how his physical find-ings for Mr. Michel and Mr. Michel’s special studies testsresults were not consistent with the annular tears that thepositive discogram revealed were present in Mr. Michel’slumbar spine.

Finally, the employer must provide to its IME physicianall other pertinent information, such as Bureau documentsand Judges’ decisions that set for the nature of the injuredworker’s accepted problems, surveillance results of theinjured worker, and complete descriptions of the injuredworker’s positions so that the IME physician may review thisadditional information to gain a full picture of the injuredworker’s physical state.

The Commonwealth Court’s Michel opinion and orderillustrates that an employer’s Petition for Terminationbased upon a comprehensive IME of the injured workercan defeat the injured worker’s defense that he remains disabled because a special studies test result supports hiscontinuing complaints. ★

IMPORTANT VICTORY(continued from page 33)

FIRM BACK GROUND AND STATE MENT OF PUR POSEMarshall, Dennehey, Warner, Coleman & Goggin, a professional corporation, was founded in 1962. Since that time, our

law firm has realized substantial growth in response to our continually expanding client base. We are exclusively a defensefirm, and our pro fes sion al practices encompass a wide spectrum of litigation matters. We apply business discipline to thepractice of law with resulting cost savings to our clients.

We are over 400 attorneys strong and have nineteen offices strategically located in Pennsylvania, New Jersey, Delaware,Ohio, Florida, and New York. Devoted to defense alone, our firm consists of a number of litigation practice groups, including:

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PROFESSIONAL LIABILITY DEPARTMENT:Philip B. Toran, Esquire—Director1845 Walnut Street, Philadelphia, PA 19103(215) 575-2813 • Fax (215) 575-0856E-Mail: [email protected] Advocacy & Post-Trial Practice GroupArchitectural, Engineering, & Construction Defect Practice GroupConsumer & Credit Law Practice GroupDefective Drywall Practice GroupEnvironmental & Toxic Torts Practice GroupInsurance Coverage & Bad Faith Practice GroupLife, Health & Disability Practice GroupProfessional Li a bil i ty Prac tice GroupPublic Entity & Civil Rights Litigation Prac tice GroupReal Estate E & O Practice GroupSecurities & Investments Professional Liability Practice GroupTechnology, Media & Intellectual Property Practice Group

WORKERS’ COMPENSATION & EMPLOY-MENT PRACTICES DEPARTMENT:Peter S. Miller, Esquire—Director1845 Walnut Street, Philadelphia, PA 19103(215) 575-2610 • Fax (215) 575-0856E-Mail: [email protected]

Surveys of the nation’s largest firms con sis tent ly show our firm to be a leader in mi nor i ty hiring and advancement.Our continued dynamic growth and the ex pan sion of our client base constitute the best evidence that we are

effectively meeting our cli ents’ business needs and ex pec ta tions. We are very proud of our success. We will striveto continue to be part of yours.

Defense Digest

Vol. 16, No. 1 March, 2010

ABOUT OUR PUBLICATIONOur experience confirms that effective risk and claims management must be founded upon timely in for ma tion.

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This publication is offered to furnish our views on current court decisions and other matters that may be of in ter est to our clients on a variety of topics not spe cif i cal ly related to any particular claim. This publication is pro vid edfree of charge and with out a pro fes sion al relationship to any particular person, entity, or claim. The views ex pressed arethose of the authors and are not to be construed or used as professional advice.

Our firm welcomes inquiries, comments, and suggestions regarding this publication or other ques tions, whichmay be directed to:

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