Spring Issue 2004
COURT GRANTS SUMMARY JUDGMENT IN MOLD DAMAGE CASE
Doe v. State Farm Insurance Company - Plaintiff alleged that upon returning home from an extended absence, she discovered that her home and personal property had been damaged by mold. After she filed a claim against her homeowner's policy, State Farm paid for damages to the structures of plaintiff's home, but denied coverage for damage to the plaintiff's personal property on the basis that the damage to her personal property was not caused by a covered peril under the policy. Although plaintiff produced two expert reports purporting to establish that her house contained elevated levels of mold, neither expert report offered an opinion as to the cause of these elevated levels. Plaintiff testified at her deposition that, in her opinion, the cause of the mold was a leak from a toilet, which would have been a covered loss. The woman watching her house while she was away testified that during plaintiff's absence she found that the water in the powder room had been shut off. When she turned the water on, a small puddle formed that she wiped up with a rag. Defense experts opined that the mold contamination of the plaintiff's home could not have resulted from a leak on the powder room floor. They attribute the mold growth to a variety of factors having nothing to do with the toilet leak, including, inter alia, damp basement walls after rainfalls, the presence of a greenhouse attached to the house, and the closed-up condition of the house during the plaintiff's two month absence.
State Farm filed a motion for summary judgment and argued that plaintiff herself was not qualified to render an opinion as to the cause of mold infestation. State Farm contended, therefore, that because plaintiff's expert failed to address causation summary judgment should be granted. Judge Legrome Davis of the United States District Court for the Eastern District of Pennsylvania granted summary judgment. He reasoned that "without a contrary expert conclusion, plaintiff fails to adequately establish that a numerated specified peril under her homeowner's policy caused the mold infestation and resulting property damage."
For further information, please contact Louis E. Bricklin, Esquire
Telephone: (215) 665-3400.
SUMMARY JUDGMENT ON PRODUCTS LIABILITY CLAIM WHERE DEFENDANT PURCHASED PRODUCT MANUFACTURER'S ASSETS AT BANKRUPTCY SALE
Mitchell v. Powermatic Corporation – On June 8, 2000, Michael Mitchell sustained a traumatic amputation of several fingers while operating a woodworking machine known as a "shaper". The shaper was manufactured in 1993 by the "Powermatic Division of DeVlieg-Bullard, Inc." In 1999, DeVlieg-Bullard, Inc. declared bankruptcy. At that time, the assets of its Powermatic Division were sold at bankruptcy sale subject to a bankruptcy court order that the purchaser was buying the assets only, and was not assuming any of the liabilities of DeVlieg-Bullard.
The assets, including the "Powermatic" name, were assigned by the purchaser to a newly formed corporation, "Powermatic Corporation" which was doing business under that name and using the Powermatic tradename when Mitchell was injured. He brought suit alleging that the shaper was defectively designed and that Powermatic Corporation was liable for the defect under the "product line" rule adopted in 1981 by the Pennsylvania Superior Court in Dawejko v. Jorgensen Steel Company. That rule generally provides that when one corporation purchases all or substantially all the manufacturing assets of another corporation and undertakes essentially the same manufacturing operations, the purchasing corporation is strictly liable for injuries caused by defects in units of the same product line, even if the offending product actually was manufactured by the selling corporation. As DeVlieg-Bullard, Inc. had been dissolved as part of the bankruptcy process, Mitchell brought suit against WMH Tool Group, Inc., a corporation into which Powermatic Corporation had been merged in 2001. WMH continued to make use of the Powermatic name on shapers that it sold. It was agreed that if Powermatic Corporation would have been liable for the injuries, that liability now was the responsibility of WMH.
WMH moved for summary judgment. It contended that under the "product line" rule as interpreted by Pennsylvania courts, a prerequisite for application of the rule was that the purchase of the manufacturing corporation's assets had to have been the cause of the demise of the manufacturing corporation. Most typically the situation arises where a company not in financial distress contracts to sell its assets including its trade name and – as part of the same deal – obligates itself to go out of business. Since in such circumstances, persons injured by equipment manufactured by the now defunct corporation would be left without a remedy, the Superior Court in Dawejko held that under such circumstances the new corporation, having contracted for the demise of the old corporation, would be responsible for its product liability claims. The Superior Court also pointed to the alleged inequity of permitting the new corporation to trade under the name of the old one, benefitting from its brand name, while not being responsible for defects in the brand's products.
In Mitchell, however, the purchase of the assets was not the cause of the demise of DeVlieg-Bullard, as that corporation was already in bankruptcy before any assets were purchased. As a result, the United States District Court held that plaintiff could not prove that Powermatic Corporation and its successor, WMH, were the cause of the plaintiff's loss of remedy against DeVlieg-Bullard. Accordingly, summary judgment was granted in favor of WMH, despite the fact that the company continues to sell shapers using the "Powermatic" brand.
For further information, please contact Joel Paul Fishbein, Esquire
Telephone: (215) 665-3307.
SUPERIOR COURT - HOMEOWNERS POLICY - "ACTUAL CASH VALUE" MAY ONLY INCLUDE DEPRECIATION IF POLICY SPECIFIC
Kane, et al v. State Farm, et al. - A group of homeowners who had sustained property damage losses sued several insurers and styled their case as a class action. They alleged that when partial losses were sustained, the insurers were illegally deducting depreciation even though their policies did not properly explain that "actual cash value" included depreciation as opposed to replacement cost reimbursement. Defendant insurers contended that the policies in question were replacement cost policies and pointed out that their policies adequately explained that the holdback or deduction for depreciation would be paid, and the insured made whole, so long as repairs were completed or at least undertaken. Thus, according to the insurers, the issue was one of timing only.
The Court of Common Pleas of Bucks County sustained preliminary objections filed by all insurers. A Superior Court panel on review upheld the trial court's ruling except with respect to one insurer, Erie. The appellate court held that following the Pennsylvania Supreme Court's holdings in Fedas v. Insurance Co. of the State of Pennsylvania (1930) and Farber v. Perkiomen Mutual Insurance Co. (1952), insurers cannot deduct depreciation in a partial loss situation when the insured is promised "actual cash value" unless the policy clearly provides to the contrary. Reviewing the language of the nine insurers' policies, the Court found that four of them contained a definition of actual cash value which was sufficient. While four other companies' policies did not contain such a definition, read as a whole the policies made clear that the term "actual cash value" could not be construed as equivalent to "replacement value." Only Erie's policy did not provide a clear and unambiguous provision for deduction of depreciation according to two of the panel members, although one judge would have found Erie's policy sufficient as well. Bad faith and consumer protection claims were also dismissed as to all insurers except Erie. Erie has filed a petition for allowance of appeal to the Pennsylvania Supreme Court which the plaintiffs have opposed.
For further information, please contact Moira Clare Duggan, Esquire.
Telephone: (215) 665-3305
JURY TRIAL - AUTOMOBILE LIABILITY - DEFENSE VERDICT
Wilhelm v. Miller - Plaintiff and defendant were involved in a motor vehicle collision on Manheim Pike in Lancaster, Pennsylvania. The collision occurred near an intersection where defendant had been traveling southbound and was stopped in traffic. After waiting a short time, he pulled into the center turn lane, with the intent of driving to where southbound Manheim Pike widened into two lanes, a left-turn lane and a travel lane. Defendant intended to make a left turn and entered the turn lane approximately two hundred feet from the intersection. In the meantime, plaintiff was stopped at a parking lot on the east side of Manheim Pike, closer to the intersection. Vehicles stopped on southbound Manheim Pike had left a space open at the parking lot for vehicles to turn in and out of the parking lot.
Plaintiff testified that a truck was stopped immediately in front of the parking lot driveway. According to the plaintiff, the truck driver waved her out to make a left turn on northbound Manheim Pike. Plaintiff testified at her deposition that she could not see to the left of that truck, nor to the right of the vehicle on the other side of the driveway, as she entered the turn lane. When she could finally see around the truck, she saw the defendant coming and tried to accelerate out of his way. The rear fender on the driver's side of her vehicle was struck by defendant's vehicle as plaintiff tried to clear the center turn lane. Defendant, on the other hand, testified that the plaintiff suddenly and without warning pulled into the turn lane, causing an impact.
After the accident, plaintiff treated with numerous physicians for complaints of headaches as well as neck, upper back, lower back, and leg pain. Approximately sixteen months after the collision she started treatment with an acupuncturist, who was the expert witness who testified on her behalf at trial. (The acupuncturist was also a medical doctor and had been plaintiff's family physician prior to the collision.) The acupuncturist testified that plaintiff sustained soft tissue injuries as a result of the impact but that she had a guarded to good prognosis. Plaintiff testified that she stopped working due to back and leg pain.
The trial was originally held on April 23, 2003, before the Honorable Lawrence F. Stengel of the Lancaster County Court of Common Pleas. The first trial resulted in a mis-trial after the plaintiff spoke to members of the jury during the lunch break. The second trial was held before the Honorable Paul K. Allison. Plaintiff and defendant both testified at the trial. Plaintiff also produced a witness who allegedly observed the truck driver wave plaintiff out. The witness also testified that the defendant was driving down the center lane, looking to his left, immediately prior to the collision. The witness was incorrect in various other portions of his testimony, however, such as the size and model of the truck that waved the plaintiff on. Plaintiff's physician was cross-examined on the fact that he had never reviewed any of the treatment notes from the physicians who treated the plaintiff the first sixteen months after the incident. Moreover, plaintiff had a long history of prior neck and back injuries, for the ten years prior to this incident. The physician was unaware of the years of prior chiropractic treatment.
After a two day trial the jury found the defendant was negligent, but that his negligence was not a substantial factor in causing the plaintiff's alleged injuries. No post-trial motions were filed.
Plaintiff's attorney--Jerome Finefrock, Esquire
Defense attorney–Kevin Blake, Esquire
For further information, please contact Kevin Blake, Esquire.
Telephone: (610) 272-2602
JURY TRIAL - DOG FIGHT - TORN MEDIAL MENISCUS AND ANTERIOR CRUCIATE LIGAMENT OF KNEE - $15,000 VERDICT
Pagano v. Fattah -- George Pagano claimed that he was walking his dog in Pennypack Park when an unleashed dog accompanied by defendant, Mary Abdelfattah, attacked his dog and then bit him on the right ankle. This caused him to fall and twist his right knee. Due to torn ligaments in the knee, he underwent an arthroscopy and suffered permanent weakness and disability.
Mr. Pagano brought suit against Ms. Abdelfattah and her brother, Victor Bebb, who owned the dog. The case was tried before the Honorable Ricardo Jackson of the Philadelphia County Court of Common Pleas and a jury. At trial, the court granted Mr. Bebb's motion for a compulsory nonsuit because there was no evidence that he was aware that the dog had vicious propensities or that the leash he provided was defective.
Ms. Abedelfattah disputed that she was negligent and also that plaintiff was injured in the incident. She and her two nieces, then ages 9 and 11, testified that Mr. Pagano was not bitten and did not fall to the ground. Ms. Abdelfattah also testified that she had walked the dog, Rufus, on prior occasions without incident and that she was using a leash on the day of the alleged bite.
However, Ms. Abdelfattah stated that the leash handle broke and that after the dog got away he was stung by bees multiple times which agitated him. Therefore, Ms. Abdelfattah could not hold onto his collar or leash. Before Ms. Abdelfattah could gain control of the dog again, the fight with Mr. Pagano's dog began. Ms. Abdelfattah and her nieces were also stung by bees.
Plaintiff's expert, Dr. Mark Avart, an orthopedist who had not treated the plaintiff but who examined him on one occasion testified that both tears in his knee -- of the medial meniscus and the anterior cruciate ligament – were related to the incident. Defendant's expert, Dr. Alexander Sapega, a knee expert testified that the medial meniscus tear was not related because it was degenerative, but that assuming plaintiff's version of the incident was true; the anterior cruciate ligament tear was caused by the incident. However, he further testified that the arthroscopy was performed because of the medial meniscus tear -- not the anterior cruciate ligament tear which was not diagnosed until the surgery.
Defendant also argued that according to Dr. Cohen, plaintiff's family doctor, plaintiff had recovered by November 23, 2001–two years after the incident. Dr. Cohen examined plaintiff shortly after a motor vehicle accident of that date and wrote in a report to plaintiff's counsel that plaintiff had no orthopedic complaints and had experienced a good recovery from the dog incident of October 3, 1999. Plaintiff's surgeon, Dr. Nazarian, also wrote a report to plaintiff's counsel stating that Mr. Pagano had an excellent prognosis with no permanent medical condition in his knee.
After a five day trial, the jury returned an award in favor of the plaintiff in the amount of $15,000. Prior to trial the demand had been $100,000. The defendants had not made an offer.
Plaintiff's Attorney -- Michael McDermott, Esquire
Defense Attorney -- Victoria M. Komarnicki, Esquire
Plaintiff's Medical Expert-- Dr. Mark Avart
Defense Medical Expert – Alexander Sapega, M.D.
For further information, please contact Victoria M. Komarnicki, Esquire.
Telephone: (215) 665-3303
Bennett, Bricklin & Saltzburg LLP will be presenting a seminar entitled "Uninsured/Underinsured Motorist Law Update 2004" on Thursday, April 22, 2004 at the ACE Center on Ridge Pike in Lafayette Hill. Invitations will be mailed shortly. If you would like to attend, please call Dawn Drapczynski at (215) 665-3317 or e-mail her at Drapczynski@bbs-law.com