2017 • Vol. 4

SCOTUS Decision Proves Appellate Practice A Minefield

Horizontal Exhaustion Applies Before Excess Policies Are Triggered

Medical Malpractice Claim Not Barred By Statute Of Repose

th Anniversary

A summary of significant recent developments in the law focusing on substantive issues of litigation and featuring analysis and commentary on special points of interest. 2017 • Vol. 4

FEATURES ARTICLES 3 Sidebar PPELLATEA 6 2018 Illinois Super Lawyers 12 2017 DRI Annual Meeting: Appellate Advocacy and Rising Stars Committee CLE Panel Presentation Highlights 8 CM News by Melinda S. Kollross 10 On The Litigation Front EMPLOYMENT LAW 29 Case Notes 13 Common Law Claim For Intentional Infliction Of Emotional Distress In Sexual Harassment Case Preempted By Illinois Human Rights Act Report Staff by Brian J. Riordan and Kathleen M. Klein Editor-In-Chief LIABILITY INSURANCE COVERAGE Melinda S. Kollross 15 Manufacturing And Selling Are But One Occurrence Assistant Editor by Don R. Sampen Joseph J. Ferrini 17 Horizontal Exhaustion Applies Where Excess Policies Require Exhaustion Of All Underlying Coverage Before Senior Advisor and Excess Polices Are Triggered Editor Emeritus by Henry T.M. LeFevre-Snee Edward M. Kay 19 Second Circuit Enforces Non-Cumulation Clauses Feature Commentators In Olin Corp. v. OneBeacon Am. Ins. Co. Kimbley A. Kearney by Henry T.M. LeFevre-Snee Lisa A. Hausten MEDICAL MALPRACTICE Case Notes 21 Medical Malpractice Claim Brought Under The Contributing Writers Wrongful Death Act Can Relate Back To Existing Melinda S. Kollross Claim And Is Not Barred By Statute Of Repose Paul V. Esposito by Melinda S. Kollross Joseph J. Ferrini 24 Hospital Not Vicariously Liable For Acts Don R. Sampen Of Employees Of Unrelated, Independent Clinic Under Apparent Agency Theory by Melinda S. Kollrosss The CM Report of Recent Decisions is provided as a general information source and PREMISES LIABILITY is not intended, nor should it be considered, the 27 California Supreme Court Holds Landowner Not rendition of legal advice. Please contact us to Liable For Obvious Danger It Does Not And Cannot discuss any particular questions you may have. Control © 2018 Clausen Miller P.C. by Meredith D. Stewart

2 clausen.com SIDEBAR

United States Supreme Court Decision Proves That Appellate Practice Is A Minefield Best Navigated By Savvy Appellate Practitioners by Melinda S. Kollross and Edward M. Kay

Introduction limited such extensions of time to file Melinda S. Kollross is a Clausen Miller AV® rated (Preeminent) The recent unanimous decision by a notice of appeal to only 30 days in all cases. Respondents did not object senior partner and co-chair of the the United States Supreme Court Appellate Practice Group. Specializing in Hamer v. Neighborhood Housing to this 60-day extension of time. in post-trial and appellate litigation Services of Chicago, __ U.S.__ (No. nationwide, Melinda is admitted to practice in both New York and Illinois, 16-58, Nov. 8 2017), illustrates Hamer appealed within the 60-day extension. On appeal, the United as well as the U.S. Supreme Court and once again the perilous nature of U.S. Courts of Appeals for the Third, appellate practice, for in this decision States Court of Appeals for the Sixth, Seventh, Eighth, Ninth, Tenth and the Supreme Court took to task Seventh Circuit questioned its own Eleventh Circuits. Melinda has litigated jurisdiction raising the time limit over 150 federal and state court appeals experienced federal appellate jurists and has been named a Super Lawyer and for failing “to grasp the distinction” found in FRAP Rule 4(a)(5)(C). The Seventh Circuit found that this time Leading Lawyer in appellate practice. “between jurisdictional appeal filing [email protected] deadlines and mandatory claim- limit of an additional 30 days to file processing rules.” a notice of appeal was a jurisdictional time limit. In other words, Hamer Facts was entitled to an extension of only an additional 30 days, not 60 days and Petitioner Hamer sued respondents thus Hamer's appeal filed outside this for employment discrimination. 30-day time limit deprived the court Respondents obtained summary of subject matter jurisdiction to hear judgment against Hamer on September the appeal. 14, 2015, making Hamer’s notice of appeal due by October 14, 2015. On SCOTUS Reverses October 8, 2015, before the 30-day notice of appeal deadline was about On appeal, the Supreme Court found to expire, Hamer’s counsel filed that the Seventh Circuit, like other Edward M. Kay Circuits, “tripped over” the holding is a Clausen Miller partner and co- two motions-one to withdraw as chairs the Appellate Practice Group. counsel and another for a two-month in prior decisional law that the taking He is AV® rated (Preeminent) by extension of time to file the notice of of an appeal within the prescribed Martindale-Hubbell and is a Fellow appeal so that Hamer could find new time is mandatory and jurisdictional. in the prestigious American Academy According to the Court, time periods of Appellate Lawyers. Ed has been counsel. The District Court granted chosen as a Leading Illinois Appellate both motions and extended Hamer’s are jurisdictional “only if Congress Attorney, a Super Lawyer and has over notice of appeal time from October sets the time,” because “only Congress 30 years experience in trial monitoring 14, 2015 to December 14, 2015. The may determine a lower federal court’s and post-trial/ appellate litigation District Court's extension order, subject-matter jurisdiction.” A time which he regularly brings to bear in significant cases nationwide. Ed has however, contravened Federal Rule of limit not set by Congress ranks as only prosecuted over 500 appeals nationwide. Appellate Procedure 4(a)(5)(C) which a “mandatory claims processing rule”. [email protected]

clausen.com 3 SIDEBAR

The Court held that this distinction was did not have a statutory basis, and Practice Pointer: As this decision crucial since the failure to comply with could not be treated as a jurisdictional illustrates, preserving appellate rights a jurisdictional time period deprives a time period. from either the standpoint of an Court of Appeals with adjudicatory appellant or appellee requires not authority over an appeal. Mandatory In remanding the case for further only a thorough understanding of claim-processing rules though “are consideration, the Court noted the Federal Rules, but also the federal less stern.” According to the Court, that certain issues regarding the statutes conferring and prescribing while such rules must be enforced, they enforcement of FRAP Rule 4(a)(5) jurisdiction and the cases interpreting can be waived or forfeited, unlike a (C) were unaddressed and presumably those statutes and rules. Such appellate jurisdictional rule which is subject to would be addressed upon remand: work should only be handled by no such waiver or forfeiture. trained and experienced appellate – whether respondents’ failure advocates and not by trial counsel The Court found that FRAP Rule to raise any objection in or the occasional appellate lawyer. 4(a)(5)(C) limiting extensions of time the District Court to the Further, as shown by the Court’s to file a notice of appeal in all cases overlong time extension, by remand order, appellate practitioners are usually best qualified to prevent a to just 30 days was only a claims- itself, effected a forfeiture; processing rule and not a jurisdictional forfeiture of objections to violations time period. The Court based this of appellate rules . . . savvy appellate – whether respondents could conclusion on the application of 28 counsel here would have undoubtedly gain review of the District U.S.C. 2107 which limits an extension objected to the extension of time of 60 of time to file a notice of appeal to Court’s time extension only days as a violation of FRAP Rule 4(a) only those cases where the appellant by filing their own appeal (5)(C), and if those objections were lacked notice of the entry of judgment. notice, and overruled, savvy appellate counsel According to the Court, “[f]or other would have filed a notice of appeal cases, the statute does not say how long – whether equitable from the order to preserve the right to an extension may run.” Accordingly considerations may occasion contest that order on appeal. FRAP Rule 4(a)(5)(C) prescribing a an exception to Rule 4(a)(5) 30-day extension of time to all cases (C)’s time constraint.

4 clausen.com Clausen Miller Presents Client-Site Seminars For CLE and/or CE Credit As part of our commitment to impeccable client service, we are proud to provide client work-site presentations for Continuing Legal Education (“CLE”) and/or Continuing Education (“CE”) credit. You will find available courses listed below. Please view the complete list of individual course descriptions at www.clausen.com/education/ for information regarding the state specific CE credit hours as well as course and instructor details.

Additional Insured Targeted Tender Issues And Other Emerging Trends Affecting Strategic Claims Determinations Additional Insured Targeted Tender Issues and Other Legal Considerations Affecting Strategic Coverage and Litigation Determination Alternatives to Litigation: Negotiation and Mediation An Ethical Obligation or Simply an Option?: Choose Your Own Adventure When Adjusting a First Party Property Claim An Insider’s Guide To New York Practice Appellate and Trial Protocols for Resolving Coverage, Casualty and Recovery Issues Facing the Insurance Claims Professional Attorney-Client Privilege and Work Product Doctrine Bad Faith Law and Strategy for the Claims Professional and Appellate Protocols for the Resolutions of Such Claims

Breaking Bad Faith, Failure To Settle Within Policy Limits, And Strategy For The Claims Professional Builders Risk Insurance: Case Law, Exclusions, Triggers And Indemnification Coverage and Trial/Appellate Litigation— Strategies Affecting Coverage Determinations Coverage Summer School: “Hot” Insurance Topics for “Cool” Claims Handling Deep Pockets: Prosecuting & Defending Government Liabilities— US & Municipalities Developments In Property Insurance Coverage Law Jumping Over the Evidentiary Hurdles to Victory Miscellaneous Issues of Interest Relating to Property Insurance Negotiation: Methods For Determining Settlement Values And Strategies For Acquiring Movement Recent Developments In Insurance Coverage Litigation Recent Trends In Bad Faith And E-Discovery Issues And Protocols To Resolve Same For The Claims Professional Subrogation: Initial Recognition, Roadblocks and Strategies Targeted Tenders, Suits Against Employers, And Other Legal Issues Facing The Claims Professional Tips And Strategies For Claims Professionals: The Affordable Care Act, Unilateral Settlement Agreements, And Ethics In Claims Handling Tips And Strategies For The Claims Professional: What You Need To Know About Medicare Reporting, The Affordable Care Act, Targeted Tenders, And Unilateral Settlement Agreements If you are interested in a course or topic not currently listed in our available courses, please contact the Clausen Miller Marketing Department at [email protected] clausen.com 5 Illinois Super Lawyers 2018

Paul V. Esposito Edward M. Kay Kimbley A. Kearney

Melinda S. Kollross Amy R. Paulus Don R. Sampen

Illinois Rising Star 2018

William C. Dickinson

6 clausen.com Illinois Super Lawyers Paul V. Esposito Melinda S. Kollross Appellate Appellate Paul is senior counsel for Clausen Miller P.C. and brings to our clients over Melinda is a senior partner and co-chair of Clausen’s Appellate Practice Group, 35 years of experience in appellate and trial courts throughout the nation. specializing in post-trial and appellate litigation nationwide. She is AV® rated He has been the primary handling attorney in appeals brought in the United AV® Preeminent™ by Martindale-Hubbell. Melinda has litigated more than States Supreme Court, the United States Courts of Appeals for the Third, 150 appeals in state and federal reviewing courts, including participation in two Fifth, Sixth, Seventh, Eighth and Tenth Circuits, and supreme and appellate appeals before the United States Supreme Court. Melinda has a winning record in courts in numerous states. Those appeals have covered a wide range of appeals, she has argued before the Illinois Supreme Court, and has been named federal and state issues including constitutional, procedural, personal injury, an Illinois Super Lawyer and a Leading Lawyer in Appellate practice. Her work transportation, employment, insurance coverage, and general commercial spans all areas of firm practice, including commercial, first-party property, liability law. Among his recent accomplishments, Paul was successful in obtaining the insurance coverage and liability defense. reversal of a multi-million dollar punitive damages award. Amy R. Paulus Edward M. Kay Insurance Coverage Appellate Amy is the Liability Coverage and Reinsurance Practice Group Leader, a Ed is a Clausen Miller senior partner and co-chair of the Appellate Practice Group. senior shareholder and member of the Board of Directors of Clausen Miller. He is rated AV® Preeminent™ by Martindale-Hubbell and is a Fellow in the Amy has built a national reputation in all areas of liability insurance coverage prestigious American Academy of Appellate Lawyers. Ed has over 30 years law, professional liability, employment practices, transportation, claims handling experience in trial monitoring and post-trial/appellate litigation which he regularly issues and best practices, bad faith, excess insurance, intellectual property, brings to bear in significant cases nationwide. Ed has prosecuted over 500 cyber losses, and reinsurance matters and arbitrations. Demonstrating her appeals nationwide. commitment to, and deep understanding of, the insurance industry, Amy is a CPCU (Chartered Property Casualty Underwriter). She is also AV® PreeminentTM rated by Martindale-Hubbell. Her AV® rating is a reflection of her expertise, Kimbley A. Kearney experience, integrity and overall professional excellence. Amy has earned Civil Litigation: Defense designations as a Super Lawyer, Leading Lawyer, Top Women Attorneys, and was named a Top Civil Defense Lawyer in Illinois. In addition, Amy is a Fellow of Kim is a partner with Clausen Miller P.C. and is AV® Preeminent™ rated by the prestigious Litigation Counsel of America Trial Lawyer Society. Martindale-Hubbell. She has successfully litigated cases involving catastrophic personal injury, wrongful death, property loss, class actions, mass toxic tort, employment discrimination, insurance coverage and commercial disputes in trial Don R. Sampen and appellate courts throughout the United States. Kim is a Proctor in Admiralty and a former Member of the Board of Directors of the Maritime Law Association Insurance Coverage of the United States. She received her Juris Doctor, cum laude, and M.B.A. from Don has over 30 years of trial and appellate experience in various areas, Tulane University. including insurance coverage and commercial litigation. Don is a magna cum laude graduate of Northwestern University College of Law, where he was Executive Editor of the Northwestern Law Review, and is currently an Adjunct Professor at Loyola University College of Law teaching a course in Insurance Law. Don is also a prolific writer, authoring articles and book chapters in various areas of the law, including antitrust and whistleblower litigation. He also writes a column in the Chicago Daily Law Bulletin which appears twice monthly on insurance coverage matters. He has maintained an AV® Preeminent™ rating (highest possible peer review rating for legal ability and ethical standards) with Martindale-Hubbell for 25 years.

Illinois Rising Stars

William C. Dickinson Civil Litigation: Defense Will is a partner in the Chicago office of Clausen Miller PC. He is an experienced litigator whose practice includes commercial litigation, medical malpractice, products liability, and construction law. Will has successfully defended clients in diverse areas of law, including claims for breach of contract, wrongful death and property damage, obtaining summary judgments and dismissals with prejudice on their behalf. In addition to his success in the courtroom, he has as achieved the positive resolution of cases through mediation, arbitration, and settlement negotiations.

clausen.com 7 CM NEWS

CLAUSEN MILLER ANNOUNCES NEW OFFICE IN CONNECTICUT

Clausen Miller is proud to announce Headquartered in Chicago, the Firm the opening of an office in Stamford, also maintains U.S. offices in New Connecticut. This new office location York, New Jersey, Indiana, Wisconsin, will enhance the Firm’s ability to offer and Southern California. Clausen its full array of legal services throughout Miller LLP is located in London, the tri-state area, including all state England, in the heart of the global and federal courts. Clausen Miller insurance market. Clausen Miller recognizes the insurance industry’s P.C. is also the founding member presence in Connecticut, and the of Clausen Miller International, a needs of its clients in Connecticut, and cooperative of leading independent responded by expanding its presence law firms with affiliates in Paris, Rome, in the Northeast. Brussels, Dusseldorf, and Berlin that practice in all aspects of insurance and The office, located at 68 Southfield reinsurance law. Avenue, is managed by Clausen Miller Partner Matthew Van Dusen Please contact Carl Perri with any and is supported by Shareholders questions about Clausen Miller’s Carl Perri and Courtney Murphy, new office in Stamford, Connecticut: Partner Jacob Zissu with Associates [email protected] Thomas Hennessey and Gregory Popadiuk who also have a presence in the Stamford office.

MINDY MEDLEY PUBLISHED IN AMERICAN BAR ASSOCIATION’S THE BRIEF

Mindy Medley, Clausen Miller Oath: What You Need to Know,” Shareholder, was recently published which examines how to prepare for an in the Fall 2017 edition of The Brief, EUO and discusses nationwide case law the publication of the ABA’s Tort Trial analyzing this important tool of insurers. and Insurance Practice Section. Mindy Please contact Mindy at mmedley@ co-authored “The Examination Under clausen.com with any questions.

SENIOR PARTNER AMY PAULUS NAMED LEADING CIVIL DEFENSE LAWYER

Congratulations to Senior Partner Reinsurance. This recognition was Amy Paulus on being named a Top earned by being among those lawyers Civil Defense Lawyer in Illinois most often recommended by their by Chicago Lawyer Magazine. Amy peers. Amy heads up Clausen’s received this distinction for her Liability Insurance Coverage and work in Insurance Coverage and Reinsurance Practice Groups.

8 clausen.com CM NEWS

CLAUSEN MILLER LAUNCHES RESTATEMENT OF THE LAW OF LIABILITY INSURANCE TASK FORCE

Liability Coverage and Reinsurance or court orders. CM will identify the Practice Group Leader Amy Paulus issues on which the Restatement is is spearheading CM’s efforts to equip cited; the jurisdictions/courts; types our clients with the most up-to-date of insurance policies or relevant policy and thorough arsenal of research language at issue; policyholder firms and briefs to combat the misuse and tactics promoting its use; and of the nascent ALI Restatement of counterarguments and authorities Liability Insurance Law in coverage that show the true state of the law in litigation and elsewhere. While the all jurisdictions. draft Restatement is not technically scheduled to be called for a vote Additionally, several clients have until May 2018, Ms. Paulus notes requested that CM’s Task Force that it has already been cited by provide consulting services and several courts, and it even played a “parachute in” with assistance on role in two recent decisions of courts briefing, oral arguments and amicus in Texas and Indiana. Despite the submissions. Ms. Paulus reports that efforts of various insurance industry CM is ready to provide the insights groups and commentators, the reality and firepower to our clients on this is that the Restatement is now a tool important initiative. CM Partners being used by the policyholder’s bar Colleen Beverly, Ilene Korey and in coverage litigation, so time is of the Mark Zimmerman have joined Ms. essence for insurers. Paulus in ensuring that seasoned coverage litigators are leading the CM’s Restatement Task Force Task Force endeavors. has created a database to monitor and track primary and secondary If you would like additional sources that pertain to the use of the information or would like to be Restatement, including court filings, included on the Restatement Task rulings, publications, speeches, etc. Force’s circulation list, please contact Important developments will be Amy Paulus at [email protected] logged and reported, especially if the or 312-606-7848. Restatement is mentioned in pleadings

clausen.com 9 on the LITIGATION FRONT

GEORGE FLYNN AND MAURA MORGAN WIN SUMMARY JUDGMENT IN COOK COUNTY LEGAL MALPRACTICE CASE

Clausen Miller Partners George Flynn of the case, and thus “cure” any and Maura Morgan won summary alleged malpractice. The motion was judgment, thereby averting a 3-week denied, and the denial affirmed by the trial for their client, just minutes after Appellate Court. a co-defendant law firm reached a seven-figure settlement with a plaintiff On remand, the Association’s president Condominium Association. admitted to terminating the firm, and testified that he never expected the Flynn and Morgan represented a large firm to take further action on behalf law firm (lawyers for the Association of the Association, as the firm no in an underlying lawsuit against a longer possessed any such authority. developer for alleged failures to cure The Motion for Summary Judgment construction defects in connection with aimed at avoiding any “law of the the turnover of the condominium). case” issues, and instead focused on the The handling partner for the firm plaintiff’s inability to prove an ongoing allowed the underlying case to be duty owed by the terminated firm. dismissed; resigned from the firm; The plaintiff has appealed the ruling and then continued the Association’s of the Cook County Circuit Court. representation at his new firm. Flynn Please feel free to contact George Flynn moved for dismissal, arguing that the ([email protected]) or Maura “viability doctrine” was a bar to a Morgan ([email protected]) finding of proximate cause, since the with any questions concerning the successor firm and the Association legal issues involved in the matter. had a right to seek reinstatement

APPELLATE PRACTICE GROUP WINS IN ILLINOIS AND NEW JERSEY

In late December, the Illinois Appellate In early January, Paul Esposito and Court, Fourth District unanimously CM Partner Matthew Leis scored affirmed a defense judgment in a a big victory when the New Jersey medical malpractice case based on Superior Court, Appellate Division, arguments made in a brief filed by unanimously affirmed the dismissal of a CM Appellate Practice Group co- legal malpractice claim against our client chair Melinda Kollross and Appellate arising out of his defense of a domestic Senior Counsel Paul Esposito. The disturbance matter. Leis and Esposito appellate briefing showed that the trial demonstrated that the complaining court properly exercised its discretion person failed to provide an affidavit as by excluding harmful evidence at trial required by New Jersey law attesting to and by rejecting plaintiffs’ argument the alleged merit of his claim. that the verdict should have been reversed based on the alleged lack of qualifications of a defense expert.

10 clausen.com is proud to announce the opening of an additional office location

Stamford, Connecticut 68 Southfield Avenue, 2 Stamford Landing Suite 100 Further expanding Clausen Miller’s presence in the Northeast and its ability to serve its clients in the tri-state area clausen.com 11 Visit us at clausen.com APPELLATE 2017 DRI Annual Meeting: Appellate Advocacy Committee CLE Panel Presentation Highlights by Melinda S. Kollross

From left: Melinda S. Kollross, Paul V. Esposito, Hon. Rita B. Garman, Michael W. Rathsack

On October 4, 2017, the DRI including briefing motions to dismiss appellate practitioner to handle the Appellate Advocacy Committee and for summary judgment. At trial, appeal, especially if trial counsel won presented “Perspectives on the they not only function as the client’s below?” Justice Garman confirmed Appellate Practitioner’s Role at Trial eyes and ears by providing daily trial that as a general rule, appellate and on Appeal: A View from the reports objectively assessing “how the practitioners write better appellate Plaintiff, the Defense, and the Court.” case is going”, but also actively assist briefs and present better oral arguments. I was honored to moderate the panel the trial team by preparing motions She explained that in her experience, discussion, which featured Mike in limine, consulting on jury selection, appellate practitioners are more likely Rathsack, the most prominent Illinois researching/briefing evidentiary issues, to present succinct, focused briefs plaintiffs’ appellate attorney, defense drafting jury instructions and motions with compelling legal argument attorney and Clausen Miller Senior for directed verdict, and generally while avoiding redundancy and other Counsel Paul Esposito, one of the most ensuring that error is preserved for problems. Justice Garman also noted frequently retained trial monitoring appellate review by making sure that the tendency of many trial attorneys and appellate practitioners, and sitting a complete record exists—including to make a jury-type closing argument Illinois Supreme Court Justice Rita renewed objections and offers of before the appellate tribunal—rather Garman. The panelists analyzed proof as needed in a given jurisdiction. than tailoring their argument to the the value of retaining an appellate This team approach allows the trial appellate arena, where the judges specialist at trial and on appeal. attorney to focus on openings/closings, are concerned with the legal issues examination of witnesses, and overall presented, the applicable standard of After uniformly recognizing the trial strategy while the appellate review, and the precedential impact of current trend towards increased use practitioner researches, writes and the opinion they render. Mike and Paul of appellate practitioners in both the documents error, thereby maximizing likewise confirmed their preference trial and appellate courts, the panelists the chance of obtaining a successful for facing an appellate practitioner focused on specific ways in which result at trial while simultaneously (sometimes each other) rather than trial clients can benefit from employing the creating the strongest record on appeal. counsel when prosecuting or defending services of an appellate practitioner at Justice Garman noted that waiver is an appeal. the trial court level and in prosecuting a common issue which the proactive or defending an appeal. use of appellate counsel at trial can Audience members were encouraged help avoid. to ask questions throughout the panel Mike and Paul described how they discussion, increasing its instructional are routinely called upon to assist trial The discussion then moved on to value for all participants. counsel with pre-trial proceedings, appeals. When asked “why retain an

12 clausen.com EMPLOYMENT LAW

Common Law Claim For Intentional Infliction Of Emotional Distress In Sexual Harassment Case Preempted By Illinois Human Rights Act by Brian J. Riordan and Kathleen M. Klein

The Seventh Circuit recently took on, her presence. When she complained of Brian J. Riordan is a shareholder at Clausen Miller P.C., and eventually barred, an emotional the conduct and filed a discrimination having joined the firm in 1996. Brian distress claim for sexual harassment complaint with the company, she represents both foreign and domestic in the workplace in Richards v. U.S. was told she needed to adjust to the professional indemnity and general Steel, 88 F.3d 557 (7th Cir. 2017). supervisor’s rough management style, liability carriers and their insureds in The Plaintiff could not file a claim that she was too emotional, and that the full range of both litigated and non- litigated matters. He also specializes in under the Illinois Human Rights Act she should see a psychiatrist. the defense of cases involving commercial (the Act), so instead filed a common and professional liability, including the law claim for intentional infliction of After most of Richards’ claims against representation of attorneys, architects, emotional distress. The Court threw U.S. Steel were dismissed as filed engineers, insurance and investment advisors and broker/dealers. out the emotional distress claim, too late, Richards was left with only [email protected] because the Act preempted it. her claim for intentional infliction of emotional distress under Illinois Facts common law. The employer won After fourteen years at the defendant summary judgment in the trial court, company, Plaintiff employee Richards and Richards appealed. participated in a four-month electrician training rotation program. Analysis It was at that point that the harassment The Seventh Circuit affirmed, finding allegedly started. The department that Richards’ distress claim is supervisor told her she would never preempted by the Act. be able to meet his standards as an electrician. After that rotation, she The Act provides that claims brought transferred to another department, under it preempt claims for the same Kathleen M. Klein where Richards testified she was conduct at common law. On appeal in is a partner in the Chicago office of subject to inappropriate comments Richards, the Court had to determine Clausen Miller P.C. She specializes in litigation, including the defense of medical and behavior by the supervisor. She whether the facts alleged by Richards, malpractice, professional liability, broker/ complained of a variety of conduct, specifically, were preempted—a case- dealer/investment advisor malpractice, testifying that the supervisor pulled by-case analysis. premises liability, products liability, and her jacket open and made a vulgar personal injury matters. Kathleen also comment; jerked her radio off her The only way a plaintiff could bring an defends clients in the healthcare, financial, construction, insurance, clinical laboratory, chest, where it was attached to her bra; emotional distress claim for sexually and hospitality industries. She works in commented on whether something harassing conduct is if the conduct was arbitration and mediation forums, at she was standing on would hold her “extreme and outrageous.” However, state and local administrative hearings, weight; dared Richards to call him an if an employee’s acts were “extreme and before FINRA (the Financial Industry Regulatory Authority) and the EEOC. insulting name; and told lewd jokes in and outrageous” sexual harassment, [email protected] clausen.com 13 EMPLOYMENT LAW

or constituted assault, they could not Plaintiff for whatever reason decided be attributed to the employer under not to bring a claim under the Act. common law, because they did not Where there is only a tort claim, the “serve” the employer under agency Richards case provides an avenue for principles. So, any part of the claim defense counsel to obtain dismissal. based on “extreme and outrageous” conduct had to be dismissed, since This is a fact-intensive inquiry, and the case was brought only against is most likely to be successful after U.S. Steel. the facts have been developed in depositions, as in Richards, where The parts of Richards’ emotional the Plaintiff had already given her distress claim that were based on deposition testimony. The court will conduct that was not “extreme look at the specific conduct testified to and outrageous”—or, conduct that at deposition. Does the conduct meet actually did serve the employer— the court’s high standard for “extreme likewise had to be dismissed. The Act and outrageous” conduct? If it is, such created new duties, for example, not to conduct by an employee cannot “serve engage in sexually harassing behavior, the master,” and so cannot be the basis even where the behavior did not rise of an emotional distress claim against to “extreme and outrageous” conduct the employer. If the conduct is not actionable at common law. The law extreme and outrageous, counsel can defines “extreme and outrageous” as argue it should be preempted, because going beyond “mere insults, indignities, the statute creating the duty also threats, annoyances, petty oppressions, demands preemption. or other trivialities,” and “beyond the parameters of the typical workplace 2. A Warning About Illinois dispute.” Where the acts are these Human Rights Act Claims “mere insults” or “indignities,” and the duty with respect to the conduct arises Looking beyond the Court’s holding, out of the statute, the claim for distress the decision is a warning to employers. caused by that conduct is preempted. The Court commented that, had Plaintiff been able to proceed under Practice Pointers: the Act, it may have required a different response from management, and the 1. Dismissing Distress Claims employer may have faced a less favorable Based on Richards result in court. The Court’s repeated The key inRichards was that Plaintiff admonishments of the employer’s did not have an Act claim. U.S. Steel’s conduct are a clear signal that this type appellate victory was merely because of conduct isn’t actionable against the Richards waited too long to file some employer as emotional distress, but of her claims, and was barred from with a timely filed complaint could proceeding under the Act. In practice, certainly be a source of liability for this could be because the statute of employers under the Act.  limitations ran on an Act claim, or

14 clausen.com LIABILITY INS. COVERAGE

Manufacturing And Selling Are But One Occurrence by Don R. Sampen

Most commercial general liability The Travelers Indemnity Co. and/ policies are subject to both an occurrence or Travelers Casualty and Surety limit and a higher aggregate limit. Hence, Co. (Travelers) issued United several an important question sometimes primary-level comprehensive general arises whether a loss or series of losses liability and umbrella liability policies involves just one occurrence, thereby from 1952 through the mid 1970s. triggering only the single occurrence The policies had aggregate limits that limit, or whether it involves more than were higher than the per-occurrence one occurrence, for which two or more limits. The number of occurrences occurrence limits could be available. determined whether a policy’s per- The question is particularly important occurrence limits or higher aggregate where the insured manufactures and limits applied. sells a product resulting in multiple Don R. Sampen injuries. The Illinois Appellate Court, Beginning in 1983, United was named is a Clausen Miller partner and has over First District recently held that the as a defendant in thousands of lawsuits 30 years of trial and appellate experience in various areas, including insurance continuous manufacture and sale of filed in multiple jurisdictions by coverage and commercial litigation. a product giving rise to thousands of individuals claiming to have sustained Don is a magna cum laude graduate of lawsuits for asbestos-related diseases, bodily injury allegedly from inhaling Northwestern University College of Law, constituted but one occurrence. United asbestos fibers from United's conveyor where he was Executive Editor of the Conveyor Corp. v. Allstate Insurance Co., Northwestern Law Review. Don is an systems while installing or repairing Adjunct Professor at Loyola University 2017 IL App (1st) 162314 (Dec. 5, 2017). the systems. Travelers defended College of Law teaching a course in United against the suits under a full Insurance Law. Facts reservation of rights, including the [email protected] The insured, United, designed, right to enforce the policies' applicable manufactured and sold ash- "limits of liability." handling conveyor systems for coal plants according to its customers’ In January of 2009, United received a specifications. From about the 1930s letter from Travelers stating that all the to early 1984 the company sold primary policies had been exhausted. asbestos-containing gaskets that were United interpreted the letter to used in the systems' assembly and mean that the per-occurrence, not for replacement parts. Asbestos was aggregate, limits had been exhausted. used because the systems operated The record, however, contained no under high temperatures that required contemporaneous writings reflecting sealants to withstand intense heat. United's disagreement with Travelers' position or asserting United's position

clausen.com 15 LIABILITY INS. COVERAGE

that the design and installation of each Addressing the occurrence issue, the separate human intervening event conveyor system should be treated as Court noted that, under Nicor, Inc. relating to each system was involved. a separate occurrence. v. Associated Electric & Gas Insurance Rather, all the claims related to a single Services Ltd., 223 Ill. 2d 407 (2006), occurrence. And the per-occurrence In mid-2012, United nonetheless filed Illinois has adopted the "cause" theory limit therefore applied. suit seeking a declaration that the of liability to determine the number asbestos claims constituted multiple of occurrences. That means that the As for United's further argument occurrences, triggering the policies' number of occurrences is decided that it should have been allowed aggregate limits and not just the per- by determining the cause of the to amend its complaint to raise its occurrence limits. After several years of damage rather than by looking at the estoppel argument, the Appellate litigation, United moved for summary consequences of the damage. Court found that United was aware judgment on the multiple occurrences of Travelers' occurrence position issue, and also asserted that Travelers The Appellate Court observed that both when it filed this case in 2009. It in was estopped from arguing for only a Nicor and an earlier case effectively fact raised the estoppel argument as single occurrence because it allegedly applying the cause test, United States part of its summary judgment motion, failed to reserve on that issue. In Gypsum Co. v. Admiral Insurance Co., and Travelers responded that United response, Travelers filed its own cross 268 Ill. App. 3d 598, (1st Dist. 1994), was foreclosed from arguing waiver motion. focused on the number of deductibles, and estoppel because it had never or self-insured retentions, an insured pleaded such claims. Hence, granting In early 2016, the trial court found in had to pay before triggering coverage. the motion would have prejudiced favor of Travelers and against United. Nonetheless, the First District found Travelers by requiring it to defend United then filed a motion for leave that whether focusing on deductibles against entirely different claims after to amend its complaint seeking a or occurrence limits, the same cause summary judgment had been allowed. determination that Travelers had test should be used for determining waived, or was estopped to raise, the the number of occurrences. The First District therefore affirmed single occurrence position, and that the decision of the trial court in favor motion was denied. Because cross- Here, said the Court, the single, of Travelers. claims among the defendants remained unitary cause of the claims against pending, the trial court entered a United was the fact that it incorporated Learning Point: Under the cause finding under Illinois Supreme Court asbestos-containing components test for determining the number of Rule 304(a) that there was no just or products into each of its systems occurrences, an insured's conduct in reason to delay appeal. United brought designed for high-heat operations. The manufacturing and selling a product this appeal. cause of loss was not attributable to allegedly causing injury to multiple the installation and maintenance by purchasers or users of the product Analysis United's customers of each conveyor constitutes but one occurrence.  In an opinion by Justice Mary Anne system that contained asbestos Mason, the First District affirmed. products. Thus, unlike in Nicor, no

16 clausen.com LIABILITY INS. COVERAGE

Horizontal Exhaustion Applies Where Excess Policies Require Exhaustion Of All Underlying Coverage Before Excess Polices Are Triggered by Henry T.M. LeFevre-Snee

In Montrose Chemical Corp. of Cal. v. policy period up to the full limits of each Superior Court, 14 Cal. App. 5th 1306 policy, thereby forming one giant “uber- (Cal. App. 2017), the Court of Appeal policy” with limits equal to the sum of all of California held that, where excess triggered policies. policies required exhaustion of all underlying coverage before they could The insurers, on the other hand, argued be triggered, horizontal exhaustion that all underlying policy limits must would apply to determine the manner be exhausted before any excess policy in which coverage attached. could be called upon. The trial court agreed with the insurers, and applied Facts horizontal exhaustion to Montrose’s From 1947 - 1982, Montrose produced entire coverage program. dichloro-diphenyltrichloroethane (“DDT”) at a facility in Torrance, California. Analysis Henry (Mackie) T.M. LeFevre-Snee In 1990, environmental regulators brought The Court of Appeal focused on provisions focuses his practice on insurance suit, alleging that Montrose’s operations in policies issued by American Centennial coverage disputes involving mass caused environmental contamination. Insurance Company (“American torts, environmental pollution, and Montrose subsequently entered into Centennial”), Continental Casualty construction defects in state and partial consent decrees, through which it Company (“Continental”), and Columbia federal court. Prior to joining Clausen Miller in Chicago, Mackie was an allegedly incurred hundreds of millions of Casualty Company (“Columbia”). The associate at a New York City-area dollars in damages. Montrose then sought American Centennial policies contained firm, litigating insurance coverage coverage under more than 115 primary and the following “retained limit” clause: disputes in state and federal courts in excess CGL policies applicable to the New York, New Jersey, and Delaware. Mackie also served as a law clerk in Torrance facility, which it had purchased [T]he company’s liability shall be only the Superior Court of New Jersey, for between 1960 and 1986. for the ultimate net loss in excess of the Hon. Kenneth J. Grispin, P.J.Cv. the insured’s retained limit defined [email protected] Citing State of California v. Continental as the greater of . . . the total of the Ins. Co., 55 Cal. 4th 186 (2012) applicable limits of the underlying (“Continental”), Montrose asserted policies listed in [the declarations] that to reach any excess policy it need hereof, and the applicable limits of any only exhaust underlying policies in other underlying insurance collectible the same policy period, rather than by the insured. all underlying policies in every policy period. In Continental, the California The American Centennial policies’ Supreme Court held that, in the absence “other insurance” clause provided: of anti-stacking provisions, standard policy language permits an insured to If other collectible insurance . . . is stack policy limits across every triggered available to the insured covering a clausen.com 17 LIABILITY INS. COVERAGE

loss also covered hereunder (except defined “loss” to include deductions for insurance purchased to apply in “other insurances (whether recoverable or excess of the sum of the retained limit not) other than the underlying insurance.” and the limit of liability hereunder) Further, the “other insurance” clause the insurance hereunder shall be in provided that the Continental and excess of and not contribute with, Columbia policies did not cover losses such other insurance. for which Montrose had other insurance. The Court of Appeal also distinguished Continental’s and Columbia’s policies the excess policies at issue, which attached defined “loss” as: upon exhaustion of underlying coverage, from primary policies, which attach upon [T]he sums paid as damages in the happening of a covered occurrence, settlement of a claim or in satisfaction and declined to hold that the excess of a judgment for which the insured policies’ other insurance clauses only is legally liable, after making applied to contribution among insurers. deductions for all recoveries, salvages Accordingly, horizontal exhaustion would and other insurances (whether The other insurance clause did “not apply apply to coverage underlying these excess recoverable or not) other than the with respect to the underlying insurance policies, and to others whose language underlying insurance and excess or excess insurance purchased specifically also required exhaustion of all underlying insurance purchased specifically to to be in excess of this policy.” policies triggered by the loss, regardless of be in excess of this policy. when those policies were in effect. Affirming in part and reversing in part, the The Continental and Columbia “other Court of Appeal noted that Continental Finally, the Court of Appeal declined insurance” clauses stated: did not decide whether an insured may to apply horizontal exhaustion broadly access higher level excess insurance before across Montrose’s entire coverage If, with respect to a loss covered exhausting lower level excess insurance program. Rather, the manner of hereunder, the insured has other written for different policy periods. exhaustion of underlying coverage should insurance, whether on a primary, Moreover, Continental did not announce be determined on a policy-by-policy basis, excess or contingent basis, there any “general principle” that insureds may according to each policy’s language. shall be no insurance afforded tap policies for indemnification however hereunder as respects such loss; they choose. Rather, policies must be Learning Points: Under California provided, that if the applicable interpreted and applied according to their law, before coverage may attach, excess limit of liability of this policy own terms. policy language referencing exhaustion is greater than the applicable of all underlying coverage triggered by limit of liability provided by the The Court of Appeal noted that the a loss requires horizontal exhaustion other insurance, this policy shall American Centennial policies’ “retained of all underlying coverage, regardless afford excess insurance over and limit” clause stated that the insurers’ of whether those underlying policies above such other insurance in liability was in excess of the “applicable were in effect during the same policy an amount sufficient to give the limits of any other underlying insurance period. However, horizontal exhaustion insured, as respects the layer of collectible by the insured.” Moreover, the is not applicable per se; the sequence coverage afforded by this policy, “other insurance” clause provided that the in which policies may be accessed a total limit of liability equal to policies were excess to both scheduled must be decided on a policy-by-policy the applicable limit of liability and unscheduled policies. Similarly, basis, taking into account the relevant afforded by this policy. Continental’s and Columbia’s policies provisions of each policy. 

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Second Circuit Enforces Non-Cumulation Clauses In Olin Corp. v. OneBeacon Am. Ins. Co. by Henry T.M. LeFevre-Snee

In Olin Corp. v. OneBeacon Am. Ins. Each of the OneBeacon Policies contained Co., 864 F.3d 130 (2d Cir 2017) a “prior insurance” or “noncumulation” (“Olin IV”), the U.S. Court of Appeals clause, which provided: for the Second Circuit held, in an environmental insurance coverage It is agreed that if any loss covered action, that where policies contain hereunder is also covered in whole “prior insurance clauses”, an insurer or in part under any other excess may reduce the limits of liability of policy issued to the Insured prior those policies by the amounts paid to the inception date hereof, the by another insurer for the same loss limit of liability hereon . . . shall under any prior policy in the same be reduced by any amounts due excess layer, rejecting the policyholder to the Insured on account of such position that the prior insurance clause loss under such prior insurance. only applied to prior policies issued by the same insurer. The prior insurance clause was accompanied by a “continuing coverage” Facts clause, which provided: OneBeacon issued to Olin Corporation (“Olin”) three excess umbrella Subject to the foregoing paragraph insurance policies for the period of and to all other terms and conditions 1970 through 1972 (the “OneBeacon of this Policy in the event that Policies”). These policies attached personal injury or property damage at various points above a $300,000 arising out of an occurrence covered primary policy issued by the Insurance hereunder is continuing at the Company of North America (“INA”). time of termination of this Policy, The London Market Insurers (“LMI”) [OneBeacon] will continue to issued excess umbrella policies for protect the Insured for liability in periods prior to the effective periods respect of such personal injury or of the OneBeacon policies. property damage without payment of additional premium. Olin had previously entered into a global settlement with the London Market OneBeacon argued in the district court Insurers as to all Olin’s environmental that the prior insurance clause required liability, including the sites for which that the per occurrence limits of the Olin was pursuing OneBeacon. OneBeacon Policies be reduced by the per occurrence limits of any prior policies

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in the same layer of coverage triggered application to prior policies issued by the insurer’s admission of liability. by the same occurrence, irrespective of the same insurer. The Court further The Court remanded the matter for which insurer issued the earlier policies. stated that this result was supported a determination of what amounts, if The district court disagreed, holding that by all sums allocation methodology any, of LMI’s global settlement with the prior insurance clause applied only applied to the damages at issue, and Olin pertained to the environmental to any other excess policy issued by the that the same principle which allows sites at issue. same insurer. a policyholder to attribute the full amount of its loss to a single policy Learning Points: Under New York Analysis year also “limits [the Policyholders’] law, the all sums method applies OneBeacon appealed and the Second ability to tap multiple insurers for the to excess policies containing prior Circuit Court of Appeals reversed same loss.” insurance and continuing coverage in part. Initially, and based on the clauses, and the all sums method intervening decision of the New However, the Court rejected determines the exhaustion of policies York Court of Appeals in In re OneBeacon’s argument that, under underlying excess policies containing Viking Pump, Inc., 52 N.E.3d 1144 the prior insurance clause, the limits such clauses. The Olin IV Court held (N.Y. 2016) the Olin Court held that of the OneBeacon Policies should that, under the prior insurance clause, all sums allocation applied to the be reduced by the limits of any an insurer may reduce the limits environmental losses at issue, and prior policies that were triggered by of its liability by the amounts paid that vertical exhaustion applied to the the same occurrence, regardless of (including by way of settlement) for relevant policies, such that the insured whether those policies had been called the same loss under any prior policy could access each excess policy upon for indemnification. Rather, the in the same excess layer, regardless once the immediately underlying prior insurance clause only prevented of whether that insurer also issued policies’ limits were depleted, even Olin from stacking policies once it those policies; Olin IV rejected the if other lower-level policies during had actually been indemnified. The insurers’ argument that the prior different policy periods remained Court did agree with OneBeacon that insurance clause allows the insurer to unexhausted. Turning its attention “amounts due” under prior policies reduce the policy’s limits by the limits to the prior insurance provision, included settlements, rejecting Olin’s of any prior policy also triggered by the Olin Court held that the plain argument that “amounts due” only the same loss, regardless of whether language of the prior insurance included amounts paid pursuant to a any funds had been paid under that clause required that the occurrence judgment against the insurer, or prior policy.  limit of each OneBeacon Policy be reduced by amounts actually paid under any applicable prior excess insurance policy in the same layer of coverage for the same loss, regardless of whether that prior policy was issued by another insurer. Citing Viking Pump, the Olin Court reasoned that the intent of the prior insurance clause thereby prevented Olin from stacking, or cumulating, coverage by adding together the maximum limits of successive policies triggered by an occurrence. The Court explained that this result was supported by the plain language of the prior insurance clause, which applied to “any other excess policy”, and did not limit its

20 clausen.com MEDICAL MALPRACTICE

Medical Malpractice Claim Brought Under The Wrongful Death Act Can Relate Back To Existing Claim And Is Not Barred By Statute Of Repose by Melinda S. Kollross

The Illinois Supreme Court holds that in a timely-filed complaint. Therefore, a medical malpractice claim brought the Appellate Court held, Defendants under the Wrongful Death Act, 740 would not be prejudiced by claims ILCS 180/0.01 et seq., can relate back filed after the expiration of the statute to an existing claim and is not barred of repose. The relation-back doctrine by the statute of repose. Lawler v. The saved the wrongful death claim, which University of Chicago Medical Center, otherwise would be time-barred. 2017 IL 120745. Analysis Facts The Illinois Supreme Court granted On August 4, 2011, Prusak filed a leave to appeal and affirmed in a medical malpractice claim against unanimous opinion authored by Defendants, alleging that Defendants Justice Freeman. The Court examined Melinda S. Kollross is a Clausen Miller AV® rated (Preeminent) failed to diagnose her macular the Wrongful Death Act, the medical senior partner and co-chair of the pathology (an injury she allegedly malpractice statute of repose, and the Appellate Practice Group. Specializing discovered on August 7, 2009) leading relation back statute in its Opinion. in post-trial and appellate litigation Defendants to fail to recognize Prusak’s nationwide, Melinda is admitted to practice in both New York and Illinois, lymphoma. Prusak died on November Wrongful Death Act as well as the U.S. Supreme Court and 24, 2013. As the executor of Prusak’s A wrongful death action allows the U.S. Courts of Appeals for the Third, estate, Prusak’s daughter (“Lawler”) Sixth, Seventh, Eighth, Ninth, Tenth and decedent’s next of kin to recover substituted as Plaintiff. On April Eleventh Circuits. Melinda has litigated damages for their own loss based on 11, 2014, Lawler filed an amended over 150 federal and state court appeals the wrongful actions of another. The and has been named a Super Lawyer and complaint adding a wrongful death cause of action accrues when the death Leading Lawyer in Appellate practice. claim. Defendants moved to dismiss [email protected] occurs. In a wrongful death action the wrongful death claim as barred “the cause of action is the wrongful by the four-year statute of repose act, neglect or default causing death, applicable to medical negligence cases, and not merely the death itself.” 735 ILCS 5/13-212(a). The circuit court A wrongful death action must be granted the motion to dismiss, finding commenced within two years after the that the wrongful death claim was a death. 740 ILCS 180/2 (West 2010). new action and did not relate back to the original claims. Medical Malpractice The Illinois Appellate Court reversed. Statute of Repose It concluded that the wrongful death The medical malpractice statute claim arose out of the same occurrence of repose (735 ILCS 5/13-212(a)) set forth in the original pleading, and provides that actions based on medical that Defendants had notice of the malpractice are subject to a four-year underlying medical malpractice claims statute of repose triggered by the

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occurrence of the act or omission that time within which an action may be even though it accrued after the statute caused the injury: brought or right asserted” where two of repose period expired and it can be conditions are met: (1) the original added by amendment to Plaintiff’s Except as provided in Section pleading was timely, and (2) the pending complaint in accordance with 13-215 of this Act, no action amendment grew out of the same the relation back statute. The Court for damages for injury or death transaction or occurrence set up in found support for its holding in two against any physician . . . whether the original pleading. 735 ILCS 5/2- out-of-state decisions: Sisson v. Lhowe, based upon tort, or breach of 616(b) (West 2010). 954 N.E.2d 1115 (Mass. 2011), and contract, or otherwise, arising out Wesley Chapel Foot & Ankle Center, of patient care shall be brought The Court then considered, as a LLC v. Johnson, 650 S.E.2d 387 (Ga. more than 2 years after the date matter of first impression, Defendants’ Ct. App. 2007). on which the claimant knew, or contention that the relation back through the use of reasonable statute does not apply where decedent’s The Court rejected Defendants’ diligence should have known, or death occurred more than four years contention that the statute of received notice in writing of the after the alleged medical negligence. repose “extinguishes” a wrongful existence of the injury or death Defendants maintained that Plaintiff’s death claim such that the relation for which damages are sought in wrongful death cause of action was back statute cannot apply, and that the action, whichever of such date “extinguished” by the statute of repose the appellate court’s ruling here occurs first, but in no event shall in August 2013— before it accrued enabled the plaintiff to “preserve” its such action be brought more than in November 2013—and the relation wrongful death claim until the claim 4 years after the date on which back statute cannot “preserve” it. accrued, in contravention of the occurred the act or omission or Court’s holding in Evanston Insurance occurrence alleged in such action If Plaintiff had filed an original Co. v. Riseborough, 2014 IL 114271. to have been the cause of such complaint alleging a wrongful death The Court explained that the legal injury or death.” 735 ILCS 5/13- cause of action in November 2013, it fiction that the relation back statute 212(a) (West 2010). would have been barred by the statute considers the claim brought as of the of repose. 735 ILCS 5/13-212(a) (West date of the original complaint does The only exception expressly noted by 2010). However, the relation back not run afoul of the Court’s holding in the statutory language is fraudulent statute provides that amendments Evanston Insurance Co.—which did not concealment, which is not at issue to a complaint “shall not be barred involve an amendment to a pending here. The repose period was enacted by by lapse of time under any statute or complaint—because the legislature the legislature to curtail the “long tail” contract prescribing or limiting the chose to preclude claims from being of exposure to medical malpractice time within which an action may be time-barred in very limited situations claims as a result of the 2-year discovery brought or right asserted, if the time such as here, where, if an amendment rule by placing an outer time limit prescribed or limited had not expired related back to the timely filed original within which a malpractice action when the original pleading was filed.” complaint, it would not be “barred must be commenced. 735 ILCS 5/2-616(b) (West 2010). The by lapse of time under any statute or parties do not dispute that Plaintiff’s contract prescribing or limiting the Relation Back Statute original complaint was timely filed time within which an action may be and the amendment clearly grew out of brought or right asserted.” 735 ILCS The relation back statute permits an the same transaction or occurrence as 5/2-616(b) (West 2010). This legal amended pleading to relate back to the alleged in the original complaint. Thus, fiction of the amendment relating date of the original pleading such that the Court found that Plaintiff satisfied back to the date of filing allows the “[t]he cause of action . . . set up in any the two requirements in the relation statute to function as the legislature amended pleading shall not be barred back statute, and it applies to her intended; it does not mean that an by lapse of time under any statute or wrongful death claim. Pursuant to the amendment can add a claim that has contract prescribing or limiting the statute, the claim is not time-barred not yet accrued.

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The Court further rejected Defendants’ the relation back statute is a procedural was enacted to curtail the “long tail” argument that the appellate court’s provision. Moreover, Defendants argued of liability created by the increased decision was in error because it that the only exception to the statute use of the discovery rule beginning blurred the distinctions between of repose that the legislature expressly in the 1960s. It aims to prevent statutes of limitations and statutes of provided for was fraudulent concealment, the assertion of stale claims and to repose. According to the Court, the which does not apply here. protect defendants from uncertain appellate court referred to “notice” and and protracted liability. However, “prejudice” based on the legislative The Court found that the statutes do when there is a pending complaint history of the relation back statute, not conflict with one another. The based on medical malpractice and which shows that the rationale behind statute of repose bars a cause of action a wrongful death claim is added to the same occurrence or transaction if it is initially brought more than that complaint, these concerns are rule was based “on the belief that if four years after the alleged medical not implicated. A defendant would the defendant has been made aware of negligence. The relation back statute already be aware of a claim for medical the occurrence or transaction which is governs amendments to complaints malpractice, and the wrongful death the basis for the claim, he can prepare and functions without being subject to claim would not be stale if it is based to meet the plaintiff’s claim, whatever time limitations. Thus, when applying on the same transaction or occurrence theory it may be based on.” the relation back statute, the statute as the original complaint. of repose will not bar an amendment The Court also rejected Defendants’ as long as there is a pending timely Learning Point: Under Lawler, a contention that even if the relation filed original complaint and the medical malpractice claim brought back statute applies to Plaintiff’s same transaction or occurrence test is under the Wrongful Death Act can wrongful death claim, the resulting satisfied. The relation back statute is relate back to an existing claim and “conflict” between the statute of repose the more specific statutory provision is not barred by the 4-year statute and the relation back statute must to these circumstances. In the Court’s of repose where: (1) the original be resolved in favor of the statute of view, its interpretation does not create pleading was timely filed, and (2) the repose. They maintain that the statute an exception, nor is it contrary to amendment grew out of the same of repose should control since it is the the legislative intent of the statute of transaction or occurrence set forth in more specific statutory provision and repose. As noted, the statute of repose the original pleading. 

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Hospital Not Vicariously Liable For Acts Of Employees Of Unrelated, Independent Clinic Under Apparent Agency Theory by Melinda S. Kollross

In a split decision, the Illinois Supreme allegations of close ties between Erie Court holds that a hospital could and NMH to support the apparent not be held vicariously liable under agency claim. She did not sue Erie. the doctrine of apparent agency for the acts of the employees of an NMH moved for partial summary unrelated, independent clinic that was judgment, arguing that it had no not a party to the litigation. Yarbrough control over Erie or its employees, v. Northwestern Memorial Hospital, 2017 did not provide any financial or IL 121367. operational support to Erie, and did not otherwise hold Erie out as its agent. Facts The circuit courtsua sponte certified Plaintiff obtained prenatal medical a question under Supreme Court care at Erie Family Health Clinic, a Rule 308 regarding whether NMH federally-funded, non-profit clinic. could be held vicariously liable under She was told she would receive an apparent agency theory “for the some prenatal care at Northwestern acts of the employees of an unrelated, Memorial Hospital (“NMH”) and independent clinic that is not a party would deliver her baby there. Erie- to the present litigation.” employed physicians seeking privileges to practice at NMH are required to The First District Appellate Court apply for them, as would any physician. answered “yes.” It initially noted that a hospital can be vicariously liable for After some initial complications, the acts of independent contractor Plaintiff obtained an emergency physicians, even where the conduct ultrasound at another hospital, occurred at an affiliated clinic outside which revealed that she had uterine of the four walls of the hospital. It and cervical issues. A follow-up concluded that the key inquiry is ultrasound was performed at Erie, whether the hospital and/or clinic held which revealed only the cervical issue. themselves out as having such close A 20-week ultrasound was performed ties that a reasonable person could at NMH. Plaintiff then gave birth at conclude that an agency relationship 26 weeks. Among others, she sued existed, and whether the plaintiff NMH, alleging that Erie was its relied on the hospital for treatment, apparent agent, and Erie rendered rather than any particular physician. negligent prenatal care for failing It further held that there was no to detect and treat her uterine and requirement that the apparent agent cervical conditions, which caused her also be named as a defendant. preterm delivery. She asserted several

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NMH filed a petition for leave employee or agent of the hospital; (2) vicariously liable for the malpractice of to appeal arguing that the First where the acts of the agent create the the anesthesiologist, and affirmed the District greatly expanded the scope appearance of authority, the plaintiff trial court's denial of Rush’s motion for of the apparent agency doctrine, in must also prove that the hospital had judgment notwithstanding the verdict. contravention of prior Illinois Supreme knowledge of and acquiesced in them; The York Court discussed in detail Court precedent, creating liability for and (3) the plaintiff acted in reliance what it termed the “realities of modern a hospital for all acts of any physician upon the conduct of the hospital or its hospital care” and concluded that “the with hospital privileges. agent, consistent with ordinary care fervent competition between hospitals and prudence. to attract patients, combined with the Analysis reasonable expectations of the public The Illinois Supreme Court granted The Court revisited the issue of apparent that the care providers they encounter review and reversed the Appellate authority in the medical malpractice in a hospital are also hospital employees, Court in a 4-3 opinion authored by context in Petrovich v. Share Health raised serious public policy issues with Justice Theis (Chief Justice Karmeier Plan of Illinois, 188 Ill. 2d 17 (1999), respect to a hospital’s liability for the and Justices Thomas and Garman, wherein plaintiff alleged that an HMO negligent actions of an independent- concurring). The certified question was vicariously liable for the conduct contractor physician.” before the Court asked: of the participating physicians who treated her. Following its rationale Turning to the present case, the Court Can a hospital be held vicariously in Gilbert, the Court held that to found the question before it does not liable under the doctrine of establish apparent authority against an implicate the policy considerations apparent agency set forth in HMO for physician malpractice, the that informed its decision in Gilbert Gilbert v. Sycamore Mun. Hosp., patient must prove (1) that the HMO and later holdings in Petrovich and 156 Ill.2d 511, 622 N.F.2d held itself out as the provider of health York. Those cases sought to protect 788, 190 Ill. Dec. 758 ([1993]), care, without informing the patient a patient who is unaware that the and its progeny for the acts of that the care is given by independent individual providing him or her the employees of an unrelated, contractors, and (2) that the patient medical treatment is not an employee independent clinic that is not a justifiably relied upon the conduct of or agent of the hospital or HMO from party to the present litigation? the HMO by looking to the HMO whom treatment is sought. Under to provide health care services rather such circumstances, the Court found In Gilbert, the Illinois Supreme Court than looking to a specific physician. a patient should have the right to look held that a hospital may be found to the hospital or HMO in seeking vicariously liable under the doctrine The Court’s most recent statements compensation for any negligent care. of apparent authority for the negligent on apparent authority in the area acts of a physician providing care at of medical malpractice come in Here, by contrast, plaintiff “sought a hospital, regardless of whether the York v. Rush-Presbyterian-St. Luke’s treatment at Erie but looks to physician is an independent contractor, Medical Center, 222 Ill. 2d 147 impose liability on NMH.” Erie unless the patient knows or should (2006). In York, the plaintiffs filed is neither owned nor operated by have known that the physician is an a medical malpractice action against NMH. While Erie receives some independent contractor. Gilbert sets the attending anesthesiologist charitable financial and technical forth the following three elements who was employed by University assistance from NMH, Erie is an for a hospital to be liable under the Anesthesiologists, S.C., and added FQHC that relies heavily on federal doctrine of apparent authority: (1) Rush as a defendant on the theory grants and Medicaid reimbursement plaintiff must show that the hospital, that the anesthesiologist was Rush's to provide underserved communities or its agent, acted in a manner that apparent agent. The Court found that with primary and preventative care would lead a reasonable person to the York plaintiff presented sufficient regardless of an individual's ability to conclude that the individual who evidence of apparent authority to pay. Erie's employees are considered was alleged to be negligent was an support the jury’s verdict finding Rush federal employees, and suits against clausen.com 25 MEDICAL MALPRACTICE

Erie or its employees can only be The Court recognized that physicians Justice Burke authored a lengthy maintained under the Federal Tort employed by Erie routinely have dissent, in which she was joined Claims Act. Erie does not utilize privileges to practice at NMH. However, by Justices Freeman and Kilbride. the Northwestern name. There is no they must apply for such privileges as Justice Burke stated “[t]he appellate Northwestern-related branding or would any doctor. The Court explained: court did a thorough analysis of the use of Northwestern's trademark “Gilbert was informed by our concern the Gilbert elements and explained purple color by Erie. with the reasonable expectations of why there remain questions of fact the public that the care providers that sufficient to preclude the entry of The Court distinguished these facts they encounter in a hospital are also summary judgment. I find this analysis from the Malanowski case cited by hospital employees . . . Gilbert does persuasive and would adopt it herein.” Plaintiff, wherein Loyola owned and not suggest that merely granting a operated the subject outpatient center physician employed by another entity Learning Point: A hospital cannot be which allegedly bore the "Loyola" hospital staff privileges alone could held vicariously liable under the doctrine name, the outpatient center held create an apparent agency relationship.” of apparent agency for treatment itself out as a direct provider of The Court accordingly refused to read rendered at and by employees of an health care services, the outpatient Gilbert and its progeny “so broadly as unrelated, independently owned and center introduced the decedent to to impose vicarious liability under the operated clinic which did not use the her physician, and the payment for doctrine of apparent authority on a hospital’s name or branding; the mere services provided by the physician was hospital for the care given by employees fact that some physician employees of made directly to the outpatient center. of an unrelated, independently owned the clinic also had staff privileges at Malanowski v. Jabamoni, 293 Ill. App. and operated clinic like Erie.” the hospital is insufficient to establish 3d 720 (1997). liability under Gilbert and its progeny. 

26 clausen.com PREMISES California Supreme Court Holds LIABILITY Landowner Not Liable For Obvious Danger It Does Not And Cannot Control by Meredith D. Stewart

A landowner’s liability to its invitees church and the plaintiff appealed. The hinges on whether or not a duty is California Court of Appeal reversed the imposed by law. But, mere ownership decision, but the California Supreme of property does not automatically Court recently disagreed and found equate to liability. Rather, in Vasilenko v. that no duty was owed by the church Grace Family Church (2017) 3 Cal.5th to prevent the plaintiff’s injuries. 1077, the California Supreme Court recently declined to find a landowner Analysis owed a duty to protect invitees from Generally, each person has a duty obvious dangers presented by crossing to exercise, in his or her activities, a public street. In reaching its decision, reasonable care for the safety of others. Meredith D. Stewart California’s highest court reversed the Historically, courts have utilized is a partner with Clausen Miller P.C. in decision of the Court of Appeal and the concept of duty to limit the the Irvine, CA office. Her experience found that a church, which did nothing infinite liability that might flow from includes several years focused exclusively more than site and maintain a parking every negligent act. A duty is to be on the defense of medical malpractice lot requiring its invitees to cross a claims throughout Southern California. created only where “clearly supported She also has experience in the defense of public street, owed no duty to protect by public policy.” In California, insurers against bad faith claims. After its invitees from the obvious dangers whether or not to impose a duty is joining Clausen Miller P.C., Meredith presented by the public street. The measured by evaluation of several further expanded her practice to include Vasilenko decision is critical for premises the defense of general and professional, foreseeability and public policy factors premises and personal injury claims liability matters in that it defines and outlined in Rowland v. Christian, throughout California. constricts the extent of a duty that is (1968) 69 Cal.2d 108. Those factors [email protected] owed by a landowner to its invitees in are: “the foreseeability of harm to similar circumstances. the plaintiff, the degree of certainty that the plaintiff suffered injury, the Facts closeness of the connection between Plaintiff Aleksandr Vasilenko the defendant’s conduct and the injury (“plaintiff”) was struck by a car while suffered, the moral blame attached to crossing a public street from defendant the defendant’s conduct, the policy In Vasilenko, the Court examined Grace Family Church’s (“church”) of preventing future harm, the extent whether an exception to the general overflow parking area to the main of the burden to the defendant and rule that a landowner owes a duty to premises of the church. Plaintiff was consequences to the community of its invitees exists where the landowner injured and he and his wife sued imposing a duty to exercise care with sites and maintains a parking lot, the church for negligence and loss resulting liability for breach, and the which causes its invitees to cross a of consortium, contending that the availability, cost and prevalence of public street. The decision was in light church owed him a duty of care to insurance for the risk involved.” This of the known and obvious dangers assist him in crossing the public street. is traditionally a question of law for presented by crossing a public street The church filed a motion for summary the Court because a finding that there and the fact that the church increased judgment on the ground that it did not is no duty represents a decision by the the likelihood that its invitees would owe a duty to the plaintiff because the Court that there is an exception to encounter danger because they had to church did not own, possess or control the general rule that each person has encounter the danger of crossing the the public street at issue. Summary a duty to act with reasonable care for public street. Can subjecting an invitee judgment was granted in favor of the the safety of others. to such increased exposure to danger

clausen.com 27 PREMISES LIABILITY

be exempted from the general duty of considered a safer available alternative.” considered by the Court of Appeal on care owed to invitees? The California The Court went on to find that drivers remand if the plaintiff elected to pursue Supreme Court now says “yes.” and invitees can exercise greater care to the theory. It appears this latter issue prevent future harm than landowners, leaves the determination of the existence In looking at the Rowland factors, the and the burden on landowners in of a duty slightly open if there are facts Vasilenko Court found that the first monitoring the dangers of the public alleging, and evidence supporting, the two factors support imposition of a street were too high. These latter factors argument that the church assumed a duty—i.e., it was foreseeable that the weighed against finding a duty. As duty by maintaining a parking lot across plaintiff could be struck by a car when for the moral blame factor, the Court the street which required its invitees to crossing the street and it is certain found landowners have limited ability cross a public street. that plaintiff suffered injury. However, to reduce the danger and generally the Vasilenko Court found the third exercise no greater control over the Learning Points: In the well-reasoned Rowland factor—closeness of the danger than the invitees who cross the Vasilenko opinion, the California connection between the defendant’s street. As for availability of insurance, Supreme Court carefully evaluated conduct and the injury suffered—did in light of the insurance available the foreseeability and public policy not weigh in favor of finding a duty. to drivers, to invitees (uninsured or considerations that must be taken into The reason was simple—without facts underinsured motorist coverage) and to account in deciding whether to impose and evidence to demonstrate “the landowners, that factor did not weigh a duty on a landowner to protect its landowner impaired the driver’s ability for or against imposition of a duty. invitees from injury presented by the to see and react to crossing pedestrians, obvious danger of crossing a public the driver’s conduct is independent The Court evaluated the Rowland factors street to access its premises. Beyond just of the landowner’s.” In addition, the with varied results. However, the Court street crossing situations, this decision is invitees decision as to when, where and found the “policy of preventing future particularly significant where an invitee how to cross the street was independent harm looms particularly large.” The plaintiff seeks to recover damages for of the landowner absent facts and Court reasoned that the comparative alleged negligence of a landowner when evidence that the landowner somehow ability of a landowner to take steps the injury producing event was not only impaired the invitee’s ability to see and to reduce the risk to its invitees as obvious, but caused by the actions of react to passing motorists. The Court compared with the ability of both the invitee himself or a third party. For looked further at the public policy invitees and drivers to prevent injury defendant landowners, the Vasilenko factors to reach its ultimate decision tipped the scale against finding a decision weighs in favor of pursuing that no duty was owed by the church duty on behalf of the landowner. summary judgment on the issue of duty to the plaintiff. Furthermore, imposing a duty on where obvious dangers are present and the landowner, or the church in this outside the control of the landowner. Specifically, the church had limited case, would discourage the landowner As a matter of public policy, because ability to control the public street or from designating parking, which landowners are not insurers of public the movement of traffic. Moreover, itself carried many benefits to the safety, an exception to the general rule the danger of crossing the street is invitees. The Court also did not ignore of duty is not only logical, it is now obvious and there is no duty to warn a key factual distinction in Vasilenko backed by California precedent.  of obvious dangers. With respect to as compared with other authorities the parking lot chosen by the church, addressing similar issues—there were because there are numerous factors that no facts suggesting the church created may weigh in favor of and against the a danger beyond that presented by the location of the lot, it is not obvious how public street itself. While the plaintiff to determine whether a safer lot was argued on appeal that the church available. This would place a difficult voluntarily assumed a duty to assist burden on the landowner to “reliably him, the Court found that issue was not predict which parking lot might be presented in the trial court, but may be

28 clausen.com CASE NOTES

CONSTRUCTION a plenary action. The plan of operation INSURER NOT LIABLE FOR for ELANY limited its remedy to INSURED’S DEFENSE COSTS DOH ADEQUATELY reporting fee violations to DFS. ASSESSED PROJECT’S OneBeacon Am. Ins. Co. v. Celanese ENVIRONMENTAL IMPACT LIABILITY Corp., 84 N.E.3d 867 (Mass. App.) INSURANCE Friends of P.S. 163, Inc. v. Jewish Home Insured terminated its costs-sharing Lifecare, Mnhttn., 2017 N.Y. LEXIS COVERAGE agreements and demanded that insurer 3699 (N.Y.) defend asbestos/product liability claims QUESTION WHETHER TRUCK under its GL policies. Held: Insurer Parents of students at a school next WAS “HIRED AUTO” ALLOWS was not liable for attorney’s fees incurred door to a construction site challenged CLAIMS TO SURVIVE after insured rejected insurer’s offer of the Department of Health’s defense. By defending without reservation Carlson v. Am. Intl. Group, Inc., 2017 environmental quality assessment, of rights, insurer was entitled to control N.Y. LEXIS 3280 (N.Y.) which allowed construction to the defense, including choice of counsel. proceed. The parents asserted the Although an exception exists for conflicts Woman was killed when a truck DOH adopted a flawed methodology of interest, insurer neither offered a painted with a packaging company’s to measure the prevalence of lead at the conditional defense nor subordinated logo, owned (and driven) by another construction site, failed to fully assess insured’s interest. A disagreement as to company, crossed the double-yellow the impact of airborne lead dust, and tactical strategy or potential liability does divider and hit her car head-on. The never looked specifically at the danger not create a conflict. companies had a cartage agreement posed to children, the elderly, or the whereby the one transported the infirm.Held: DOH complied with its INSURER LIABLE FOR packages of the other. Plaintiff sued responsibilities by taking the requisite COVERAGE OF TEMPORARY the former’s insurer. The lower court SUBSTITUTE VEHICLE “hard look” at the relevant areas of dismissed the claims outright, ruling environmental concerns and making the vehicle was not a hired auto and Conaway v. Cincinnati Ins. Co., 2017 a reasoned elaboration of the basis for that the former company could not Ohio App. LEXIS 5229 (Ohio App.) its determinations. grant the latter permission to use the vehicle, despite expert affidavit that Following a breakdown of a truck EXCESS INSURANCE under industry custom they were covered under a business auto policy, hired autos used with permission. employees were injured/killed when EXCESS LINE ASSOCIATION Held: Reversed. Where policies did commuting to work in a co-employee’s HAS NO RIGHT TO SUE not define “hired auto”, the fact issue van. Held in a split decision: The van of the degree of control exercised by was a “temporary substitute vehicle.” The Excess Line Assn. of N.Y. v. Waldorf & the packaging company over the other policy covered a temporary substitute Assoc., 30 N.Y.3d 119 (N.Y.) company’s trucks was pivotal to a when a named vehicle was out of service. determination of whether the trucks It did not need to be unavailable for a The Excess Line Association of New constituted hired autos precluding set time. An agreement to use another York (ELANY) facilitates compliance dismissal. Notably, the mere fact was unnecessary. The policy provided with the many filing and record keeping that the cartage agreement labeled coverage where persons were “occupying” requirements for excess line brokers. the truck owner an “independent a temporary substitute. The dissent argued ELANY sued a brokerage firm seeking contractor” was not dispositive, but that basing coverage on a mere intent to recoupment of stamping fees the firm one factor to be weighed with others. use a substitute was overextensive. Absent had failed to pay. Held: The legislatively van’s owner’s agreement that the vehicle created ELANY was not authorized to was a temporary substitute, the injured recover unpaid stamping fees through persons were mere passengers. clausen.com 29 CASE NOTES

MEDICAL excess allocation of fault. Special RIDER ASSUMED circumstances arise when an employee THE RISK OF FALL FROM MALPRACTICE commits an intentional tort or is PARADE FLOAT incapable of negligence, and when an LIMITATIONS PERIOD RUNS employer is a charitable institution. Wagner v. Kretz, 2017 Ohio App. FROM DATE OF BIRTH IN Both theories may be pursued in LEXIS 4933 (Ohio App.) NEGLIGENT BIRTH CASES punitive damages cases. Parade float rider fell off when his B.F. v. Reproductive Med. Assoc. of TAVERN OWNER NOT LIABLE unsecured chair collapsed. Held: The N.Y., LLP, 2017 N.Y. LEXIS 3724 FOR PARKING LOT INCIDENT primary assumption of risk doctrine (N.Y.) barred recovery. The risk of falling Powell v. Stuber, 2017 Ind. App. off an unsecured chair while riding Couples sought in vitro fertilization LEXIS 830 (Ind. App.) on a moving parade float is a danger treatment from defendant doctor. ordinary to the activity. It is common Doctor supplied an egg donor who Patron was injured in a tavern parking knowledge that danger exists, and tested positive for chromosomal lot while trying to pursue his assailant. plaintiff was aware. The injury occurred abnormality that can result in deficits Held: The tavern owner did not owe in the course of the activity. in child. Couples sued and doctor a duty of care. The imposition of a claimed lawsuits were out of time. duty requires an analysis of the type PROPERTY MANAGER Held: In actions permitting parents of plaintiff and type of harm involved. NOT LIABLE FOR TRIP ON to recover the extraordinary expenses Although a patron can be subject UNEVEN PORCH AT NIGHT incurred to care for a disabled infant to attack, owners do not routinely who, but for a physician’s negligence, contemplate that it would continue by Callentine v. Mill Invest., 2017 Ohio would not have been born, the statute a victim’s pursuit of his assailant. The App. LEXIS 5057 (Ohio App.) of limitations runs from alleged date of likelihood of harm was not enough to birth rather than date of malpractice. warrant precautions. Tenant’s guest was injured while stepping from porch to sidewalk at NEGLIGENCE HOMEOWNER NOT LIABLE night. Held: Under the two-inch FOR WORKER’S FALL rule, the imperfection as to sidewalk NEGLIGENT HIRING CLAIM THROUGH ATTIC segments was too trivial to support DISALLOWED WHERE recovery. A variation under two inches AGENCY ADMITTED Roseberry v. Diepenbrock, 2017 Ohio is slight as a matter of law. Attendant App. LEXIS 5225 (Ohio App.) circumstances provide an exception, Sedam v. 2 JR Pizza Enters., LLC, 84 but the test is objective and does not N.E.3d 1174 (Ind.) Exterminator fell through attic floor consider the actions of the parties while searching for bats. Held: A unless conditions created by a property Decedent was killed when struck by homeowner has no liability to an owner distracted a victim. The guest a pizza shop employee driving within independent contractor undertaking saw the area when entering the house. the scope and course of employment. potentially dangerous work. Worker The defect was open and obvious. And Held: Absent special circumstances, had been trained as to attic dangers. under the step-in-the-dark rule, the claims of negligent hiring, training, Homeowner was not aware of problem guest was contributorily negligent by and/or supervision are precluded when with a plank. Worker did not rely on not checking the area before walking. employer admits agency and is subject an assurance that planks were stable. to vicarious liability. A contrary rule Homeowner did not participate in work would confuse the jury, waste judicial other than in a general supervisory role. resources, expose the employer to He lent worker a flashlight and told him double recovery, and result in an to stay on the planks.

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PRODUCT LIABILITY PUBLIC BENEFIT contract limited the total reinsurance CORPORATIONS available under the contract to the MANUFACTURER OF NON- amount of the cap regardless of DEFECTIVE COMPONENT whether the underlying policy was BPCA UNABLE TO CHALLENGE understood to cover expenses such as, UNDER NO DUTY CONSTITUTIONALITY OF for instance, defense costs. Held: Excess TO WARN END USER REVIVAL STATUTE ABOUT THE DANGERS OF did not create such a presumption or construction. Further held: New York A COMPLETED ASSEMBLY Matter of WTC Lower Mnhttn. Disaster law does not impose either a rule, or Site Litig., 2017 N.Y. LEXIS 3286 (N.Y.) Pantzis v. Mack Trucks, Inc., 2017 a presumption, that a limitation on liability clause necessarily caps all Mass. App. LEXIS 151 (Mass. App.) The New York legislature enacted obligations owed by a reinsurer, such a revival statute allowing workers as defense costs, without regard for the Decedent was strangled when his who had been harmed cleaning up specific language employed therein. clothing caught on a moving assembly the World Trade Center disaster under his truck. Held: Manufacturer site to bring claims for exposure to of a non-defective component has toxins against the Battery Park City TORTS no duty to warn of dangers created Authority, a public benefit corporation. by a completed assembly. Whether a The workers then brought claims and UNLAWFUL DISCRIMINATION component could be foreseeably used or BPCA challenged the constitutionality STATUTE PUNITIVE misused did not create a jury question. of the revival statute. The Second STANDARD SAME AS There was no assumption of a duty Circuit submitted a certified question COMMON LAW STANDARD to warn end users merely because the to the New York Court of Appeals, component manufacturer provided seeking clarification as to whether the Chauca v. Abraham, 2017 N.Y. LEXIS general warnings. When a component BCPA was able to do so. Held: Like 3278 (N.Y.) may have different uses, a seller generally other state entities, public benefit need not provide safety features peculiar corporations lack capacity to challenge The Second Circuit submitted a certified to a specific adaptation. the constitutionality of a state statute question to the New York Court of . Appeals, seeking clarification as to the standard for punitive damages for actions REINSURANCE claiming unlawful discriminatory practices under Administrative Code LIABILITY LIMITATION CLAUSE of the City of NY § 8-502(a). Held: DOES NOT NECESSARILY Standard for determining punitive CAP ALL OBLIGATIONS damages under § 8-502(a) is the common law standard—willful or Global Reins. Corp. of Am. v. Century wanton negligence, or recklessness, Indem. Co., 2017 N.Y. LEXIS 3723 (N.Y.) or a conscious disregard of the rights of others or conduct so reckless as to The Second Circuit submitted a amount to such disregard. certified question to the New York Court of Appeals, seeking clarification as to whether its prior ruling in Excess Insurance Co. Ltd. v. Factory Mutual Insurance Co., 3 N.Y.3d 577 (2004), imposed either a rule of construction, or a strong presumption, that a per occurrence liability cap in a reinsurance

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