SDNY Bankruptcy Judge Refuses to Extend Bankruptcy Stay to Non-Bankrupt Building Owner

            Typically, when a large retail company files for bankruptcy protection hundreds (if not thousands) of personal injury claimants are dramatically affected by the “stay” typically granted under the Bankruptcy Code.  When the defendant is a “self-insured” entity the stay usually cannot be lifted and the plaintiffs are lumped in with the other unsecured creditors.  At the end of the bankruptcy proceedings these claimants usually get some token amount – very rarely a sum that reasonably compensates them for their injuries.

            However, there is a way of avoiding this result IF the case involves a sidewalk accident in New York City where there is a lawsuit against the building owner.  Last week, the Honorable Robert Drain denied A&P’s motion seeking to extend the bankruptcy stay protection to a non-bankrupt building owner.  The significant factors in our presentation to the Court were: a) we severed the debtor from the State Court proceedings; b) the negligence claim was based on NYC Adm. Code §7-210 – which imposes a non-delegable duty on building owners to maintain the adjacent sidewalk; and c) The lease provision between the landlord and A&P whereby A&P has to indemnify the landlord for any accident claims involving the sidewalk is probably void under New York Law.    

            By fighting for our client, her case will be proceeding to trial next month -instead of being put on hold until the bankruptcy proceedings for a multi-billion dollar entity are concluded.

THE COURT OF APPEALS LEVELS THE PLAYING FIELD FOR CAR ACCIDENT VICTIMS

This morning the New York Court of Appeals published its decision in Perl v. Meher and provided clarity to the trial courts on whether lawsuits stemming from motor vehicle accidents should be permitted to continue to trial.  
 

 For years, many injured people were unable to get their “day in court” because they were not able to establish that they sustained a “serious injury” under New York Ins. Law §5102(d) the No Fault Threshold.  Until today, injured people had to establish by “objective proof” of the injury shortly after the accident, namely that a medical doctor took objective measurements of lost range of motion and strength.  The statement in the chart that the patient has “significant” lost range of motion/diminished strength was legally insufficient under the prevailing law.  The problem was that medical doctors are primarily concerned with treating the patient and not with tailoring the medical records to withstand judicial scrutiny on the chance that the patient may pursue a lawsuit.  As a result, many deserving patients’ lawsuits were dismissed on this technicality.  This was a huge tactical advantage for the automobile insurance carriers (GEICO, Allstate, State Farm etc.) and “Threshold Motions” were common place in motor vehicle lawsuits.

The Perl Decision takes into account that doctors may not be aware of the technicalities of documenting the medical chart to establish the contemporaneous “objective” measurements of lost range of motion and strength.  The treating physician must still make some “qualitative” assessment of the plaintiff’s condition contemporaneous with the car accident.  However, the measurements of the severity of the injury can wait until a later date – after the patient has an opportunity to benefit from treatment.  The Perl case is a big step towards keeping the Courthouse doors open to people injured in car accidents.

The First Department Agrees and Reinstates Case

            I am proud of the fact that the Appellate Division, First Department agreed with our arguments in the case of Fragale v. The City of New York, 2011 NY Slip Op 07138 (1^st Dept. 2011). 

            The case involves a Sanitation supervisor who slipped and fell on a oil/grease patch at a City owned garage.  The garage supervisor’s report indicated that there was no oil/grease in the area of the accident.  However, there was conflicting testimony from a worker at the garage indicating that the area of the accident was routinely covered in grease/oil because it was the staging area for attaching snow plows to the garbage trucks.  The testimony also showed that Mr. Fragale was found in a patch of oil/grease and that the worker was told to spread “Speedy Dry” to soak up the oil after the accident.  The Court’s complete decision is annexed below as I think it is helpful on many cases involving recurring conditions.

[*1]Pietro Fragale, et al., Plaintiffs-Appellants,

v

The City of New York, Defendant-Respondent.

Order, Supreme Court, Bronx County (Larry S. Schachner, J.), entered May 11, 2010, which, in this personal injury action arising from a slip and fall in a garage owned and managed by defendant, denied as moot plaintiff's motion for a trial preference and granted defendant's cross motion for summary judgment dismissing the complaint, unanimously reversed, on the law, without costs, the cross motion denied, and the matter remanded for proceedings consistent with this decision.

Supreme Court erred in finding that there were no issues of fact as to constructive notice of the alleged oil condition on the garage floor where plaintiff fell. The testimony and statements of defendant's employees raised an issue of fact as to whether there was an ongoing and recurring dangerous oil condition in the area of the accident that defendant routinely left unaddressed (see Zisa v City of New York, 39 AD3d 313, 314 [2007]). Indeed, a supervisor stated that the garage floor was oily for "weeks and months," and a superintendent testified that he performed only weekly inspections of the premises (compare Mercer v City of New York, 223 AD2d 688 [1996], affd 88 NY2d 955 [1996]). The evidence also presents a triable issue as to whether defendant created the alleged oil condition (see Zisa, 39 AD3d at 314). One of defendant's supervisors testified that defendant routinely performed maintenance work on vehicles in the area where plaintiff fell, causing oil to spill on the floor. Any conflict between the witnesses' statements and their EBT testimony presents credibility questions not suitable for resolution on the defendant's motion for summary judgment.

We decline to decide whether plaintiff should have been granted a trial preference. Supreme Court denied plaintiff's motion as moot, and thus never addressed the merits of the issue. Accordingly, we remand for the court to consider plaintiff's application for a trial preference.

THIS CONSTITUTES THE DECISION AND ORDER 10/11/2011

A Manufacturer has a Continuing Duty To Warn Customers:

            The next time you throw out the product registration card for your snow thrower, table saw or child’s car seat – ask yourself this question: How will the manufacturer let me know if they discover a problem with this product?   The responsibility to warn the consumer does not end when a defectively design product leaves a manufacturer.  They are required to stay abreast of product design changes and let product users know if they learn of a danger – even after the sale.

            In Cover v. Cohen, 61 N.Y.2d 261, 274-275, 473 N.Y.S.2d 378 (1984), the Court of Appeals held that: A manufacturer or retailer may, however, incur liability for failing to warn concerning dangers in the use of a product which come to his attention after manufacture or sale, through advancements in the state of the art, with which he is expected to stay abreast, or through being made aware of later accidents involving dangers in the product of which warnings should be given to users.  See also, Power v. Crown Equipment Corporation, 189 A.D.2d 310, 596 N.Y.S.2d 38, 39-40 (1^st Dept. 1993). 

            In Cover v. Cohen, the Court of Appeals reiterated the principal that evidence of post-manufacture design changes is admissible to establish that it was feasible for the defendant to have included the proposed design at the time the machine was originally manufactured and to demonstrate that the defendant failed to satisfy its continuing duty to warn.  61 N.Y.2d at 270, 473 N.Y.S.2d at 868.  In Liquori v. Hollymatic Corp., 230 A.D.2d 893, 894, 643 N.Y.S.2d 886, 887 (2d Dept. 1996), the Court held that evidence of post-manufacture design changes is admissible “.  .  . for the purposes of demonstrating the feasibility of alternative designs as of the time of manufacture, or in order to establish the manufacturer’s failure to satisfy its continuing duty to warn of a known risk.”  In Cramer v. Kuhns, 213 A.D.2d 131, 139, 630 N.Y.S.2d 128, 133 (3d Dept. 1995) the Court held that, “where a plaintiff is able to show that the manufacturer had knowledge of a defect prior to the accident, evidence of subsequent design changes is admissible” with respect to the continuing duty to warn.  See also, Haran v. Union Carbide Corporation, 68 N.Y.2d 710, 506 N.Y.S.2d 311 (1986).  

            As consumers, we can do two important things to help prevent future accidents and hold the manufacturer responsible for past accidents.  Report the specific details of the accident to the manufacturer and the US Consumer Products Safety Commission at www.cpsc.gov.

You Are Not in This Alone - Evidence of Other Accidents

             One of the most important battles in any product liability/machine accident case is the fight to obtain discovery from the manufacturer relating to prior accidents.  This information is vital at trial to show the jury that: (a) the defendant was aware of a problem with the design of the product; and (b) that the plaintiff was not the only person ever hurt by this product.   This is particularly important when the case involves a product that has been on the market for a long time because the defendant wants to say to the jury that you were the “only one” injured on one of the thousands of machines they produced over the last 50 years.  The clear implication is that the plaintiff suing a manufacturer because of a defective product got hurt because he/she was “stupid” rather than due to a defective design.  

            Evidence of other accidents occurring on admittedly similar model machines is admissible at trial to establish the defendant’s knowledge of the defect in the design and the dangerous nature of the machines.  Courts have consistently held that evidence of prior accidents is proper "to establish that the condition was dangerous and that defendant had notice of it before plaintiff's injury."  Sawyer v. Dreis & Krump Manufacturing Co., 67 N.Y.2d 328, 336, 502 N.Y.S.2d 696, 701, 493 N.Y.S.2d 920 (1986). 

            This concept is so effective at trial that manufacturers fight very hard to limit the information they disclose.  First, they attempt to limit the scope of discovery to the exact same model number involved in the plaintiff’s accident.  Second, they attempt to limit the timeframe for the discovery.  Finally, they try to argue that all of the other accidents are different from the plaintiff’s case.  To force disclosure of accidents involving “other models” it is important to show that even though they model name/number differs they are essentially the same design.  Often, a manufacturer makes different sizes of the same machine.  In addition, model names/numbers may change over the years with cosmetic changes (sometimes as trivial as changing the color); or with changes to the user manual.  This is particularly true in cases involving industrial machines that may be unchanged for decades. 

            The argument that the hordes of other accidents are different from the plaintiff’s case is often the most difficult because we are usually relying on the information provided by the manufacturer.  However, the plaintiff does not need to prove that each prior accident occurred “exactly” like his/hers – only that the prior accidents were substantially similar to the current case.  Therefore, if ten other people were hurt pushing meat into a grinding machine the jury should be allowed to hear it (regardless of the particulars of any one case).  This evidence is so important in the litigation of defective products and machines because it changes the theme from the plaintiff was the only “stupid” person to get hurt to “this was just an accident waiting to happen” because the defendant refused to protect people from this dangerous machine.

Springtime in New York means Little League, playing in the park … and “assumption of the risk.”

            “Assumption of the Risk” is a little known doctrine in New York Law that allows the Court to dismiss your case for any injury that is considered to be inherent in the activity.  For example, if you break a leg playing football the case will probably be dismissed because that is a risk associated with the sport. See, Trupia v. Lake George Central School District, 14 N.Y.3d 392 (2010).  However, your case can also be dismissed if the injury was caused by a defect in the playing surface that was open and obvious.  If an athlete is injured as a result of a defect in, or feature of, the field, court, track, or course upon which the sport/activity is being played, the owner of the premises will be protected by the doctrine of primary assumption of risk as long as risk presented by the condition is inherent in the sport.  If the playing surface is as safe as it appears to be, and the condition in question is not concealed such that it unreasonably increases risk assumed by the players, the doctrine applies. 

            For example, in Calise v. City of New York, 239 A.D.2d 378 the plaintiff was thrown from a mountain bike, which he was riding on an unpaved dirt and rock path in a park, when the bike struck an exposed tree root. This Court held that the plaintiff's action was barred by the doctrine of primary assumption of risk, reasoning that “[a]n exposed tree root is a reasonably foreseeable hazard of the sport of biking on unpaved trails, and one that would be readily observable.”  On the other hand, in Cotty v. Town of Southampton, 64 A.D.3d 251 (2d Dept. 2009) the same Court found that a person riding a bicycle on a paved roadway (even when riding a high speed in tight groups) does not “assume” the risks associated with a negligently maintained road and dangerous conditions created by roadwork being performed on the roadway. 

            In Gallagher v. County of Nassau, 74 A.D.3d 877 (2d Dept. 2010) the Court held that a plaintiff could maintain a lawsuit when he was injured while trying to make a diving catch while playing softball where his injury was caused by a small, round cement object which he had not seen or encountered previously and which had been permanently installed in fair territory in the outfield, apparently to assist in drawing lines on the field when it was used for soccer.  The rationale of the Court was that while participants in sporting events assume the known, apparent, and reasonably foreseeable risks of their participation they do not consent to risks which are concealed, unassumed, or unreasonably increased.  However, the same Court recently dismissed the case in Palladino v. Lindenhurst Union Free School District, where an 11 year old boy who was injured while playing handball at the school.  His injury was caused by a dangerously installed air-intake grate on the handball court.  The Court dismissed the case because the boy knew that the grate was improperly placed (leaving a 3-6 inch gap hole in the court) and was warned that the area of the court was dangerous.   In short, the answer to whether you can successfully bring a lawsuit in these cases will depend on what you knew at the time of the accident.

Did You Know that the Defense Attorney is Speaking to Your Doctor?

            It is relatively well known that when you bring a personal injury action your medical records are disclosed to the defense.  However, currently in New York, pursuant to Arons v. Jutkowski, 9 N.Y.3d 393 (2007), you are also required to give your doctors permission to speak to the defense attorneys in a private, unrecorded conversation.  The “logic” of the Court of Appeals is based on the premise that attorneys prefer to informally interview witnesses, including doctors, to determine if they would be beneficial to his/her client’s position at trial.  Under the pre-Arons rules, the Court found that plaintiff attorneys had the advantage of informal access to the plaintiff’s medical doctors at the request of the plaintiff/patient.  The Arons Court required the plaintiff to sign an authorization permitting the doctor to speak informally to the defense attorney.  However, in its logic, the Court did not think through the potential abuses of this ruling.

            In a medical malpractice case, for example, there is no protection against an unscrupulous defense attorney from attempting to influence the doctor with statements like: they share medical malpractice insurance carriers with the target defendant; “imagine” if the patient sued you next; the target defendant is on the board of a prestigious hospital; or a multitude of less subtle ways of skewing the treating doctor’s potential testimony.  There have even been instances where the treating doctor has refused further treatment of the patient after one of these private “interviews”.  In other personal injury cases, the defense attorney must be given permission to speak to all of the client’s doctors – even if the treatment has nothing to do with the case.  For example, a woman with a broken wrist as a result of a car accident, may have to give permission to her gynecologist to speak to the defense attorneys.  The thought is that there may be some nugget of useful information about your broken wrist that can be gleaned from privately interviewing a completely unrelated specialist. 

            There is some hope to change this ill conceived rule of law coming from the NYS Legislature.  There is currently a bill working its way through the Legislature (S3296A/A964A) that would reverse the Arons Court and prohibit ex-parte interviews with treating physicians.  Please let your elected officials in Albany know that you are asking them to support this  bill.