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June 2006
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August 2006

NY Court of Appeals--Insurer Must Indemnify Insured In Wrongful Death Action

In Automobile Ins. Co. of Hartford v. Cook, 2006 NY Slip Op 04456, the Court of Appeals held that an insurer had the duty of defend its policyholder under his homeowner's insurance policy in an underlying wrongful death action resulting from a shooting committed by the insured in self defense.  The issue of indemnification was left to the finder of fact.

The Court framed the issues as follows: 

Our inquiry is two-fold: whether an "occurrence" is involved that gives rise to policy coverage and, if so, whether it falls within the "expected or intended" injury policy exclusion. As relevant here, the insurance policy defines an "occurrence" as "an accident . . . which results, during the policy period, in . . . bodily injury." The policy also contains an exclusion for bodily injury "which is expected or intended by any insured."

The Court then set forth the relevant law:

It is well settled that an insurance company's duty to defend is broader than its duty to indemnify...

Thus, an insurer may be required to defend under the contract even though it may not be required to pay once the litigation has run its course....

When an insurer seeks to disclaim coverage on the further basis of an exclusion, as it does here, the insurer will be required to "provide a defense unless it can 'demonstrate that the allegations of the complaint cast that pleading solely and entirely within the policy exclusions, and, further, that the allegations, in toto, are subject to no other interpretation' " ...In addition, exclusions are subject to strict construction and must be read narrowly... (Citations omitted).

The Court then concluded that the negligent conduct alleged in the Complaint fell within the definition of "occurrence" as set forth in the policy and that the exclusion was inapplicable since the insurer "failed to demonstrate that the allegations of the complaint are subject to no other interpretation than that (insured) 'expected or intended' the harm to (the victim)."

I loved this case.  In part because of the unusual fact pattern (make sure to read the lengthy recitation of the facts in the decision).  And, in part because I was involved in a successful declaratory judgment action against an insurer a few years back on behalf of our client who sought defense and indemnification in an underlying negligence suit with an equally strange fact pattern.  As a result, I find these types of opinions to be of particular interest.

And, this case didn't disappoint--it was certainly interesting.

Comedic Break

Here's a lawyer joke for you:

Three lawyers and three accountants got on the train in New York to go to a convention in DC. The three accountants bought a ticket each, but the three lawyers bought only one ticket between them. The accountants commented on the illegality of their action but the lawyers said, "Trust us--we're lawyers."

When the conductor entered the end of the car to collect the tickets, the three lawyers got up and all went into the bathroom together. When the conductor knocked on the bathroom door, a hand shot out with the one ticket, which the conductor duly cancelled.

On returning to their seats the three accountants expressed admiration for such a clever trick. "Well," they said modestly, "we ARE lawyers."

After the convention they all entered Union Station for the return trip home to New York. This time the accountants bought one ticket between them, while the lawyers did not buy any tickets at all. The accountants were amazed and said so. "Trust us," the three said. "We're lawyers."

When the conductor arrived, the three accountants quickly jumped up and went into the bathroom. As soon as the door closed, the three lawyers got up and headed for the ajoining bathroom. As the last lawyer went by the accountant's bathroom, he knocked on the door. A hand shot out with the ticket, which the lawyer quickly grabbed before entering the other bathroom.


Define That Term #127

Thursday's term was ex rel., which is defined as:

conj. abbreviation for Latin ex relatione, meaning "upon being related" or "upon information," used in the title of a legal proceeding filed by a state Attorney General (or the federal Department of Justice) on behalf of the government, on the instigation of a private person, who needs the state to enforce the rights of himself/herself and the public. For example, the caption would read: The State of Tennessee ex rel. Archie Johnson v. Hardy Products.

Today's term is:


Educated guesses only, please.  No dictionaries.

NY Court of Appeals Rejects Product Line Exception to the Rule Against Successor Liability

In Semenetz v. Sherling & Walden, Inc., 2006 NY Slip Op 04750, the Court of Appeals considered the issue of whether another exception, the "product line" exception, should be added to the exceptions outlined in Schumacher v Richards Shear Co. 59 NY2d 239 (1983).  Schumacher set forth 4 exceptions to the general rule that a corporation that purchases another corporation's assets is not liable for the seller's torts.

The Court first summarized the "product line" exception  by examining the California Supreme Court decision that created it:

The "product line" exception to the general rule against successor liability originated with the California Supreme Court's decision in Ray v Alad Corp. (19 Cal 3d 22, 560 P2d 3, 136 Cal Rptr 574 [1977]). In Ray, the court imposed liability on the successor corporation for an injury sustained by a plaintiff who fell off a ladder manufactured by its predecessor. The court concluded that successor liability was proper because "a party which acquires a manufacturing business and continues the output of its line of products under the circumstances here presented assumes strict tort liability for defects in units of the same product line previously manufactured and distributed by the entity from which the business was acquired"...

The court articulated three rationales for the "product line" exception:   "(1) the virtual destruction of the plaintiff's remedies against the original manufacturer caused by the successor's acquisition of the business, (2) the successor's ability to assume the original manufacturer's risk-spreading role, and (3) the fairness of requiring the successor to assume a responsibility for [its predecessor's] defective products that was a burden necessarily attached to the original manufacturer's good will being enjoyed by the successor in the continued operation of the business"...

The Court of Appeals rejected each rationale: 

As for the Ray court's first rationale — the virtual destruction of the products liability plaintiff's remedies against the original manufacturer — this "is not a justification for suing the successor, but rather . . . merely a statement of the problem...

Importantly, the "product line" exception threatens "economic annihilation" for small businesses...

Further, extending liability to the corporate successor places responsibility for a defective product on a party that did not put the product into the stream of commerce. This is inconsistent with the basic justification for strict products liability...

Thus, the Court declined to adopt the "product line" exception: 

(A)doption of the "product line" exception would mark "a radical change from existing law implicating complex economic considerations better left to be addressed by the Legislature"... We therefore join the majority of courts declining to adopt the "product line" exception.

I'm on the fence on this issue.  Usually I've got an opinion either way, but in this case, I find arguments for each position equally compelling.  Thoughts?

Should They Have Been Charged?

I find it ludicrous that, as reported in this article, two physicians and a nurse were charged with murder and face life sentences for their actions in the aftermath of Katrina:

Dr. Anna Pou and nurses Cheri Landry and Lori Budo were accused of being principals to second-degree murder in the deaths of four patients at Memorial Medical Center three days after Katrina hit. The charge carries a mandatory life sentence, though the state will turn the case over to the New Orleans prosecutor, who will decide whether to ask a grand jury to bring charges.

Pou, Landry and Budo are accused of killing four patients, ages 61 to 90, with morphine and a powerful sedative called Versed.

Our government had seemingly abandoned the people of New Orleans in the week following Katrina.  It seemed that way to those of us watching in horror from the safety of our homes in areas not ravaged by the hurricane.  One can only imagine how it felt to those stranded in New Orleans, in sweltering heat, with no aid in sight and no means of communicating with people in the building next door, let alone with those outside of New Orleans.

And, the nurses and physicians who stayed behind were faced with the monumental task of caring for critically ill people without the bells and whistles of modern medicine--with their drug supplies being rapidly depleted.  There was no electricity, no running water, no modern day conveniences.  Nurses  manually ventilated those who had been on ventilators.   Snipers shot at the few rescue helicopters that made it through.  Celebrities rowed into New Orleans on boats while the the almighty United States government, with all of its money, power and resources couldn't seem to get its act together in order to simply drop bottled water into the convention center.

Chaos reigned supreme in New Orleans.  And, help was nowhere to be found.  This was not business as usual on the ICU unit.  It was hell on earth.  It was the equivalent of conditions in a war zone.  And, absent absolute depraved indifference to human life, medical judgments made under those conditions should not be second guessed.  And, those making the decisions certainly should not be prosecuted for murder and facing a life sentence.

It's disgraceful--as disgraceful as our government's response, or lack thereof, to Katrina. 

Should the Court Have Interfered?

And, more importantly, should the parents have been found to be neglectful?

As reported in this article, a judge has ordered that a 16 year old, Starchild Abraham Cherrix (yes, that's really his name) abandon pursuing alternative cancer treatments and report to a hospital in order to undergo any cancer treatments deemed appropriate by physicians. 

Since he's a minor, I can accept that ruling, although I still question the determination that he's not in a position to make medical decisions  (with his parent's guidance).  But, the judge already ruled that he's under "joint custody" of his parents and the County.  So, the ruling makes sense--sort of.  I'm curious as to how the judge went about balancing the County's interests with the parent's and the boy's interests, and how that balancing act resulted in his decision.

But, what's even more interesting to me is that the judge found that Starchild's parent's were neglectful:

The judge also found Starchild Abraham Cherrix's parents were neglectful for allowing him to pursue alternative treatment of a sugar-free, organic diet and herbal supplements supervised by a clinic in Mexico, lawyer John Stepanovich said.

That just doesn't sit well with me.  It's one thing for the State or County to take custody of a minor and make medical decisions on behalf of said minor.  But, it's an entirely different thing to find the parents "neglectful" for encouraging their child to pursue alternative methods of  treatment.

When is it in the State's interest to protect "life"?  And who determines quality of life anyway?  Or is that simply not an important consideration?   

If someone wants to seek alternative treatments in lieu of aggressive,  invasive, and not necessarily effective treatments, is it really the government's business?  If someone chooses to die without having had their body ravaged by puke-inducing chemo, should the government have a say?  And if parents support their 16 year old (not exactly a wee little kid) son's decision to pursue alternative treatments, should they be deemed "neglectful" simply by virtue of philosophical differences?

If you haven't already guessed, my answer to each of the above questions is a resounding "no."  Or perhaps "NO!!!"

Belated NY Blawg Round Up

Here's the New York blawg round up for the week that this blog was on hiatus:

Indignant Indigent:

New York Attorney Malpractice Blog

New York Disability Lawyer Blog

Second Opinions

Comedic Break

I doubt the scenario in this joke would have occurred in a courtroom where the judge was packing heat:

After his motion to surpress evidence was denied by the court the angered attorney spoke up, "Your Honor," he said, "what would you do if I called you a stupid, degenerate, old fool." The Judge, now also angered, revered, "I would hold you in contempt of court and seek to have you suspended from practicing before this court again!" "What if I only thought it?" asked the attorney. "In that case, there is nothing I could do, you have the right to think whatever you want." "Oh, I see. Then, if it pleases the court, let the record reflect, that I 'think' you're a stupid, degenerate, old fool."

Define That Term #126

The most recent term was widow's election, which is defined as:

n. the choice a widow makes between accepting what her husband left her in his will and what she would receive by the laws of succession. Example: the state law in which the husband died would give his widow one-half of his estate by the law of succession (the other half going to the children) if there were no will, but in his will the late husband left his widow only one-quarter of his estate. She can elect to take the one-half. See also: community property descent and distribution succession will.

In addition to Slickdpdx's guess, another reader, Perry, offered the following via e-mail:

(M)y guess -- and I am guessing rather wildly -- is that a widow's election is the widow who has inherited real estate choosing whether to retain residence of a property to which she has dowry rights, perhaps for the remainder of her life, or to sell it/let it be sold, taking some percentage of the sale price.

I think that Slickdpdx's guess was a bit closer, although Perry touched upon the basic idea as well.

Today's term is: 

ex rel.

As always, no dictionaries, please.