On October 5, 2011, in Estate of Mack Pitts v. City of Atlanta, the Georgia Court of Appeals ruled that the City of Atlanta (“the City”) and various construction companies associated with a construction project at the Atlanta airport were liable to the Estate of Mack Pitts, deceased, because the City and the contractors failed to make sure that a subcontractor which was responsible for the death of Mr. Pitts had sufficient insurance to cover a wrongful death verdict obtained against the subcontractor.
In June of 2007, Mack Pitts was killed while working on a construction project at the Atlanta airport when he was struck by a vehicle driven by an employee of A & G Trucking, Inc. (“A & G”). Mr. Pitts’ Estate obtained a wrongful death judgment against A & G and its driver in the amount of $5.75 million. A & G only had insurance coverage of $1 million. The Estate then sued the City and the contractors claiming that it failed to enforce a contractual provision requiring A & G to have $10 million in coverage. The Estate claimed that all of the defendants breached a contractual duty to require A & G to carry a minimum of $10 million in automobile liability insurance to work on the project. The trial court granted summary judgment to the defendants and the Court of Appeals disagreed. Instead, the Court of Appeals found that summary judgment should be granted to the Estate on its claim for breach of contract.
The City had contracted with various construction companies which acted as a joint venture regarding the project. In the main contract between the City and the joint venture, the general contractor would serve as a construction manager for the project and was authorized to enter into subcontracts. The general contractor was obligated to require any subcontractor to assume all of the obligations to the City under the main contract. The contract contains what is commonly known as OCIP (“Owner’s Controlled Insurance Program”). The purpose of the OCIP was to provide one master insurance program providing coverage with high limits for all the participants. The main contract required that the named insureds complied with all requirements of the OCIP which require the contractor to provide, at its own expense, automobile, bodily injury, and property damage liability coverage of no less than $10 million. The subcontractors agreed to be bound by the terms of the main contract.
The claims of the Estate were for breach of contract. The Estate claimed that Mr. Pitts and the Estate were third party beneficiaries of the main contract. The Court of Appeals agreed and found that although Mr. Pitts was not specifically named as a beneficiary in either the main contract or the subcontracts it was the intention of those contracts to provide one master insurance program that will benefit all participants involved in the project. Ms. Pitts was a participant in the project.
One of the defendants’ arguments in response was that the Estate’s claims were barred by the statutory immunity afforded under the Workers’ Compensation Act. However, even though the Estate’s claims arose out of a tort injury, the Court of Appeals found that the Act did not preclude the estate from proceeding against the third parties because the claims against the third parties were based upon breach of contract. The injury for which the Estate sought damages was not the physical injury itself, according to the Court, but was the loss of access to insurance coverage brought about by the defendants’ alleged breach of contract.
It was unquestioned that A & G did not have the minimum automobile liability insurance of $10 million when it worked on the project. The contract obligated all subcontractors to bind all lower tier subcontractors to the obligations of the main contract. This was not done. Therefore, according to the Court of Appeals, the undisputed evidence showed that the defendants breached their contractual duties regarding the OCIP by allowing A & G to work on the construction project without the required minimum coverage.
It is important to note that the Court of Appeals based its opinion on the very specific language of the contract and the OCIP which required coverage for “all participants involved in the project.” Had that language not been in the contracts it is questionable whether the Court would have reached this ruling. For future reference, in large construction projects involving an OCIP, all parties should closely review the contracts to determine whether this language exists within the contracts and whether they want it to exist. If that language is present, extra effort should be undertaken to confirm that all subcontractors on all levels have appropriate insurance coverage.
Please call me if you have any questions.
Michael
Friday, October 14, 2011
Friday, September 30, 2011
No Indemnification for Contractor in Default
On September 30, 2011, in U.S. Lawns, Inc. v. Cutting Edge Landscaping, LLC, the Georgia Court of Appeals declined to enforce an indemnification clause because the contractor seeking indemnification settled the underlying claim only after it had gone into default.
U.S. Lawns, Inc. (“U.S. Lawns”) contracted to provide landscaping services to Bank of America in Macon, Georgia. U.S. Lawns then subcontracted its landscaping duties to Cutting Edge Landscaping, LLC (“Cutting Edge”). The subcontract between U.S. Lawns and Cutting Edge contained an indemnification provision.
In July of 2007, Gloria Freeman filed a negligence suit against Bank of America, U.S. Lawns and Cutting Edge alleging that she injured herself when she stepped in a hole on the premises of the bank. U.S. Lawns was served with the Complaint and Summons and but failed to file an Answer and went into default. U.S. Lawns filed a motion to open the default which was denied. Thereafter, U.S. Lawns negotiated a settlement with Ms. Freeman and then filed a lawsuit against Cutting Edge seeking indemnification for the amounts paid to Ms. Freeman. Both the trial court and Court of Appeals found that U.S. Lawns was not entitled to indemnification against Cutting Edge.
Generally, the fact that an indemnitee has settled or comprised an underlying tort action brought by an injured party does not bar the indemnitee from pursuing a claim for indemnification from a third party indemnitor. However, if the indemnitee who settles the underlying tort action has an available defense which would have defeated the action but fails to assert it, no indemnification can be recovered. The burden of proof in this situation is on the indemnitee (U.S. Lawns in this case) to come forward with evidence to reflect that it could have been held liable in the underlying tort action had the case not been settled.
U.S. Lawns had an available defense which would have defeated Ms. Freeman’s claims. The contract between U.S. Lawns and Bank of America reflected that the repair of holes such as the one that Ms. Freeman fell into was not part of U.S. Lawns or Cutting Edge’s contractual duties. There was also no evidence indicating that the hole was caused by U.S. Lawns or Cutting Edge. U.S. Lawns could have successfully defended itself in the Freeman action on the basis that neither it nor its subcontractor, Cutting Edge, had any legal duty to repair the hole in the curb where Freeman was injured. By letting itself go into default, U.S. Lawns failed to assert this defense.
U.S. Lawns also argued that Cutting Edge had a contractual duty to defend U.S. Lawns and therefore Cutting Edge was responsible for the fact that U.S. Lawns went into default. The Court of Appeals was not persuaded by this argument because U.S. Lawns never notified Cutting Edge that it expected Cutting Edge to file an Answer on its behalf. The Court found an implied duty for U.S. Lawns to timely notify Cutting Edge that it had been served with a Complaint that fell within the indemnification provision and that it expected a response to the Complaint to be filed on its behalf. The default and subsequent settlement with Freeman were not the fault of Cutting Edge, according to the Court.
Also, the Court wrote that when U.S. Lawns went into default and by reason of that default failed to assert a defense that would have defeated the lawsuit, the liability brought about by the default did not “arise out of” and was not related to Cutting Edge’s performance, but instead arose from U.S. Lawn’s own conduct in allowing the default and failing to assert a meritorious defense.
This case reinforces that a party seeking indemnification should immediately notify the indemnitor of its expectations. Of course, filing an Answer to a lawsuit is always the best practice.
Please let me know if you would like a copy of this Opinion.
Michael
U.S. Lawns, Inc. (“U.S. Lawns”) contracted to provide landscaping services to Bank of America in Macon, Georgia. U.S. Lawns then subcontracted its landscaping duties to Cutting Edge Landscaping, LLC (“Cutting Edge”). The subcontract between U.S. Lawns and Cutting Edge contained an indemnification provision.
In July of 2007, Gloria Freeman filed a negligence suit against Bank of America, U.S. Lawns and Cutting Edge alleging that she injured herself when she stepped in a hole on the premises of the bank. U.S. Lawns was served with the Complaint and Summons and but failed to file an Answer and went into default. U.S. Lawns filed a motion to open the default which was denied. Thereafter, U.S. Lawns negotiated a settlement with Ms. Freeman and then filed a lawsuit against Cutting Edge seeking indemnification for the amounts paid to Ms. Freeman. Both the trial court and Court of Appeals found that U.S. Lawns was not entitled to indemnification against Cutting Edge.
Generally, the fact that an indemnitee has settled or comprised an underlying tort action brought by an injured party does not bar the indemnitee from pursuing a claim for indemnification from a third party indemnitor. However, if the indemnitee who settles the underlying tort action has an available defense which would have defeated the action but fails to assert it, no indemnification can be recovered. The burden of proof in this situation is on the indemnitee (U.S. Lawns in this case) to come forward with evidence to reflect that it could have been held liable in the underlying tort action had the case not been settled.
U.S. Lawns had an available defense which would have defeated Ms. Freeman’s claims. The contract between U.S. Lawns and Bank of America reflected that the repair of holes such as the one that Ms. Freeman fell into was not part of U.S. Lawns or Cutting Edge’s contractual duties. There was also no evidence indicating that the hole was caused by U.S. Lawns or Cutting Edge. U.S. Lawns could have successfully defended itself in the Freeman action on the basis that neither it nor its subcontractor, Cutting Edge, had any legal duty to repair the hole in the curb where Freeman was injured. By letting itself go into default, U.S. Lawns failed to assert this defense.
U.S. Lawns also argued that Cutting Edge had a contractual duty to defend U.S. Lawns and therefore Cutting Edge was responsible for the fact that U.S. Lawns went into default. The Court of Appeals was not persuaded by this argument because U.S. Lawns never notified Cutting Edge that it expected Cutting Edge to file an Answer on its behalf. The Court found an implied duty for U.S. Lawns to timely notify Cutting Edge that it had been served with a Complaint that fell within the indemnification provision and that it expected a response to the Complaint to be filed on its behalf. The default and subsequent settlement with Freeman were not the fault of Cutting Edge, according to the Court.
Also, the Court wrote that when U.S. Lawns went into default and by reason of that default failed to assert a defense that would have defeated the lawsuit, the liability brought about by the default did not “arise out of” and was not related to Cutting Edge’s performance, but instead arose from U.S. Lawn’s own conduct in allowing the default and failing to assert a meritorious defense.
This case reinforces that a party seeking indemnification should immediately notify the indemnitor of its expectations. Of course, filing an Answer to a lawsuit is always the best practice.
Please let me know if you would like a copy of this Opinion.
Michael
Friday, September 2, 2011
Construction Project Indemnification Upheld
In JNJ Foundation Specialists, Inc. v. D.R. Horton, Inc., decided July 28, 2011, the Georgia Court of Appeals upheld an indemnification agreement in a construction contract and found that a contractor was required to indemnify a project developer even though the contractor’s work did not necessarily cause the injury which brought the claim about. According to the Court of Appeals, the term arising out of in the contract did not require a finding that the subcontractor’s actions directly or proximately caused the injury.
JNJ Foundation Specialist, Inc. (“JNJ”) contracted with D.R. Horton, a developer, to pour entry sidewalks for a subdivision. Plaintiff Gary Hall was driving near the front of the subdivision when he saw construction barrels in the middle of the travel lane. Hall stopped his vehicle and was rear-ended by another vehicle. Hall sued D.R. Horton alleging that Horton was negligent in entrusting operation of the construction site to a John Doe which had failed to adequately mark the lane closure and created a hazard. D.R. Horton answered the complaint and filed a third-party complaint against JNJ and its insurer, Columbia National Insurance Company (“Columbia National”). D.R. Horton alleged that JNJ was liable for refusing to provide a defense and indemnification pursuant to the construction contract entered into between JNJ and D.R. Horton. The trial judge granted summary judgment for D.R. Horton and found that, contractually, JNJ was liable for indemnification. The Court of Appeals agreed.
JNJ argued that the indemnification agreement did not apply because: (a) there was no evidence that JNJ placed the construction barrels in the roadway; (b) there was no evidence that the barrel placement was the direct and proximate cause of Hall’s injury; and (c) the complaint did not allege facts that came within the scope of JNJ’s work. The contract provided that JNJ had a duty to defend and indemnify D.R. Horton for any claims "in any way occurring, incident to, arising out of, or in connection with . . . the work performed or to be performed by contractor or contractor’s personnel, agents, suppliers, or permitted subcontractors." JNJ argued that there was no evidence that Hall’s injury arose out of its work.
Under Georgia law, the phrase “arising out of” in indemnification provisions does not mean proximate cause in the strict legal sense nor does it require a finding that the injury was directly caused by the indemnitor's actions. According to the Court “almost any causal connection or relationship will do.” Because there was evidence that JNJ placed the construction barrels in the roadway and was working in the area and pouring concrete around the time of the accident, Hall’s claim either arose out of or was connected in some way to JNJ’s work. Therefore, JNJ had a duty to defend and to indemnify D.R. Horton pursuant to its contract.
The Court of Appeals also rejected Columbia National’s argument that it had not received notice of the claim “as soon as practicable” from D.R. Horton and found that a jury question exists as to whether Columbia National has been prejudiced by late notice of the lawsuit by D.R. Horton.
This case provides good arguments for any owner or contractor seeking to enforce a broad indemnification agreement. Any involvement of the subcontractor whatsoever in the portion of the project giving rise to an injury might bring about the duty to indemnify. Subcontractors should take the time to carefully review their contracts to make sure they are aware of the potential scope of their indemnification.
Please let me know if you have any questions or would like a copy of the opinion. Have a great Labor Day. Michael.
JNJ Foundation Specialist, Inc. (“JNJ”) contracted with D.R. Horton, a developer, to pour entry sidewalks for a subdivision. Plaintiff Gary Hall was driving near the front of the subdivision when he saw construction barrels in the middle of the travel lane. Hall stopped his vehicle and was rear-ended by another vehicle. Hall sued D.R. Horton alleging that Horton was negligent in entrusting operation of the construction site to a John Doe which had failed to adequately mark the lane closure and created a hazard. D.R. Horton answered the complaint and filed a third-party complaint against JNJ and its insurer, Columbia National Insurance Company (“Columbia National”). D.R. Horton alleged that JNJ was liable for refusing to provide a defense and indemnification pursuant to the construction contract entered into between JNJ and D.R. Horton. The trial judge granted summary judgment for D.R. Horton and found that, contractually, JNJ was liable for indemnification. The Court of Appeals agreed.
JNJ argued that the indemnification agreement did not apply because: (a) there was no evidence that JNJ placed the construction barrels in the roadway; (b) there was no evidence that the barrel placement was the direct and proximate cause of Hall’s injury; and (c) the complaint did not allege facts that came within the scope of JNJ’s work. The contract provided that JNJ had a duty to defend and indemnify D.R. Horton for any claims "in any way occurring, incident to, arising out of, or in connection with . . . the work performed or to be performed by contractor or contractor’s personnel, agents, suppliers, or permitted subcontractors." JNJ argued that there was no evidence that Hall’s injury arose out of its work.
Under Georgia law, the phrase “arising out of” in indemnification provisions does not mean proximate cause in the strict legal sense nor does it require a finding that the injury was directly caused by the indemnitor's actions. According to the Court “almost any causal connection or relationship will do.” Because there was evidence that JNJ placed the construction barrels in the roadway and was working in the area and pouring concrete around the time of the accident, Hall’s claim either arose out of or was connected in some way to JNJ’s work. Therefore, JNJ had a duty to defend and to indemnify D.R. Horton pursuant to its contract.
The Court of Appeals also rejected Columbia National’s argument that it had not received notice of the claim “as soon as practicable” from D.R. Horton and found that a jury question exists as to whether Columbia National has been prejudiced by late notice of the lawsuit by D.R. Horton.
This case provides good arguments for any owner or contractor seeking to enforce a broad indemnification agreement. Any involvement of the subcontractor whatsoever in the portion of the project giving rise to an injury might bring about the duty to indemnify. Subcontractors should take the time to carefully review their contracts to make sure they are aware of the potential scope of their indemnification.
Please let me know if you have any questions or would like a copy of the opinion. Have a great Labor Day. Michael.
Tuesday, August 9, 2011
Jury Instruction Allowing Apportionment of Fault Against a Non-Party Criminal Approved in Premises Liability Case
On July 14, 2011, the Georgia Court of Appeals agreed that a DeKalb County Judge had properly instructed a jury in a premises liability case involving a murder that it was allowed to apportion fault against the murderer. In Pacheco v. Regal Cinemas, Inc., the Court affirmed the jury verdict in favor of the defendants in a case which was won at trial and on appeal by my partner, Matt Moffett.
On September 29, 2006, 21 year-old Jesus Silencio was walking through the parking lot of a DeKalb County movie theater when a truck stopped near him and several individuals verbally communicating gang affiliations confronted Silencio and began punching and hitting him with a bat. During the altercation, Silencio was fatally shot and the individuals fled. Silencio’s family filed a wrongful death action against Regal Cinemas, Inc. and a security company, Perfections Management Solutions, LLC, alleging that negligent security led to Silencio’s death.
At trial, the Judge instructed the jury that they were allowed to apportion fault against the criminal perpetrator. The case resulted in a jury verdict in favor of the defendants so there was no actual apportionment against the murderer but the DeKalb County jury would have been allowed to do so under the Judge’s instruction.
The plaintiffs argued that the Judge’s instruction was inappropriate and relied on several out-of-state decisions which refused to apply apportionment principles where the defendants were alleged to have been negligent in failing to keep the premises safe from allegedly foreseeable intentional conduct. The Court of Appeals declined to adopt those rulings and noted that in the Florida case relied upon by the plaintiffs there was an express provision in the statute which made it inapplicable where the case was “based upon an intentional act.” The Georgia statute has no such exclusionary provision.
It should be noted that the Court of Appeals found that the plaintiffs at various points during the trial had failed to properly preserve their objections. However, this case is good authoriy for the principle that in a premises liability case arising out of a criminal act, i.e., an assault, murder, rape, etc., the jury should be allowed to apportion fault against the criminal who committed the act.
Please call me if you have any questions or would like a copy of the opinion. I congratulate Matt, who was assisted by Wayne Melnick, on this great result.
Michael
On September 29, 2006, 21 year-old Jesus Silencio was walking through the parking lot of a DeKalb County movie theater when a truck stopped near him and several individuals verbally communicating gang affiliations confronted Silencio and began punching and hitting him with a bat. During the altercation, Silencio was fatally shot and the individuals fled. Silencio’s family filed a wrongful death action against Regal Cinemas, Inc. and a security company, Perfections Management Solutions, LLC, alleging that negligent security led to Silencio’s death.
At trial, the Judge instructed the jury that they were allowed to apportion fault against the criminal perpetrator. The case resulted in a jury verdict in favor of the defendants so there was no actual apportionment against the murderer but the DeKalb County jury would have been allowed to do so under the Judge’s instruction.
The plaintiffs argued that the Judge’s instruction was inappropriate and relied on several out-of-state decisions which refused to apply apportionment principles where the defendants were alleged to have been negligent in failing to keep the premises safe from allegedly foreseeable intentional conduct. The Court of Appeals declined to adopt those rulings and noted that in the Florida case relied upon by the plaintiffs there was an express provision in the statute which made it inapplicable where the case was “based upon an intentional act.” The Georgia statute has no such exclusionary provision.
It should be noted that the Court of Appeals found that the plaintiffs at various points during the trial had failed to properly preserve their objections. However, this case is good authoriy for the principle that in a premises liability case arising out of a criminal act, i.e., an assault, murder, rape, etc., the jury should be allowed to apportion fault against the criminal who committed the act.
Please call me if you have any questions or would like a copy of the opinion. I congratulate Matt, who was assisted by Wayne Melnick, on this great result.
Michael
Wednesday, July 6, 2011
Convenience Stores May Be Liable For Sale of Alcohol Under Dram Shop Act
Yesterday, the Georgia Supreme Court decided that Georgia’s dram shop act applies when a convenience store sells closed or packaged containers of alcohol not intended for consumption on the premises to a noticeably intoxicated person. This 6-1 ruling overturned a Court of Appeals finding that, as a matter of law, convenience stores could not be liable for the sale of packaged and closed containers of alcohol. Flores v. Exprezit! Stores 98-Georgia.
This case arose out of motor vehicle collision in which six people were killed and several were injured. Approximately four hours before the collision, the driver of one of the vehicles, Billy Joe Grundell, drove with a passenger to a convenience store. Grundell was noticeably intoxicated when he entered the store and purchased a 12-pack of beer. Grundell and his passenger drove off and consumed the beer. Later, Grundell crossed the centerline of a highway and ran head-on into a van going the opposite direction. Grundell’s blood alcohol level at time of the accident was 0.181, twice the legal limit. After the injured passengers brought suit under the dram shop act against the owner of the convenience store, Exprezit! Stores 98-Georgia, LLC (“Exprezit!”), the trial Judge granted summary judgment to Exprezit! and the Court of Appeals agreed.
The Georgia dram shop act provides that a person who sells, furnishes, or serves alcoholic beverages to a person who is in a state of noticeable intoxication, knowing that such person will soon be driving a motor vehicle, may become liable for injury or damage caused by or resulting from the intoxication of that person. Other States, in their dram shop acts, have expressly exempted convenience stores from liability. The Georgia statute, however, does not provide for any express exemption.
In creating an exemption for convenience stores, the Court of Appeals had applied the reasoning of the Georgia Supreme Court in its 2005 decision exempting airlines from liability under the dram shop act. In a lawsuit against Delta, the Supreme Court found that airline passengers generally do not have direct and immediate access to their vehicles after they deplane and the airline has no way of knowing whether any of its passengers will “soon” be operating a vehicle as opposed to remaining at the airport or departing by some other means of transportation. The Court of Appeals found, and Exprezit! argued, that like airlines, convenience stores have no way of knowing if their customers will soon be driving a motor vehicle. Exprezit! also argued that unlike taverns, bars and restaurants, where customers consume alcoholic beverages on the premises, convenience stores are limited in their ability to discern whether their customers are noticeably intoxicated. The Supreme disagreed.
According to the Supreme Court, when a convenience store sells alcoholic beverages to a customer it often has an opportunity to observe how the customer arrived and, conversely, the manner in which he will depart. Therefore, a convenience store may very well know if a customer will soon be driving a motor vehicle. The convenience store seller also has, according the Court, an opportunity to observe the customer to determine if he appears to be noticeably intoxicated.
The issue of what the convenience store operator knows insofar as the level of intoxication of the customer and whether the customer is driving will now always involve a factual determination. Only in cases where the facts are clear that the convenience store had no knowledge, and could have had no knowledge, that the patron was driving or where there is no evidence that the patron was “noticeably intoxicated” will summary judgment be granted to a convenience store in a dram shop case. The focus, according the Supreme Court, is on the convenience store’s knowledge as to whether its customer was noticeably intoxicated and would be driving soon. "If a convenience store sells alcohol to such a customer, it is foreseeable that the customer will drive while intoxicated and injure an innocent third party and if the plaintiff can prove that such sale of alcohol was a proximate cause of any injuries the convenience store will be held liable."
One unfortunate result of this opinion is that a convenience store cashier now is in the same position as a bartender serving alcohol over the counter in a bar. Both must exercise their judgment as to who is intoxicated and whether or not he or she is driving. Convenience stores should all now closely review their policies on the sale of alcoholic beverages.
Please let me know if you have any questions or would like a copy of this opinion.
Michael
This case arose out of motor vehicle collision in which six people were killed and several were injured. Approximately four hours before the collision, the driver of one of the vehicles, Billy Joe Grundell, drove with a passenger to a convenience store. Grundell was noticeably intoxicated when he entered the store and purchased a 12-pack of beer. Grundell and his passenger drove off and consumed the beer. Later, Grundell crossed the centerline of a highway and ran head-on into a van going the opposite direction. Grundell’s blood alcohol level at time of the accident was 0.181, twice the legal limit. After the injured passengers brought suit under the dram shop act against the owner of the convenience store, Exprezit! Stores 98-Georgia, LLC (“Exprezit!”), the trial Judge granted summary judgment to Exprezit! and the Court of Appeals agreed.
The Georgia dram shop act provides that a person who sells, furnishes, or serves alcoholic beverages to a person who is in a state of noticeable intoxication, knowing that such person will soon be driving a motor vehicle, may become liable for injury or damage caused by or resulting from the intoxication of that person. Other States, in their dram shop acts, have expressly exempted convenience stores from liability. The Georgia statute, however, does not provide for any express exemption.
In creating an exemption for convenience stores, the Court of Appeals had applied the reasoning of the Georgia Supreme Court in its 2005 decision exempting airlines from liability under the dram shop act. In a lawsuit against Delta, the Supreme Court found that airline passengers generally do not have direct and immediate access to their vehicles after they deplane and the airline has no way of knowing whether any of its passengers will “soon” be operating a vehicle as opposed to remaining at the airport or departing by some other means of transportation. The Court of Appeals found, and Exprezit! argued, that like airlines, convenience stores have no way of knowing if their customers will soon be driving a motor vehicle. Exprezit! also argued that unlike taverns, bars and restaurants, where customers consume alcoholic beverages on the premises, convenience stores are limited in their ability to discern whether their customers are noticeably intoxicated. The Supreme disagreed.
According to the Supreme Court, when a convenience store sells alcoholic beverages to a customer it often has an opportunity to observe how the customer arrived and, conversely, the manner in which he will depart. Therefore, a convenience store may very well know if a customer will soon be driving a motor vehicle. The convenience store seller also has, according the Court, an opportunity to observe the customer to determine if he appears to be noticeably intoxicated.
The issue of what the convenience store operator knows insofar as the level of intoxication of the customer and whether the customer is driving will now always involve a factual determination. Only in cases where the facts are clear that the convenience store had no knowledge, and could have had no knowledge, that the patron was driving or where there is no evidence that the patron was “noticeably intoxicated” will summary judgment be granted to a convenience store in a dram shop case. The focus, according the Supreme Court, is on the convenience store’s knowledge as to whether its customer was noticeably intoxicated and would be driving soon. "If a convenience store sells alcohol to such a customer, it is foreseeable that the customer will drive while intoxicated and injure an innocent third party and if the plaintiff can prove that such sale of alcohol was a proximate cause of any injuries the convenience store will be held liable."
One unfortunate result of this opinion is that a convenience store cashier now is in the same position as a bartender serving alcohol over the counter in a bar. Both must exercise their judgment as to who is intoxicated and whether or not he or she is driving. Convenience stores should all now closely review their policies on the sale of alcoholic beverages.
Please let me know if you have any questions or would like a copy of this opinion.
Michael
Tuesday, June 21, 2011
Expert Causation Testimony Required in Toxic Tort Case
In a recent case, the Georgia Court of Appeals has ruled that the plaintiffs must come forward with expert testimony to prove that their medical issues were caused by carbon monoxide poisoning. This proof was especially necessary because another toxic substance, mold, was found in the plaintiff’s home. Seymour Electric and Air Conditioning Serv., Inc. v. Statom (decided May 26, 2011).
Willie and Betty Statom sued Seymour Electrical and Air Conditioning Service, Inc. for negligence alleging that they were injured by carbon monoxide poisoning from a gas furnace that was improperly installed and repaired. Seymour installed a new furnace in the Statoms’ home in May of 2007 and during a service call in July 2008, Seymour failed to convert a replacement valve nozzle from its factory setting for natural gas to the setting for propane gas, which was being used by the Statoms. The failure to properly convert the nozzle led to incomplete combustion inside the furnace which resulted in soot and carbon monoxide.
After the initial installation of the furnace, but before the faulty replacement of the valve nozzle, the Statoms began experiencing a variety of medical problems, including headaches, nausea, burning throats, burning eyes, stomach pain, fatigue, and memory loss. Mrs. Statom was hospitalized for three days and missed at least a month of work. The Statoms moved out of their house for approximately six months while efforts were made to identify and correct any problems that might be causing their symptoms.
During the course of the investigation to determine potential environmental hazards, mold was discovered in the house and some consultants believe that it was the cause of the Statoms’ symptoms. A service technician with a different heating and air conditioning company discovered the replacement valve nozzle issue in November of 2008.
In December of 2008 the Statoms moved back into their house and their symptoms subsided. They then sued Seymour contending that their medical symptoms had been the result of carbon monoxide poisoning and sought damages for physical and emotional injury. Seymour moved for summary judgment, arguing among other things that there was no evidence of causation. The trial court denied the motion but the Court of Appeals felt otherwise.
Seymour was negligent in its installation of the furnace and its subsequent replacement of the valve nozzle. The issue was whether there was any competent evidence that Seymour’s negligence caused the Statoms’ medical symptoms. Although the Statoms sought medical attention for their symptoms, they failed to come forward with any evidence that a physician ever tested them for carbon monoxide poisoning or diagnosed them as having that condition. There was no expert medical testimony establishing a causal link between their medical symptoms and their alleged exposure to carbon monoxide. Rather, the Statoms simply argued that a jury could “infer” that the carbon monoxide from the furnace caused their medical symptoms because the dangers associated with its inhalation are well known.
According to the Court of Appeals, this “inference” was not enough. While expert testimony is unnecessary to establish causation in many negligence cases, some cases raise issues that can be resolved by a jury only with the assistance of experts with specialized medical knowledge. This is one of those cases as are many toxic tort cases. Medical evidence was especially necessary in this case because of the possibility of another cause for the Plaintiffs’ symptoms: mold.
In any toxic tort case plaintiffs will need to have medical testimony that the substance which they contend caused their injury did, in fact, do so. Remember also that the physician or expert providing that testimony must be qualified to do so and must have a proper foundation for his or her opinion.
Please let me know if you would like a copy of the opinion.
Michael
Willie and Betty Statom sued Seymour Electrical and Air Conditioning Service, Inc. for negligence alleging that they were injured by carbon monoxide poisoning from a gas furnace that was improperly installed and repaired. Seymour installed a new furnace in the Statoms’ home in May of 2007 and during a service call in July 2008, Seymour failed to convert a replacement valve nozzle from its factory setting for natural gas to the setting for propane gas, which was being used by the Statoms. The failure to properly convert the nozzle led to incomplete combustion inside the furnace which resulted in soot and carbon monoxide.
After the initial installation of the furnace, but before the faulty replacement of the valve nozzle, the Statoms began experiencing a variety of medical problems, including headaches, nausea, burning throats, burning eyes, stomach pain, fatigue, and memory loss. Mrs. Statom was hospitalized for three days and missed at least a month of work. The Statoms moved out of their house for approximately six months while efforts were made to identify and correct any problems that might be causing their symptoms.
During the course of the investigation to determine potential environmental hazards, mold was discovered in the house and some consultants believe that it was the cause of the Statoms’ symptoms. A service technician with a different heating and air conditioning company discovered the replacement valve nozzle issue in November of 2008.
In December of 2008 the Statoms moved back into their house and their symptoms subsided. They then sued Seymour contending that their medical symptoms had been the result of carbon monoxide poisoning and sought damages for physical and emotional injury. Seymour moved for summary judgment, arguing among other things that there was no evidence of causation. The trial court denied the motion but the Court of Appeals felt otherwise.
Seymour was negligent in its installation of the furnace and its subsequent replacement of the valve nozzle. The issue was whether there was any competent evidence that Seymour’s negligence caused the Statoms’ medical symptoms. Although the Statoms sought medical attention for their symptoms, they failed to come forward with any evidence that a physician ever tested them for carbon monoxide poisoning or diagnosed them as having that condition. There was no expert medical testimony establishing a causal link between their medical symptoms and their alleged exposure to carbon monoxide. Rather, the Statoms simply argued that a jury could “infer” that the carbon monoxide from the furnace caused their medical symptoms because the dangers associated with its inhalation are well known.
According to the Court of Appeals, this “inference” was not enough. While expert testimony is unnecessary to establish causation in many negligence cases, some cases raise issues that can be resolved by a jury only with the assistance of experts with specialized medical knowledge. This is one of those cases as are many toxic tort cases. Medical evidence was especially necessary in this case because of the possibility of another cause for the Plaintiffs’ symptoms: mold.
In any toxic tort case plaintiffs will need to have medical testimony that the substance which they contend caused their injury did, in fact, do so. Remember also that the physician or expert providing that testimony must be qualified to do so and must have a proper foundation for his or her opinion.
Please let me know if you would like a copy of the opinion.
Michael
Tuesday, June 14, 2011
Florida Wrongful Death Law Violates Public Policy of Georgia
On May 27, 2011 in Carroll Fulmer Logistics Corp. v. Hines the Georgia Court of Appeals ruled that Florida’s wrongful death law violates the public policy of the State of Georgia and should not be applied to a lawsuit pending in Georgia but based on an occurrence which took place in Florida.
Travis Hardaway was killed when the tractor-trailer he was driving on Interstate 10 in Jacksonville, Florida struck the rear of the tractor-trailer driven by Clifford Pauldo in the course of his employment for Carroll Fulmer Logistics Corp. (“CFL”). Hardaway died shortly after the collision from burns and smoke inhalation when, as a result of the collision, the driver’s compartment of his tractor-trailer burst into flames. Both drivers were Georgia residents. Hardaway’s Estate brought a wrongful death action in Georgia against Pauldo and CFL. Generally, under Georgia law, because the incident giving rise to the lawsuit occurred in Florida, the substantive law of Florida would apply. However, Georgia recognizes a public policy exception to this rule. Under the exception, even if the tort occurred in another state, Georgia Courts will not apply the other state’s substantive law if that law contravenes the public policy of Georgia.
Florida and Georgia have substantially different wrongful death laws. In Georgia, a survivor has the right to recover the full value of the life of the deceased without deducting for any of the necessary or personal expenses of the deceased had he or she lived. Damages are measured from the deceased’s point of view and there is no recovery for damages in Georgia for mental or emotional suffering experienced by the deceased’s survivors as a result of the wrongful death. That is not the case in Florida. Under the Florida Wrongful Death Act, survivors have the right to recover damages suffered by the survivor, not by the deceased, as a result of the deceased’s injury and death. The Court of Appeals found that this was a significant enough difference so that application of Florida law would violate the public policy of the State of Georgia and therefore Florida wrongful death law should not apply.
This ruling can be used in any case involving a wrongful death action filed in Georgia but where the occurrence took place in another state. If the other state’s wrongful death laws are significantly different than Georgia’s, then Georgia courts are likely to apply Georgia law. This case also shows a willingness on the part of the Court of Appeals to examine closely all laws of other states to determine if they differ substantially from Georgia’s laws and not to blindly apply another state’s law in Georgia courts.
Please call me if you have any questions or would like a copy of the opinion.
Michael
Travis Hardaway was killed when the tractor-trailer he was driving on Interstate 10 in Jacksonville, Florida struck the rear of the tractor-trailer driven by Clifford Pauldo in the course of his employment for Carroll Fulmer Logistics Corp. (“CFL”). Hardaway died shortly after the collision from burns and smoke inhalation when, as a result of the collision, the driver’s compartment of his tractor-trailer burst into flames. Both drivers were Georgia residents. Hardaway’s Estate brought a wrongful death action in Georgia against Pauldo and CFL. Generally, under Georgia law, because the incident giving rise to the lawsuit occurred in Florida, the substantive law of Florida would apply. However, Georgia recognizes a public policy exception to this rule. Under the exception, even if the tort occurred in another state, Georgia Courts will not apply the other state’s substantive law if that law contravenes the public policy of Georgia.
Florida and Georgia have substantially different wrongful death laws. In Georgia, a survivor has the right to recover the full value of the life of the deceased without deducting for any of the necessary or personal expenses of the deceased had he or she lived. Damages are measured from the deceased’s point of view and there is no recovery for damages in Georgia for mental or emotional suffering experienced by the deceased’s survivors as a result of the wrongful death. That is not the case in Florida. Under the Florida Wrongful Death Act, survivors have the right to recover damages suffered by the survivor, not by the deceased, as a result of the deceased’s injury and death. The Court of Appeals found that this was a significant enough difference so that application of Florida law would violate the public policy of the State of Georgia and therefore Florida wrongful death law should not apply.
This ruling can be used in any case involving a wrongful death action filed in Georgia but where the occurrence took place in another state. If the other state’s wrongful death laws are significantly different than Georgia’s, then Georgia courts are likely to apply Georgia law. This case also shows a willingness on the part of the Court of Appeals to examine closely all laws of other states to determine if they differ substantially from Georgia’s laws and not to blindly apply another state’s law in Georgia courts.
Please call me if you have any questions or would like a copy of the opinion.
Michael
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