Sox Are ‘Slippery When Wet’: Contractor May be Liable for Injury Caused by Work Installed According to Customer Specifications

Amandeep S. Kahlon | Bradley Arant Boult Cummings LLP | March 21, 2019

An Illinois appellate court recently addressed the scope of negligence liability for a slip and fall injury on a newly installed roof at the Chicago White Sox Stadium. In 2013, a maintenance employee slipped on the roof at the stadium and suffered severe muscle tears. The employee filed suit alleging negligence and strict liability against the White Sox, the roofing contractor, and the manufacturer of the roofing product. All three defendants moved for and were granted summary judgment by the trial court, and the employee appealed.

On appeal, the manufacturer argued that it owed no duty of care to the employee and, regardless, had provided sufficient warning to its immediate vendee, the contractor, so as to relieve the manufacturer of any liability. The contractor argued that it owed no duty of care to the plaintiff because it relied on the customer’s specifications and performed the work in accordance with the specifications.

After reviewing the manufacturer warnings, the appellate court agreed that the manufacturer had provided adequate warnings to the contractor regarding use of its roofing product and affirmed summary judgment in favor of the manufacturer. However, the appellate court reversed the trial court’s grant of summary judgment with respect to the White Sox and the contractor. Although the contractor cited past Illinois rulings that relieved contractors from liability to third parties when contractors followed the plans, specifications and instructions provided by an owner, the appellate court here found that the contractor still owed a duty of care to third parties. The court reasoned that, because the White Sox sought the contractor’s “expertise, advice, and direction” to make recommendations regarding roofing materials and necessary safety equipment, the contractor was not just “blindly replicat[ing]” specifications and plans.

The court was particularly persuaded by evidence that the White Sox and contractor negotiated the contract over several iterations and meetings. Unlike a traditional design-bid-build work scenario, the contractor had input on the specifications, plans and materials to be used in the construction of the roof, not unlike a design-build project.

The court’s decision places the contractor in a precarious position, where it may be held accountable for an injury to a third party, despite following its customer’s plans and specifications. Contractors, especially those involved in negotiated private work and, in particular, those performing construction manager roles with input into design and constructability decisions, should be mindful of the Illinois court’s decision and the implications the decision may have on future claims. A careful contractor can do several things to mitigate the risk of liability to third-party plaintiffs such as the White Sox employee in this case:

  1. pass on any manufacturer warnings explicitly to the owner;
  2. expressly disclaim liability for defective specifications or plans and seek indemnity from the owner for the same; and
  3. evaluate, during negotiations, the potential unintended consequences of recommending different materials, equipment or systems, especially if the recommended alternatives are to satisfy a demanding customer’s price concerns.

Before the Slip and Fall: Lease Drafting Guidance for Tenants

Scott R. Kipnis | ICSC

Some of the most prevalent, mundane, and time- and money-consuming claims that tenants find themselves litigating stem from slip-and-fall accidents in shopping center common areas. The lease between landlord and tenant, specifically the allocation of maintenance obligations as well as indemnification and insurance provisions, is often the determining factor of the outcome in such cases. It is determinative of which party’s insurer is obligated to defend the claim. As demonstrated by the analysis of the Second Judicial Department of the Appellate Division of the Supreme Court of the State of New York in Atlantic Ave. Sixteen AD, Inc., v. Valley Forge Insurance Company (“Atlantic”)[1], specificity in drafting can be key to shielding tenants from liability and effectuating the intent of the parties.

Atlantic Ave. Sixteen AD, Inc., v. Valley Forge Insurance Company — Procedural background

The tenant, Linea 3 Corporation d/b/a Marilena Imports (“Tenant”), leased space in a commercial building in Rockland County, New York, from Atlantic Ave. Sixteen AD, Inc., (“Landlord”) in which it operated a wedding and party supplies store. In the underlying personal injury suit[2], Tenant’s employee was allegedly injured after falling on black ice in the building’s parking lot while walking from his car to work. The injured employee brought an action to recover damages for his injuries in the Kings County Supreme Court against the Landlord and Universal Strapping Corp. (“Universal”), which operated a business in the same building and was owned by the same principals as the Landlord.[3]

Tenant maintained a commercial liability insurance policy with Valley Forge Insurance Company, and Landlord and Universal had a commercial liability insurance policy from Citizen Insurance Company of America. Landlord tendered the defense of the claim to Valley Forge, which denied the tender. Thereafter, Landlord impleaded Tenant and Tenant moved for, and was granted, summary judgment. Landlord then commenced an action seeking a declaratory judgment action in the Rockland County Supreme Court that Valley Forge and Tenant were obligated to defend and indemnify it in the personal injury action as required by Tenant’s insurance policy and by the indemnification language in the lease.

The Rockland County Supreme Court granted summary judgment in favor of Valley Forge and dismissed the complaint, finding that under the terms of the governing lease neither Tenant nor its insurer had any duty to defend or indemnify Landlord in the personal injury action. Landlord then appealed the decision and sought a judgment declaring that Tenant’s insurance company was obligated to defend and indemnify Landlord in the personal injury action. The Second Judicial Department of the Appellate Division of the Supreme Court of the State of New York affirmed the order of the Rockland County Supreme Court.

Case analysis

In evaluating the merits of the Landlord’s appeal, as well as Valley Forge’s motion to dismiss the action brought in the Rockland County Supreme Court, the courts addressed the following:

  1. which party was responsible for the maintenance of the parking lot under the lease,
  2. the indemnification language under the lease and
  3. the insurance coverage in effect at the time of the alleged slip and fall.

Maintenance and indemnification issues

The lease between Landlord and Tenant provided that the parking lot was a common area outside of the leased Premises and that Tenant had no obligation to maintain the common areas; Tenant’s only obligation was to contribute toward the expense of common area maintenance. Under the lease, Landlord was responsible for common area maintenance, including the removal of snow. The lease further provided that Tenant would “defend, indemnify and hold Landlord harmless from and against any and all suits, claims, actions, damages, loss, expense or liability, including reasonable attorneys’ fees arising out of or in connection with any act or omission of Tenant…arising out of, or in connection with, Tenant’s use and possession of the [leased] Premises.”[4]

Therefore, the Rockland County Supreme Court held that Tenant neither leased the parking lot nor had any responsibility for snow and ice removal. Additionally, Tenant only indemnified the Landlord for Tenant’s acts and omissions in connection with the leased premises, and this indemnification did not extend to the common areas.

Insurance coverage and additional insured status issues

The lease required both Landlord and Tenant to obtain commercial liability insurance. Tenant’s insurance policy included an endorsement covering the Landlord as an additional insured for “liability arising out of the ownership, maintenance or use of that part of the premises leased to [Tenant] and shown in the Schedule”.[5] The schedule stated the specific unit of the building leased by Tenant and did not reference the common areas.

While the Supreme Court Appellate Division held that a party named as an additional insured is entitled to the same coverage as the policyholder,[6] because the additional insured endorsement was limited to liability “arising out of” the “ownership, maintenance or use” of the “premises leased” to Tenant, and since Tenant neither leased nor maintained the parking lot, the insurance policy did not provide coverage for the alleged injury. Therefore, Tenant’s insurance company had no duty to indemnify or defend the Landlord for the slip and fall.

Key points of analysis

Here, the lease was clear that Tenant was not responsible for parking lot maintenance. Further, because Tenant only indemnified Landlord for claims related to Tenant’s use and possession of the premises, which did not include the parking lot, Tenant had no liability for the incident. In addition, Tenant’s liability policy naming Landlord as an additional insured only covered the premises and did not extend to the common areas. Based on the foregoing, and the absence of any allegation that any wrongful act or omission by the Tenant in the common areas contributed to the injury, Tenant and its insurer had no obligation to defend the injured party’s claim.

This case offers practical drafting guidance for tenants to ensure that they are likewise protected, either when sued directly by an injured party or are otherwise forced to defend such claims. By using practical common sense and narrowly defining the premises, setting forth each party’s maintenance obligations with specificity and tailoring the insurance and indemnification clauses as described below, tenants can take steps to protect themselves from the pitfalls of having to litigate personal injury claims.

Lease considerations when drafting

Define what you are leasing. The lease should expressly identify what constitutes the premises as distinct from the common areas. “Common areas” should be defined comprehensively to account for all existing improvements, and should also be broad enough to encompass all areas provided by the landlord for the common use of the tenants of the shopping center and their customers. Especially significant in the context of slip and falls, the lease should specifically define sidewalks as part of the common area, and not part of the premises. The differentiation between common areas and premises and narrowly defining what constitutes the “leased premises” is critical when it comes to each party’s insurance coverage, even where the tenant may be responsible for maintenance and repairs, as further discussed below.

Maintenance and repair obligations. The lease should unambiguously set forth the maintenance obligations of each party with respect to the common areas and the premises. Unless the parties have negotiated for the tenant to be responsible for performing certain common area maintenance or repairs, the lease should state that the landlord shall be solely responsible for maintaining the common areas. It should further discuss in detail what such common area maintenance entails, i.e., routine sweeping, seasonal plowing and snow and ice removal from both parking and sidewalks adjacent to or in front of the storefront. By including such details, it leaves little room for allowing the landlord or the injured party to advance the argument that such items are the responsibility of the tenant or impose obligations on the tenant that were not contemplated by the lease. To further protect a tenant from unbargained-for liability, the lease should expressly state that the tenant shall have no obligations with respect to maintaining the common areas, other than to reimburse Landlord, or, as applicable, that any reimbursement obligations are captured in the base rent.

Indemnification. As demonstrated in Atlantic, courts will look at the indemnification provisions of a lease to determine whether either party has agreed to indemnify or defend the other in such actions. When maintenance of the common areas is a landlord responsibility, a tenant will want to make sure that the landlord holds the tenant harmless and agrees to indemnify the tenant from and against all claims that arise in such common areas. The indemnification language should be clear that the landlord is responsible for anything that occurs outside of the premises or within the common areas of the shopping center, and that the tenant can in turn indemnify the landlord for claims arising inside the premises. While there can be a carve-out for claims resulting from one party’s negligence or, preferably, gross negligence, where a tenant is not responsible for common area maintenance, it would have to take some action that contributes to the condition causing the party’s injury in order for a negligence claim to prevail.

Insurance coverage and additional insured status. Under the lease, both parties should carry commercial general liability insurance parallel to their respective indemnification undertakings. In accordance with the above, the landlord should be responsible for insuring the shopping center, including the common areas, and the tenant should insure the narrowly defined premises. Most significantly for the foregoing, and equally as important as having insurance coverage in the first place, is making sure that each party names the other as an additional insured in its respective policy. As noted by the court in Atlantic, a party named as an additional insured is entitled to the same coverage under the policy as though it were the named insured. Simply put, the landlord should name tenant as an additional insured for the common areas, with such coverage being primary and noncontributory other than for gross negligence; and a lawsuit can be avoided.

Landlord insuring tenant’s risk. Where the tenant is responsible for common area maintenance, it should still attempt to have the landlord insure the common areas in order to limit its exposure to liability. Other than with regard to New York’s unique vicarious liability rule, the landlord will want to carry its own commercial general liability insurance covering perils unrelated to the tenant’s negligence, such as negligent design of the parking lot.[7] In situations where the tenant is in care, custody or control of the common areas but the landlord is insuring the risk, to avoid any doubt that the tenant is entitled to such coverage, the lease should expressly state that the landlord’s policy is intended to cover any common area maintenance that the tenant is required to perform. To further ensure that the tenant has an enforceable claim to coverage, the lease should be clear that the cost of such insurance is either included in the base rent or is otherwise being paid by the tenant to the landlord. The lease should also clarify that the tenant is required to be named as an additional insured and should specify that such coverage is primary and noncontributory. Having primary and noncontributory coverage in place eliminates the question of who is negligent, analogous to the waiver of subrogation (a concept born in New York to effectuate the public policy that landlord and tenant should not fight among themselves concerning an insurable loss). This also prevents the tenant from being deprived of coverage for which it has bargained due to a reconciliation process between the parties’ insurance carriers as to whose negligence caused the accident. Having the “primary and noncontributory” language in the lease related to the common areas protects the tenant as an additional insured, since the landlord’s carrier cannot seek contribution from any other policy unless the claim exceeds the amount of landlord’s coverage.

Conclusion

The facts of each specific case may ultimately determine the tenant’s liability. However, tenants can take steps toward limiting their exposure to claims resulting from slip-and-fall accidents in shopping center common areas by negotiating the provisions described above.


[1] Atlantic Ave. Sixteen AD, Inc., v. Valley Forge Insurance Company, 150 A.D.3d 1182 (2d 2017).

[2] Raven v. Universal Strapping Corp., Supreme Ct. Kings Co. Index No. 4126/2011.

[3] Workers’ compensation laws would have prohibited the plaintiff from directly suing his employer.

[4] Atlantic Ave. Sixteen AD, Inc., v. Valley Forge Insurance Co., Supreme Ct., Rockland Co. Index No. 033887/13. Decision and Judgment dated Oct. 3, 2014.

[5] Atlantic Ave. Sixteen AD, Inc., v. Valley Forge Insurance Company, 150 A.D.3d 1182 (2d 2017).

[6] Ibid.

[7] Likewise, the tenant should also insure the common areas against comparable perils.

A Slippery Slope: How Counsel and Experts Can Work Together to Detect Slip and Fall Claims Fraud

Jonathan H. Colman and Angela DiDomenica | CLM Magazine | April 2017

Questionable slip and fall claims aren’t going away anytime soon. According to the National Safety Council, slip and fall incidents are the third leading cause of injury to customers and employees each year, costing American businesses a whopping $70 billion annually in workers compensation and insurance claims.

In analyzing a slip and fall claim, either pre-litigation or at the onset of litigation, an investigation and discovery plan is crucial. Depending upon the nature of the claim and potential injury exposure, counsel representing companies and insurers are tasked with the responsibility of directing investigations (to protect attorney-client privilege whenever possible) as well as discovery. In advance of the retention of an expert, it is important that fact specific requests for admissions and contention interrogatories are used to force the claimant to narrow the facts of the loss as much as possible. Detailed deposition questioning— including, most importantly, eliciting testimony about all of the movements of the claimant prior to, during, and following the alleged incident—will help not only counsel at trial, but also the designated expert.

Red-flag indicators specifically relating to questionable slip and fall claims include the following:

1. An unusually long distance between the location of the fall and the claimant’s residence.

2. Attorney involvement may include linkage with medical clinics and prior slip and fall claims, attorney representation on the date of the loss or soon thereafter, and the first notice of loss being made by the attorney.

3. Inspection of the scene shows no defect in the surface that could have caused the slip and fall.

4. The reported body movements are contrary to the laws of physics based upon the reported facts.

5. Minor slip and fall procedures with highly questionable and exaggerated medical costs.

Retention of the appropriate investigators and experts is important to obtain detailed statements from the claimant, conduct interviews of property/business owners as well as employees, and canvas for witnesses and surveillance, medical history, background checks, and even sub rosa. Investigators also will request maintenance records (sweep sheets), interview potential maintenance witnesses, obtain necessary safety manuals, and arrange for a determination of whether the location of the incident complies with appropriate building codes, standards, and guidelines.

Analyzing an alleged slip and fall event entails ascertaining, if possible, which adjusts the speed of the truck while in cruise control and attempts to maintain a set following distance when detecting a lead vehicle in front of it. However, one must understand the multiple parameters of a particular vendor’s collision mitigation system technology, specifically including radar detection of—and reaction to— moving vehicles, stopped vehicles, and stationary objects.

On the contrary, lane departure warning systems and event recorders are passive safety systems. Lane departure warning systems use camera technologies to identify lane markings and provide an audible, visual, or seat vibration alert to warn drivers of lane deviations when the appropriate turn signal has not been activated. Naturally, this technology application presents difficulties when the cameras are misaligned or the roadway markings are obfuscated, for example, by construction or by precipitation on the window.

Event recorders capture video and other data, and have basic features that may include:

• A one-way, road-facing camera that captures what is going on outside the truck.

• A two-way camera, with one lens road-facing to capture external events and another lens facing into the cab to capture the driver.

• A quad-view or 360-degree view, using multiple cameras to see all around the truck.

• Recorders that capture the speed, lateral movement, accelerations, and decelerations (measured by g-force change), as well as other mechanical aspects of the vehicle.

Event recorders typically operate in one of two modes: continuously recording or on demand. The latter is triggered by a certain set of events, such as a hard brake, overspeed, or high definition shock (variably measured by each vendor as a g-force change). Some implications of the technology’s application are very clear. The CEO of one major carrier recently testified before Congress that the use of collision mitigation systems reduced rear-end collisions by 69 percent in one year.

The value of other technologies is not always so obvious. For example, we are aware of carriers that have implemented roll stability control technology only to see instances of tractor-trailers rolling over increase, apparently because drivers endeavored to over-rely on the technology. A technology application’s value, after all, rests largely upon the manner in which we humans interact with it. Accordingly, drivers will need to clearly understand how their safety technology functions in their vehicles.

SHAPING EVENTS

Technology choices cannot be made without careful consideration of the purpose to which the technology will be put. With respect to event recorders, attention must be paid to the size and type of fleet, as well as the nature of the workforce.

For instance, a relatively small workforce that has little turnover and whose drivers navigate familiar routes may take no offense to an inward-facing camera of an event recorder. In contrast, a larger carrier with a more diverse workforce of over-the-road drivers and a high turnover rate may choose not to impose an inward-facing camera on its drivers. Certainly, inward-facing cameras pose a potential privacy invasion for over-the road truckers who sleep in their cabs, but drivers may perceive a privacy invasion even while they’re awake. We are aware of more than one carrier that implemented a pilot program of two-way cameras only to find that turnover increased so dramatically as to make the pilot program untenable.

Event recorders have the potential to capture an enormous quantity of data. A carrier that implements event recorders is well-advised to decide in advance how the data will be used as well as the costs and benefits of using the recorded data as a coaching tool. Certainly, in this regard, the overhead investment to use the data as a coaching tool is substantial. However, the carrier must also consider the uses to which the data will be put in the event no coaching is provided. Those who have been in the industry any meaningful length of time will anticipate the plaintiffs’ bar seeking to use the failure to coach as a sword in future litigation.

With respect to the defense of any particular case, some implications of the technology are fairly straightforward. We can well expect, for instance, that event recorders— to the extent they act as impartial observers of the circumstances surrounding a collision—will provide enormous clarity to cases of clear liability and, just as clearly, prevent protracted litigation over disputed factual issues when viewed by plaintiff’s counsel. We anticipate that claims with reasonably clear event recorder data will close more quickly either through a swifter settlement or a withdrawn claim once plaintiff’s counsel sees the video.

From a legal perspective, carriers will need to make some policy decisions, too. These include determining the video or data retention policy; when and to whom video and data will be released (including instances when the subject driver is not involved in the occurrence itself); and when to seek protective orders for video and data produced, including a prohibition on social sharing. The savviest carriers already are headed down these paths, with no clear answers likely to emerge in the immediate future.

As the continued application and improvement of transportation technologies is inevitable, those in the transportation industry must remain vigilant to understand the current technologies, anticipate future technology, and carefully consider how these technologies will apply to their organizations. The only constant we can fairly anticipate is change.

If You Post It, Your Opponent Can Probably Discover It

Dick Bennett | Cozen O’Connor’s Property Insurance Law Observer | January 26, 2015

In March we ran a post on how important videos, photographs, and statements on social media sites can be when investigating a property loss.  A picture is literally worth a thousand words.  Earlier this month, a Florida court explained that such material is also discoverable – even in situations where the policyholder employs privacy settings that prevent the general public from having access to his or her account – because the user’s privacy interest in such a site is “minimal, if any.”  Nucci v. Target Corp., – So.3d –, 2015 WL 71726, 2015 Fla. App. LEXIS 153 (Fla.Dist.Ct.App., Jan. 7, 2015) involved a slip-and-fall, but it applies with equal force to discovery in a first-party matter.

Maria Nucci filed a personal injury action against Target, alleging that she fell on “a foreign substance” on the floor of one of the defendant’s stores.  Her complaint contended that she sustained permanent injuries, aggravated pre-existing ones, and also experienced lost earnings and emotional pain and suffering.  Prior to her deposition, Target’s attorneys reviewed her Facebook profile and found that it contained 1,285 photographs.  She was questioned about some of them at the deposition itself, and she promptly took three dozen of the pictures down.

Target moved to compel.  After a hearing, the trial court ordered production of “copies or screenshots of all photographs associated with” any social networking account that Ms. Nucci was currently registered with from two years prior to the date of loss until the present.  The plaintiff then sought certiorari review from Florida’s intermediate level appellate court.

Earlier this month, a unanimous panel denied the petition.  As Judge Robert M. Gross’ opinion explained, one reason was that “certiorari review is available in only a narrow class of cases and [Ms. Nucci’s] case does not meet the stringent requirements” for that remedy.  The judges also denied the petition, however, because the Facebook pictures were “highly relevant” and, most significantly, because it held that Ms. Nucci had “but a limited privacy interest, if any, in pictures posted on her social networking sites.”

With respect to relevance, Judge Gross explained the court’s rationale as follows:

In a personal injury case where the plaintiff is seeking intangible damages, the fact-finder is required to examine the quality of the plaintiff’s life before and after the accident to determine the extent of the loss.  From testimony alone, it is often difficult for the fact-finder to grasp what a plaintiff’s life was like prior to an accident. It would take a great novelist, a Tolstoy, a Dickens, or a Hemingway, to use words to summarize the totality of a prior life.  If a photograph is worth a thousand words, there is no better portrayal of what an individual’s life was like than those photographs the individual has chosen to share through social media before the occurrence of an accident causing injury. Such photographs are the equivalent of a “day in the life” slide show produced by the plaintiff before the existence of any motive to manipulate reality. The photographs sought here are thus powerfully relevant to the damage issues in the lawsuit.

With respect to privacy, the panel held that “the relevance of the photographs overwhelms Nucci’s minimal privacy interest in them.”  As Judge Gross noted, before the right to privacy attaches, “there must exist a legitimate expectation of privacy.”  Ms. Nucci argued that she had just such an expectation because her Facebook page had been on a privacy setting that prevented the general public from accessing her account.  The court was unconvinced, however, explaining that the very nature of a social networking site such as Facebook effectively rules out such an expectation.  According to the opinion:

We agree with those cases concluding that, generally, the photographs posted on a social networking site are neither privileged nor protected by any right of privacy, regardless of any privacy settings that the user may have established.

*  *  *

Because information that an individual shares through social networking web-sites like Facebook may be copied and disseminated by another, the expectation that such information is private, in the traditional sense of the word, is not a reasonable one.

via If You Post It, Your Opponent Can Probably Discover It | Cozen O’Connor’s Property Insurance Law Observer.