CAMELOT RETURNS TO MANHATTAN!
Gartner + Bloom is pleased to support the Washington Heights and Inwood Development Corp (WHIDC.org), which holds the annual Medieval Festival at Fort Tryon Park on Sunday, October 1, 2017 from 11:30 am to 6pm.
The festival is a unique chance to experience the Medieval period in the most authentic setting this side of the Atlantic. The area around the Cloisters Museum in Fort Tryon Park is transformed into a medieval market village where knights in armor, jugglers, jesters, magicians, musicians, storytellers, and puppeteers will perform. A blacksmith, manuscript illuminator, pottery decorator, wood carver and other artisans will demonstrate their crafts. Performers and fair-goers dress in historical costumes. Medieval food is available and craft items will be sold.
The afternoon culminates with a jousting event between knights on horseback! Yes, they do knock each other off horses!
Admission is free. This annual event is sponsored by the City of New York Parks and Recreation and the WHIDC.
We hope to see everyone there!
http://www.whidc.org/festival/home.html
Construction Defect Claims: A New Statute of Limitations Analysis
By: Jacqueline A. Muttick, Esq.
Associate, New Jersey
Date: September 19, 2017
On September 14, 2017, the New Jersey Supreme Court in The Palisades at Fort Lee Condominium Association, Inc. v. 100 Old Palisade, LLC, articulated when the accrual date of the six year statute of limitations for construction defect claims accrues. The Court held that a construction defect claim accrues when the building’s owner, or a subsequent owner, knows or should have known though reasonable diligence about the existence of an actionable claim. Under the statute of limitations, the owner then has six years in which to bring a claim. For the purposes of the statute of limitations, a subsequent owner of the property stands in the shoes of a prior owner with regard to notice, so the statute of limitations begins to run upon notice to any prior owner.
This litigation was instituted by Plaintiff The Palisades at Fort Lee Condominium Association (“Condominium Association”), who asserted construction defects at The Palisades. Palisades A/V Acquisitions Co., LLC (“A/V Acquisitions”), owned and developed The Palisades, hiring a general contractor who subsequently retained various subcontractors for the project. The architect certified the project as “substantially complete” on May 1, 2002. A/V Acquisitions then rented units for the following two years before selling the property to 100 Old Palisade, LLC (“Old Palisade”), which converted the rentals to condominiums. Old Palisade’s expert noted some defects at the property but no structural concerns, and a report reflecting the same was attached to the public offering statement and master deed. Old Palisade relinquished control to the Condominium Association in July 2006. The Condominium Association then hired its own expert who found additional construction defects and issued a report in June 2007. The Plaintiff subsequently filed suit against the general contractor and other entities in March 2009 and continued to add defendants to the lawsuit through the next year.
Since substantial completion of the building occurred in May 2002, and the trial court determined that the six-year statute of limitations began running at that time, it followed that suit should have been filed by May 2008. Since the Condominium Association did not institute proceedings until after May 2008, the trial court dismissed those claims. Upon appeal, the Appellate Division reversed utilizing the “discovery rule”, finding that the construction defect claims did not accrue until the Condominium Association had full unit-owner control of the building and became aware of the claims through its expert. The New Jersey Supreme Court has now held that neither the standard utilized by the trial court nor the one employed by the Appellate Division were correct.
The statute of limitations for tort-based property claims under N.J.S.A. 2A:14-1 requires instituting claims within six years of the date of accrual. Accrual of a claim begins when a reasonable person with ordinary diligence would be alerted that there was an injury due to another’s fault. Id. (slip op. at 19) (quoting Caravaggio v. D’Agostini, 166 N.J. 237, 246 (2001)). Accrual does not begin to run against an unknown third party until the plaintiff has evidence of that third party’s involvement, which may result in different accrual times against different defendants. Id. (slip op. at 23-24) (quoting Caravaggio, 166 N.J. at 248-250). Also applicable in determining accrual is the discovery rule, which holds that the time limit to bring a claim under an applicable statute of limitations does not begin to accrue until the plaintiff knew or should have known with reasonable diligence that an actionable claim existed against a defendant. Utilizing the statute of limitations and the discovery rule, the Court here determined that “[a] construction-defect lawsuit must be filed within six years from the time that the building’s original or subsequent owners first knew or, through the exercise of reasonable diligence, should have known of the basis for a cause of action.” Id. (slip op. at 6-7) (emphasis in original).
Furthermore, “[a] subsequent owner stands in no better position than a prior owner in calculating the limitations period. If a prior owner knew or reasonably should have known of a basis for a construction-defect action, the limitations period began at that point.” Id. (slip op. at 7). Since a subsequent owner to a property takes title subject to the original owner’s rights, if the original owner knew or should have known of a construction defect claim then the subsequent owner will stand in the original owner’s shoes with regard to the statute of limitations. Id. (slip op. at 28). In other words, “[a] cause of action, for purposes of N.J.S.A. 2A:14-1, accrues when someone in the chain of ownership first knows or reasonably should know of an actionable claim against an identifiable party.” Id. (slip op. at 29) (citing O’Keeffe v. Snyder, 83 N.J. 478, 502 (1980)).
This accrual analysis applies even in situations involving condominium associations. In this matter, the first owner, A/V Acquisitions, was the developer and the Condominium Association was a subsequent buyer. As such, if a prior owner knew or should have known of a construction defect claim, then the statute of limitations began to accrue before the Condominium Association took ownership of the property. Since there is a question as to when the statute of limitations began to accrue, the Court remanded the litigation to the trial court for a Lopez hearing on this issue. Id. (slip op. at 7) (citing Lopez v. Swyer, 62 N.J. 267 (1973)).
The Supreme Court also stressed that the 10-year statute of repose in construction defect cases remains in effect. The statute of repose, N.J.S.A. 2A:14-1.1(a), requires all construction defect claims against construction professionals be brought within ten years of the date of substantial completion. Id. (slip op. at 32-33). The six-year statute of limitations, in conjunction with the discovery rule, determines when a claim must be brought and the statute of repose sets an outside limit of ten years for those claims. Therefore, as noted by the Court, if a claim accrued eight years after substantial completion, the plaintiff in such a matter would have two years to bring a claim before having that claim barred by the statute of repose. Id. (slip op. at 33).
There remains the unresolved issue raised by defendants regarding the claims barred by the statute of repose. The defendants noted that the statute of repose appears to bar claims involving “defective and unsafe” conditions arising from construction. Defendants were concerned that the statute of repose could be interpreted as barring those conditions that are both defective and unsafe, potentially leaving viable claims that only regard defects alone. A reading of the statute in this manner could result in a situation in which a claimant is able to bring a construction defect claim outside of the ten-year statute of repose. Utilizing the example provided by the Court, the instance could arise if a claim accrues eight years after substantial completion but does not impact safety and is therefore timely filed fourteen years after substantial completion. The Court declined to opine on this issue and noted that the wording of the statue could be addressed by the Legislature.
The takeaway from this ruling is that construction defect claims do not accrue upon substantial completion but instead accrue when the building’s owner (or predecessor owner) knows or should have known though reasonable diligence about the existence of an actionable claim. The owner then has six years in which to bring a claim. This accrual date does not re-start when a new owner takes possession of the property but is instead imputed to each subsequent owner. The accrual date also may vary as to different defendants, depending on when the owner was or should have been aware of the claim. The ten-year statute of repose remains in effect and bars claims filed ten years after substantial completion, however the Court did not directly address in this opinion what claims the statute of repose specifically bars.
LESSONS AND LAW FROM A CRANE COLLAPSE
LESSONS AND LAW FROM A CRANE COLLAPSE, by Anne E. Armstrong
The First Department has reduced the awards to plaintiffs in the widely covered crane collapse case of May 30, 2008. The First Department also upheld the preclusion of a defense expert whose testimony was deemed to be speculative and conclusory. Additionally, the First Department upheld the piercing of the corporate veil to hold defendant James Lomma, personally, and many of his other companies liable to plaintiffs. Below is a recap of the First Department’s lengthy decision.
The Crane Collapse
On May 30, 2008, a crane collapsed on East 91st Street in Manhattan, resulting in the deaths of crane operator Donald Leo and construction worker Ramdan Kurtaj. The subject crane was leased from defendant NY Crane, a company owned by individual defendant James Lomma. In 2007, before being used on the 91st Street project, it was determined that the crane’s bearing ring, upon which both the operator’s cab and counterweight arm rested, had developed a crack and required replacement. Lomma admitted knowing that any failure of the bearing ring would have catastrophic results. Upon being informed that a replacement from the original manufacturer would cost $34,000.00 dollars, and would take one (1) year to manufacture, Lomma directed an employee to find an alternative. This employee, who had no technical expertise, performed a Google search and located a China-based company, RTR, who claimed it could make the bearing ring for only $20,000.00 dollars and on the needed timeline. Defendant corporation JF Lomma paid for the bearing ring.
Lomma pressed forward with RTR to manufacture the bearing ring, despite RTR’s own stated reservations about its ability to weld the bearing. Lomma paid RTR an additional $1,710.00 dollars, and provided them general information from the manufacturer regarding the welds. RTR then agreed to weld the bearing. During the manufacturing process for this bearing, Lomma contacted engineers to get their input on the bearing and potential certification of same, however none of the engineers would sign off on the bearing for DOB certification. As a result, Lomma, who is not an engineer, certified the bearing himself. Upon receipt of the replacement bearing, Lomma had the steel tested to ensure compliance with industry requirements but he did not have the weld tested. The bearing was then installed by Brady Marine Repair Co., who did not test the welds because Lomma did not request they do so. Lomma then contacted a former NY Crane employee, now employed with DOB, to inspect the crane to be placed back in service. This DOB employee only visually inspected the crane, a breach of DOB protocol. On April 19 and 20, 2008 the crane was erected, and at that time passed DOB testing. In late April, Brady Marine informed Lomma that another RTR-manufactured turntable had a bad weld that was pitted and not fused properly. Lomma did not take any action to determine if the just installed bearing ring had similar flaws, and instead negotiated a discount of $6,000 for the other ring.
For the next five weeks, the crane performed without issue. However at 8:00 a.m. on May 30, 2008, as Donald Leo was operating the crane to lift a basked of electricians' tools, the “headache ball”, a ballast used to keep the lifting line taught, was 30 to 40 feet off the ground, and stationary when the crane began to tip backwards. Donald Leo was trapped, alone, in the operator cab. Witnesses testified to seeing him pray and then brace himself against the coming impact. He suffered catastrophic injuries, and died less than 20 minutes after the accident. Ramadan Kurtaj screamed at his coworkers to run, and his injuries were indicative of attempts to brace himself against the impact. Kurtaj succumbed to his injuries approximately four (4) hours after the accident.
The Trial and Jury Award
Plaintiffs presented testimony from numerous experts all of whom pointed to the inadequacy of the RTR welds in bringing about the crane collapse. Defendants were only able to present one expert at trial, Edward Cox, as another expert, James Wiethorn, was precluded. Even Cox, defendants' own expert, testified that he would not have certified the RTR bearing.
The jury found defendants Lomma, NY Crane and JF Lomma negligent. For Plaintiff Leo the jury awarded $7.5 million for pre-impact terror, $8 million for pain and suffering, and $24 million in punitive damages. For Plaintiff Kurtaj the jury awarded $7.5 million for pre-impact terror, $24 million for pain and suffering, and $24 million for punitive damages. Lomma, NY Crane and JF Lomma appealed the awards as well as the preclusion of their expert witness, Wiethorn, and the piercing of the corporate veil subjecting Lomma to personal liability. Though the appellate court did reduce the awards, it upheld Wiethorn’s preclusion and the piercing of the corporate veil.
Where Entities Are Treated As One, The Corporate Veil Will Be Pierced
Mr. Lomma was found to have exercised complete dominion over multiple businesses, all of which were determined to have operated, essentially, as one entity and were treated as such by Lomma himself. The First Department found that each of the various companies would rent equipment from the other at will, profits were readily shifted between companies, and they all shared the same offices, email and staff. Most damning for Lomma was his personal involvement in the events that brought about the crane collapse. The court found that Lomma was personally involved in the events that launched a dangerous instrumentality, failed to respect the corporate form of his businesses and was therefore able to be held personally liable to plaintiffs. It is important to note that Lomma himself was acquitted of criminally negligent homicide, and all charges, resulting from this accident.
Expert Testimony Precluded Where Plainly Contradicted by Facts in Evidence
The First Department also upheld the trial court’s preclusion of defense expert Wiethorn, holding that his opinion was conclusory and plainly contradicted by the record. Essentially, Wiethorn placed the blame for the accident on Leo, opining that Leo “high boomed” and “two-blocked” the crane. The First Department found that none of the eyewitness accounts of the accident would support Wiethorn’s theory, and that he was contradicted by the physical evidence. The First Department upheld the trial court’s decision to preclude the testimony as it would have lacked probative value in that it was conclusory, speculative and contradicted by the evidence.
Damages Reduced, but Remain Significant
In reducing the awards to plaintiffs the First Department sought guidance from similar cases. Pre-impact terror is a subcategory of conscious pain and suffering designed to compensate for the time between the first apprehension of danger and the resulting injuries. The First Department noted that each plaintiff experienced inconceivable pre-impact terror, and tried to shield themselves from the debris. The pre-impact terror awards to Leo and Kurtaj of $7.5 million each were found to be excessive regardless, and reduced to $2.5 million and $2 million, respectively.
The awards to Leo and Kurtaj for conscious pain and suffering, $8 million and $24 million, respectively, were also reduced by the First Department. An award of conscious pain and suffering requires proof of some level of cognitive awareness following the injury. The burden of proof falls to plaintiff to prove consciousness following an accident. The record established that Leo was conscious for less than 20 minutes following the accident, and that Kurtaj would remain alive for some four (4) hours. The injuries suffered by each man, as detailed in the record, were catastrophic. With regard to Leo, the First Department noted that other plaintiffs, also surviving for a brief period of time following an accident, were awarded damages of less than $1 million for conscious pain and suffering. However, the court also noted that the injures suffered by Leo were extreme, and then reduced the award to $5.5 million. As to Kurtaj, the court again looked to similar plaintiffs and found awards ranging from $1.2 million to $3 million. The court again noted, however, that Kurtaj’s injuries were almost singular in their devastation, and then reduced his award to $7.5 million.
Each plaintiff was awarded $24 million in punitive damages, which was then reduced to $8 million for Leo and $9.5 million for Kurtaj. In upholding an award of punitive damages in this case, the court found that Lomma placed profit over the safety of the public and construction workers, and made numerous calculated decisions toward that end. The court noted that Lomma failed to test the welds, have them properly certified and failed to act when warned about the welds on another crane. The court noted that the accident occurred early in the day, and that had it occurred later, the result could have been even more devastating. However, the court also noted that punitive damages must comport with constitutional limitations, specifically the Due Process Clause which prohibits grossly excessive punishments. The First Department found that a reduction in the awards was necessary, but that a sizeable award was required to punish the defendants and to deter any future misconduct. It should be noted that, in addition to Lomma himself, all of his companies were also acquitted of criminal charges in this matter.
-9/13/17
The First Department has reduced the awards to plaintiffs in the widely covered crane collapse case of May 30, 2008. The First Department also upheld the preclusion of a defense expert whose testimony was deemed to be speculative and conclusory. Additionally, the First Department upheld the piercing of the corporate veil to hold defendant James Lomma, personally, and many of his other companies liable to plaintiffs. Below is a recap of the First Department’s lengthy decision.
The Crane Collapse
On May 30, 2008, a crane collapsed on East 91st Street in Manhattan, resulting in the deaths of crane operator Donald Leo and construction worker Ramdan Kurtaj. The subject crane was leased from defendant NY Crane, a company owned by individual defendant James Lomma. In 2007, before being used on the 91st Street project, it was determined that the crane’s bearing ring, upon which both the operator’s cab and counterweight arm rested, had developed a crack and required replacement. Lomma admitted knowing that any failure of the bearing ring would have catastrophic results. Upon being informed that a replacement from the original manufacturer would cost $34,000.00 dollars, and would take one (1) year to manufacture, Lomma directed an employee to find an alternative. This employee, who had no technical expertise, performed a Google search and located a China-based company, RTR, who claimed it could make the bearing ring for only $20,000.00 dollars and on the needed timeline. Defendant corporation JF Lomma paid for the bearing ring.
Lomma pressed forward with RTR to manufacture the bearing ring, despite RTR’s own stated reservations about its ability to weld the bearing. Lomma paid RTR an additional $1,710.00 dollars, and provided them general information from the manufacturer regarding the welds. RTR then agreed to weld the bearing. During the manufacturing process for this bearing, Lomma contacted engineers to get their input on the bearing and potential certification of same, however none of the engineers would sign off on the bearing for DOB certification. As a result, Lomma, who is not an engineer, certified the bearing himself. Upon receipt of the replacement bearing, Lomma had the steel tested to ensure compliance with industry requirements but he did not have the weld tested. The bearing was then installed by Brady Marine Repair Co., who did not test the welds because Lomma did not request they do so. Lomma then contacted a former NY Crane employee, now employed with DOB, to inspect the crane to be placed back in service. This DOB employee only visually inspected the crane, a breach of DOB protocol. On April 19 and 20, 2008 the crane was erected, and at that time passed DOB testing. In late April, Brady Marine informed Lomma that another RTR-manufactured turntable had a bad weld that was pitted and not fused properly. Lomma did not take any action to determine if the just installed bearing ring had similar flaws, and instead negotiated a discount of $6,000 for the other ring.
For the next five weeks, the crane performed without issue. However at 8:00 a.m. on May 30, 2008, as Donald Leo was operating the crane to lift a basked of electricians' tools, the “headache ball”, a ballast used to keep the lifting line taught, was 30 to 40 feet off the ground, and stationary when the crane began to tip backwards. Donald Leo was trapped, alone, in the operator cab. Witnesses testified to seeing him pray and then brace himself against the coming impact. He suffered catastrophic injuries, and died less than 20 minutes after the accident. Ramadan Kurtaj screamed at his coworkers to run, and his injuries were indicative of attempts to brace himself against the impact. Kurtaj succumbed to his injuries approximately four (4) hours after the accident.
The Trial and Jury Award
Plaintiffs presented testimony from numerous experts all of whom pointed to the inadequacy of the RTR welds in bringing about the crane collapse. Defendants were only able to present one expert at trial, Edward Cox, as another expert, James Wiethorn, was precluded. Even Cox, defendants' own expert, testified that he would not have certified the RTR bearing.
The jury found defendants Lomma, NY Crane and JF Lomma negligent. For Plaintiff Leo the jury awarded $7.5 million for pre-impact terror, $8 million for pain and suffering, and $24 million in punitive damages. For Plaintiff Kurtaj the jury awarded $7.5 million for pre-impact terror, $24 million for pain and suffering, and $24 million for punitive damages. Lomma, NY Crane and JF Lomma appealed the awards as well as the preclusion of their expert witness, Wiethorn, and the piercing of the corporate veil subjecting Lomma to personal liability. Though the appellate court did reduce the awards, it upheld Wiethorn’s preclusion and the piercing of the corporate veil.
Where Entities Are Treated As One, The Corporate Veil Will Be Pierced
Mr. Lomma was found to have exercised complete dominion over multiple businesses, all of which were determined to have operated, essentially, as one entity and were treated as such by Lomma himself. The First Department found that each of the various companies would rent equipment from the other at will, profits were readily shifted between companies, and they all shared the same offices, email and staff. Most damning for Lomma was his personal involvement in the events that brought about the crane collapse. The court found that Lomma was personally involved in the events that launched a dangerous instrumentality, failed to respect the corporate form of his businesses and was therefore able to be held personally liable to plaintiffs. It is important to note that Lomma himself was acquitted of criminally negligent homicide, and all charges, resulting from this accident.
Expert Testimony Precluded Where Plainly Contradicted by Facts in Evidence
The First Department also upheld the trial court’s preclusion of defense expert Wiethorn, holding that his opinion was conclusory and plainly contradicted by the record. Essentially, Wiethorn placed the blame for the accident on Leo, opining that Leo “high boomed” and “two-blocked” the crane. The First Department found that none of the eyewitness accounts of the accident would support Wiethorn’s theory, and that he was contradicted by the physical evidence. The First Department upheld the trial court’s decision to preclude the testimony as it would have lacked probative value in that it was conclusory, speculative and contradicted by the evidence.
Damages Reduced, but Remain Significant
In reducing the awards to plaintiffs the First Department sought guidance from similar cases. Pre-impact terror is a subcategory of conscious pain and suffering designed to compensate for the time between the first apprehension of danger and the resulting injuries. The First Department noted that each plaintiff experienced inconceivable pre-impact terror, and tried to shield themselves from the debris. The pre-impact terror awards to Leo and Kurtaj of $7.5 million each were found to be excessive regardless, and reduced to $2.5 million and $2 million, respectively.
The awards to Leo and Kurtaj for conscious pain and suffering, $8 million and $24 million, respectively, were also reduced by the First Department. An award of conscious pain and suffering requires proof of some level of cognitive awareness following the injury. The burden of proof falls to plaintiff to prove consciousness following an accident. The record established that Leo was conscious for less than 20 minutes following the accident, and that Kurtaj would remain alive for some four (4) hours. The injuries suffered by each man, as detailed in the record, were catastrophic. With regard to Leo, the First Department noted that other plaintiffs, also surviving for a brief period of time following an accident, were awarded damages of less than $1 million for conscious pain and suffering. However, the court also noted that the injures suffered by Leo were extreme, and then reduced the award to $5.5 million. As to Kurtaj, the court again looked to similar plaintiffs and found awards ranging from $1.2 million to $3 million. The court again noted, however, that Kurtaj’s injuries were almost singular in their devastation, and then reduced his award to $7.5 million.
Each plaintiff was awarded $24 million in punitive damages, which was then reduced to $8 million for Leo and $9.5 million for Kurtaj. In upholding an award of punitive damages in this case, the court found that Lomma placed profit over the safety of the public and construction workers, and made numerous calculated decisions toward that end. The court noted that Lomma failed to test the welds, have them properly certified and failed to act when warned about the welds on another crane. The court noted that the accident occurred early in the day, and that had it occurred later, the result could have been even more devastating. However, the court also noted that punitive damages must comport with constitutional limitations, specifically the Due Process Clause which prohibits grossly excessive punishments. The First Department found that a reduction in the awards was necessary, but that a sizeable award was required to punish the defendants and to deter any future misconduct. It should be noted that, in addition to Lomma himself, all of his companies were also acquitted of criminal charges in this matter.
-9/13/17
New York Litigation Landscape in the Autonomous Vehicle Era
by Vera Tsai
There is no doubt that we are entering the “autonomous vehicle era.” Just nine months ago, the National Highway Traffic Safety Administration (“NHTSA”) issued a “Federal Automated Vehicles Policy” (“The NHTSA Policy”) which provides guidance on the safe design and development of “Highly Automated Vehiclesi” (HAVs). The NHTSA Policy reflects the Department of Transportation’s view that “automated vehicles hold enormous potential benefits for safety, mobility and sustainability.” As we are entering the autonomous vehicle era, inevitable questions arise as to how these driverless vehicles will impact motor vehicle litigation.
Much of the future landscape in motor vehicle litigation will depend upon the regulatory framework adopted by the federal and state governments. The NHTSA Policy sets forth guiding “reasonable practices and procedures” that manufacturers and suppliers should follow in developing HAVs. These standards and procedures will likely become rules and regulations in the years to come. Additionally, the NHTSA Policy encourages states to regulate HAV “drivers”ii for the limited purpose of enforcing traffic laws and to consider allocating liability among HAV owners, operators, passengers, manufacturers, and others when a crash occurs. The NHTSA Policy makes clear that regulations on the “performance” of the HAVs are exclusively within the province of the federal governmentiii while states should “examine its laws and regulations in the areas including insurance and liability and enforcement of traffic laws and regulations.” Therefore, it is anticipated that the federal government will issue unified safety standards for HAVs while individual states will update their traffic, liability, and insurance laws to regulate these vehicles.
This article sets forth the current legal framework in motor vehicle litigation in New York involving fully autonomous vehicles (“AVs”). In early April of this year, the New York lawmakers approved a state budget bill that includes a new measure allowing AVs on New York highways for the limited purpose of testing or demonstration. Just last month, the Department of Motor Vehicles began accepting applications for autonomous vehicle testing. What happens if an AV is involved in an accident? For purposes of illustration, assume an AV is involved in a collision with another vehicle driven by a human (“non-AV”) and the non-AV driver is injured as a result. The injured non-AV driver may potentially sue (1) the owner of the AV (if different than the manufacturer); (2) the human driver of the AV (if human driving was involved); and (3) the manufacturer of the AV. Set forth below is an analysis of possible claims against each of these parties in this fact pattern.
1. The Owner of the AV
In New York, in order to recover from the owner of a vehicle in a car accident, an injured plaintiff typically needs to prove that the owner was negligent and that such negligence caused his or her injuries. Negligence is defined as “lack of ordinary care,” which is the “failure to use that degree of care that a reasonably prudent person would have used under the same circumstances.” PJIiv 2:10. Additionally, New York Vehicle and Traffic Law (“VTL”) establishes “rules of the road” and violation of a VTL section constitutes negligence. PJI 2:26; Deleon v. N.Y.C. Sanitation Dept., 14 N.Y.S.3d 280 (2015).
In a typical motor vehicle case, even if the owner of the vehicle was not involved in the operation of the vehicle, the owner may nevertheless be found liable if he or she failed to properly maintain the vehicle and such failure resulted in the plaintiff's injuries. Additionally, the owner may be implicated pursuant to VTL §388 which imposes liability on the owner of a vehicle for the negligence of a driver if the owner had given permission to the driver to operate the vehicle.
In our fact pattern, if the accident occurred as a result of the malfunctioning of the AV due to the failure to maintain the vehicle, including the software, then liability will likely attach to the owner. For example, if the owner failed to update the AV software as required by the manufacturer, or if the owner modified the software, then the owner will likely be found liable. However, unlike in a typical case, VTL
§388 will likely not apply to the owner of an AV even though the owner technically gave permission to the AV software “driver” to operate the vehicle. This is because the statute, as it is currently written, imputes liability on the owner only for the negligent operation of the vehicle by a “person.” Specifically, VTL §388 provides that:
Every owner of a vehicle used or operated in this state shall be liable and responsible for death or injuries to person or property resulting from negligence in the use or operation of such vehicle, in the business of such owner or otherwise, by any person using or operating the same with the permission, express or implied, of such owner (emphasis added).
VTL defines a “person” as a “natural person, firm, partnership, association, or corporation.” As such, it is unlikely that the AV software would qualify as a “person” for purposes of VTL §388. Therefore, if the vehicle was in fully autonomous mode and its software “driver” simply made an incorrect prediction or decision, then the owner of the AV will not be implicated by the operation of VTL §388 since the AV software is not a “person.” Liability may attach, however, if human control of the AV was involved, such as when an occupant of the AV took over the control of the vehicle. If the AV was bein g operated by a “person,” then the owner of the AV will be liable for the negligence of the driver if the owner had given permission to the driver to operate the vehicle.
It should be noted, however, that the state legislature may choose to revise VTL §388 to impute liability on the owner for the decisions and actions of the AV, depending upon the state's policy involving AVs. While clearly stating that allocating liability and regulating traffic rules remain the responsibility of the individual states, the NHTSA Policy does recommend that the term “driver” in state traffic laws be redefined to accommodate new scenarios which may be presented by a self-driving car. Specifically, the NHTSA Policy recommends that an HAV system that conducts the driving task and monitors the driving environment (generally SAE Levels 3-5) be considered the “driver” of the vehicle. For vehicles and circumstances in which a human is primarily responsible for monitoring the driving environment (generally SAE Levels 1-2), NHTSA recommends the state consider the human to be the driver for purposes of traffic laws and enforcement.
At this time, the New York Vehicle and Traffic law defines a “driver” as “Every person who
operates or drives or is in actual physical control of a vehicle.” VTL §113. As indicated above, VTL
§131 defines a “person” as “[e]very natural person, firm, partnership, association, or corporation.” Therefore, it does not appear that a software “driver” would be considered a “driver” for purposes of the New York traffic law. However, based upon the recommendations in the NHTSA Policy, New York state legislature will likely change the definition of “driver” to include both a “person” and an HAV system. It is, therefore, possible that the state legislature may also revise VTL §388 to impute liability on the owner of a vehicle for the negligent operation of vehicle by either a person or an HAV system.
2. The Driver of the AV
Similar to seeking recovery from the owner of a vehicle, an injured person suing the driver of a vehicle must prove that the driver was negligent in the operation of the vehicle and that such negligence caused the injuries. The inquiry is generally whether the driver used reasonable care in the operation of the vehicle. Additionally, New York Vehicle and Traffic Law (“VTL”) governs rules of the road that a driver must abide by and a violation of the VTL is prima facie evidence of negligence.
In our fact pattern, therefore, if human operation of the AV was involved, then the liability of the human driver would be determined according to the “reasonably person” standard mentioned above. If a human driver was forced to take control of the AV because of issues arising out of the software, and the accident nevertheless occurred, then the human driver’s liability will depend upon whether his conduct was reasonable under the circumstances.
3. The Manufacturer of the AV
In addition to suing the owner and driver of the AV, an injured person may also make a claim against the manufacturer on products liability grounds. If an injured plaintiff alleges that the software “driver” did not act properly and caused the accident, then a design defect claim may be implicated. For example, a plaintiff may bring a design defect claim if the AV incorrectly predicted the movement of another vehicle or made a driving decision that is being questioned. An injured person claiming a design defect may allege causes of action in negligence and strict products liability. Under the strict liability theory, a manufacturer is liable if the injury was caused by a defective product that was used for its intended or reasonably foreseeable purpose. Under the negligence theory, in addition to proving a defective product, the plaintiff also needs to prove that the manufacturer knew, or in the exercise of reasonable care should have known, that the product was defective.v
Under both strict liability and negligence theories, a product is “defective” if it is not “reasonably safe.” PJI 2:120. A product is not reasonably safe if a reasonable person who knew or should have known of the product's potential for causing injury and of any feasible alternative design would have concluded that the product should not have been marketed in that condition. In deciding whether a product was defective, the jury is required to balance the risks involved in using the product against (1) the product's usefulness and its costs, and (2) the risks, usefulness and costs of the alternative design as compared to the product in question. PJI 2:120, 2:126. To prove his case, a plaintiff is “under an obligation to present evidence that the product, as designed, was not reasonably safe because there was a substantial likelihood of harm and it was feasible to design the product in a safer manner.” Voss v. Black & Decker Mfg. Co.,
59 N.Y.2d 102, 108 (1983). The defendant manufacturer, on the other hand, may present evidence show-
ing that “the product is a safe product--that is, one whose utility outweighs its risks when the product has been designed so that the risks are reduced to the greatest extent possible while retaining the product's
inherent usefulness at an acceptable cost." Id.
Additionally, a product is as a matter of law “not reasonably safe” if a Federal Safety statute is violated. See Feldman v. CSX Transp., Inc., 31 A.D.3d 698, 703 (2d Dept. 2006). The Federal Motor Vehicle Safety Standards (FMVSS) are regulations setting forth minimum safety performance require- ments for motor vehicles or items of motor vehicle equipment. If such a safety standard is violated, then the product is not “reasonably safe.” However, compliance with a Federal Safety Standard constitutes “some evidence” of due care but does not by itself preclude the imposition of liability. See Lugo v. LJN Toys, Ltd., 146 A.D.2d 168 (1 Dept. 1989). vi
In applying these principles, the injured non-AV driver will have to prove that the AV software, as designed, was substantially likely to cause harm and that there was a safer alternative which is not cost-prohibitive. In deciding whether the AV software was “substantially likely to cause harm,” a jury will necessarily have to first determine whether the AV’s behavior in the accident was improper. If the AV had acted properly, then the AV software, as designed, was clearly not likely to cause harm. The “substantially likely” standard also suggests that the jury will need to consider the likelihood of a specific accident fact pattern occurring. Additionally, the non-AV driver would need to present expert evidence of an alternative safer design that is not cost prohibitive. Such a “safer alternative design” will likely take the form of better machine learning algorithms, a rule-based algorithm or increased data input (training) to enable the AV software to make better decisions.
However, this standard may be difficult to apply in cases involving a self-driving car ’s software as an inquiry into the propriety of an AV's decision or behavior involves value judgment that could differ from individual to individual. A jury in one case may find an AV's decision or behavior improper while a different jury may return a different result. Should an AV be found “defective” just because it made a decision that five people on the jury disagree with? Should a manufacturer be facing liability each time a jury questions a decision made by an AV? Additionally, what standard should an AV's behavior be held to? Should an AV be held to a “reasonable person” standard as in a standard motor vehicle case? Since most of the AVs are programmed to drive more conservatively and marketed to be safer than a human driver, should they be held to a higher standard of behavior, such as a “reasonable machine” standard?
Additionally, a recent studyvii by London School of Economics found that some drivers intend to “bully” AVs when they hit the road- driving aggressively around them in the assumption that they will have to stop and let the bully through. Such a behavior may create a higher risk of accidents for AVs. Should an AV be programmed to predict such bully behavior? Furthermore, in the case of an imminent crash, should the vehicle prioritize the well-being of passengers or pedestrians? This is yet another example of value judgment that may differ from one person to another.
As illustrated above, the advent of the autonomous vehicle era necessarily creates the need for change in the law. Such changes will likely be made by both the federal and state legislatures with the courts filling the gaps. A new legal landscape will inevitably emerge as self-driving cars enter the market place.
Vera Tsai is an associate at Gartner + Bloom, P.C.
i The NHTSA has adopted the SAE International (“SAE”) definitions for levels of automation in vehicles. HAVs represent
SAE levels 3-5 vehicles which are vehicles with the ability to monitor driving environments.
ii The Policy, in various places, refers to the automated vehicle system as the “HAV’s computer ‘driver ’” and suggests that
states should update references to a human driver as appropriate when evaluating their laws and regulations.
iiiThe Vehicle Safety Act expressly preempts states from issuing any standard that regulates performance if that standard is
not identical to an existing Federal Motor vehicle Safety Standard (“FMVSS”) regulating that same aspect of performance.
iv New York Pattern Jury Instructions (PJI) is used by judges throughout New York State to instruct juries in civil cases.
vIt should be noted, however, that the Court of Appeals has stated in dictum that causes of action for negligent design and
defective design are “essentially identical” and that separate jury questions on each theory were “redundant.” It is currently unclear whether the Court of Appeals intended to eradicate all distinctions between negligent design and defective design claims.
vi However, liability may not be imposed upon a manufacturer on a theory that has been pre-empted by federal law, that is, if the theory directly conflicts with a Federal Safety Standard or stands as an obstacle to the accomplishment of a Federal Motor Vehicle Safety Standard. See Geier v. Am. Honda Motor Co., 529 U.S. 861 (2000).
vii Think Good Mobility Survey 2016, http://media.wix.com/ugd/efc875_d98af657dce04c72a4c167a9efd93757.pdf
There is no doubt that we are entering the “autonomous vehicle era.” Just nine months ago, the National Highway Traffic Safety Administration (“NHTSA”) issued a “Federal Automated Vehicles Policy” (“The NHTSA Policy”) which provides guidance on the safe design and development of “Highly Automated Vehiclesi” (HAVs). The NHTSA Policy reflects the Department of Transportation’s view that “automated vehicles hold enormous potential benefits for safety, mobility and sustainability.” As we are entering the autonomous vehicle era, inevitable questions arise as to how these driverless vehicles will impact motor vehicle litigation.
Much of the future landscape in motor vehicle litigation will depend upon the regulatory framework adopted by the federal and state governments. The NHTSA Policy sets forth guiding “reasonable practices and procedures” that manufacturers and suppliers should follow in developing HAVs. These standards and procedures will likely become rules and regulations in the years to come. Additionally, the NHTSA Policy encourages states to regulate HAV “drivers”ii for the limited purpose of enforcing traffic laws and to consider allocating liability among HAV owners, operators, passengers, manufacturers, and others when a crash occurs. The NHTSA Policy makes clear that regulations on the “performance” of the HAVs are exclusively within the province of the federal governmentiii while states should “examine its laws and regulations in the areas including insurance and liability and enforcement of traffic laws and regulations.” Therefore, it is anticipated that the federal government will issue unified safety standards for HAVs while individual states will update their traffic, liability, and insurance laws to regulate these vehicles.
This article sets forth the current legal framework in motor vehicle litigation in New York involving fully autonomous vehicles (“AVs”). In early April of this year, the New York lawmakers approved a state budget bill that includes a new measure allowing AVs on New York highways for the limited purpose of testing or demonstration. Just last month, the Department of Motor Vehicles began accepting applications for autonomous vehicle testing. What happens if an AV is involved in an accident? For purposes of illustration, assume an AV is involved in a collision with another vehicle driven by a human (“non-AV”) and the non-AV driver is injured as a result. The injured non-AV driver may potentially sue (1) the owner of the AV (if different than the manufacturer); (2) the human driver of the AV (if human driving was involved); and (3) the manufacturer of the AV. Set forth below is an analysis of possible claims against each of these parties in this fact pattern.
1. The Owner of the AV
In New York, in order to recover from the owner of a vehicle in a car accident, an injured plaintiff typically needs to prove that the owner was negligent and that such negligence caused his or her injuries. Negligence is defined as “lack of ordinary care,” which is the “failure to use that degree of care that a reasonably prudent person would have used under the same circumstances.” PJIiv 2:10. Additionally, New York Vehicle and Traffic Law (“VTL”) establishes “rules of the road” and violation of a VTL section constitutes negligence. PJI 2:26; Deleon v. N.Y.C. Sanitation Dept., 14 N.Y.S.3d 280 (2015).
In a typical motor vehicle case, even if the owner of the vehicle was not involved in the operation of the vehicle, the owner may nevertheless be found liable if he or she failed to properly maintain the vehicle and such failure resulted in the plaintiff's injuries. Additionally, the owner may be implicated pursuant to VTL §388 which imposes liability on the owner of a vehicle for the negligence of a driver if the owner had given permission to the driver to operate the vehicle.
In our fact pattern, if the accident occurred as a result of the malfunctioning of the AV due to the failure to maintain the vehicle, including the software, then liability will likely attach to the owner. For example, if the owner failed to update the AV software as required by the manufacturer, or if the owner modified the software, then the owner will likely be found liable. However, unlike in a typical case, VTL
§388 will likely not apply to the owner of an AV even though the owner technically gave permission to the AV software “driver” to operate the vehicle. This is because the statute, as it is currently written, imputes liability on the owner only for the negligent operation of the vehicle by a “person.” Specifically, VTL §388 provides that:
Every owner of a vehicle used or operated in this state shall be liable and responsible for death or injuries to person or property resulting from negligence in the use or operation of such vehicle, in the business of such owner or otherwise, by any person using or operating the same with the permission, express or implied, of such owner (emphasis added).
VTL defines a “person” as a “natural person, firm, partnership, association, or corporation.” As such, it is unlikely that the AV software would qualify as a “person” for purposes of VTL §388. Therefore, if the vehicle was in fully autonomous mode and its software “driver” simply made an incorrect prediction or decision, then the owner of the AV will not be implicated by the operation of VTL §388 since the AV software is not a “person.” Liability may attach, however, if human control of the AV was involved, such as when an occupant of the AV took over the control of the vehicle. If the AV was bein g operated by a “person,” then the owner of the AV will be liable for the negligence of the driver if the owner had given permission to the driver to operate the vehicle.
It should be noted, however, that the state legislature may choose to revise VTL §388 to impute liability on the owner for the decisions and actions of the AV, depending upon the state's policy involving AVs. While clearly stating that allocating liability and regulating traffic rules remain the responsibility of the individual states, the NHTSA Policy does recommend that the term “driver” in state traffic laws be redefined to accommodate new scenarios which may be presented by a self-driving car. Specifically, the NHTSA Policy recommends that an HAV system that conducts the driving task and monitors the driving environment (generally SAE Levels 3-5) be considered the “driver” of the vehicle. For vehicles and circumstances in which a human is primarily responsible for monitoring the driving environment (generally SAE Levels 1-2), NHTSA recommends the state consider the human to be the driver for purposes of traffic laws and enforcement.
At this time, the New York Vehicle and Traffic law defines a “driver” as “Every person who
operates or drives or is in actual physical control of a vehicle.” VTL §113. As indicated above, VTL
§131 defines a “person” as “[e]very natural person, firm, partnership, association, or corporation.” Therefore, it does not appear that a software “driver” would be considered a “driver” for purposes of the New York traffic law. However, based upon the recommendations in the NHTSA Policy, New York state legislature will likely change the definition of “driver” to include both a “person” and an HAV system. It is, therefore, possible that the state legislature may also revise VTL §388 to impute liability on the owner of a vehicle for the negligent operation of vehicle by either a person or an HAV system.
2. The Driver of the AV
Similar to seeking recovery from the owner of a vehicle, an injured person suing the driver of a vehicle must prove that the driver was negligent in the operation of the vehicle and that such negligence caused the injuries. The inquiry is generally whether the driver used reasonable care in the operation of the vehicle. Additionally, New York Vehicle and Traffic Law (“VTL”) governs rules of the road that a driver must abide by and a violation of the VTL is prima facie evidence of negligence.
In our fact pattern, therefore, if human operation of the AV was involved, then the liability of the human driver would be determined according to the “reasonably person” standard mentioned above. If a human driver was forced to take control of the AV because of issues arising out of the software, and the accident nevertheless occurred, then the human driver’s liability will depend upon whether his conduct was reasonable under the circumstances.
3. The Manufacturer of the AV
In addition to suing the owner and driver of the AV, an injured person may also make a claim against the manufacturer on products liability grounds. If an injured plaintiff alleges that the software “driver” did not act properly and caused the accident, then a design defect claim may be implicated. For example, a plaintiff may bring a design defect claim if the AV incorrectly predicted the movement of another vehicle or made a driving decision that is being questioned. An injured person claiming a design defect may allege causes of action in negligence and strict products liability. Under the strict liability theory, a manufacturer is liable if the injury was caused by a defective product that was used for its intended or reasonably foreseeable purpose. Under the negligence theory, in addition to proving a defective product, the plaintiff also needs to prove that the manufacturer knew, or in the exercise of reasonable care should have known, that the product was defective.v
Under both strict liability and negligence theories, a product is “defective” if it is not “reasonably safe.” PJI 2:120. A product is not reasonably safe if a reasonable person who knew or should have known of the product's potential for causing injury and of any feasible alternative design would have concluded that the product should not have been marketed in that condition. In deciding whether a product was defective, the jury is required to balance the risks involved in using the product against (1) the product's usefulness and its costs, and (2) the risks, usefulness and costs of the alternative design as compared to the product in question. PJI 2:120, 2:126. To prove his case, a plaintiff is “under an obligation to present evidence that the product, as designed, was not reasonably safe because there was a substantial likelihood of harm and it was feasible to design the product in a safer manner.” Voss v. Black & Decker Mfg. Co.,
59 N.Y.2d 102, 108 (1983). The defendant manufacturer, on the other hand, may present evidence show-
ing that “the product is a safe product--that is, one whose utility outweighs its risks when the product has been designed so that the risks are reduced to the greatest extent possible while retaining the product's
inherent usefulness at an acceptable cost." Id.
Additionally, a product is as a matter of law “not reasonably safe” if a Federal Safety statute is violated. See Feldman v. CSX Transp., Inc., 31 A.D.3d 698, 703 (2d Dept. 2006). The Federal Motor Vehicle Safety Standards (FMVSS) are regulations setting forth minimum safety performance require- ments for motor vehicles or items of motor vehicle equipment. If such a safety standard is violated, then the product is not “reasonably safe.” However, compliance with a Federal Safety Standard constitutes “some evidence” of due care but does not by itself preclude the imposition of liability. See Lugo v. LJN Toys, Ltd., 146 A.D.2d 168 (1 Dept. 1989). vi
In applying these principles, the injured non-AV driver will have to prove that the AV software, as designed, was substantially likely to cause harm and that there was a safer alternative which is not cost-prohibitive. In deciding whether the AV software was “substantially likely to cause harm,” a jury will necessarily have to first determine whether the AV’s behavior in the accident was improper. If the AV had acted properly, then the AV software, as designed, was clearly not likely to cause harm. The “substantially likely” standard also suggests that the jury will need to consider the likelihood of a specific accident fact pattern occurring. Additionally, the non-AV driver would need to present expert evidence of an alternative safer design that is not cost prohibitive. Such a “safer alternative design” will likely take the form of better machine learning algorithms, a rule-based algorithm or increased data input (training) to enable the AV software to make better decisions.
However, this standard may be difficult to apply in cases involving a self-driving car ’s software as an inquiry into the propriety of an AV's decision or behavior involves value judgment that could differ from individual to individual. A jury in one case may find an AV's decision or behavior improper while a different jury may return a different result. Should an AV be found “defective” just because it made a decision that five people on the jury disagree with? Should a manufacturer be facing liability each time a jury questions a decision made by an AV? Additionally, what standard should an AV's behavior be held to? Should an AV be held to a “reasonable person” standard as in a standard motor vehicle case? Since most of the AVs are programmed to drive more conservatively and marketed to be safer than a human driver, should they be held to a higher standard of behavior, such as a “reasonable machine” standard?
Additionally, a recent studyvii by London School of Economics found that some drivers intend to “bully” AVs when they hit the road- driving aggressively around them in the assumption that they will have to stop and let the bully through. Such a behavior may create a higher risk of accidents for AVs. Should an AV be programmed to predict such bully behavior? Furthermore, in the case of an imminent crash, should the vehicle prioritize the well-being of passengers or pedestrians? This is yet another example of value judgment that may differ from one person to another.
As illustrated above, the advent of the autonomous vehicle era necessarily creates the need for change in the law. Such changes will likely be made by both the federal and state legislatures with the courts filling the gaps. A new legal landscape will inevitably emerge as self-driving cars enter the market place.
Vera Tsai is an associate at Gartner + Bloom, P.C.
i The NHTSA has adopted the SAE International (“SAE”) definitions for levels of automation in vehicles. HAVs represent
SAE levels 3-5 vehicles which are vehicles with the ability to monitor driving environments.
ii The Policy, in various places, refers to the automated vehicle system as the “HAV’s computer ‘driver ’” and suggests that
states should update references to a human driver as appropriate when evaluating their laws and regulations.
iiiThe Vehicle Safety Act expressly preempts states from issuing any standard that regulates performance if that standard is
not identical to an existing Federal Motor vehicle Safety Standard (“FMVSS”) regulating that same aspect of performance.
iv New York Pattern Jury Instructions (PJI) is used by judges throughout New York State to instruct juries in civil cases.
vIt should be noted, however, that the Court of Appeals has stated in dictum that causes of action for negligent design and
defective design are “essentially identical” and that separate jury questions on each theory were “redundant.” It is currently unclear whether the Court of Appeals intended to eradicate all distinctions between negligent design and defective design claims.
vi However, liability may not be imposed upon a manufacturer on a theory that has been pre-empted by federal law, that is, if the theory directly conflicts with a Federal Safety Standard or stands as an obstacle to the accomplishment of a Federal Motor Vehicle Safety Standard. See Geier v. Am. Honda Motor Co., 529 U.S. 861 (2000).
vii Think Good Mobility Survey 2016, http://media.wix.com/ugd/efc875_d98af657dce04c72a4c167a9efd93757.pdf
SLIPPERY STAIRS AND THE LABOR LAW: NEW GUIDANCE,
By Arthur P. Xanthos
Defense counsel and carriers should be aware of the recent Court of Appeals pronouncement on Labor Law 240(1) cases, particularly because this latest pronouncement provides a roadmap for defeating plaintiffs’ common stratagem – the summary judgment motion.
The decision is O'Brien v Port Auth. of N.Y. & N.J., 2017 N.Y. LEXIS 725, 2017 NY Slip Op 02466 (N.Y. Mar. 30, 2017). The facts have been seen many times: Plaintiff working on construction site, while descending an exterior temporary scaffold staircase which was wet and slippery due to rain, slips and falls thereby injuring himself. Plaintiff sues all relevant parties and the focus of the complaint is Labor Law 240(1).
Plaintiff made the traditional summary judgment motion, supported by an expert affidavit from a professional engineer who opined that the stairs were "not in compliance with good and accepted standards of construction site safety and practice", that slippery conditions on stairways should be eliminated before use, and that the stairs in question were smaller, narrower, more worn, and steeper than typical stairs. The expert concluded that these conditions coupled with the fact that the stairs were wet due to rain created a dangerous condition that was not in compliance with good and accepted standards of construction site safety and created a significant risk of slipping on the stairs and of thus falling down the stairs.
In opposition, defendants submitted affidavits from a construction safety expert, who disagreed with plaintiff’s expert, and opined that the staircase was designed for both indoor and outdoor use and provided traction acceptable within industry standards and practice in times of inclement weather. He further disagreed that the steps were too narrow, or that the step treads had been worn down. He noted that the staircase provided both perforated holes to allow rain to pass through and raised metal nubs for traction. He concluded that these anti-slip measures were sufficient. The defendants’ expert also opined that the use of both handrails could have helped prevent plaintiff's fall.
Not surprisingly, the lower court and the appellate division ruled in favor of the plaintiff on the motion. The Court of Appeals, however, reversed plaintiff’s summary judgment award. The Court’s primary rationale was the following: the mere fact a plaintiff falls from a height on a construction site does not give rise to automatic Labor Law 240(1) liability, and where the defendants raise questions of fact as to whether a safety device (in the O’Briencase, the staircase) provided adequate protection to the plaintiff, summary judgment is not warranted.
While this decision and rationale is not a technical rewrite of Labor Law 240(1), it does mark a sea change in what presumptions the lower courts should make in analyzing these motions. Heretofore, the process with some exceptions has been maddeningly difficult for the defense, because once a court heard that a plaintiff had fallen from a height and was injured, the court presumed – regardless of contradicting expert affidavits -- that inadequate safety devices were in place. In other words, courts have been utilizing the fact of the fall to impose automatic liability.
O’Brien counsels the courts against making that presumption.
-APX 5/26/17
LANDLORDS AND SECONDHAND SMOKE COMPLAINTS:
THE APPELLATE DIVISION CLEARS THE AIR
By Joseph Rapice and Arthur P. Xanthos
This Firm recently won a successful appeal concerning whether a co-op has an obligation to guarantee an odor free apartment for a shareholder. The appellate decision, Reinhard v. Connaught Tower Corporation, is available on this website under Publications.
Shareholder-tenant Susan Reinhard sued her co-op, the Connaught Tower Corporation, alleging that a cigarette smoke odor condition rendered her apartment uninhabitable for nine years, thereby forcing her to live in another premises. Prior to trial, plaintiff had made a settlement demand of $600,000.00, essentially making settlement impossible and forcing a trial.
At a three-day non-jury trial, plaintiff testified that she, her family, and a close family friend smelled cigarette smoke in the apartment on a handful of occasions over a nine year period, although the source of the odor was never identified. Plaintiff also proffered the testimony of an expert industrial hygienist, who testified that air passageways existed behind the walls in plaintiff’s apartment, implying that offensive odors could have been entering the apartment via those passageways. The industrial hygienist also testified that he too smelled a smoke odor in the apartment during his inspections.
In defense, we noted at trial that plaintiff’s expert, although he could have done so, failed to do a nicotine test. We pointed out as well via cross-examination that such tests are inexpensive and easy to do. We further demonstrated that without such objective testing and data, plaintiff could show no threshold amounts of any toxin (i.e.,secondhand smoke) in the apartment. Essentially, we proved that the only objective evidence presented by plaintiff was that yielded by her nose – she smelled something she did not like.
At trial we also introduced other critical facts: plaintiff was a full time resident of Connecticut, never actually inhabited her apartment, and instead desired to use the apartment as a Manhattan pied a terre.
Despite these facts, the trial court ruled that the co-op had breached the proprietary lease and the statutory warranty of habitability, thereby constructively evicting Plaintiff. The trial court awarded plaintiff a full return of nine years of maintenance payments in an amount of $120,000.00, and an award of attorneys fees. In so ruling, the trial court found that “significant cigarette smoke permeates and pollutes the apartment,” that the apartment was “infiltrated by secondhand smoke”, and that the apartment was “smoke-polluted.” We appealed that decision.
On May 4, 2017, the Appellate Division First Department unanimously reversed the trial court’s decision, dismissed plaintiff’s complaint in its entirety, and awarded attorneys’ fees to our client – the co-op. The appellate court held that the evidence failed to show that the subjective odor of cigarettes on a few occasions over nine years rendered plaintiff’s apartment uninhabitable. Critically, the appellate court reasoned that plaintiff failed to show that the alleged odor was present on a consistent basis and that it was sufficiently pervasive as to affect the health and safety of the occupants. (The Court also noted that plaintiff lived in Connecticut and only intended to stay in the apartment occasionally.)
The Reinharddecision marks a significant victory for building owners, cooperatives, and condominium boards, as well as for their insurers. The trial court’s ruling had temporarily opened a Pandora’s Box with regard to habitability claims, as it seemed to imply that a tenant need only claim a subjective odor to recover a full rent abatement. (Indeed, this Firm had seen an uptick in smoke odor cases following that decision.) The Appellate Division First Department’s decision, however, reaffirmed two rules: (i) that a plaintiff-tenant must present objective evidence of the presence of a toxin, a threshold level of it, and proof of a causal connection to health and safety of an occupant; and (ii) that a claim based upon the habitability of an apartment dwelling requires proof that the plaintiff occupied the dwelling.
-5/9/17