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CLM National: August 2022

News and verdicts that affect you from across the country

August 16, 2022 Photo

Gov. Tom Wolf in Pennsylvania signs a bill granting cannabis businesses access to the banking and insurance systems, the Texas Supreme Court finds a discovery request seeking drug-test information of drivers unrelated to the accident in question to be overbroad, and the New Jersey Supreme Court finds the Rescue Doctrine does not apply for plaintiff who saved defendant’s dog.


Inns Now Seminal Case for COVID-19 Shutdown Orders

The California Supreme Court summarily denied review of the now seminal case, Inns By The Sea v. California Mutual, which found no coverage for business interruption losses due to COVID-19-related government shutdown orders. The Fourth Appellate District had affirmed the trial court’s dismissal, finding that Inns’ complaint did not sufficiently identify any direct physical damage to property that caused it to “suspend” its operations. In contrast, the Second Appellate District in Marina Pacific Hotel v. Fireman’s Fund Ins. found the complaint was adequately pled as to “direct physical loss” due to robust allegations of the presence of the virus that could not be eradicated. Marina Pacific has been the only case thus far adverse to California insurers regarding artful pleading of direct physical damage. Complaints that inescapably allege losses caused solely by government orders are still controlled by the Inns case.—From CLM Members Ian R. Feldman, Amy R. Paulus, Melinda S. Kollross, and Tami Kay Lee of Clausen Miller P.C.


No Discovery for Unrelated Drivers’ Drug Use Info

The Texas Supreme Court found in In re UPS Ground Freight that a discovery request in a wrongful death action compelling production of drug tests and other personal information of uninvolved UPS drivers was overbroad and prohibited by federal law. Phillip Villareal tested positive for THC after a multi-vehicle crash that killed Nathan Dean Clark. Clark’s mother, Jacintha McElduff, brought a lawsuit against Villareal and UPS for negligence and gross negligence. Villareal admitted he used cannabis for years and often provided it to other drivers. McElduff requested detailed documents regarding the identities and personal information of all UPS drivers working out of the same facility, as well as all drug and alcohol test results of these drivers, with no time restriction parameters. The trial court compelled production but the Supreme Court reversed, stating the result of other drivers’ drug tests were irrelevant as proof that UPS negligently trained, retained, or entrusted a vehicle to Villareal.—From CLM Members Christopher K. Chapaneri and Jessica R. Gonzales, Wood Smith Henning & Berman


Wolf Signs Cannabis Financial Institution Legislation

Gov. Tom Wolf signed HB 331 in July, which allows banks and insurance companies to offer services to legitimate cannabis businesses. HB 331 states, “A financial institution authorized to engage in business in this Commonwealth may provide financial services to or for the benefit of a legitimate cannabis-related business and the business associates of a legitimate cannabis-related business.” Government agencies cannot prohibit or penalize institutions that provide these services, and cannot recommend against providing services. News reports note Gov. Wolf has backed legalizing recreational use of marijuana in the state, but as of now, only medical use is legal.—From Senior Managing Editor Phil Gusman

Washington D.C.

OSHA Enforcement Initiative Follows Trench Deaths

OSHA has launched an enhanced enforcement initiative to protect workers in response to an “alarming” increase in trench-related fatalities, the U.S. Department of Labor announced on July 14. In the first six months of 2022, 22 workers died from hazards in trench and excavation work, surpassing the 15 that died in all of 2021, according to OSHA. “Every one of these tragedies could have been prevented had employers complied with OSHA standards,” OSHA assistant secretary Doug Parker said to Engineering News-Record. OSHA’s trenching standards require protective systems be used on trenches deeper than five feet, and that soil be kept at least two feet from the trench’s edge. OSHA said it would consider various enforcement tools, including adding emphasis for how officials evaluate penalties, and criminal referrals for federal or state prosecution to hold employers or others accountable for putting workers’ lives at risk.—From Mark Friedlander, Insurance Information Institute

New Jersey

Saving Dog Doesn’t Entitle Rescue Doctrine Recovery

In Samolyk v. Berthe, the New Jersey Supreme Court was required to determine whether to expand the common law rescue doctrine to permit plaintiffs to recover damages for injuries sustained as a proximate result of attempting to rescue defendants’ pet dog. After saving the life of defendants’ dog, plaintiff sustained neurological and cognitive injuries. Plaintiff alleged defendants were liable under the rescue doctrine by negligently allowing their dog to fall or jump into a canal. Plaintiff claimed that the defendants invited the rescue because their dog was in peril and the plaintiff would not have jumped but for the dog needing rescue. The court emphasized the rescue doctrine permits recovery for damages and injuries sustained when an individual had acted to shield human life. The court reasoned that any attempt to reform the application of the rescue doctrine to include the protection of property, must emanate from the instinct to protect human life. The court affirmed the Appellate Division decision to dismiss plaintiff’s complaint.—From CLM Member Franklin Muñoz, Callahan & Fusco

New York

Grieving Families Act May See Update

The current wrongful death statute in New York, in place since 1847, may soon get a revamp. Senate Bill S74A, the Grieving Families Act, is currently awaiting Gov. Kathy Hochul’s signature. The bill would expand compensable damages in wrongful death actions to include emotional losses, such as grief and anguish, to the types of damages family members would be entitled to recover. Additionally, the definition of “family member” would expand to include a greater spectrum of people affected by such deaths—including spouses, domestic partners, children, parents, grandparents, stepparents, and siblings—as those who are entitled to recover damages. Finally, the bill would extend the current statute of limitations for bringing a wrongful death claim from two years to three and a half years. Opponents argue the bill would increase costs of litigation, increase length of time to litigate cases, and duplicate currently available remedies. Proponents believe the updates would justly compensate all who suffer from such wrongful deaths.—From CLM Member Jillian E. Madison, Goldberg Segalla

About The Authors
Phil Gusman

Phil Gusman is senior managing editor for CLM Magazine and Construction Claims magazine.  phil.gusman@theclm.org

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