T H I S I S A N A D V E R T I S E M E N T

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Insurance Law

T H I S I S A N A D V E R T I S E M E N T

BUILDING CODE VIOLATIONS DO NOT CREATE AUTOMATIC NEGLIGENCE; THE OPEN AND OBVIOUS DOCTRINE STILL APPLIES TO CODE VIOLATIONS By Shawn M. Blatt, Esq.

The Sixth District Court of Appeals ruled that evidence of building code violations doesn’t automatically create liability for a motel customer’s injury in Riehl v. Birds Nest, Inc., Case No. OT-09-003 (Dec. 18, 2009) (6th App. Dist. Ottawa County). In Riehl, the plaintiff was injured when she fell from the rear steps of a cottage operated as a resort/motel. She was walking down the steps at night in the dark and had chosen not to turn on the outside light as she exited the cottage.

The plaintiff produced evidence that the steps violated the administrative rules of the Ohio Basic Building code because the risers were of varying heights, there was a lack of handrails, and there was no landing at the top. Such violations were admissible as evidence of possible negligence but did not mean that the motel was automatically negligent simply because it did not comply with building code. It is only where a state statute mandates compliance with the safety requirements of the Ohio Basic Building code that a violation will be negligence as a matter of law, such as the requirements of the Landlord/Tenant act. No such statute applied the Ohio Basic Building code to the steps.

The plaintiff admitted she had been up and down the steps on several occasions before she fell, and she admitted that the various heights of the steps were plainly visible, the lack of a handrail was visible, and she was aware of the conditions surrounding the steps. The court held that the condition of the steps, the lack of handrailing, and the other surrounding circum-stances were conditions that were “open and obvious” to the plaintiff and, as a result, the motel did not owe any duty to her for those details. The court rejected the claim that darkness consti-tuted an “attendant circumstance,” which made the conditions more dangerous. Generally, darkness is a naturally occurring event, and increases the degree of care a person should care when walking in the dark.

The plaintiff also claimed there was a violation of a state statute that required specific lighting of exit ways in motels. The court acknowledged the applicability of the statute and noted that the motel could be automatically negligent for a violation of the statute. However, the exterior lighting for the cottage was provided by a porch light that the plaintiff intentionally chose to leave off at the time of her fall. As a result, no proximate cause existed between the alleged violation and the accident, because the illumination provided by the porch light was deliberately left off by the plaintiff.

Building code violations do not constitute automatic negligence against a store or motel owner unless a statute specifically requires compliance with the building code. As a result, adminis-trative building code violations, in and of themselves, are subject to the “open and obvious” rule, which provides that any hazard or danger that is clearly visible serves as the warning itself, and no duty of care exists on behalf of the premises owner to warn of the hazard. The owner can reasonably expect that people on the premises will discover those open and obvious dangers and take appropriate measures to protect themselves.

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SIXTH CIRCUIT ADOPTS “HIGHLY LIKELY TO OCCUR” STANDARD FOR DETERMINING WHETHER INJURY IS ACCIDENTAL IN ERISA CASES

By Shawn M. Blatt, Esq.

The Sixth Circuit Court of Appeals has adopted a uniform standard to be applied to the term “accidental” for the purpose of determining whether benefits are payable under an ERISA plan. Kovach v. Zurich American Ins. Co., Case No. 08-4512 (6th Cir. C.A., Nov. 13, 2009). The court set forth the following objective standard to be used to determine whether an injury arises out of “accidental means” or was expected or intended:

[W]hether a reasonable person, with background and characteristics similar to the insured, would have viewed the injury as highly likely to occur as a result of the insured’s intentional conduct.

(Quoting Wickman v. Northwestern Nat’l Ins. Co., 908 F.2d 1077, 1088 (1st Cir. 1990).

In Kovach, the claimant was injured in a motorcycle accident and was insured under an ERISA plan. At the time of the accident, the insured was legally intoxicated with a blood alcohol of .148%. There was also evidence of opiates in the insured’s blood stream. He ran a stop sign and was severely injured, resulting in the amputation of his left leg.

The ERISA plan paid benefits for losses, including dismemberment, resulting from an injury defined as “a bodily injury directly caused by accidental means which is independent of all other causes . . . .” The term “accidental” was not defined but the plan included several exclusions from coverage, such as injuries arising out of skydiving, parasailing, hang gliding, bungee jumping, or similar activities. After the accident, the insured filed a dismemberment claim with the ERISA insurer. The insurer denied coverage, finding that the injury was not caused by “accidental means” because Mr. Kovach was

driving with almost twice the legal blood alcohol content, tested positive for opiates, and ran a stop sign, thereby initiating the crash. The insurer relied upon several other federal decisions that upheld the denial of benefits under similar circumstances involving injuries arising while driving drunk or doing other, highly risky activities. The Sixth Circuit rejected the insurer’s position, finding that the decision was arbitrary and capricious. The court noted that the cases relied upon by the insurer had significantly greater risky behavior and higher alcohol rates than was involved with Kovach. The court held that the term “accidental,” in its ordinary meaning, means those events that are unforeseen, happening through carelessness. Nothing in the facts or the evidence indicated that the injured party intended or expected to be hurt. The court noted that the insurer used the term “accident” when referring to the plaintiff’s injury throughout its documentation, thereby implying that the injuries themselves were accidental. In addition, the court held that it was not a foregone conclusion that someone will be injured if he drives with a blood alcohol content of .148. The court noted that although a person may increase his risk of collision while driving drunk, the same increase occurs with persons doing other activities, such as using a cell phone, text messaging, or driving when very tired. As a result, the court held that the denial of coverage was arbitrary and capricious and that the insured was entitled to benefits because the injury was “acciden-tal” as that term is understood, both in its common usage as well as under the ERISA plan.

In so holding, the court adopted a uniform standard for determining whether an injury was “accidental.” The Sixth Circuit borrowed a standard established by the First Circuit Court of Appeals in Wickman v. Northwestern Nat’l Ins. Co., 908 F.2d 1077 (1st Cir. 1990). In order to determine whether an injury arises out of an accident for purposes of coverage under an ERISA plan, the Sixth Circuit Court of Appeals will now look to:

Whether a reasonable person, with background and characteristics similar to the insured, would have viewed the injury as highly likely to occur as a result of the insured’s intentional conduct.

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SUPREME COURT EXPANDS SCOPE OF RECOVERY IN DOG BITE CLAIMS

By Shawn M. Blatt, Esq.

A person injured by a dog can now sue under both the “dog bite” statute providing for automatic liability and under a claim for common law negligence. Beckett v. Warren, 2010-Ohio-4. By allowing plaintiffs to sue under both common law and the statute, the Ohio Supreme Court has potentially expanded the scope of the claims and the potential damages. In Beckett, the plaintiff filed injury claims on behalf of her minor child who was bitten on the head by the defendant’s dog. Suit was filed under both a claim for common law negligence and a claim for damages under the dog bite statute in Ohio, Ohio Revised Code § 955.28. The trial court ordered the plaintiff to choose between seeking a remedy under either the statute or the common law. The plaintiff chose the statutory remedy, and the jury rendered a verdict in the amount of $5,000. The plaintiff appealed several issues, includ-ing the claim that she should have been allowed to seek a remedy under both common law and the statute at the same time.

A dispute existed as to whether a person could sue for injuries caused by a dog under both common law and the statute. The two claims are mutually exclusive. A plaintiff does not get to recover double damages, nor is the plaintiff awarded damages for the same losses under both common law and the statute. The two approaches are alternate theories to recover for an injury caused by a dog. Courts were split as to whether a plaintiff could pursue recovery under both the statute and common law, or whether a plaintiff had to choose one or the other.

Under common law theories of negligence, an owner can only be liable for injuries caused by a dog if the person knew of the dog’s vicious tendencies and then failed to use reasonable care in

controlling the dog after becoming aware of those tendencies. This approach became known as the “one-bite rule,” which implied that an owner of a dog could not be liable until the dog actually bit or injured someone, thereby giving the owner notice of the dog’s potential viciousness and putting the owner on notice of the need to control the dog.

In common law dog bite claims, the plaintiff must prove that the owner knew of the dog’s viciousness and then failed to take reasonable care to control the dog. Many felt it was unfair to force an innocent injured person to meet those requirements to recover for injuries that were clearly caused by the owner’s dog. Many times, seriously injured victims were not able to obtain relief from their injuries because they could not prove the owner had knowledge of the dog’s potential viciousness. As a result, the “dog bite” statute was developed, which created automatic liability on the part of the owner for injuries caused by the owner’s dog.

In Ohio, the dog bite statute, R.C. 955.28, as it is currently written, makes an owner or keeper of a dog automatically liable for injuries caused by the dog unless the injured person was guilty of criminal trespass, was committing a criminal offense (other than a minor misdemeanor) on the property, or was teasing, tormenting, or abusing the dog at the time of the injury. Unless one of those three defenses applied, the owner is

automatically liable for injuries caused by the dog. A plaintiff is not required to prove that the owner failed to use reasonable care in controlling the dog or was aware of the dog’s viciousness. Instead, the injured party only had to prove that the person was the owner or keeper of the dog and that the dog caused the injury. Compensatory damages available under the statue and common law were the same. However, one major distinction between the two causes of action was that the plaintiff could obtain punitive damages under the common law. If a plaintiff was able to prove that the owner not only had knowledge of the dog’s vicious propensities but also acted willfully, wantonly or with malice in keeping and failing to control the dog, an award of punitive damages could be made. Punitive damages are not available under the statute.

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SUPREME COURT EXPANDS SCOPE OF RECOVERY IN DOG BITE CLAIMS (continued)

The Ohio Supreme Court held years ago that the dog bite statute, in creating a rule of automatic liability, was a new and different cause of action than a common law right of action. The court held that a suit could be instituted “either under the statute or at common law.” Warner v. Wolfe (1964), 176 Ohio St. 389. By using that language, “either under statute or at common law,” a number of courts held that a suit could be commenced either under statute or at common law, but not both. Courts also noted that a plaintiff should not be allowed to pursue damages under both common law and the statute, because evidence that would be admissible for a common law claim was inadmissible under the statute, and that to allow the plaintiff to pursue both at the same time would potentially confuse the jury. Courts were concerned that evidence relevant to punitive damages under common law would be presented to a jury who was considering a claim for automatic liability under the statute, potentially prejudicing the jury with respect to the statutory claim for damages. Plaintiffs were faced with a choice: seek to recover under the statute, and obtain the benefit of the automatic liability provisions of the statute but forego any punitive damage claims, or recover under the common law, which is harder to prove, but which would allow plaintiffs to seek punitive damages, in addition to compen-satory damages.

The Ohio Supreme Court rejected the concerns of confusion of a jury and held that its earlier decision in Warner v. Wolfe did not mean that a plaintiff could only seek to pursue a claim under one or the other causes of action for dog bites. The court held that an injured party can seek to recover under both common law negligence and the dog bite statute at the same time. The Ohio Supreme Court majority felt that through proper instruction, the court could keep the jury focused on separating out the two causes of action to determine whether liability exists under either. This decision creates the potential for a greater increase in damages that may be awarded in claims of injuries caused by dogs. A claimant seeking to recover under a dog bite will now be able to introduce evidence of the dog’s viciousness, and the

alleged knowledge of an owner of that viciousness, while at the same time getting the benefit of automatic liability under the statute. Previously, evidence of the dog’s viciousness and the owner’s failures to control or knowledge of the viciousness was not admissible when pursuing a statutory dog bite claim. In statutory claims, the only issue was whether the person was the owner or keeper of the dog, whether the dog caused the injury, and the value of that injury. Now, evidence of the dog’s vicious-ness and the owner’s knowledge and other alleged bad acts in terms of keeping the dog or maintaining the dog will be introduced, all of which can potentially increase any claim for compensatory damages (the only damages allowed under the statute). There is now no risk on the part of the plaintiff to attempt to seek such punitive damage claims while at the same time having the security of getting automatic liability under the statute.

Justice Terrence O’Donnell dissented from the Court’s decision, noting the inherent confusion that will occur when two separate causes of action are pursued requiring the comingling of inconsis-tent evidence and allowing in evidence as to the issues of negligence and punitive damages, while also instructing on a theory of automatic liability. As stated by Justice O’Donnell, “it is logically inconsistent to tell a jury to consider a dog’s vicious propensity for a common law negligence claim and at the same time instruct the same jurors to ignore that evidence in connec-tion with evidence relating to a statutory claim.”

Dog bite claims will now have to be considered as automatic liability with a potential for increased damages if there exists any evidence of previous injuries caused by the dog or previous incidents that put the owner on notice that the dog could cause harm, thereby increasing the potential value of all dog bite claims in Ohio.

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SLIP-AND-FALLS: WHEN ARE STORES RESPONSIBLE? By Shawn M. Blatt, Esq.

If you braved the crush of holiday shoppers at the malls this season, you undoubtedly came across merchandise that spilled over and fell on the floor or jutted out into aisle ways. You might not give such yuletide debris a second thought, but for the store, anything laying on the floor or blocking a walkway creates a potential hazard. If someone trips and falls, a lawsuit is sure to follow.

In Ohio, businesses are not automatically liable if a customer is injured while on the premises. A store has a duty of ordinary care to keep the premises in a reasonably safe condition so that customers are not unnecessarily exposed to danger. There are a number of factors that courts will consider when a customer trips and falls in a store. Recently, the Second District Court of Appeals reconfirmed those factors in Miranda v. Meijer Stores Ltd. Partnership, Case No. 23334, C. A. 2nd App. Dist. (Dec. 18, 2009). There are basically three ways that a store can be found liable for a customer’s injury:

1.The store created the hazard or put the substance on the floor, and did not clean it up or warn of it.

2.Although the store did not create the hazard, the store had actual knowledge of the existence of the hazard and did not give warnings to customers or did not promptly remove or clean it up.

3.The store did not know about the hazard but the hazard existed long enough to justify the inference that the store’s failure to either warn about it or remove it was a failure to use ordinary care.

Even if one of the three factors exists to establish a potential claim, the “open and obvious” defense can prohibit liability if the hazard itself was open and obvious to persons in the store. A discussion of the nature of the “open and obvious” defense was included in the October issue of this newsletter.

It’s usually difficult to determine when an object or substance appeared on the floor and how it got there. If there’s no evidence to show that the store is responsible or had knowledge, either actual or implied, the case should be resolved on summary judgment. In Miranda, the Second District Court of Appeals rejected the claim of a customer who slipped on spilled dog food in a grocery aisle because there was no evidence as to who caused the spill, how long the spill was there, or whether the storeowner was aware of it.

Storeowners are not insurers of the safety of their stores. If the claimant can’t offer any evidence as to how the hazard got on the floor, how long it was there, or whether anyone knew of it, the store will not be liable. Early investigation into these issues, including witness interviews, scene photos and candid discus-sions with the store can be used to establish the lack of liability. Challenging the lack of evidence early can result in a dismissal of the case on summary judgment.