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The following article is being reprinted with the permission of the author, Joseph H. Bornstein, Vice President/Sr. Account Executive of The Mangelsdorf Companies. This article originally appeared in the Fall 2001 issue of TheMangelsdorf News. The Mangelsdorf Companies are structured settlement brokers who have been in business for the past 25 years. Cont'd...
A Pennsylvania federal judge has held that “under the right circumstances” a nursing home may be held liable under the Corporate Negligence Doctrine if it fails to uphold the proper standard of care owed the patient. In the Estate of Silverman v. City of Philadelphia, 2001 WL 148635 (Nov. 21, 2001), a woman suddenly collapsed in the dining room of Ashton Hall, a corporation providing health and nursing care to elderly individuals. The decedent was experiencing cardiac arrest, but Ashton Hall’s staff failed to recognize the severity of her condition. Finally, Ashton Hall’s staff told the administrator of Ashton Hall of the woman’s condition, and the administrator called an ambulance. Unfortunately, neither the administrator nor Ashton Hall’s staff called the city’s emergency service at 911 or an Ashton Hall physician. This led to a delay in the treatment of the decedent, and she died. Cont'd...
Court Holds That Pollution Exclusion Clause Does Not Apply To Lead Poisoning.
In a recent decision, the Supreme Court of Pennsylvania has held that a pollution
exclusion clause in a Commercial General Liability insurance policy is ambiguous
enough so as not to preclude coverage for injuries caused by a minor’s ingestion
and/or inhalation of lead-based paint. Lititz Mutual Insurance Co. v. Steely,
2001 WL 1523849 (Nov. 30, 2001)
. Cont'd...
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One Structured Settlement Consultant’s Perspective of Mediation.
About eleven years ago, the concept of mediation emerged as a way to help clear court dockets. Over the years, “Alternative Dispute Resolution” has come to replace the old-fashioned settlement conference where both parties sat across from the table eye to eye and tried to hammer out a settlement. It worked in some cases but many participants could have benefited from a more structured environment. It was not long before many saw mediation as a possible means to settle more cases sooner and possibly saving money for both parties, especially in personal injury matters. I know some of you believe mediations are just a way to get free discovery or learn trial theories prior to trial, but I am now a true believer in the process. I believe that if both parties are serious about bringing about a resolution, they must have an open mind and be willing to evaluate their case realistically.
Since 1989, I have personally participated in over 1,000 mediations from New York to California, in more than 30 different states. I have seen a resounding success rate with more than 80% of these matters settled at mediation or soon after, but before trial. What I have found is that even though the success rate is high, the level of expertise of mediators varies. My experience has shown me that in order for a mediator to be effective, they must have certain qualities to effectuate a compromised resolution. When selecting a mediator, I would recommend that you look at the prospective mediator to see if:
· They have experience in the type of case you are mediating. You don’t want a mediator who is used to mediating auto accidents, mediating a medical negligence matter.
· Does the mediator have the psychological training, background or persuasive powers to sway the decision makers to change their minds? Sometimes attorneys and or claim professionals come to mediation with unrealistic goals and they can benefit from a trusted neutral third party.
· Does the mediator have the respect and trust among their legal peers? In other words, will the decision makers listen to the legal opinions of the mediator and believe them.
· Does the mediator have the ability to point out the weaknesses of your case? There are many who are number passers but very few who can really show you the downside of your case.
· Do they believe in the process? Some mediations need to take 12-14 hours for both sides to come to grips with the compromised value of their cases. I’ve seen too many mediators declare impasses too early in the process.
· Finally, are the facilities conducive to the process? Often times, I’ve seen situations where there are cramped quarters, and you must go out for meals as opposed to bringing lunch in and continuing to work through lunch.
These are just a few observations that I have noticed over the years. I hope they will assist you in selecting a mediator who can be effective. Please feel free to call me for my opinion regarding specific mediators and my experience with them. Joseph M. Bornstein (214)369-1181.
The woman’s estate filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania, alleging that defendant, Ashton Hall, was liable for negligence and for corporate negligence under Pennsylvania law. The Doctrine of Corporate Negligence was first established by the Pennsylvania Supreme Court in the case of Thompson v. Nason Hosp., 591 A.2d 703 (Pa. 1991). In the Thompson case, the court upheld a theory of liability against the defendant hospital, stating: “corporate negligence is a doctrine in which the hospital is liable if it fails to uphold the proper standard of care owed the patient, which is to ensure the patient’s safety and well-being while at the hospital. This theory of liability creates a non-delegable duty which the hospital owes directly to a patient. Therefore, an injured party does not have to rely on and establish the negligence of a third party.” There are four general areas of corporate liability: (1) a duty to use reasonable care in the maintenance of safe and adequate facilities and equipment; (2) a duty to select and retain only competent physicians; (3) a duty to oversee all persons who practice medicine within its walls as to patient care; 4) a duty to formulate, adopt and enforce adequate rules and policies to ensure quality care for patients. Before the Estate of Silverman case, no Pennsylvania court had extended the Corporate Negligence Doctrine to nursing homes. However, the Pennsylvania Superior Court has recently extended the Corporate Negligence Doctrine to Health Maintenance Organizations (HMO’s). SeeShannon v. McNulty, 718 A.2d 828 (Pa. Super. 1998). The court recognized the “central role played by HMO’s in the total health care of its subscribers.”
The federal court reviewed the Shannon and Thompson cases and concluded that “under the right circumstances” the Pennsylvania Supreme Court may extend the Doctrine of Corporate Negligence to other health organizations, including nursing homes. The federal court found that the plaintiff had alleged sufficient facts to prove that Ashton Hall played a central role in the decedent’s health care in order to support their corporate negligence claim. Accordingly, the court denied Ashton Hall’s motion to dismiss the plaintiff’s complaint.
This case could have broad ramifications for corporations operating nursing homes, because a Pennsylvania court may hold that the corporation itself has a non-delegable duty owed directly to the patient. Therefore, the patient would not have to rely on and establish the negligence of a third party, such as a nurse or physician, in order to hold the corporation liable.
In this case, a child lived in two rental properties over the course of approximately seven and one half years. His mother brought an action against the owners of the rental properties, alleging negligence, breach of implied warranty of habitability, and misrepresentation, due to her son ingesting and inhaling lead-based paint, which was present on the interior surfaces of the homes. The minor had developed lead poisoning and neuro-developmental delay.
One of the homeowners was insured by Lititz Mutual Insurance Co., and when the Steelys notified Lititz of the lawsuit, Lititz notified them of its intention to defend pursuant to a reservation of rights. Lititz then started a declaratory judgment action, which sought a determination that the child’s lead poisoning claims were precluded by the policy’s pollution exclusion, which excluded coverage for “bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants: (a) at or from premises owned, rented or occupied by the named insured.” The Lititz policy defined pollutants as “any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.”
Lititz filed a motion for summary judgment, which the trial court denied, because it found that the definition of pollutants and the excluded methods of transmission were ambiguous when applied to the facts of the case. The court also examined the divided state of the law among other jurisdictions on this issue. Once the court concluded that the exclusion was ambiguous, the court, as required by Pennsylvania law, resolved the ambiguity in favor of the insured and denied the motion for summary judgment. Accordingly, the court found that Lititz had a duty to defend the homeowners.
The Superior Court reversed the trial court’s decision, because it found that the definition of pollutants clearly and unambiguously applied to the lead paint. The Superior Court also concluded that the exclusion’s requirement that the alleged injury arose out of the “actual, alleged or threatened discharge, dispersal, release or escape of pollutants” was unambiguous, because it found that the terms such as “discharge” and “dispersal” encompassed “all types of degrees and movement”, including the lead-based paint, which “over time exfoliated, abraded, flaked, deteriorated or otherwise moved off of the walls as small particles of paint dust.” Accordingly, the Superior Court found that there was no coverage under the Lititz policy.
The Pennsylvania Supreme Court reversed and ruled that the pollution exclusion clause does not preclude coverage for the minor’s lead poisoning in this matter. In making its decision, the Supreme Court first concluded that the definition of “pollutant” in the pollution exclusion clause “unambiguously” encompasses lead-based paint.
The Court then considered whether the pollution exclusion’s requirement of a “discharge, dispersal, release or escape” of pollutants is ambiguous as applied to lead-based paint. The Court stated that the critical question is “whether the process by which lead-based paint becomes available for human ingestion/inhalation unambiguously involves a type of motion that can be characterized as a discharge, dispersal, release or escape.” The Court examined the affidavits submitted by the toxicology experts, and stated that, “the process by which lead-based paint becomes available for human ingestion/inhalation does not, in the usually case, occur quickly. Rather, the process of surface degradation occurs continually, but at a slow rate.” The court stated that one “would not ordinarily describe the continual, imperceptible, and inevitable deterioration of paint that has been applied to the interior surface of residence as a discharge (“a flowing or issuing out”), a release (“the act or an instance of liberating or freeing”), or an escape (“an act or instance of escaping”). The court did hold that arguably, such deterioration could be understood to constitute a “dispersal” (“the process… of… spreading… from one place to another”). The court stated that “any such inconsistency in meaning simply indicates, however, that the exclusionary language does not clearly include or exclude the physical process here at issue, but is, as to that process, ambiguous. Such ambiguity requires that the language be interpreted in favor of the insured.”
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