I. MEDICAL MALPRACTICE - DAMAGES

Court Holds $8 /Day Award to Amputee Grossly Insufficient and a Miscarriage Of Justice

In Walsh v. Disciglio, 2008 WL 3850803 (N.J. Super. August 19, 2008), an unpublished opinion, plaintiff filed suit against George Constantinopoulos, M.D. alleging a breach of the standard of care in the treatment of circulatory problems in her toes. Plaintiff had been seen by numerous doctors over several years before she first saw vascular surgeon, Dr. Constantinopoulos. Plaintiff was in severe pain and Dr. Constantinopoulos recommended an arteriogram. The doctor advised the procedure should be performed immediately but because he was not in her health plan, she would have to see another doctor. The test was performed 15 days later and a subsequent surgery revealed that amputation might be necessary. Plaintiff had a total of seven surgeries resulting in amputation of most of her leg.

At trial, the jury returned a verdict awarding plaintiff $100,000 in damages for pain and suffering and $800,000 in economic damages. Plaintiff appealed arguing that the jury's award, which amounted to $8.00 per day for the amputation of her leg, was insufficient in relation to the nature of the injury and the consequences thereof. Plaintiff requested a new trial on compensatory damages.

Relying on three Appellate Division rulings in which compensatory damages of $50,000 were deemed insufficient, the court held that the compensatory damages awarded to plaintiff were grossly insufficient and a miscarriage of justice. The court noted that plaintiff had experienced substantial pain and suffered permanent injury. The evidence indicated she would ultimately be relegated to a wheelchair. The court also found that a recalculation of damages based upon the trial transcripts without having the opportunity to observe the witnesses would be a further miscarriage of justice and remanded the matter for a new trial on the issue of compensatory damages.

II. INSURANCE COVERAGE

Insurer Does Not Owe Duty to Defend or Indemnify Under a Professional Liability Policy Where All Claims in Complaint "Arise Out Of" Services Excluded in Policy

In Everest National Insurance Co. v. Brett & Co., P.C., 2008 WL 4083175 (E.D.Pa. August 29, 2008), Plaintiff, Everest National Insurance Company ("ENIC") sought a declaratory judgment that it did not owe a duty to defend or indemnify certain insureds in an accountants professional liability policy which it issued to the Defendant, J. Daniel Brett & Co., P.C. A Motion for Judgment on the pleadings was filed by plaintiff.

The underlying complaint was filed by Veneesa, Inc., Joseph Ventresca and Kathleen Ventresca against Thomas Stevenson, Terri Stevenson, J. Daniel Brett & Co., P.C., J. Daniel Brett, CPA and Michael LoStracco, CPA. The underlying complaint alleged, among other things, that the president of Veneesa, Inc. fraudulently and illegally misappropriated funds for six years, shared the benefits of said funds with his wife, and used the services of another officer of the corporation, Michael LoStracco, as well as the corporation's Certified Public Accountants, J. Daniel Brett & Co., P.C.; J. Daniel Brett, to cover up his actions."

ENIC issued the policy in question to named insured J. Daniel Brett & Company, PC. The Policy provided coverage for legal liability arising out of certain designated professional services (i.e., accounting services) subject to various exclusions, conditions, and limitations. Both J. Daniel Brett, CPA and Michael LoStracco, CPA were Insureds under the Policy for professional services performed on behalf of J. Daniel Brett & Co., P.C.

Section II ("Exclusions") of the Policy, at Exclusion E, provided:

This policy does not apply to any claim:

E. arising out of any Insured's involvement in, or professional services performed for, any entity not named in the Declarations if, at the time the professional services are performed, an Insured is an officer, director, partner, member, manager or employee of such entity or an Insured or combination of Insureds hold than a 15% ownership in such entity;

Defendant in the underlying matter, Venessa, Inc., was not named in the Declarations of the ENIC Policy. The claims in the underlying complaint arose out of the professional services performed for Veneesa by Brett and LoStracco at a time when LoStracco was also an officer, agent and shareholder of Vaneesa.

Defendants argued that plaintiffs had a duty to defend since several allegations of the complaint asserted claims which did not relate to Defendant LoStracco's alleged double employment by the Brett, P.C. and by Vaneesa. Defendants cited Pennsylvania law that an insurer has a duty to defend if the Complaint filed by the insured party potentially comes within the policy's coverage, even if only a single claim in a multi-claim lawsuit is potentially covered.

Plaintiff argued that the counts which the Defendants contended show "potential" coverage incorporate by reference all of the prior allegations of the complaint which include the allegations of LoStracco's dual relationships with Brett and Veneesa, and that Veneesa is not named in the Policy Declarations. The court found that "[a]lthough it may be the case that the allegations against the Defendants in the underlying complaint are broader than necessary for some of the specific counts, Pennsylvania cases consistently hold the allegations in the underlying complaint govern." As such, the Court held that all the claims in the complaint "arise out of" the involvement of LoStracco in performing both professional services, and also serving in a capacity with Vaneesa covered by exclusion E. Therefore, exclusion E of the Policy applied and coverage was precluded for the claims in the underlying complaint.

III. EMPLOYMENT LITIGATION

Arbitration Clause in Employment Agreement is Enforceable Even Where One Party is Ignorant of the Language in Which the Agreement is Written

In Morales v. Sun Contractors, Inc., --- F.3d ---, 2008 WL 3974059 (3d. Cir. August 28, 2008), plaintiff was hired by Sun Constructors, Inc. in April of 2004. The employment relationship between plaintiff and Sun was governed by a signed employment agreement (the Agreement) that contained an arbitration clause. In April 2005, plaintiff was fired for violating safety standards. Plaintiff filed a wrongful termination suit against Sun. Sun moved to stay the proceedings pending arbitration, but the District Court denied the motion, finding that plaintiff signed the Agreement without realizing it contained an arbitration clause. The District Court concluded that the arbitration clause was unenforceable because plaintiff could not assent to the clause due to the fact that he did not understand the English language. On appeal, Sun argued that plaintiff was bound by the entire Agreement, even if he was ignorant of its terms.

The Third Circuit Court of Appeals cited the objective theory of contract formation:

[W]hat is essential is not assent, but rather what the person to whom a manifestation is made is justified as regarding as assent. Thus, if an offeree, in ignorance of the terms of an offer, so acts or expresses itself as to justify the other party in inferring assent, and this action or expression was of such a character that a reasonable person in the position of the offeree should have known it was calculated to lead the offeror to believe that the offer had been accepted, a contract will be formed in spite of the offeree's ignorance of the terms of the offer. ,/In Morales v. Sun Contractors, Inc., --- F.3d ---, 2008 WL 3974059 (3d. Cir. August 28, 2008), plaintiff was hired by Sun Constructors, Inc. in April of 2004. The employment relationship between plaintiff and Sun was governed by a signed employment agreement (the Agreement) that contained an arbitration clause. In April 2005, plaintiff was fired for violating safety standards. Plaintiff filed a wrongful termination suit against Sun. Sun moved to stay the proceedings pending arbitration, but the District Court denied the motion, finding that plaintiff signed the Agreement without realizing it contained an arbitration clause. The District Court concluded that the arbitration clause was unenforceable because plaintiff could not assent to the clause due to the fact that he did not understand the English language. On appeal, Sun argued that plaintiff was bound by the entire Agreement, even if he was ignorant of its terms.

The Third Circuit Court of Appeals would not grant plaintiffs' request to create an exception to the objective theory where a party is ignorant of the language in which the contract is written. The Court provided "[i]n the absence of fraud, the fact that an offeree cannot read, write, speak, or understand the English language is immaterial to whether an English-language agreement the offeree executes is enforceable."

The Third Circuit Court of Appeals held that plaintiff was bound by the arbitration clause noting that it was plaintiff's obligation to ensure he understood the Agreement before signing. Plaintiff failed to do so in that he never asked the interpreter to translate the document word-for-word or ask to take the Agreement home and have it translated.