The Major Pitfalls of Compensable Consequence

Written by Bob McAdam, Esq. Edited by Claire C. Carr, Esq.   The Court of Appeals of Virginia recently decided a case with potentially far-reaching effects. In Merck & Co. v. Vincent, COA Record No. 0424-19-1, (01/14/2020) the Court explained some of the major pitfalls of the doctrine of compensable consequences. First, what is a “compensable consequence?” The compensable consequence doctrine applies “when the injury does not arise on the day of the accident, but instead develops as a direct consequence of an initial injury.” Under the doctrine of compensable consequences, an employer's liability for an industrial injury extends to “all the medical consequences and sequelae that flow from the primary injury.” The employer is responsible for a natural consequence that flows from the original injury, if it is a direct and natural result of the primary injury. In Vincent, the Court of Appeals affirmed the Full Commission’s affirmation of a deputy commissioner’s award of permanent total disability benefits to a claimant, who lost the use of his left arm while working for the employer and subsequently lost the use of his leg as a consequence of the effects of medication taken for the arm injury—because the compensable consequences of the leg injury arose “in the same accident” as the arm injury for the purpose of Va. Code Ann. § 65.2-503(C). In 2009, the claimant injured his left arm and neck while working for the employer. The deputy commissioner awarded temporary total disability, and the Commission affirmed. The employer did not appeal that award. The claimant underwent surgery to treat these injuries. In 2011, he became dizzy and fell...

VIRGINIA COURT RESPONSE TO COVID -19

Like all businesses and industries, the judicial system is struggling to maintain normal operations as it attempts to limit gathering of large numbers of people to avoid the spread of COVID-19.  In response to directions of the CDC, Virginia Department of Health, and the Governor of Virginia, the courts have all issued orders suspending most matters on the upcoming docket, and they have gone even further with civil jury trials where members of the general public are required to meet.  The following orders and changes have been made to the various court dockets in Virginia. STATE COURTS:  The Supreme Court of Virginia has issued an Order Declaring a Judicial Emergency such that from Monday, March 16th through April 6, 2020, all non-essential and non-emergency court proceedings in Circuit Courts and District Courts are suspended, and all civil, traffic, and criminal matters, including jury trials are continued (with the exception of emergency matters).  It was further ordered that all deadlines are tolled for 21 days.  If an emergency matter must be heard, courtroom attendance is limited to attorneys, parties, necessary witnesses, and press in matters that cannot be continued.  The following persons may be denied entry to the courthouse: A person may be denied entry to the courthouse if: ·       They have within 14 days visited China, Iran, South Korea, Europe, or other high-risk country designated by the CDC; ·       Been asked to quarantine or isolate his or herself by a doctor, hospital or health agency; ·       Been diagnosed with or had contact with anyone diagnosed with COVID-19; ·       Has a fever, cough or shortness of breath or resides with...

“What’s not covered!?”: Defining an “occurrence” in a Subcontractor Claim

Written by Matt Daly, Esq. Edited by Claire C. Carr, Esq. Ayttorneys and claims examiners handling construction litigation know that every construction case starts with coverage issues. In claims against subcontractors, perhaps the most commonly encountered issue is the interplay between an “occurrence” and the “your work” exclusion. Subcontractors facing a claim are often surprised to learn what may and may not be covered when this exclusion comes into play. A recent opinion from the United States District Court for the Western District of Virginia provides a solid blueprint for analyzing this issue. Western World Insurance Company v. Air Tech, Inc. U.S.D.C., West. Dist. Va., Case No. 7:17-CV-518 (Roanoke) involved an insurance dispute between Western World and its insured, Air Tech. The dispute arose after Air Tech was sued for breach of contract and negligence arising from a subcontract agreement that Air Tech entered into with Hall’s Construction Corp. Under the subcontract, Air Tech agreed to supply a Solvent Recovery Chiller for a project Hall’s had undertaken. Air Tech supplied the chiller and was alleged to have been involved in the installation as well. When the chiller failed and required a replacement, Hall’s sued Air Tech for breach of the subcontract and negligence based on: the failure to properly provide the materials and equipment necessary to install the chiller; failure of the manuals provided to accurately describe the equipment and components and required electrical connections; failure of the manuals to accurately describe the work to be performed; and failure to correctly install the chiller. The Western World policy provided coverage for property damage only if caused by an “occurrence.”...

How Defendants Can Hold a Plaintiff Accountable, Even After a Nonsuit.

Written by Jessica Relyea, Esq. Edited by Brian Cafritz, Esq.   In Virginia, by statute, Plaintiff has a right to one nonsuit, or voluntary dismissal, as a matter of right. You can read more about the procedure and rules surrounding a nonsuit here. While a nonsuit is a very important vehicle for Plaintiff to correct defects in their case, it does not shield Plaintiff from a pending motion for sanctions. The Supreme Court of Virginia has held that a trial judge must still hear and decide a motion for sanctions that is pending against Plaintiff, even if Plaintiff files and receives a nonsuit. Williamsburg Peking Corp. v. Xianchin Kong, 270 Va. 350 (2005). In the case of Williamsburg Peking Corp. v. Xianchin Kong, the Supreme Court held that the trial court should have considered the pending motion for sanctions against Plaintiff even after the trial court granted Plaintiff’s motion for nonsuit and entered an order nonsuiting the matter. Id. In that case, a pro se Plaintiff had alleged that Williamsburg Peking Corp. ("Peking") improperly terminated her employment as a waitress. Id. at 352. Plaintiff did not prosecute her case for one year and then filed numerous discovery requests and motions which Peking contended were "inordinately voluminous" and "redundant." Id. Peking responded to the requests in good faith, to which Plaintiff responded with four separate letters objecting to Peking's responses. Id. at 352-353. Peking filed a motion for a protective order, which was granted by the trial court. Id. at 353. Peking then filed a motion for sanctions to recover the more than $16,000 in costs and fees it incurred...

“Does It Matter When The Damage Occurred?”: Analyzing the Timing of Coverage for General and Subcontractors

Written by Andrew Strobo, Esq. Edited by Claire C. Carr, Esq. In evaluating coverage for a general or subcontractor, it is important to understand not only what is covered by your liability policy, but also when coverage is triggered. The type of coverage will affect when coverage is triggered, and thus affect the types of damages that are covered. Liability insurance policies typically come in one of two forms: claims-made or occurrence-based. As the name suggests, a claims-made policy provides coverage for claims made during the policy period. On the other hand, an occurrence-based policy provides coverage for damage caused by an “occurrence” during the policy period, regardless of when the claim is actually made. Of the two, an occurrence-based policy offers highly valued long-term protection. As an “occurrence” is typically defined by liability insurance policies as an “accident” and an occurrence-based policy provides coverage for damage caused by an “occurrence”, it is easy to assume that coverage is based on when the accident causing the damage occurred. Indeed, a subcontractor who maintains such a policy for a construction project may think that any damage caused by the work it performed during the policy period would be covered, even if the damage actually occurred years after the policy period had expired. To the contrary, an occurrence-based policy insures only against damage occurring during the policy period, not future damage stemming from an act that occurred during the policy period. In many cases, damage occurs simultaneously or shortly after the act that causes the damage. However, in cases where it is unclear when the damage occurred, courts across the nation...