KPM LAW wins Virginia Supreme Court case making indemnity contracts easier to enforce

Written by Brian Cafritz, Esq   Practically every business, in some form or fashion, relies on contractors and vendors to efficiently operate.  Almost all contracts governing these relationships contain some form of an indemnity clause.  Whether it is a retailer, restaurant, or service industry contract, these indemnity provisions allow parties to deliberately and intelligently control risk.   Unfortunately, when something goes wrong, enforcing those indemnity agreements can be more difficult than getting a party to agree to indemnity in the first place.  Recently, KPM LAW sought to enforce one such indemnity provision for one its clients. In doing so, we opened the door to allow for an easier means of enforcing indemnity agreements in Virginia.   On February 1, 2018, in the case of Dominion Nuclear Connecticut, Inc. v. Securitas Security Services USA, Inc., ___ Va. ___ (2018) Record No. 170130, the Virginia Supreme Court agreed with KPM LAW attorneys and ruled that Dominion could rely upon issues raised in its affirmative defense to trigger the duty to defend in an indemnity clause.   The facts of the case were largely undisputed.  Dominion operated a Nuclear Power Plant in Connecticut.  As part of its operations, it contracted with Securitas to provide security services at the power plant.  The contract contained an indemnity provision requiring Securitas to defend and indemnify Dominion to the extent the claim arose from Securitas’s negligence.  One day, a Securitas guard slipped and fell on ice as she was performing her security rounds at the power plant.  She sued Dominion under a premises liability theory. The only allegation in her Complaint was that Dominion was negligent...

Supreme Court of Virginia Rules on Various Issues Frequently Arising in Trial

Written by Lauren Gibbons, Esq. Edited by Bill Pfund, Esq. One of the Virginia Supreme Court’s most recent decisions touches on various issues that may, and often frequently do, arise in trial. In Emerald Point, LLC, et al. v. Lindsey Hawkins, et al., the tenants of an apartment complex prevailed in a jury trial against defendants, their landlord and its management company, for injuries from alleged carbon monoxide poisoning. 2017 Va. LEXIS 197 (2017). Plaintiffs’ apartment was heated by a natural gas furnace. On several occasions the carbon monoxide detector in the unit was activated. Following various inspections and maintenance calls, the furnace was replaced. For this appeal, there is no dispute that plaintiffs suffered injuries as a result of CO exposure. The Supreme Court addressed the following issues, in pertinent part, on the defendants’ appeal: (1) whether an expert’s testimony was properly allowed despite failure to disclose the opinion in accordance with Rule 4:1(b)(4)(A)(i); (2) whether the trial court erred in using an adverse inference jury instruction; and (3) whether the court properly allowed plaintiffs to increase their ad damnum following the close of evidence and over defendants’ objection. A summary of the Supreme Court’s pertinent rulings are as follows: Expert Testimony Disclosure The pretrial scheduling order entered in this matter mandated that “all information discoverable under Rule 4:1(b)(4)(A)(i) of the Rules of the Supreme court of Virginia shall be provided or the expert will not ordinarily be permitted to express any non-disclosed opinions at trial.”  The expert relied on a “very recent paper” to support his contention that exposure to CO leads to the development of dementia....

OPEN AND OBVIOUS CONDITION VERSUS AN OPEN AND OBVIOUS HAZARD Does the distinction matter? It may now!

 Written and edited by Brian Cafritz Whether it is an injury caused by a sidewalk defect, a parking lot hazard, a product or shelving display, or even a broken glass or bowl, retailers and restaurants regularly defend negligence cases by arguing that notice is not required for Open and Obvious conditions. At its heart, the Open and Obvious doctrine relieves a defendant from the duty to warn of a condition if that condition is clearly visible and noticeable to the Plaintiff.  The idea is that warnings are not necessary when the Plaintiff knows (or should know) of the danger by simply paying attention.  “If a person trips over an ‘open and obvious condition or defect’ she is ‘guilty of contributory negligence as a matter of law,’ unless there is a legally valid justification for failing to observe the defect. Scott v. City of Lynchburg, 241 Va. 64, 66, 399 S.E.2d 809, 810, 7 Va. Law Rep. 1300 (1991). Stated differently, ‘where a defect is open and obvious to persons using a sidewalk it is their duty to observe the defect,’ and ‘[w]here there is no excuse for not seeing the defect one cannot recover.’ Town of Va. Beach v. Starr, 194 Va. 34, 36, 72 S.E.2d 239, 240 (1952).”  Estep v. Xanterra Kingsmill, LLC, 2017 U.S. Dist. Lexis 43706 (E.D. Va., March 20, 2017).  The doctrine has been alive and well for generations, but a recent decision by Judge Mark Davis of the US District Court for the Eastern District of Virginia has created a ripple in the way the doctrine is analyzed. The case is Estep v. Xanterra...

Evidence of Bad Faith Now Required for Spoliation Sanction in Virginia

Written by Brian A. Cafritz, Esq. In the Commonwealth of Virginia, there is no independent cause of action for spoliation of evidence. Rather, spoliation is an evidentiary sanction that helps right a wrong caused by the destruction of necessary evidence. A judge is given wide latitude in the types of sanctions that can be ordered.  Such sanctions can include fines, limiting or prohibiting testimony of a witness or other evidence, the issuance of a negative jury instruction, or even striking defenses. Because of this, Plaintiff’s attorneys regularly seek these sanctions to lessen their burden of proof. In recent years, arguments have been strongly pushed that Virginia Courts should impose spoliation sanctions not just for intentional spoliation, but also for the negligent destruction of evidence. Those attempts came to a screeching halt last month when the Virginia Supreme Court finally settled the dispute. The case is Emerald Point v. Lindsey Hawkins, and it is premises liability case for 4 tenants’ personal injuries caused by carbon monoxide poisoning sustained in their apartment. The poisoning was caused by the incorrect connection of the furnace flue, which resulted in carbon monoxide being vented into the tenant’s’ apartment. The tenants sued for injuries alleging faulty maintenance of the furnace and flue system. Discovery revealed that the landlord stored the subject furnace for more than a year, but that it then disposed of it. The disposal date, however, was well before the date when Plaintiffs filed their Complaint. When the Judge was advised of the furnace’s destruction during trial, he expressly noted that nothing indicated that the destruction of evidence was in bad faith. Nevertheless,...

Insurance Coverage for Alleged Sexual Misconduct

Written by Gary A. Reinhardt, Esq. As news continues to swirl around allegations of persistent and pervasive sexual misconduct, ultimately lawsuits will result.  In an effort to get around an intentional act exclusion and find coverage, plaintiffs will blame employers, parents or others with some sort of control or supervisory role for negligently handling or dealing with the perpetrator.  Many policies now have exclusions for claims of sexual “molestation,” “physical abuse” or “sexual harassment.” The following language is typical: EXCLUSIONS THAT APPLY TO LIABILITY COVERAGES “We do not provide coverage for: “Bodily injury” or “property damage” that arises out of sexual molestation. “Bodily injury” or “property damage” that arises out of physical or mental abuse. Both exclusions have been deemed valid.  Importantly, neither limits the excluded conduct to conduct of an “insured.”  The policy exclusions reference only the acts, “sexual molestation” and “physical or mental abuse” without referencing the perpetrator.  “The policy refers to claims arising out of sexual molestation without reference to any limitation as to who committed the act of molestation. Thus, the policy appears to state that the exclusion is based on the nature of the act, not the identity of the actor.”  Ristine v. Hartford Ins. Co., 195 Ore. App. 226, 97 P.3d 1206 (2004).  Therefore, regardless of who commits the excluded act, “insured” or not, there is no coverage for any conduct falling into these categories of behavior.   Even an “insured” accused of negligently supervising or controlling a perpetrator of “sexual molestation” or “physical or mental abuse” will not have coverage because the injury arises out of the excluded conduct. In contrast, some policy...

Res Judicata is No Laughing Matter – Just Ask The Funny Guy

Written by Matthew L. Liller, Esq. Edited by William J. Pfund, Esq. The Supreme Court of Virginia recently looked closely at the issue of res judicata, a defense barring a plaintiff from bringing a second lawsuit on the same claim, in the all-too-serious case of The Funny Guy, LLC, et al. v. Lecego, LLC, et al., 293 Va. 135, 795 S.E.2d 887 (2017). The underlying dispute between the parties was simple: Funny Guy contended it was not paid for I.T. work it performed for Lecego. However, in this 4-3 decision, it was Lecego that ultimately laughed all the way to the bank. Funny Guy filed a lawsuit in October 2014 alleging that the parties reached a settlement agreement to the dispute, but Lecego breached that agreement by failing to pay any of the agreed-upon amount. This suit was dismissed because the trial court found no such agreement existed. In June 2015, Funny Guy filed a second lawsuit alleging that (1) Lecego breached an oral agreement to pay for the services given, and (2) even if there were no oral agreement, it should be paid for the value of the work performed. The trial court then dismissed the second suit because it held those claims should have been asserted in the first suit and were therefore barred. The Court looked at Rule 1:6 of the Rules of the Supreme Court of Virginia, which states in pertinent part: “A party whose claim for relief arising from identified conduct, a transaction, or an occurrence, is decided on the merits by a final judgment, shall be forever barred from prosecuting any second or...