presented by: c. scott rybny "social liability" – the new cause of action october 23,...
TRANSCRIPT
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Presented By:
C. Scott Rybny
"SOCIAL LIABILITY" – THE NEW CAUSE OF ACTION
OCTOBER 23, 2015
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The Current
“Pennsylvania
Problem”
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BRUNO V. ERIE INS. CO.,104 PA LEXIS 3319 (PA. DEC. 15, 2014)
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BRUNO V. ERIE INS. CO.,104 PA LEXIS 3319 (PA. DEC. 15, 2014)
• Bruno discovers mold behind paneling while renovating basement.
• Mold caused by leaking water pipe.
• Bruno submits insurance claim to Erie.
• $5,000 mold limitation in policy, which Erie eventually pays.
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BRUNO V. ERIE INS. CO.,104 PA LEXIS 3319 (PA. DEC. 15, 2014)
• Erie retains engineer, who inspects property with adjuster. Adjuster and expert tell Brunos:
"The mold was harmless and [the Brunos] should continuing tearing out the existing paneling and that health problems associated with mold were a media frenzy and overblown."
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BRUNO V. ERIE INS. CO.,104 PA LEXIS 3319 (PA. DEC. 15, 2014)
• Wife/Policyholder dies of esophageal cancer linked to mold exposure.
• Remaining family members also get sick.
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BRUNO V. ERIE INS. CO.,104 PA LEXIS 3319 (PA. DEC. 15, 2014)
• Policyholders pled negligent and false assurances by Erie’s contractor and engineer regarding toxicity of black mold.
• PA Supreme Court allows policyholder negligence claim against carrier and engineer to proceed.
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BRUNO V. ERIE INS. CO.,104 PA LEXIS 3319 (PA. DEC. 15, 2014)
• Court stated that these negligence allegations “facially concern Erie’s alleged breach of a general social duty, not a breach of any duty created by the insurance policy itself.”
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THE BRUNO EFFECT
• Potential impact on insurers
• Underwriting: loss control surveys, risk management
• Claims: 1st and 3d party claims
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THE BRUNO EFFECT
• How is liability created
• The action must result in either:
• An increase in the risk of harm, in an undertaking to perform a duty owed by another to a 3rd person; or
• In reliance by the insured or the employee of the insured upon the undertaking
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SELMEK V. STATE FARM FIRE & CAS. CO.,2014 U.S. DIST. LEXIS 162294 (W.D.PA. 2014) – PRE BRUNO
• Wind Damage Claim Involving Residential Roof
• Policyholder Asks Claims Adjuster Whether He Should Temporarily Tarp the Roof
• Adjuster Responds “Yes”
• Policyholder Falls Through the Roof and is Rendered Paraplegic
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SELMEK V. STATE FARM FIRE & CAS. CO.,2014 U.S. DIST. LEXIS 162294 (W.D. PA. 2014)
• Policyholder suit for negligence and Bad Faith
• Court allowed the Bad Faith action to proceed beyond a Motion to Dismiss
• Allegations of an unreasonable denial of temporary repair benefits
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TAKEAWAYS