Last week, Judge Charles Pannell of the United States District Court for the Northern District of Georgia dismissed a lawsuit in which the plaintiff contended that the defendants, owners of an apartment complex, provided inadequate security which resulted in the plaintiff being shot and severely injured. Judge Pannell based his ruling solely on the allegations in the complaint. Nicole Leet and I represent the defendant, Capmark Finance. Wilfred Rivera v. Capmark Finance, Inc., et. al.

In his complaint, plaintiff Wilfred Rivera alleged that an individual who represented that he resided at High Forest Apartments invited Mr. Rivera to an apartment within the complex. Mr. Rivera, another individual named Martin, and the man representing himself as a tenant at Highland Forest arrived at an unfurnished apartment that appeared to be unoccupied. Immediately upon their entry into the apartment, multiple gunmen emerged from a room within the apartment and opened fire upon Mr. Rivera. Mr. Rivera was shot multiple times and has incurred medical expenses of more than $120,000. Mr. Rivera alleged that the defendants, owners and managers of the apartment complex, did not provide adequate security and therefore the assault was easily carried off in the apartment complex. Mr. Rivera contended that the defendants were liable for negligence and for maintaining a public nuisance.

We filed a motion to dismiss the complaint on the basis that Mr. Rivera had not alleged that he was an invitee of the apartment complex and that the complaint set forth no facts establishing that the apartment owed any duty to him. Therefore, the apartment complex could not be liable to Mr. Rivera for negligence. In response, Mr. Rivera argued that he was a guest of a tenant and that, under Georgia law, the guest of a tenant may obtain invitee status because he stands in the shoes of the tenant.

Judge Pannell, in his Order dismissing the lawsuit, points out that the complaint did not use the word “invitee” and, more importantly, Mr. Rivera did not allege that the unknown man with him was a tenant. Rather, the complaint alleges only that the unknown man “represented” that he was a tenant at the apartment complex. The complaint even refers to this gentleman as the “supposed tenant.” There is no allegation that Mr. Rivera believed the man to be a tenant at the apartment complex. According to Judge Pannell, the owners of the apartment complex owed no duty to an individual who pretends to be a tenant of the apartment complex. Therefore, there can be no derivative duty extended to Mr. Rivera.

Judge Pannell also found that Mr. Rivera had not alleged sufficient facts to support his claim that the apartment complex was a “public nuisance.”

This decision highlights that, in Federal Court, a plaintiff is held to a much higher standard for alleging facts to support his or her claim. Vague allegations of negligence are insufficient in Federal Court. This complaint was originally filed in DeKalb Court State Court and we removed it to Federal Court and quickly filed our motion to dismiss. The option of removal to Federal Court should be strongly considered, where possible, for any lawsuit filed in a liberal jurisdiction.

Please call me if you would like a copy of this decision or have any questions.

Michael.

A recent decision by the Georgia Court of Appeals and several cases coming from Cobb County, Georgia reinforce the necessity of identifying available insurance coverage in response to a properly phrased Interrogatory in discovery, even when the claim may seem relatively minor and the defendant has a high deductible or self-insured retention. Ford Motor Company has unfortunately found out graphically what can go wrong when this is not done.

On February 7, 2013, a panel of the Georgia Court of Appeals decided Reese v. Ford Motor Company, and upheld a decision by a trial judge in Cobb County granting a new trial to the plaintiffs in a case in which a jury had found in favor of Ford. The basis for the Judge’s ruling was that Ford had not properly identified insurance carriers so that the jury could be qualified as to their relationship with the carriers. Reese involved a product liability wrongful death claim against Ford. The case had originally gone to trial in Cobb County and the Plaintiffs had received a $3M verdict which was appealed by Ford and overturned by the Court of Appeals because of an improper jury instruction. When the case went back for a second trial, the jury returned a defense verdict in favor of Ford. The Judge, however, granted a new trial for the plaintiffs because in another case pending in Cobb County, the trial court had sanctioned Ford for failing to disclose that it had excess liability insurance coverage and the identity of the insurer. In Reese, Ford had likewise failed to disclose excess liability coverage.

Ford’s Interrogatory response in Reese indicated that it was responsible for paying any “reasonable judgment” and identified no insurance coverage. However, in the other case, which was settled after severe sanctions were levied against Ford and its attorneys, it came out that Ford was self-insured for damages up to $2M with excess insurance coverage above that. The trial judge in Reese found that Ford should have divulged its excess coverage and the identity of the insurance carrier so that the jury could be qualified as to the carrier.

Interestingly, last week a different panel of the Court of Appeals heard oral argument in another Cobb County Ford case in which Ford had won a defense verdict in 2009 but, in 2011, the judge granted a new trial to the plaintiffs because of Ford’s “willful concealment of insurance coverage.” Ford’s counsel sought to distinguish the Reese case at oral argument.

The moral of this story is that regardless of the size of the deductible or self-insured retention, a corporate defendant should identify available excess insurance coverage in response to a proper Interrogatory. The jurors are allowed to be qualified as to their relationship with these insurance carriers. Beyond that, the fact of insurance coverage should not be mentioned to the jury.

Please call me if you would like a copy of the Reese opinion or have any questions.

Michael.

On July 9, 2012, in Couch v. Red Roof Inns, Inc., the Georgia Supreme Court decided that a jury should be allowed to apportion damages among a property owner and a criminal assailant in a premises liability case and instructions or a special verdict form requiring such apportionment would not violate the plaintiff’s constitutional rights.

The plaintiff in Couch suffered a violent attack by an unknown criminal assailant while staying in a hotel and subsequently brought suit against the owner of the hotel for failing to keep the premises safe. The case is pending in Federal Court and had been sent to the Georgia Supreme Court to answer questions regarding the interpretation of Georgia’s apportionment statute.
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On June 18, 2012, in Hoover v. Maxum Indem. Co. a majority of the Georgia Supreme Court found that an insurer could not deny a claim on one basis and reserve its right to assert other defenses later.

James Hoover sustained a serious brain injury on October 20, 2004 when he fell while climbing down from the roof of a residence while working for his employer, Emergency Water Extraction Services (“EWES”). EWES, at the time of the accident, held a commercial liability insurance policy issued by Maxum Indemnity Company. Almost two years later, on September 22, 2006, Hoover filed a personal injury lawsuit against EWES. Apparently, there was no workers’ compensation bar to this claim because EWES did not have workers’ compensation insurance. EWES forwarded the complaint to Maxum which asserted that its first notice of Hoover’s injury was EWES’s correspondence dated October 19, 2006 enclosing the complaint.
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In its November 2009 Opinion, the Georgia Court of Appeals wrote that “what constitutes property damage and an occurrence in the realm of construction defect claims against an insured general contractor for the acts and/or omissions of its subcontractors are perhaps the most litigated insurance issues over the last several years.” Today, March 7, 2011, the Georgia Supreme Court weighed in on that issue and agreed with the Court of Appeals that faulty or negligent workmanship on a jobsite may constitute an “occurrence” under a standard commercial general liability (CGL) policy. American Empire Surplus Lines Insurance Company v. Hathaway Development Company, Inc.
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On January 25, 2011, the Georgia Court of Appeals ruled, in Landmark Insurance Company v. Khan, that Landmark had breached its duty to defend its insured, an Atlanta strip club, in a premises liability suit brought by Jamil Kahn. Landmark argued that Kahn’s injuries arose out of an assault and battery which was excluded under the policy. The Court of Appeals disagreed.
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On November 10, 2010, the Georgia Court of Appeals ruled in favor of an HVAC contractor which had been sued by Southern Mutual Church Insurance Company (“Southern Mutual”) in a subrogation case. The Court found that Southern Mutual’s claims against the contractor were barred because Southern Mutual had made a voluntary payment to its insured which, pursuant to the terms of its own policy, it did not owe. Because Southern Mutual did not owe the money paid to its insured it could not subrogate against the contractor for those sums.
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As part of the Tort Reform Act of 2005, the Georgia Legislature passed O.C.G.A. § 51-12-33 which requires apportionment of damages among multiple defendants and non-parties who are found liable, thereby avoiding the onerous effect of joint and several liability. In response, plaintiffs have been arguing that the statute does not allow for apportionment unless the plaintiff is also found to be at fault. In Cavalier Convenience, Inc. v. Sarvis, decided July 9, 2010, the Georgia Court of Appeals found that appointment is required even when the plaintiff bares no fault.
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In World Harvest Church, Inc. v. Guideone Mutual Insurance Company, decided May 3, 2010, the Georgia Supreme Court ruled that Guideone was responsible for $1,000,000 because Guideone had not properly reserved its rights to deny coverage and provided a defense to its insured, World Harvest Church, Inc. (“the Church”), for over 10 months. This was true even though both sides agreed that the claims against the Church in the underlying case did not come within the terms of the policy.
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