Employee’s Negligence Trumps Owner of Premise’s Knowledge of Dangerous Condition Creating Triable Issues of Fact

In premise liability cases, a tried and true defense to a customer’s slip and fall action was to argue that the spillage or other dangerous condition happened before the business knew about the spill or other condition that caused or contributed to the customer’s injury.

Recently, a California appellate reversed summary judgment in favor of a defendant jewelry store when the plaintiff established an inference that the business owner or its employees may have caused cleaning fluid to have been spilled on a backroom floor that was only accessible to plaintiff to the defendant store owner’s employees. The appellate court found that when the employee can show sufficient facts to create a reasonable inference that the store owner or the store’s employees caused the dangerous condition, notice of the condition is presumed, thereby preventing summary judgment.

The appellate court admitted that the facts were unusual in that the typical case, the customer has no idea who caused the spill and cannot prove that it is more reasonable to believe the store’s employees, as opposed to another customer, caused the dangerous condition.

Why the case certainly does not mark the end of the defense of lack of notice, it does make defending premises liability claims more difficult where the plaintiff can show either that the store or a store employee caused the dangerous condition or can at least show that a reasonable inference could be drawn that a store employee, as opposed to a third party, caused the dangerous condition.

And just because summary judgment was defeated does not necessarily mean that the trier of fact will find for the plaintiff. If the store is able to show at trial that more than just store employees had access to area the where plaintiff and had access to the cleaning fluid plaintiff slipped on, the store owner may still be able to defense the claim on the merits.

But the case does serve as a reminder of the importance of a thorough fact investigation into the accident. The more people that had access to the area where the fluid was or who could have spilled the fluid, the less likely a court would find a “reasonable” inference existed that a store employee caused the dangerous condition. And, in cases where it is clear that the employee caused the spill that the customer slipped on, the claim will likely be decided on agency or “respondeat superior” rather than on notice. There, the issue will be how reasonable and how quick the store’s response was to clean up the spill and whether there were adequate warnings, as these defenses will decide the case over a claim that the store lacked sufficient notice of the dangerous condition. In sum, employees can be more dangerous than you think to the defense of slip and fall claims.

Hotel Liability For Not Supplying Bath Mats—Lack of Similarity of Past Accidents Supports Summary Judgment


By John Armstrong

A recent case out of California’s Fourth District Court of Appeal involving Omni Hotels shows that a good investigation helps support summary judgment—even in California where such summary disposition  of cases are hard to come by.

For adjustors involved in hotel claims, however, it is the last two pages of the opinion that are of interest. The trial court granted summary judgment for defendants that a hotel was not liable for premises liability or under any of the products liability theories advanced for failing to supply bath mats. The trial court however granted plaintiff a motion for new trial on whether the hotel was negligent in either not investigating further or not communicating more widely within the hotel chain the reports of bathtub accidents at Omni hotels. 

The appellate court affirmed the summary judgments, but reversed the trial court’s grant of a new trial to plaintiff based on plaintiff’s evidence of past accidents. The appellate court looked at the hotel incident reports and determined that these did not show the required “substantially similar accidents” and lacked detail about the conditions of or in the bathtubs, and lacked details about the medical conditions of the guests who were reported to have fallen in the hotel’s bathtubs. The court found the reports only provided “speculative or conjectural evidence” that Omni knew or had reason to know of a dangerous condition surrounding its hotel bathtubs.

The court also rejected the argument that hotel’s past reports of bathtub accidents necessarily put on the hotel on a “heightened duty of inquiry” to find out from the bathtub manufacturer, Kohler, if Kohler was aware of similar incidents with its bathtubs. Though the plaintiff alleged he could bring “ample” evidence that Omni had both actual and constructive knowledge that tubs in its hotels were dangerously slippery, he failed to support these claims with anything but his anecdotal witness testimony and opinions. The appellate court found this evidence insufficient to create triable issues of fact.

The lesson? Courts are looking at the foundation of expert declarations mare carefully to see if the evidence relied on is legally sufficient to support having a trial. The appellate court recognized that bathtubs are inherently slippery, meaning that for a plaintiff to impose liability against the hotel, he’d have to prove that either the hotel made dangerously more slippery or was on notice that its tubs were more slippery than other tubs—a very difficult burden. Usually, if there is a clash of expert declarations, most courts will hold a trial and let the jury decide, which is probably why the trial court granted the motion for new trial. The appellate court reversed however because it carefully examined plaintiff’s evidence and found that it was not legally or logically compelling to prove the claim that Omni knew its Kohler tubs were more slippery than other tubs—“even if” the hotel had other reported tub accidents. Implicit in the court’s decision was that it would be likely for any large hotel chain to have tub accidents since they are slippery and since the general public, including persons with a variety of medical conditions, could cause or contribute to causing tub accidents.

The moral? You can get summary judgment granted in California when the plaintiff’s expert’s opinions are based on anecdotal evidence, educated guesses, or are otherwise lacking foundation.  

Dealing With Difficult People-Kill ‘Em With Kindness Is The Best Policy—No Matter How Much It Hurts You

By John Armstrong

Being in business means dealing with people. Being involved in insurance claims means dealing with difficult people. Normal, good, decent people tend to be difficult or impossible when under stress. You and your company may be wrongly accused of all kinds of things. You may be threatened with lawsuits or worse. What to do? Turn the other cheek! Don’t given into the temptation to write about how you really feel to the claimant, in your claimants, or to anyone. If you really feel the need to do, write what you want to say on waste paper, and then shred your personal thoughts. While valid, they have no place in the insured’s claim file. 

Why? Well… I began my career defending insurance bad faith property cases arising out of the 1994 Northridge Earthquake. The most difficult cases to defend where ones in which the claims adjuster wrote “less than nice things” about the insured.The lawyers armed with the claims correspondence all obtained recoveries and better ones, than where there wasn’t this added “bad fact” in defending the claim. (Of course only this information was only produced after valiant efforts were made to protect the claims file.) The sad part was that if you carefully reviewed the entire file, you understood where the adjuster was coming from. But all that anyone on a jury would be focused on would be the “bad”  comments by the adjuster.

From a juror’s perspective, the claims adjuster, as the insurer’s agent, has all the cards in his or her favor. The claimant has suffered a loss, and may be out thousands of dollars or more and may even have sustained permanent bodily injury from the event giving rise to the claim. In contrast, the claims adjuster’s stress “only” has to deal with fairly adjusting the loss. No doubt the adjuster must deal with the verbal and written threats by the insured and insured’s attorney. No doubt it its unpleasant. But adjusters are held to a higher level. They are expected to be professional at all time because, after all, claims is their profession. 

To illustrate what I’m writing about, I once had to defend a claimant who was also an attorney. I had to copy all of correspondence to the handling and senior claims adjuster and coverage counsel since there was such a high chance of the insured suing for bad faith. But not matter how nasty the multiple tomes of single-spaced emails I received every day, I always responded with kindness and professionalism. The result? We got the claim resolved, and when it was all over, the insured sent me a very nice and unexpected thank you. That is a much happier result than trying to defend your words once your company is sued for bad faith. The moral? Kill ‘em with kindness. It’ll save you and your employer countless headaches and plenty of $$$ in the long run.

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An Ounce of Prevention—Sometimes the Best Claims Handling Is Resolving Problems Before They Rise to the Level of Claim

By John Armstrong

Whether you’re an insurance adjuster or a self-insured business, or have a high insurance deductible, your likely to have a claim involving your business. This blog covers a sub-category. Namely, the “pre-claim” claim. It’s hard to define a “pre-claim.” Some malpractice policies describe it as the point when the professional has notice of a situation where a claim is likely to develop in the future. Real life examples I’ve seen are claims against a publicly traded corporation regarding financial errors/mismanagement that should have been caught by the publicly traded firm’s accountants. The SEC or class action may be against the corporation’s Board of Directors at first, but it may be just a matter of time before others are sued. Another situation is where a business is subpoenaed to provide information in a lawsuit regarding work or services the business provided one of the parties in the dispute.

In both of these situations, there generally is no insurance coverage because, thus far, there is no “claim” as that term is ordinary defined in standard liability insurance policies. But here’s the dilemma; do nothing, and by the time a real “claim” is made against the insured business, there may be little hope of fighting liability or damages—especially if depositions have been taken. Some insurers will agree to treat such situations as a “modified” claim where the insured pays a modest deductible because a defense for the deposition and subpoena and others will just agree to hire pay hire the insured’s attorney at panel counsel rates to protect the insured. Certainly, in the above scenarios the insurer is not legally obligated to start funding a defense. However, the big picture is too avoid being penny wise and dollar foolish; that is, the few thousand dollars spent today may prevent a “claim” from ever being made against the insured, and if there is one, the valuable of the claim is likely to be much less.

Another thing businesses and insurers can benefit from is having the insurance company offer seminars to insured businesses on good risk prevention practices. Some insurers may even offer discounts on premiums to insureds who participate in such programs. Many insureds are unaware that these programs exist. For insurers offering Employment Practices Liability (a.k.a. “EPL” policies), such programs are invaluable to claim prevention.

Even if an insurance company doesn’t offer a risk prevention program, often the law firms they use will, or even a business’s existing lawyers, if asked. Law firms will generally treat this kind of a seminar as a marketing event instead of billable event. Of course, it always a good idea to let the law firm know as much information about the business so that a well tailored risk prevention seminar can be given.

In sum, early claim detection and prevention saves insurers and business thousands if not ten thousands of dollars. If you’re a business and you think that a claim might be pursued against your business, that’s a great time to start a dialogue with your insurer and with your attorneys. Even before then, taking advantage of educational opportunities will let you know what to do and how to do it to prevent potential claims, or to at least mitigate the costs when a claim is made.