Declarations and Exclusions

A Mean Motor[less] Scooter -- 11-Year Old’s Injury on City Sidewalk Not Necessarily the Result of “Assumption of the Risk”

Engaging in a sporting activity that involves a known element of risk of injury? Under California law, if you are injured by that known risk your recovery against others whose negligence contributed to your injury may be barred by the doctrine of “primary assumption of the risk.” Does the doctrine apply to a child injured while traveling along an uneven sidewalk on a scooter? The Court of Appeal is skeptical. The court’s summary:

Tatiana Childs fell and suffered serious injury when she rode a small ‘razor’ scooter over an uplifted section of sidewalk on a residential street in the County of Santa Barbara. She sued the County contending that the sidewalk constituted a dangerous condition of public property. The trial court ruled that the doctrine of primary assumption of risk barred liability because, as a matter of law, riding a scooter is a recreational activity, and falling is an inherent risk of the activity. She appeals a summary judgment granted in favor of the County. (Code Civ. Proc., § 437c, subd. (c).)

We conclude that riding a scooter is covered by the doctrine of primary assumption of risk only when the activity involves an element of danger, requires physical exertion and skill, and includes a competitive challenge. A triable issue exists in this case regarding whether Tatiana was riding her scooter in such a manner. Accordingly, we reverse.

The County argued that falling from a scooter is a risk inherent in the use of the scooter, and that its uneven sidewalk did not increase that inherent danger. The Court, to the contrary, concludes that the risk of injury is not inherent in simply using a scooter. Rather, the risk to which “primary assumption of the risk” relates requires a showing that the scooter was being used in a risky or competitive fashion.

In support of its motion for summary judgment, the County relied on allegations in the complaint to establish that Tatiana was riding a scooter on a residential sidewalk and fell ‘as she rode over a break in the sidewalk that was raised more than three inches above the adjoining sidewalk section.’ The County offered no evidence that she was riding at any particular speed, or with other children in a structured or unstructured contest such as a race, or was testing the limits of her ability or the scooter, or that she was attempting any trick or maneuver requiring skill. Based on the evidence, Tatiana may have been engaged in no more than the diversion of getting from one place to another through the use of a child's toy with wheels. Further, the characteristics of the scooter show that it was not a formidable means of transportation. It was lightweight and could be folded up into something not much larger than a breadbox. And, Tatiana testified that it ‘looks like a normal scooter, except it's a lot smaller.’

* * *

Application of the doctrine of assumption of risk is determined by the manner in which equipment is used, not the manner in which it can be used, and merely using recreational equipment for pleasure does not trigger the doctrine. To conclude otherwise would mean that because a car can be used in a race, riding in a car is participation in a sport. Similarly, it would mean that because a bicycle can be used in a race, riding a bicycle as a means of transportation is participation in a sport. There are no cases holding that the use of an automobile or bicycle or other equipment is automatically subject to the assumption of risk doctrine solely because the equipment can be used in a sport or sports-related activity.

[All emphasis added.]

The decision in Childs v. Superior Court of Santa Barbara County (January 22, 2004), Case No. B162350, can be found at the following links in PDF and Word formats.

Your Cooperation is Appreciated -- Insured’s Refusal to Participate in Examination Under Oath Defeats Coverage

Most policies of property insurance include a provision requiring the insured to assist the insurer in its investigation of a claim by submitting to examination by the insurer’s representatives, under oath, on such occasions as the insurer deems necessary. The California Court of Appeal issues a reminder that the consequences of refusal to participate in the examination process may be severe, including the complete denial of the insurance claim.

Barbara Darwish is trustee of a trust that owns real property. She wanted to insure the property through the California Fair Plan¹, but the Fair Plan does not issue insurance policies to trusts. Darwish therefore transferred a one-tenth of one percent interest in the trust property to Maurice Rivera, with Rivera purchasing the policy (never mentioning his extremely limited interest in the property).

The property was vandalized, and Rivera filed a claim. He failed to appear for a scheduled examination under oath, and did not provide records requested by the Fair Plan. (The Fair Plan was apparently seeking information that would establish whether Rivera actually had any legitimate “insurable interest” in the property, without which the policy would be invalid.) Darwish then took an assignment of Rivera’s rights under the policy, and sued the Fair Plan to recover benefits for the vandalism loss.

The Fair Plan made a motion for summary judgment on the ground that its coverage had been voided by Rivera’s failure to appear for examination under oath. The trial court denied the motion, concluding that the Fair Plan was required to show that Rivera’s non-appearance had caused some actual prejudice to the Fair Plan’s interests. The Fair Plan petitioned the Court of Appeal, and that Court directed entry of judgment in the Fair Plan’s favor.

Citing a number of earlier decisions, the Court emphasized that the insurance policy specifically required the insured’s cooperation in examinations under oath as a precondition to coverage. So long as the insurer’s request for such examinations was not in itself unreasonable -- and the Court found no indication that such was the case here -- the requirement is absolute and enforceable and Rivera’s repeated failure to appear for examination was a proper basis for denial of the claim in its entirety.

The decision in California Fair Plan Association v. Superior Court of Los Angeles County (January 23, 2004), Case No. B169994, can be found at the following links in PDF and Word formats.

Attorney + Billiard Ball = “Disability”

The Ninth Circuit U.S. Court of Appeals, in a case arising in Nevada, has reversed summary judgment in favor of a disability insurer and remanded for jury trial on the question of whether an attorney who suffered a serious facial injury and resulting depression sustained a “disability” as defined in the policy. The facts of the case present a sad story that will cause many an attorney to shudder a bit :

Milton Eichacker is a lawyer who started his own law practice in Las Vegas, Nevada. . . .

On September 14, 1996, Eichacker was an innocent bystander in a barroom brawl. When he attempted to stop the fighting, someone hurled a billiard ball at him. It hit him directly between the eyes, causing serious fractures and lacerations that required substantial reconstructive surgery. . . .

[Eichacker returned to work 60 days after his injury, but . . .] [o]n September 26, 1997, Dr. Peprah diagnosed Eichacker with major depression. He found that Eichacker had been depressed for the preceding nine months and had been “completely paralyzed into inaction.” His symptoms included sleep disturbance, impaired concentration and thinking ability, feelings of hopelessness, uncontrollable crying episodes, fear of leaving the house, and low energy. By September 1997, his emotional state had become so debilitating that he closed his law office. Over the next several months, his inability to function resulted in problems with the state bar, bankruptcy, and the eventual loss of his home.

Eichacker’s disability insurance policy included two requirements: that he be “unable to perform the important duties” of his occupation and that he be “receiving a physician’s care.” The insurer argued successfully in the trial court that it had no coverage for Eichacker’s condition because his practice had failed as a result of his depression, not as a result of his original injury, and that Eichacker was no longer under a physician’s care for that original injury at the time.

The Ninth Circuit disagrees. From the facts available, the court reasons, a jury could conclude that Eichacker was substantially unable to function as an attorney even though he returned to work within sixty days after his original injury. Moreover, a jury could also conclude that the care he received for his depressive condition was a direct outflow from the original, physical injury. The District Court should, therefore, have allowed the case to proceed to trial rather than granting judgment in favor of the insurer.

The decision in Eichacker v. The Paul Revere Life Ins. Co. (January 20, 2004), Case No. 02-17136 can be found at this link in PDF format.

Noted in Brief

Expert Witnesses; Medical Malpractice:
The need for expert witnesses to be able to articulate reasons for their opinions is emphasized in Jennings v. Palomar Pomerado Health Systems (January 8, 2004), Case No D040393 (opinion at these links in PDF and Word formats). In a medical malpractice case arising from a post-surgical infection, the court of appeal found that the plaintiff’s expert witness had no basis other than speculation for concluding that the infection in one location had been caused by the defendant’s negligent failure to remove a retractor from another, unrelated location.

Motion Procedure:
California’s 4th District Court of Appeal has disapproved language in one of its own earlier decisions and has reemphasized that parties have a right to a hearing and opportunity to present oral argument when any party presents a motion for summary judgment. No matter how thoroughly the trial court has considered the motion in coming to a tentative decision, that decision may not be made final without the opportunity for argument. Brannon v. Superior Court of San Diego County (January 13, 2004), Case No. D042907 (opinion at these links in PDF and Word formats).

Contracts; Entertainment Law:
In a dispute over the payment of merchandising royalties between the Walt Disney Company and Gary K. Wolf, the author of the book that formed the basis for Who Framed Roger Rabbit? the 2nd District Court of Appeal has vacated a partial summary judgment in Disney’s favor. The appellate court concludes that there are genuine factual issues requiring trial in order to determine which of the parties is correct concerning the interpretation of the term “gross receipts” in the royalty agreement. Wolf v. Superior Court of Los Angeles County (January 21, 2004), Case No. B169265 (opinion at these links in PDF and Word formats).

Coverage is Not in the Cards: Policy Insuring Against Liability for “Bodily Injury” Does Not Apply RICO Action Against Trading Card Manufacturer

The Upper Deck Company, a leading manufacturer of sports and entertainment trading cards, has been sued under the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, on a theory that its practice of inserting a limited number of comparatively rare “chase” cards in its packages -- and printing the odds of locating any particular card -- constitutes a form of illegal gambling. As authorized by RICO, the complaints in these various actions seek damages, treble damages, attorney’s fees and injunctive relief.

Upper Deck carried liability insurance through Federal Insurance Company. That policy, however, only applied to Upper Deck’s liability for “bodily injury” or “property damage,” as defined in the insurance contract. Upper Deck requested that Federal defend it against the RICO actions, but Federal refused on the ground that those lawsuits did not seek recovery for the sorts of injury to which its policy applied. Upper Deck sued Federal in U.S. District Court, seeking a determination that the RICO cases included claims for “bodily injury,” so that Federal should provide a defense. The District Court was not persuaded, and in a new opinion the 9th Circuit Court of Appeals agrees.

Acknowledging that the complaint against it did not include any explicit reference to anyone sustaining bodily injury as a result of exposure to its trading cards, Upper Deck nonetheless urged the court to “connect the dots” and to conclude that the claimants are alleging that the cards are somehow physically addictive. The 9th Circuit declines to endorse that theory:

Paragraphs five and twenty-one of the underlying complaint do not allege sufficient facts to give rise to a claim for bodily injury. The dots simply do not connect. Paragraph five refers to children and teenagers spending money on the “habit” of purchasing these cards. Nothing in paragraph five would transform the passing reference to ‘habit’ into a bodily injury or a disease. It is ‘tenuous and farfetched’ to claim that the word “habit” in this context is being used in place of the word ‘addiction.’ Habits are not always injurious; nor do they connote addiction. Indeed, an insurer would need to be clairvoyant to read ‘addiction’ into this underlying complaint. Under Upper Deck’s theory, every children’s fad could be considered a habit because of the time, energy, and money spent on the newest ‘in’ toy whether it be trading cards, video games, or Beanie Babies. A passing reference to a passing fancy is hardly sufficient to sustain even a theoretical recovery under the ‘bodily injury or disease’ clause.

The Court notes that an insurer’s duty to defend is determined by the facts alleged against the insured or by additional facts available to the insurer when the defense is requested. Although it is conceivable that the plaintiffs might later expand their claims to include something resembling “bodily injury or disease,” to do so would require them to raise entirely new facts not present or implied in the claim as actually presented. The insurer is not required to engage in that sort of speculation or clairvoyance in assessing its duties. Thus, there is currently no duty on Federal’s part to defend Upper Deck in the RICO cases.

The Court’s opinion in The Upper Deck Company v. Federal Insurance Company (January 12, 2004, Case No. 02-56081, can be found at the following link in PDF format.

Who Knows Where the Time Goes? -- Attorney’s Pursuit of Alternative Remedies for Client Extends Time to Sue Attorney for Failure to File Original Claim on Time

An attorney’s efforts to correct the consequences of his admitted negligence have been held to toll the statute of limitations and to permit a client, somewhat later than expected, to file suit against the attorney for malpractice.

Noralee Gold hired attorney I. Donald Weissman to sue Gold’s doctor for medical malpractice. Weissman did not file the complaint before the statute of limitations expired. He placed the blame on his attorney service. (Other recent examples of the pitfalls of relying on others to file papers in a timely manner are reported …..) Whoever may have been at fault, Weissman admitted the failure to make a timely filing in October 1998.

After revealing the error, Weissman coordinated with Gold’s daughter (herself an attorney in Illinois) in an effort to pursue the attorney service for its contribution to the loss, and to continue to pursue the allegedly negligent doctor via a claim to the Board of Medical Quality Assurance (BMQA). Ultimately, however, Gold filed suit against Weissman for his negligence in January, 2000.

Ordinarily, the statute of limitations on a claim against an attorney for professional negligence expires one year after the client discovers, or reasonably should discover, the error. Because Gold did not sue him until January 2000 -- nearly a year and a half after he notified her of his error in October 1998 -- Weissman moved successfully for summary judgment, on the ground that the claims against him for his untimeliness were themselves untimely.

The Court of Appeal reversed the judgment for Weissman, holding that the time in which Gold could sue him was extended by Weissman’s own continuing efforts to pursue other remedies on her behalf. The Court relied on a statutory provision that does not start “the clock running” so long as the attorney continues to represent the client in the matter in which he or she was negligent. The Court rejected Weissman’s arguments that the claims against the attorney service or against the doctor through the BMQA should be considered “different” from the original retention to sue the doctor for negligence.

Here, Weissman continued to explore possible compensation from the attorney service in the year before appellant filed her lawsuit. He also agreed to prepare a BMQA complaint in response to the question by appellant’s daughter of what recourse remained against appellant’s doctor other than the time-barred malpractice lawsuit. Both appellant’s unfiled lawsuit and BMQA complaint thus arose from the same event: her doctor’s malpractice. Moreover, the lawsuit and BMQA complaint shared a common purpose: to permit appellant some measure of redress for her injuries and thus some relief -- psychic from the BMQA complaint, financial from the lawsuit -- and possible closure. The distinctions Weissman tries to draw between the lawsuit and the BMQA complaint—different forums and types of relief—do not change the fact that the same medical malpractice gave birth to both proceedings, each designed, in its own way, to salve appellant’s one set of injuries. Thus, Weissman’s work for appellant after she discovered his malpractice arose out of, and related to, the same general set of facts as the matter he negligently handled.

The decision in Gold v. Weissman (January 12, 2004), Case No. B160578, can be found at these links in PDF and Word formats.

"D'oe!" -- Defendants' Active Participation in Case Precludes Claim of Untimeliness

We have reported previously on cases in which an appellate court refuses to relieve an attorney from the consequences of a procedural error. (Several examples are summarized here.) In contrast, the Court of Appeal for the Fourth District has stepped in at the last moment to salvage a claim that might very well have been deemed time-barred due to an omission of the plaintiff's attorney.

In brief, the original complaint filed in this case included several "Doe" defendants -- parties whose identities were not precisely known to plaintiff's counsel at the outset, and who were therefore sued initially under fictitious names. Counsel filed an amended complaint, leaving out any mention of the "Doe" defendants -- which under California law had the effect of dismissing them from the case. He then identified and served the "Doe" parties with the original (superceded) complaint.

Having no idea that the allegations against them had been dropped in the amended version, the "Doe" defendants appeared and actively litigated the case. Plaintiff's counsel then sought to file a second amended complaint, whereupon the former "Doe" parties learned of the existence of the previous Doe-dropping amendment. They persuaded the trial court to dismiss the case against them, because it technically did not exist at the time they had actually been served.

On appeal, the court concluded that the "Doe" defendants really weren't parties when they were served, but held that their own conduct in actively participating in the litigation bars them from now asserting they weren't brought in to the case in a timely manner. No doubt the plaintiff's attorney was relieved to read the second paragraph in this excerpt from the appellate court's opinion:

In essence, the trial court ruled that, even though the new defendants had participated in the action for over a year, filing not only answers but also cross-complaints and even a motion for summary judgment, they had never really been parties at all. Moreover, it was too late to make them parties. The plaintiff’s procedural gaffes precluded it from any recovery against them.

By and large, we agree with the trial court’s reasoning -- as far as it went. We will hold, however, that the new defendants waived any objection to their joinder by filing answers and thereby making a general appearance. Their waiver was effective even though they had no reason to suspect, at the time, that they had not been properly joined. Thus, the action was commenced against them, for purposes of the statute of limitations, not later than when they filed their answers. We cannot say, as a matter of law, that the applicable statutes of limitations had run by that date. Hence, we will reverse.

The decision in Fireman's Fund Ins. Co. v. Sparks Construction Co. (January 8, 2004), Case No. E033 453, can be found at these links in PDF and Word formats.

There's Nothing Common About the Happiest Place on Earth -- Disneyland Permitted to Vary Admission Prices to Encourage Local Patrons

Occasionally, one of the perquisites of being an appellate judge is the opportunity to wax whimsical while still deciding a genuinely contested question of law. Such an opportunity presented itself to Justice Wiseman of California's Court of Appeal for the Fifth Appellate District in a dispute over the pricing of admission to Disneyland. The initial paragraphs of the opinion tell the tale:

As we celebrate Mickey Mouse’s 75th birthday, we are called upon to address the legal status of Disneyland in the context of its Resident Salute program, a marketing concept that offers nearby residents a discount as an incentive to visit during the slow season. Essentially, during certain times of the year, if Mickey lives in Los Angeles, he pays $8 to $10 less per ticket than his girlfriend, Minnie, assuming she lives in some far off land such as Oz or Fresno.

Recognizing there is no such thing as a “free ride,” Disney fans fork out lots of money to buy a ticket to enter the Magic Kingdom and partake of its many sights and sounds. Appellants allege that Disney discriminated against them by offering cheaper admission tickets to nearby residents than all others and that doing so is unlawful because Disney is a “common carrier” under Civil Code section 2168.

We conclude that Disney is not a common carrier under section 2168 with respect to all who pay admission to enter its Disneyland theme park in Anaheim, California. If we were to conclude otherwise, the next logical step would be to characterize a baseball park as a common carrier or a movie theatre as a common carrier—just because they also contain elevators, escalators and other people-moving devices. In reaching our conclusion, we offer no opinion regarding whether any particular ride within the Disneyland theme park is or is not a common carrier as it is irrelevant to our decision regarding the park as a whole.

If you are sufficiently intrigued to want to read the entire opinion in the case -- Simon v. Walt Disney World Co. (January 8, 2004), Case No. F040732 -- it can be found at these links in PDF and Word formats.