general liability insurance certificate

Thomas J. Pryor - New Jersey Law Blog
Thomas J. Pryor, a Shareholder in the Stark & Stark Litigation Group, has been engaged since 1982 in sophisticated corporate and commercial litigation involving a wide range of practice areas: partnership disputes, real estate and land use litigation, complex insurance coverage, environmental litigation, complex commercial litigation, construction litigation and mediation. In 2006, Mr. Pryor was the keynote speaker for Reed Logic's Alternative Dispute Resolution Conference. He has also taught Appellate Advocacy as an adjunct professor at Seton Hall University School of Law and has lectured widely, as well as having published numerous articles in areas related to litigation. Mr. Pryor is a board member of Anchor House, a non-profit organization which provides emergency child care services. He serves as a trustee of the Friends of Washington Township, a non-profit organization created to preserve historic structures. Mr. Pryor also coaches youth soccer.

• Supporting the Right to Obtain a Disability Carrier's Underwriting Manuals
  Shore Orthopaedic v. The Equitable is an important case in a policyholder’s arsenal - supporting the right to obtain a disability carrier’s underwriting manuals to challenge a claim denial.
  
  The Appellate Court decided on January 24, 2008 that a $50,000 counsel fee award by the trial judge in favor of plaintiff was the proper sanction, after the disability carrier, Equitable, delayed producing its underwriting manual.  One of Shore Orthopaedic’s practitioners became disabled and unable to pay his share of the overhead expenses of the medical group.  The practice owned a disability policy through Equitable intended to pay the practice benefits to reimburse for overhead expenses the doctor, insured under the policy, was unable to pay.  The policy provided that the benefits would be paid directly to the medical practice as the owner of the policy.
  
  During discovery, Shore demanded a copy of Equitable’s underwriting manuals.  The trial judge determined that Equitable intentionally obfuscated plaintiff’s request for the manuals which were eventually produced after they “surfaced.”  Plaintiff was awarded attorney’s fees from the time of the first discovery request through its motion for summary judgment.
  
  The decision to award counsel fees was within the trial court’s discretion under R. 4:42-9, even though the court rejected plaintiff’s request for counsel fees under the Frivolous Lawsuit statute or under the statute providing for reimbursement of attorney’s fees in an action upon a liability or indemnity insurance policy, traditionally limited to “third party” claims in New Jersey as a matter of policy.
  
  Thus, the importance of the opinion is that while the court did not award counsel fees under what would have been a significant modification to the rule, by allowing attorney’s fees in what the court determined was a “first party” insurance claim, the case affirms a plaintiff’s right to obtain underwriting manuals from a defendant disability insurance carrier.  An issue in the case was whether the insurance carrier acted properly in denying the claim.  The court agreed that the carrier’s handling of the claim, i.e. disputing the insured’s medical condition, warranted an examination of the carrier’s claims handling procedure, as revealed in its underwriting manuals.
• Appeals Court Affirms Request for Arbitration After Parties Had Litigated for Over One Year
  The New Jersey Appellate Division decided Delam Construction v. 15 Thornton Road on December 10, 2007.  The parties had entered into a contract for Delam to construct a building.  Defendant, Thornton, owed Delam a balance of $187,368 for Delam’s work on the project.  Delam filed suit for breach of contract and later added Thornton’s managing member as a defendant.
  
  Thornton counterclaimed alleging construction deficiencies.
  
  Discovery took place and trial was scheduled more than one year after the complaint was filed.  By then, defendant had obtained new counsel, trial was adjourned and the court sent the matter to arbitration after defendant’s new attorney raised for the first time an arbitration clause in the original contract.  Plaintiff alleged that defendant had waived its right to arbitration by participating in the litigation for over one year.  The court examined the competing interests between, on the one hand, favoring commercial arbitration as a speedy and inexpensive alternative to litigation, particularly in construction contract disputes, and on the other hand, whether the active and prolonged litigation resulted in a waiver of the right to compel arbitration.
  
  The court noted an earlier decision where a trial judge’s compelling arbitration nearly five years after the original complaint, was rejected.
  
  After wrestling with the issue of when a waiver has occurred, the court ruled in favor of allowing the matter to proceed to arbitration.
  
  The court relied upon “prejudice” as the “touchstone” for determining when a waiver has occurred.  The court was influenced by the perceived lack of prejudice to plaintiff given that much of the same information generated through discovery would be admissible in the arbitration.  The court was also persuaded by the assumed knowledge by plaintiff that by filing in court, plaintiff was ignoring the mandatory contractual arbitration provision.  Finding neither side blameless, the court directed the matter to arbitration.
  
  The court recognized this was a difficult choice.  Parties litigating in this area should be mindful that there are federal cases which hold otherwise.  As always, the ultimate outcome was somewhat case specific and fact sensitive.
  
• Mediator Privilege
  The New Jersey Supreme Court has adopted New Jersey Rule of Evidence 519 entitled “Mediation Privilege” to become effective July 1, 2008.  It provides that a mediation communication is privileged and shall not be subject to discovery or admissible in evidence in a proceeding unless waived or precluded under limited circumstances further defined in the amendment.
  
  However, evidence or information that is otherwise admissible or discoverable does not become inadmissible or protected from discovery solely by reason of its disclosure or use in a mediation.
  
  The parties to a mediation may expressly waive the privilege, and in the case of the privilege of a mediator, it may be expressly waived by the mediator.
  
  Among the exceptions, where the privilege does not apply are the following:
  
  1.    Communications made during a public mediation;
  2.    A threat or statement of a plan to inflict bodily injury;
  3.    Communications sought or offered to prove or disprove a claim or complaint against a mediator arising out of a mediation;
  4.    Communications offered to prove or disprove a claim or complaint of professional malpractice; and
  5.    Communications sought or offered to prove or disprove child abuse or neglect in a proceeding involving DYFS, unless DYFS participates in the mediation.
  
  The privilege does not exist where a court, administrative agency or arbitrator finds that the party seeking discovery where the proponent of the evidence has shown that the evidence is not otherwise available, that there is a need for the evidence that substantially outweighs the interest in protecting confidentiality and the that the mediation communication is sought or offered in a proceeding involving a crime or to avoid liability on a contract arising out of the mediation.
  
  A mediator may not make a report or recommendation regarding a mediation to a court.
  
  The foregoing evidence rule expands upon New Jersey Court Rule 1:40-4 “Mediation - General Rules” which include a “confidentiality” provision.  It mirrors several provisions within the New Jersey Uniform Mediation Act, N.J.S.A. 2A:23C-1 to 13.  The evidence rule reaffirms the court’s intent to foster uninhibited communication during mediation, so as to further the goal of creating an environment wherein the parties will discuss freely their respective positions creating greater opportunities for settlements to occur.
• Certificate of Insurance Does Not Establish Insurance Coverage
  
  Cvetkovic vs. N.J. Water Supply Authority

   

  It is common for contractors working on large-scale construction projects to require their subcontractors to provide a “Certificate of Insurance.” These certificates are commonly issued by insurance brokers and are intended to confirm to the prime contractor that the subcontractor maintains insuran