Episode 42 -- Social Media Research in Claims Investigations Training

This is for those of you who have asked me when you might be able to attend a "full" version of my social media research training presentation.  I'll be delivering a 145-minute version of that interactive presentation on this coming Thursday, October 25, 2012 at the Albany Claims Association's 29th Annual Education Day in Latham, New York.

This will be Episode 42 in my now long-running series of social media research presentations.  Even if you have seen one of the prior episodes, you may want to attend this one.  There have been a number of important case decisions and other developments in this area that we will be discussing. Here's the seminar's agenda: 

The seminar's cost is a modest $35 per person, which includes lunch.  The stated registration deadline is this coming Monday, August 22, 2012, so click HERE to register and submit right away.  I can't imagine they would turn away walk-ins, however, in the event you are not able to register by Monday the 22nd. 

No Fishing Allowed -- Fourth Department Reverses Order Granting Discovery of Plaintiff's Facebook, MySpace and Other Internet Postings

PERSONAL INJURY – DISCOVERY – SOCIAL MEDIA CONTENT
Kregg v. Maldonado
(4th Dept., decided 9/28/2012)

Christopher Williams was injured in a motor vehicle accident while driving a motorcycle manufactured and distributed by Suzuki Motor Corporation of Japan and American Suzuki Motor Corporation.  Charlotte Gregg, Williams' guardian, sued the owner and operator of the car involved in that accident and the Suzuki defendants.  After initial disclosure exchanges, the Suzuki defendants learned that family members of Williams had established Facebook and MySpace accounts for him and had made Internet postings on his behalf in connection with those accounts. The Suzuki defendants served additional discovery demands on the plaintiff, requesting the "entire contents" of those and any other social media accounts maintained by or on behalf of Williams.  When plaintiff refused to provide those materials, the Suzuki defendants moved to compel such disclosure.   Plaintiff opposed that motion on the grounds of relevance and burden, contending that the demand for disclosure was a "fishing expedition." Supreme Court agreed with the Suzuki defendants that they were entitled to such disclosure.

In REVERSING Supreme Court's order compelling the disclosure, the Appellate Division, Fourth Department, held:

Although CPLR 3101 (a) provides for "full disclosure of all matter material and necessary in the prosecution or defense of an action," it is well settled that a party need not respond to discovery demands that are overbroad (see Optic Plus Enters., Ltd. v Bausch & Lomb Inc., 35 AD3d 1263, 1263). Where discovery demands are overbroad, " the appropriate remedy is to vacate the entire demand rather than to prune it' " (Board of Mgrs. of the Park Regent Condominium v Park Regent Assoc., 78 AD3d 752, 753). In McCann v Harleysville Ins. Co. of N.Y. (78 AD3d 1524, 1525), we addressed a similar discovery demand and concluded that the request for access to social media sites was made without "a factual predicate with respect to the relevancy of the evidence" (see Crazytown Furniture v Brooklyn Union Gas Co., 150 AD2d 420, 421). Here, as in McMann, there is no contention that the information in the social media accounts contradicts plaintiff's claims for the diminution of the injured party's enjoyment of life (cf. Romano v Steelcase, Inc., 30 Misc 3d 426, 427). As in McCann, the proper means by which to obtain disclosure of any relevant information contained in the social media accounts is a narrowly-tailored discovery request seeking only that social-media-based information that relates to the claimed injuries arising from the accident. Thus, we deny that part of the Suzuki defendants' motion to compel the disclosure of the entire contents of the injured party's social media accounts, without prejudice to the service of a more narrowly-tailored disclosure request.

The 10-Year Life Cycle of a New York Consequential Damages Claim

COMMERCIAL PROPERTY – CONSEQUENTIAL DAMAGES
Stern v. Charter Oak Fire Ins. Co.
(4th Dept., decided 9/28/2012)

Who out there other than I remembers this case and the position it forever occupies in the evolutionary chain of the recoverability of consequential damages against property insurers in New York State?  Those who do might understand then why I am blogging about a one-line decision.  

Vivian Stern made a claim to The Charter Oak Fire Insurance Company (Travelers) for losses stemming from an armed robbery that occurred at her jewelry store on or before December 28, 2001.  For reasons not apparent in the 13 (!) reported decisions of the Fourth Department in this case (most regarding motion practice), a dispute arose between the parties and Stern sued Charter Oak in 2002 for both contractual damages and consequential damages, including future lost profits and future sale value of the business.

In September 2005, Charter Oak moved to dismiss the complaint's consequential damages claim arguing, among other things, that coverage for such damages was negated by the policy's consequential loss exclusion.  Onondaga County Supreme Court (Deborah H. Karalunas, J.) granted that motion and plaintiff appealed.

In a decision issued March 16, 2007, the Appellate Division Fourth Department, unanimously affirmed Supreme Court's order dismissing the consequential damages claim, holding:

Supreme Court properly granted Charter Oak's motion to dismiss plaintiff's claim for consequential damages, including future lost profits after December 28, 2001 and future sale value of the business. The court also properly granted Charter Oak's motion to preclude plaintiff's expert from testifying with regard to that claim and denied plaintiff's cross motion seeking partial summary judgment determining that the expert's testimony was admissible at trial. The insurance policy expressly excludes coverage for the consequential damages claimed by plaintiff (see Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y., 37 AD3d 1184 [2007]; J.R. Adirondack Enters. v Hartford Cas. Ins. Co., 292 AD2d 771, 772 [2002]; Crawford Furniture Mfg. Corp. v Pennsylvania Lumbermens Mut. Ins. Co., 244 AD2d 881 [1997]).

In that decision, keen-eyed property coverage professionals will notice the Fourth Department's citation to its decision of one month earlier in Bi-Economy Market, Inc. v. Harleysville Ins. Co. of N.Y.,which decision those same professionals will also recall the New York Court of Appeals reversed in the watershed decision on the recoverability of consequential damages against New York property insurers in February 2008.

So what's a robbed jewelry store owner to do under those circumstances?  Make a motion to renew the motion that resulting in the adverse order based on a change in the law, of course.  Unfortunately, plaintiff made such a motion to the Appellate Division, which in July 2008 denied her motion and referred her back to Supreme Court with the instruction that "[i]f [she was] is aggrieved by an order of Supreme Court, plaintiff's remedy is an appeal to this Court from that order."

The order to which the Appellate Division was referring was one apparently granted by Supreme Court Justice Karalunas on May 5, 2008, which had denied plaintiff's Bi-Economy-based motion to renew her opposition to Charter Oak's original motion to dismiss plaintiff's consequential damages claim based on the doctrine of "law of the case", which essentially is a "because I already said no" legal doctrine that courts sometimes apply when litigants want a do-over.

So plaintiff appealed that order back to the Appellate Division, Fourth Department, and in February 2009 that court, in light of the intervening opinion of the Court of Appeals in Bi-Economy, modified the order appealed from to grant plaintiff's motion to renew her opposition to Charter Oak's original motion and then, on such renewal, denied Charter Oak's motion to dismiss and reinstated the plaintiff's consequential damages claim:

Following our decision in the prior appeal, the Court of Appeals reversed the order in Bi-Economy Mkt., Inc., concluding under circumstances similar to those present in this case that a contractual exclusion for consequential losses in the insurance policy issued to the plaintiff business did not bar its claim for consequential damages caused by the defendant insurer's alleged breach of the terms of the policy (Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y., 10 NY3d 187, 194-196 [2008]; see Panasia Estates, Inc. v Hudson Ins. Co., 10 NY3d 200, 203 [2008]).

While the instant action remained pending, plaintiff moved, inter alia, for leave to renew her opposition to Charter Oak's motion to dismiss her claim for consequential damages, based upon the decisions of the Court of Appeals in Bi-Economy Mkt., Inc. and Panasia Estates, Inc.  Supreme Court erred in denying that part of plaintiff's motion for leave to renew with respect to consequential damages based upon the doctrine of law of the case and instead should have granted leave to renew and, upon renewal, denied Charter Oak's motion.  "[A] court of original jurisdiction may entertain a motion to renew or [to] vacate a prior order or judgment even after an appellate court has rendered a decision on that order or judgment" (Tishman Constr. Corp. of N.Y. v City of New York, 280 AD2d 374, 377 [2001]). Furthermore, we conclude that, because "the analysis employed by this [C]ourt in the prior appeal no longer reflects the current state of the law, the doctrine of law of the case should not be invoked to preclude reconsideration of" Charter Oak's motion to dismiss plaintiff's claim for compensatory damages (Szajna v Rand, 131 AD2d 840, 840 [1987]; see Foley v Roche, 86 AD2d 887 [1982], lv denied 56 NY2d 507 [1982]). We therefore modify the order accordingly.

Rearmed with her complaint's consequential damages claims, plaintiff went back to Supreme Court where in late 2009 or early 2010 the parties moved and cross-moved for summary judgment.  As best as can be discerned from the limited information available on eCourts, those motions resulted in a November 18, 2010 order denying plaintiff's subsequent motion to correct the motion record and holding that: (1) Charter Oak had breached the insurance policy; (2) that the plaintiff's alleged business failure (aka consequential damages) was not proximately caused by that breach; and (3) that plaintiff was entitled to money damages of $7,887.19, plus interest.  That's right -- $7,900.  The printing costs already expended in the two previous trips to the Fourth Department had to cost more than the award amount.

Apparently having never heard of throwing good money after bad, or perhaps having unlimited resources to file and respond to six (!) more appellate motions prior to perfecting an appeal (five for filing extensions and one pro hac vice admission of new appellate counsel for Charter Oak), coupled with the fact that a relative of some kind assumed lead counsel responsibilities for her, plaintiff appealed Supreme Court's order denying her consequential damages and awarding her only $7,887.19 in contractual damages, plus interest.

Which brings the story of Stern v. Charter Oak to present.  In a "for reasons stated in the decision at Supreme Court" one-sentence memorandum decision issued on September 28, 2012, the Fourth Department unanimously affirmed Justice Karalunas' nth order, effectively concluding the case.  Except, of course, for perhaps another motion to renew and a motion for leave to appeal to the Court of Appeals.  Set your Google Scholar alert.