Negligence Claims

Playstation Network to Return: Legal Concerns Still Remain

Published on: June 1, 2011 | By Berniard Law Firm

Sony announced yesterday that the Playstation Network (PSN) is set to return by the end of this week. Reports indicate access began to be provided to users starting on May 15 with different regions being incrementally phased in worldwide. Questions remain, however, as to the extent of previous breaches of the gaming network’s security and just how safe gamers are from having the incidences of May occur again.

With its restoration of access to Playstation and Qriocity users in US, Europe and Asia, Sony is ending a month of outage that was first spurred by a breech of the networks’ security. As we explored previously, that Sony has admitted that the breech occurred due to the exploit of a known vulnerability opens a rather clear inquiry of just how negligent the electronics giant was in the matter. Down since April, the Playstation gaming network and Qriocity, a movie and music service, have been sorely missed by users that frequently accessed the services for their entertainment needs. However, with that access came the disclosure of information that is now likely in the open. What this information can be used for, and the subsequent ramifications for the users, remains to be seen but there is no doubt the courts will begin seeing discussion on the damages caused.

Sony has been adamant about the upgrades they have made to their system, stating they have “been conducting additional testing and further security verification of our commerce functions in order to bring the PlayStation Network completely back online so that [their] fans can again enjoy the first class entertainment experience they have come to love.” This statement, made by Sony Executive Deputy Vice President Kazuo Hirai, also came with an expression of gratitude for the patience and support offered by fans. The reality of the situation, however, is that those whose information was disclosed have zero patience for an invasion of their privacy.

Playstation Network Breeched Again in Late May

Published on: May 25, 2011 | By Berniard Law Firm

In what can only be considered a confusing lapse in digital security, Sony announced another breach of their network security in late May. This news comes on the heels of the major shutdown that aggravated a world of gamers. As the length of downtime nears a month, questions linger as to how much knowledge the electronics giant had regarding system vulnerabilities and why a breach was what it took to search for solutions.

Relating to a vulnerability regarding password resets, the most recent security breach is a major headache for Sony. The Playstation 3 Network, albeit free, is relied upon by millions of users for online gaming and, more importantly, includes a wealth of personal information for all of these users. Within the first security breach, this personal information, unfortunately, also includes billing details that could lead to vulnerability for customers who only wished to enjoy their games as sold.

Regarding the most recent breach, reports indicate that users will know their account has been compromised if they received an email indicating that their password had been changed. While the information made vulnerable in this act remains unclear, it is just yet another incident in a problematic series of events that raise significant questions about the protection being utilized by Sony and the amount of negligence that may be at play. Negligence claims involve an injured party suing a defendant for the damages suffered that were avoidable through the direct intervention of that party. In short, negligence claims deal with the ‘avoidable;’ news reports that have come out regarding this matter indicate that Sony was aware of the vulnerability.

Insurance Contract Interpretations and the Affect on Recovery of Damages

Published on: May 20, 2011 | By Berniard Law Firm

Homeowners across the Louisiana coast were affected by Hurricane Katrina. Many of those affected are still dealing with the stressful experience of rebuilding their homes, communities, and lives. Homeowners insurance is a boon to many when natural disaster strikes. Unfortunately, insurance companies do not always make recovery of benefits easy on the afflicted homeowner. The insurance recovery process can be overwhelming, and may be complicated by the often necessary instigation of litigation. Insurance negotiations can be complicated by differing interpretations of policy provisions. Many different provisions governing recovery are involved in insurance contracts. The interpretation of the language of the contract by the court plays a pivotal role in deciding the amount of damages an insured is entitled to recover.

The recent Fifth Circuit Court of Appeals case French v. Allstate Indemnity Co., illustrates that the recovery of damage benefits from an insurance company is not always a straight forward process. In French , homeowners in Slidell, Louisiana sued their homeowners insurance provider, Allstate Indemnity Co., to recover additional damages resulting from wind damage to their residence caused by Hurricane Katrina. The plaintiffs initially won a judgment in their favor in the United States District Court for the Eastern District of Louisiana , but they appealed, arguing that they were entitled to additional damages beyond the original award. The insurance company paid less than the full amount of the liability limit under the homeowners insurance policy. The District Court held that, since their repair costs would exceed their policy limit, they were entitled to at least the full limit and awarded them judgment accordingly.

On appeal, the plaintiffs argued that they were entitled to further damages under two provisions of their policy, an Extended Limits Endorsement provision and an Additional Living Expenses provision. They argued that the lower court erred in denying them recovery under these provisions. The court applied Louisiana case law which dictates that the language of the policy controls and “constitutes the law between the insured and insurer.” When an insurance contract is subject to interpretation “‘[w]ords and phrases … are to be construed using their plain, ordinary and generally prevailing meaning,’ unless the words have acquired a technical definition.” The appellate court reviewed the original award to determine if the lower court erred in their interpretation of these provisions and in denying recovery to the plaintiffs.

The Extended Limits Endorsement allowed for a certain amount of additional damages above and beyond the actual cash value of the insured’s home. The court found that the language of the provision indicated that, in order to recover under this provision, the insured had to show they had repaired or replaced their damaged property. They must also have insured their home to 100% of its value. The plaintiffs did not meet either of these requirements, and the court found the denial of an additional award under this provision was appropriate.

The Additional Living Expenses provision allowed for recovery of damages for “the reasonable increase in living expenses necessary to maintain [a] normal standard of living when a direct physical loss we cover . . . makes your residence premises uninhabitable.” The court determined that the plaintiffs had to show additional living expenses they had actually incurred. Since they had not yet begun repairs on their home, and continued to live in the residence, they were properly denied additional recovery under this provision.

Knowledge of the interpretation of insurance contract provisions is important when negotiating an insurance settlement or in litigation for recovery of damages. If you or a loved one has been affected by Hurricane Katrina you need an experienced law firm to help you navigate negotiations with your insurance company and to represent you in court should it be necessary. If you are looking for legal representation, the Berniard Law Firm has experience working with the victims of Hurricane Katrina and their families as well as a variety of storm and general insurance dispute issues.

Single-Car Wreck in Lafayette Parish Involving Alcohol Leads to Dispute Over Life Insurance Policy

Published on: May 18, 2011 | By Berniard Law Firm

Previously on the Personal Injury blog, we have explored that auto insurance policies commonly include coverage exceptions for damage or injury that arises from intentional acts. Another typical limitation concerns criminal acts, whereby the insurer’s obligation to cover losses is limited or entirely avoided when the policyholder’s claim is related to his or her own illegal activity. Similarly, life insurance policies that contain accidental death benefits usually include a provision that reduces or eliminates the pay-out when the policyholder’s death occurs while he or she is engaging in illegal activity. This very provision was at the center of an unpublished opinion by the U.S. Court of Appeals for the Fifth Circuit following a one-car accident in Lafayette Parish, Louisiana.

In 2002, Bryan Redeaux was killed in a single-car accident. At the time of his death, he was covered by a life insurance policy issued by the Southern National Life Insurance Company, Inc. that named his mother, Connie Redeaux, as the beneficiary. Southern paid Connie Redeaux $10,000 in life insurance benefits but denied her claim for accidental death benefits based on a policy exclusion “for a loss which in any way results from … injury or death occurring as a result of the commission of a crime or the attempt to commit a crime.” The coroner reported that at the time of the accident, Bryan Redeaux’s blood alcohol concentration (“BAC”) registered 0.21 percent, which was twice the legal limit under Louisiana law. Connie Redeaux filed suit in state court seeking to recover the policy’s accidental death benefits. The action was removed to federal court due to the applicability of the Employee Retirement Income Security Act. The parties filed cross-motions for summary judgment, and the district court granted Connie Redeaux’s. Southern appealed.

The court, after reviewing the trial record, determined that it was “undisputed that the insured was operating a motor vehicle at the time of his death and that his BAC was 0.21 percent, more than twice the legal limit under Louisiana law.” It rejected Connie Redeaux’s argument that the policy exclusion did not apply because no criminal charges were filed against her son; it is well established in the Fifth Circuit that “[t]he failure of the state criminal justice system to prosecute an individual … by no means constitutes an affirmative finding that the individual is absolved of any crime.” Thus, the court held that “the insured committed the crime of operating a vehicle while intoxicated under Louisiana law,” and reversed the district court’s judgment.

Although Louisiana generally endorses the view that “exclusionary provisions are to be strictly construed against the insurer with any ambiguity construed in favor of the insured,” policy holders should ensure they understand all limitations and exclusions. While Connie Redeaux’s loss of her son was tragic and her attempt to maximize her recovery under the policy understandable, the application of standard contract principles could produce no other result given the clear langauge of the policy.

Third Circuit Explains Process for Court’s Interpretation of Insurance Policy in Vernon Parish Wreck

Published on: May 16, 2011 | By Berniard Law Firm

Previously on our personal injury blog, we have seen that an automobile liability insurance carrier’s coverage of a substitute vehicle is determined by the language of the insurance policy. Courts apply “ordinary contract principles” and interpret the policy’s language, and this interpretation “is usually a legal question that can be properly resolved in the framework of a motion for summary judgment.” Indeed, when the language of a policy is “clear and unambiguous a reasonable interpretation consistent with the obvious meaning and intent of the policy must be given.”

The court’s interpretation of an insurance policy’s language was central to the summary judgment in the recent case of Newman v. State Farm Mutual Auto Insurance Co., et al. In this case, the Third Circuit Court of Appeal for the State of Louisiana reviewed the Beauregard district court’s grant of the Clarendon American Insurance Company’s motion for summary judgment. On June 30, 2007, Ann Newman’s car was rear-ended by Leslie Roshong on Louisiana Highway 109 between Leesville and Vinton. Roshong was driving his personal vehicle, a 2006 Dodge Ram pickup truck, to a site in Vinton where he was to set up a mobile home that he moved from DeRidder as part of his business, Arrow Mobile Home Movers. Newman filed suit against Roshong and the insurer of his truck, State Farm. She later amended her complaint to add Clarendon, the provider of auto liability insurance for Arrow. Clarendon filed a motion for summary judgment, asserting that it did not cover Roshong’s personal truck. The trial court agreed and dismissed Newman’s claims against Clarendon. On appeal, Newman argued that two of the endorsements in Roshong’s policy with Clarendon which concerned interstate commerce extended coverage to the accident. The court found these endorsements inapplicable because Roshong’s truck did not carry a permit from the Interstate Commerce Commission (as required by one) and did not leave the state of Louisiana on the day in question (as required by the other). The court concluded that “there is no genuine issue of material fact as to coverage under the Clarendon policy, as under the clear language of the policy, neither [endorsement] provision provides coverage for the accident at issue.” Further, “the trial court committed no error in its interpretation of the Clarendon policy.” Thus, the court upheld the summary judgment in favor of Clarendon.

It is understandable that Newman would want to ensure to include in litigation all insurance companies who may be liable for her damages related to the accident. However, courts will not overlook the plain language of an insurance policy to invent ways for a litigant to recover from an insurer who had no contractual connection with the incident in question. This decision reflects Louisiana’s public policy concern that insurance companies must be permitted to limit their liability by contract in order to, for example, cover a driver’s personal vehicle without committing to cover other vehicles owned by the driver’s business. Without this ability to define coverage, insurance companies would face too much exposure and would likely withdraw from the market.

Smooth Away Product Not All It’s Purported to Be

Published on: May 9, 2011 | By Berniard Law Firm

Infomercials, commonplace in the wee nights for insomniacs, often push the envelope of how groundbreaking and innovative their products are. Using notions of mystery and incredible results, these product “debuts” draw the viewer in by promising results, and features, that commonplace items cannot. While most people would take these promises with a grain of salt, the notion that the product may not even resemble the claims presented is something that seems improbable. In the case of “As Seen on TV” product Smooth Away, this actually is the case as plaintiffs have begun to voice their displeasure of the false reality surrounding this hair removal item.

Smooth Away is a hair removal product that is pitched through the premise that it is a pain-free solution for hygiene purposes. Advertised as an instant and painless manner to tackle shaving needs, Smooth Away has had a very solid sales cycle due to these very attractive promises. The truth, however, behind the New Jersey-based corporation’s product is not so simple. While their claims are smooth, the truth is much more rough and cloudy.

Marketed online and in local stores like Walgreens and others, it is without question that Smooth Away has found a niche in the marketplace. What’s more, sales appear to be solid as buyers, mostly women, are looking for what is being promised: a simple, painless and easy way towards hair removal. The cost of trusting this product, though, is enough to be concerned with.

Sony Network Shutdown Caused by Data/Personal Information Leak

Published on: May 2, 2011 | By Berniard Law Firm

The video game world was rocked recently by the shutdown of the Sony Playstation 3 Gaming Network. While a free service, the fact that gamers were unable to connect to the network and play their favorite games against both friends and strangers added a wrinkle to an already complex competition between the electronics giant and Microsoft’s X-Box system and network. However, a more significant wrinkle much less publicized exists: Sony was forced to shut down their network due to a breach by external individuals that exposed their personal data.

Most likely ending as a Multidistrict Litigation (MDL) situation wherein the litigation will be handled in one court and affect the rulings and settlement opportunities of people across the country, this situation affects hundreds, if not millions, of Americans. Headquartered in California, Sony still does not have a definitive answer for its customers regarding this situation. Yesterday’s news that 10 million credit card numbers may have been exposed in a data breach that involved a known vulnerability is all the more staggering.

When someone puts their faith, and personal information, in the hands of a company, let alone a giant like Sony, they believe this data will be kept secure. However, for this breach to occur, and for the company to admit it was a known issue, provides the legal basis for judicial recovery. Only time will tell what becomes of this privacy and information issue but the protection of secure data is paramount. What Sony will do to reassure its customers that they can continue to trust them remains to be seen.

Uninsured Drivers Can Affect Payouts in Car Accidents

Published on: April 20, 2011 | By Berniard Law Firm

If hit by an uninsured or underinsured motorist while at work, an employer’s insurance may not cover the damage. While everyone in Louisiana who has a liability policy is required to have uninsured motorists coverage, they can receive an exception by signing a waiver. This can leave accident victims in the dust with tons of heavy medical bills and debt for making a decision they may not have fully understood. Ecolab, Inc. employee Lyndon Doyle found himself in this situation not this lucky.

On January of 2008, Doyle was injured in a car accident while driving a vehicle owned by Ecolab. His injuries resulted in medical bills totaling over $25,000. The woman who hit him, Aniece Smith, did not have enough insurance to cover all of Doyle’s injuries. Because Doyle’s employer Ecolab had a liability insurance policy issued by National Union, Doyle sought the full policy limit from National Union under the uninsured/underinsured motorist (UM) liability provision.

While National Union admitted that a policy covering Doyle existed, they denied that UM coverage was available because Ecolab signed waivers of that coverage on February 4, 2003, and December 18, 2003. Because of the company’s prior decision, Doyle had to argue that both waivers were invalid or not executed in accordance with the law. While originally arguing that the February 4th waiver was invalid because it did not contain a policy number nor the company name in the designated place, the plaintiff chose to concede that the waiver was valid, placing all emphasis on the second argument.

In order to win, Doyle had to argue that the second, December 18 waiver was invalid and that it superseded the properly executed February 4th waiver. To argue that it superseded the first, Doyle had to show that it was signed during the original policy term and not in conjunction with a renewal nor change in coverage. National Union admitted that the December 18 waiver was invalid but asserted that it was signed pursuant to a renewal, and thus did not supersede the first, valid waiver. The court finally decided that the second waiver was simply a renewal, and did not supersede the first because the signed waiver forms were identical and the Ecolab representative who signed both, assumed he had signed the second pursuant to a renewal.

Because the second improper waiver was simply a renewal, it did not supersede the first, properly executed waiver. Thus the UM waiver was in effect at the time of Doyle’s accident, and National Union did not have to pay him anything to help with his medical debt resulting from the accident.

This case illustrates an unfortunate reality: the decisions of your employer can gravely affect your ability to recover from an accident. By hiring the best available attorney, you can make sure that no possible avenue of recovery is missed. This may be the only way to get help with the massive amount of medical debt that may result from an accident while working.

La. 4th Cir. Reverses Plaintiff’s Award of Penalties from Alleged Failure to Pay Settlement Agreement Within Statutory Period

Published on: April 18, 2011 | By Berniard Law Firm

La. R.S. 22:1973B(2) assesses penalties to an insurance company who fails to pay a settlement within 30 days after an agreement is written. In a recent case, Smith v. Bambino, the Fourth Circuit discussed when and under what circumstances will commence the 30-day period.

Th defendant, Bambino, who was driving in New Orleans with the plaintiff, Smith, crashed with another vehicle on January 13, 2007. Smith sued Bambino, his insurer, Erie Insurance Company, and her UM carrier for the injuries she allegedly suffered from the accident. The parties attended mediation, where they executed a “Memorandum of Settlement Agreement” (“memorandum”) on October 19, 2009. Bambino and Erie paid Smith $85,000 approximately 50 days later. After receiving the settlement funds, Smith executed a “Receipt, Release and Agreement to Indemnify,” which released Bambino and Erie from liability. Consequently, the trial court granted Smith’s motion to dismiss with prejudice plaintiff’s claims against Bambino and Erie.

Subsequently, however, Smith filed a motion to assess penalties for late payment of settlement funds. The trial court rendered judgment in favor of Smith, awarding her the $5,000 in penalties she sought. The defendants appealed the judgment to the Louisiana Fourth Circuit (“Court”). On appeal, the Court vacated the lower court’s judgment and dismissed the plaintiff’s claim for penalties with prejudice.

Hurricane Katrina Case Allowed to Move Forward

Published on: April 17, 2011 | By Berniard Law Firm

On August 29, 2005, Hurricane Katrina devastate much of the Gulf Coast, prompting the Louisiana Legislature to enact Acts 2006, which extended the prescriptive period within which insured’s were allowed an additional year to file certain claims under their insurance policies for losses incurred by the storms. Despite many insurance contracts granting only one year for insured’s to file claims, this prescriptive period extension allowed many residents more time to file as a result of the difficult circumstances caused by the storm. The Louisiana Supreme Court recently were asked to determine whether the Plaintiffs’ lawsuit, seeking damages from the Louisiana Citizens Property Insurance Corporation (LCPIC), filed nearly three years after Hurricane Katrina had prescribed. In an earlier decision made by the Fourth Circuit Court of Appeal, the prescriptive period was held to be interrupted by a timely filing of a class action petition against the insurer, which included the Plaintiffs as putative class members. Time is of the essence when filing lawsuits, here, the Louisiana Supreme Court held that the plaintiffs were timely and permitted to continue their lawsuit against LCPIC.

The plaintiffs, like so many other Gulf Coast residents, suffered extensive property damage as a result of Hurricane Katrina. Maneuvering through the insurance filing process became tedious and very difficult, the plaintiff’s constantly received refusals by the insurance company to make any payments on their policy limits. Thus, the plaintiff’s turned to legal help in order to obtain help to rebuild their homes and their lives. On June 27, 2008, the Plaintiffs filed a petition against their insurer, LCPIC, seeking payment of their policy limits and damages, including damages for emotional distress and mental anguish. The allegations included: The plaintiff’s property was completely destroyed during the storm, the properties in question were covered by a policy of insurance issued by the defendant LCPIC, yet, the company refused to pay the policy limits. In response, LCPIC filed an Exception of Prescription, arguing that the suit was not filed within one year of loss and that the extended period of prescription provided by legislation had also expired. The trial court initially granted the defendant’s exception of prescription and dismissed the plaintiff’s claim with prejudice, finding that they had failed to file their claim timely. However, on appeal the trial court’s decision was reversed, the prescriptive period had been interrupted by the timely filing of a class action against the defendant insurer in which the Plaintiff’s were putative class members.

Prescription, as defined by Louisiana’s civilian tradition, is defined as a means of acquiring real rights or of losing certain rights as a result of the passage of time. In the case of Cichirillo v. Avondale Industries, Inc, the court reasoned that prescription is designed to “afford a defendant economic and psychological security if no claim is made timely and to protect the defendant from stale claims and from the loss or non-preservation of relevant proof.” Prescription itself is a safety measure that was created in order to prevent defendants from the constant fear of a lawsuit twenty or more years after the fact. Conversely, the other type of period that exists in Louisiana, is liberative prescription. This is a period of time fixed by law for the exercise of a right, yet, a contractual limitation period is not a period of time fixed by law, it is a fixed agreement between the parties. Time is of the essence, yet, there are exceptions to the rule, this is exemplified by the fact that Louisiana extended the initial one year prescriptive period for property damage claims against insurers, for one additional year, allowing victims fo Hurricane Katrina more time to organize the various aspects of their lives that were devastated by the storm.

The primary issue in this recent Louisiana Supreme Court decision, was whether or not the class action suit in which the plaintiff’s were putative class members, interrupted prescription, thus, allowing them continued access to their legal claim against the insurance company. Louisiana civil code article 1793 states, “Any act that interrupts prescription for one of the solidary obligees benefits all the others.” Thus, by becoming putative class members in the initial lawsuit against the insurance company, the plaintiff’s maintained their legal claims against the defendants, allowing them to pursue further legal action against the company despite the passage of time. The court of appeal held that the filing of the class action suits against LCPIC suspended or interrupted the running of prescription against the plaintiff’s property damage claims since they were found to be putative class members when the original class action petitions were filed.

The defendant insurer argued that the contract, which provided one year from the date of the property damage, was the governing time period, even over the statutory extension provided by the Louisiana Legislature. The defendants supported this assertion by declaring that the public interest is served by permitting the insurer to limit the time of its exposure, as Louisiana Civil Code 802 states, “any suit not instituted within the specified time and any claims relating thereto, shall be forever barred unless a contract or the parties thereto provide for a later time.” However, even though the plaintiff’s did not unilaterally file a claim against the insurer within the one year contractual time period, they did enter into the class action against the insurer within the aforesaid time period. Upon the filing of the class action, liberative prescription on the claims arising out of the transaction or occurrences described in the petition were suspended as to all members of the class. The insurance contract provided a contractual time period, not a prescriptive time period, as a result, the additional one year time period afforded to Gulf Coast residents affected by the storm governs. The insurance company attempted to assert the contractual nature of its agreement to circumvent the application of the general codal and statutory rules of prescription is adverse to Louisiana civil Code Article 3471, which clearly circumscribes the limits of any contractual agreement attempting to incorporate a limitation period different from that established by law. Specifically, Louisiana Civil Code Article 3471 states:

A juridical act purporting to exclude prescrption, to specify a longer period than that established by law, or to make the requirements of prescription onerous, is null.

Thus, parties cannot “opt out” of prescriptive periods created by general codal and statutory rules. The plaintiff’s entered into a class action within the prescriptive time period, this interrupted the passage of time that would have taken away their legal rights to sue the insurer. Thus, the subsequent suit against the defendants was timely, and despite the contractual language that attempted to circumvent the Louisiana Legislature, the plaintiff’s filing was timely.