Open-and-Obvious Doctrine Saves Save-A-Lot from Liability

Slip-and-Fall cases can cost a company substantial dollars.  As just one example, in Cintron-Colon v. Save-A-Lot, Ms. Clinton-Colon was shopping at an Ohio Save-A-Lot when she slipped on “a bright yellow liquid and fell.” Largely due to the nature of the puddle being bright yellow the court concluded that the “liquid would have been observable to a reasonable person. Therefore, the puddle was an open-and-obvious condition and the store owed no duty to the appellant (Ms. Clinton-Colon) to warn of its existence.”

For slip and fall cases, the Supreme Court of Ohio adheres to the open-and-obvious doctrine, which directs a court’s attention to “the nature of the dangerous condition itself, as opposed to the nature of the plaintiff’s conduct in encountering it.” Therefore, the open-and-obvious doctrine requires an objective analysis that looks to whether a “reasonable person would deem the danger open-and-obvious,” rather than the subjective opinion of the victim.

Whether a hazard is visible is not the sole consideration of the open-and-obvious doctrine, the attendant circumstances must also be considered.  Attendant circumstances encompass all the facts involved with the accident. If a distraction occurred that would reduce a reasonable person’s attention, the distraction must be taken into account and a reduction of the amount of care expected.

Not all puddles are bright yellow and carry a strong presumption of being open-and-obvious. Especially in the winter season, floors become wet for a variety of reason and become slipping hazards that could cost you millions. To reduce the probability you are found liable for a slip and fall case, you can post signs indicating the floor is wet at your store entrance. As was held in Finzzo v. Speedway, a Michigan case, “Regardless of whether the wet floor itself was an open and obvious condition, the wet floor signs posted at each store entrance to warn customers of a potential risk certainly were.” The court further elaborated, “The proper display of a wet floor sign makes the danger associated with a wet floor open and obvious as a matter of law, and is in fact why such signs are used.”

Authored by Sarah Perez & Chad Trownson

Breaking the Ice; New York’s Law on Clearing Icy Sidewalks

Living and working in Ohio, we have learned to use extra caution when there are icy conditions. Even with extra caution, walking on ice can be dangerous. Roughly 1% to 5% of falls result in a serious fracture, according to the Journal of Bone & Joint Surgery and it is likely that ice related falls are worse than that. In fact, over 20% of US private industries injuries stem from slip and fall accidents.

19 Action News (a Cleveland news company) recently highlighted the dangers of ice on sidewalks. Most of 19 Action News’ advice falls into two categories; walk careful in proper footwear and to remove ice that creates the danger.

In New York, lawmakers have attempted to define the extra care that is required in clearing the sidewalks.  The New York Administrative Code indicates liability for snow and ice typically begins “four hours after the snow ceases to fall.” There are two main exceptions at play. First, there is an exception for certain nighttime hours (9:00 PM to 7:00 AM). Second, there is an exception if the removal would damage the pavement or the weather does not permit its removal.  If you live or work in New York, you better have your shovel handy.

For More Information:

The National Library of Medicine National Institutes of Health detailed the likelihood of injuries for age, profession, gender and a variety of other factors.

Authored by Sarah Perez & Chad Trownson

Lake Health’s New Pilot Project Benefits Self-Insured Employers

In theory, insurance is directly linked to risk. Imagine flipping a coin. If it lands on heads, then you get $1.05. If it lands on tails, then you lose $1. Chances are you would be willing to play the game because the stakes are low. A risk neutral person would flip the coin because the expected results are favorable. However, most people and established companies are actually risk adverse. Imagine flipping a coin again. But this time, if it lands on heads, you get $105k, but if it lands on tails you lose $100k.

Did your propensity to play go down? If you were forced to play, would you be willing to pay $1,000 to avoid playing altogether? If so, you are likely risk adverse. Insurance companies thrive because of risk aversion.  Through pooling, insurance companies greatly reduce their risk.

Self-insured employers understand the risks and benefits associated with their employee’s health care, which makes Lake Health’s pilot program all the more intriguing.   Lake Health, a Northeast Ohio-based community health system is partnering with Lubrizol Corp., Progressive Corp. and the Lake County Schools Council directly to provide various degrees of health care to roughly 2,500 people.  By cutting out insurance companies, Lake Health and its reported partners could see an enormous windfall and reduced risk. Interesting concept. We will see who follows suit.

Authored by Sarah Perez & Chad Trownson

BP Oil Spill: A Case Study in How Limited Liability May Only Go So Far.

The Gulf of Mexico oil spill of 2010 is widely considered the worst U.S. oil spill of all time. BP has paid over 40 billion dollars in spill related expenses and may owe around 14 billion more in federal fines.

Litigation surrounding the spill has produced a host of interesting legal issues, and the litigation over the federal fines is no exception. According to the Wall Street Journal (http://www.wsj.com/articles/oil-prices-to-play-into-bp-fine-1421610065), BP believes it “has no obligation to lend money to its subsidiary and that the court should disregard the broader BP group’s financial resources in imposing a fine.” If BP owes no obligation to pay the debts of its subsidiary, then it would not have to pay the roughly 14 billion in federal fines and the subsidiary would most likely go bankrupt or face a smaller fine.

This is one example of how using subsidiaries to reduce risk is a valid business strategy, but it is not full proof. The U.S. Justice Department argues, “BP’s subsidiary is controlled by the parent,” thus BP is responsible for the federal fines. Essentially, the USJD is attempting to remove the limited liability of the subsidiary and make BP fully liable for the subsidiary’s action.

In addition to liability for fines, BP is required to make court-ordered settlement payments to businesses affected by the oil spill pursuant to a settlement agreement approved by the U.S. District Court for the Eastern District of Louisiana in 2012.  Claims may be made for both economic losses and property damage.  The settlement is referred to as the “Deepwater Horizon Court-Supervised Settlement Program.”  Currently, the deadline for affected business to file claims and take part in the settlement is June 8, 2015.  Retailers who have lost sales as a result of the spill and its related decline in tourism and shopping may consider whether they are able to submit a claim.

For more information on the settlement and claims process, visit:  http://www.deepwaterhorizonsettlements.com/

Authored by Sarah Perez & Chad Trownson

Tiger Woods Again Making News—This Time for a Slip and Fall

Tiger Woods will go down as one of the greatest golfers of all time. He receives publicity regarding his level of golf play all the time, good and bad.  And, he will also forever be known for his reputed $110 million divorce from Elin Nordegren in 2010.  However, Tiger is currently receiving other attention in the legal world related to his former security guard’s slip on wet marble while patrolling Tiger’s mansion in 2010 (actually owned by Tiger’s company).  The former guard, John Davis, has decided to sue based upon a negligence theory: namely, the marble was wet due to negligent orientation of a sprinkler.  Of course, attorneys in Woods’ camp argue the risk was foreseeable.  This is just another reminder that premises need to not only be safe for customers and business invitees, but for employees and independent contractors as well to avoid costly workers’ compensation and tort claims.

For more information visit: http://www.businessinsurance.com/article/20150205/NEWS06/150209905/302

http://www.miamiherald.com/entertainment/ent-columns-blogs/jose-lambiet/article8725001.html

Authored by Sarah Crabtree Perez and Chad Trownson

Training Middle Management Can Save Millions When Faced With Whistleblower Situations

According to a recent Wall Street Journal article (WSJ.com/blog) a vast majority of whistleblowing employees go to the manager or supervisor they trust most with their concerns, which often tends to be an employee in middle management. In fact, 95% of all incidents are reported straight to managers, not hotlines (Corporate Secretary). Because of this, it is essential that businesses train their middle management to appropriately handle whistleblower situations. If untrained, there can be huge financial and public relations implications.

Unfortunately however, according to Christine Chi, General Counsel of Financial Crime Compliance and Co-Head of the Global Internal Investigations Group at HSBC Holdings PLC, “[h]aving sophisticated enough personnel to engage in a meaningful and responsible back-and-forth with someone who’s raised concerns…takes a lot.” So, what is the value to the company to invest in training and personnel who are sophisticated enough to handle these situations?

The two biggest fears, which stop whistleblowers from coming forward, are (1) fear of retaliation and (2) fear that no action will be taken to stop the issue (Corporate Secretary). According to a recent study, 62% of all whistleblowers lost their jobs, 18% felt they were harassed or transferred, and another 11% had their job responsibilities or salaries reduced (http://ethics.csc.ncsu.edu/). With trained middle management who know how to appropriately act in whistleblower situations, companies have an opportunity to investigate and take corrective action regarding any internal problems.  Without a trained middle management, companies risk situations similar to GM’s (Philly.com) whose management ignored a whistleblower regarding faulty Chevy Cobalt parts, which led to 13 deaths and 54 accidents (businessweek), or Trader Joe’s who is currently being sued by a former employee for allegedly firing him for whistleblowing (Northjersey.com/traderjoes). In Trader Joe’s case, the employee was allegedly fired for not having a “sense of fun” for reporting spoiling food, rodent droppings and faulty coolers and freezers.

Addressing and fixing internal issues as they present themselves and before they become a financial and legal hardship is absolutely paramount for businesses.  Case and point: GlaxoSmithKline agreed to a $3B settlement for misbranding their drug Paxil (among other things); Merck, Sharp, & Dohme, agreed to a $950M settlement for misleading doctors regarding their drug Vioxx (ConstantineCannonWhistleblowerSuccesses); and GM was forced to recall 20 million vehicles after ignoring a whistleblower who tipped them off to serious problems.

Many of these examples started as small problems and were ignored or never fully corrected by the company, forcing whistleblowers take their complaints outside the business, to places like the SEC. Just last year, the SEC gave out their biggest award ever, when they awarded an anonymous whistleblower $14M (Shrm.org). As the awards and whistleblower protection laws grow, it is imperative that businesses both stay out of trouble, and have trained management to deal with any and all whistleblower issues. If businesses train their middle management to deal with issues brought forth by whistleblowers in efficient and effective ways, it may have extra costs up front, but they may be able to save themselves millions (or even billions) in prevented lawsuits, regulatory agency issues, and public relations nightmares.

For more reading on whistleblowing check out these links:

• http://www.investopedia.com/terms/w/whistleblower.asp (definition of whistleblowing)
• http://smallbusiness.chron.com/examples-whistleblowing-business-2651.html (examples of whistleblowing in business)
• http://abcnews.go.com/Business/biggest-whistleblower-rewards/story?id=17222028 (biggest whistleblowing rewards)
• http://www.dailymail.co.uk/news/article-2677015/Georgia-lawsuit-causing-trouble-GM.html (more on GM whistleblowing story)

Post by: Sarah Crabtree Perez and Daniel Broidy