Owner of Chiropractic Center Sentenced to 3 Years in Prison

November 30, 2010

On November 22, 2010, the former owner and President of Spinal Care & Rehabilitation Center located in Rahway, New Jersey was sentenced to 37 months in federal prison. In April 2010, Roberto Castanon pled guilty to mail fraud and admitted to organizing a scheme to defraud auto insurance companies. The scheme, which lasted from January 2003 through February 2007, consisted of Castanon recruiting individuals to stage automobile accidents and then referring those individuals to his Center for medical treatment. Additionally, he coached these individuals on how to fake injuries to obtain unnecessary medical treatment. Bills for the treatment rendered to these individuals were then submitted by Castanon to insurance companies for payment.

Castanon admitted that this scheme resulted in more than $400,000 in losses to insurance companies. In addition to his prison sentence, Castanon was ordered to pay $341,688.94 in restitution. Additionally, two co-conspirators have pled guilty to mail fraud, sentenced to prison terms and ordered to pay restitution.

See the United State Attorney’s press release regarding Castanon’s sentencing here….http://bit.ly/dNiCo0

— Erik Anderson, Esq.

Reardon Anderson represents the interests of businesses, insurance companies and individuals throughout New Jersey and the metropolitan New York City area. Please visit our website at http://reardonanderson.com to learn more about our firm.

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Reardon Anderson’s New Website is Up and Running

November 29, 2010

Reardon Anderson is excited to announce that its new website is up and running.  Please visit us as www.reardonanderson.com.

Also, “friend” us at our Facebook Page….http://on.fb.me/emn8V2 and follow us on twitter at twitter.com/reardonanderson


DOES INDEMNITY CLAUSE SHIFT DEFENSE COSTS IF NO LIABILITY IS FOUND? NEW JERSEY SUPREME COURT TO DECIDE.

November 12, 2010

On November 8, 2010, the New Jersey Supreme Court heard oral argument on whether a Hold Harmless Clause that places liability on a “front line” subcontractor should allow the allocation of defense costs when no defendant is found liable for the happening of an accident. In Kieffer v. Best Buy, et al., on June 19, 2004, plaintiff slipped and fell inside a Best Buy store. Plaintiff contended that the aisle where she fell was very slippery. Accordingly, plaintiff sued Best Buy, who in turn sued AIC, its cleaning contractor. Best Buy also made a demand that AIC defend, indemnify and provide insurance coverage to Best Buy pursuant to their contract. This demand was made under the Hold Harmless Clause of the contract which provided that AIC agreed to:

Indemnify, defend and hold harmless, Best Buy…from and against any and all losses, costs, obligations, liabilities, damages, actions, suits, causes of action, claims, demands, settlements, judgments, and other expenses, (including but not limited to cost of defense, settlement and reasonable attorney’s fees) of whatever type or nature, including, but not limited to, damage or destruction to property, injury to any person or persons, which are asserted against, incurred, imposed upon or suffered by Best Buy by reason of, or arising from ….the acts or omissions of Contractor (its officers, directors, employees or agents).

Additionally, the contract provided that Best Buy was to be named as an insured under the AIC policy.

AIC, had hired All Cleaning to perform the cleaning services at the Best Buy store in question, brought All Cleaning into the lawsuit. AIC also made a demand for contractual indemnification against All Cleaning. Pursuant to the agreement entered into by AIC and All Cleaning, All Cleaning agreed to:

hold harmless and indemnify [AIC], [their] officers, shareholders, directors, agents, attorneys, employees[,] and each of [their] customers from any connection with any act of negligence, omission, or conduct arising out of the operation of [their] performance or non-performances of the Services.

In the trial court, Best Buy moved for summary judgment against the plaintiff on liability and against AIC on its contractual indemnification claim. AIC opposed Best Buy’s motion seeking contractual indemnification, but also cross-moved for summary judgment against plaintiff on the issue of liability and All Cleaning as to its contractual indemnification claim. The court granted summary judgment in favor of all three defendants with regard to liability. Further, the court granted summary judgment in favor of Best Buy and AIC regarding their respective contractual indemnification claims. The court awarded Best Buy $25,790.09 in counsel fees and costs. Likewise, the court awarded AIC $11,763.75 in counsel fees from All Cleaning. Ultimately, All Cleaning was found responsible for paying all attorney’s fees.

In reviewing this case, the Appellate Division found that under the terms of All Cleaning’s indemnity agreement, it was obligated “among other conditions to indemnify them for all claims, demands, or assertions, arising out of or arising from the performance of its cleaning services at the Best Buy stores on AIC’s behalf and on behalf of AIC’s customers, which would include Best Buy.” The court further noted that “the language contained in both indemnity agreements does not require a finding of negligence on the part of All Cleaning as a condition precedent to trigger the indemnity provisions…rather all that is required is the plaintiff’s claim relate to the subject matter of the service agreement.” Accordingly, the Appellate Division upheld the trial court’s decision.

All Cleaning sought a review of this decision by the Supreme Court which was subsequently granted. During oral argument, the main issue addressed was whether or not All Cleaning could be responsible for attorney’s fees when no liability was found against any of the defendants. Counsel for All Cleaning argued that as the indemnity agreements did not provide for this scenario. As such, the agreement is ambiguous and All Cleaning cannot be found responsible for costs and fees pursuant to the indemnity agreement. Counsel for Best Buy and AIC argued that the indemnity agreements clearly indicated that not only are judgments to be indemnified by so are claims.

It is expected that the Supreme Court’s decision will be rendered in the next few months. Once that decision is issued, an update will be provided.

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— Erik Anderson, Esq.

Reardon Anderson represents the interests of businesses, insurance companies and individuals throughout New Jersey and the metropolitan New York City area. Please visit our website at http://www.reardonanderson.com to learn more about our firm.


NEW YORK JUDGE ALLOWS NEGLIGENCE LAWSUIT AGAINST FOUR YEAR OLD

November 10, 2010

A New York Judge has recently ruled that a personal injury lawsuit could be maintained against a four year old girl. In that case, a lawsuit was filed on behalf of Claire Menagh (then 87 years old) by her executor in New York County alleging that while walking on the sidewalk, she was struck by two infant children, age 4 and 5, who were also racing their bicycles on the sidewalk. At the time of the accident, the infants’ mothers were supervising the children while they rode their bicycles. As a result of the collision, Ms. Menagh sustained a hip fracture which required surgery. She died three months later of unrelated causes.

The Estate of Ms. Menagh filed suit against the two infant children and their mothers. In lieu of filing an answer, one of the infants who was four years and nine months old at the time of the accident filed a motion seeking to have the complaint dismissed. The attorney for the infant argued that as a matter of law, due to child’s age she was incapable of being found negligent in causing the accident (the technical term for this legal concept is non sui juris – meaning not his own master). New York Courts have recognized that infants under the age of four are conclusively presumed incapable of negligence. However, the Courts in New York have found that under certain circumstances infants over the age of four can be found negligent. In those cases where an infant is over the age of four, New York Courts have held that the infant should be held to a standard of care by what is expected of a reasonably prudent child of that age, experience, intelligence and degree of development and capacity.

In this case, the Judge noted that as the infant was over four years old a factual record must be developed regarding the maturity and experience of the infant. As no discovery had been exchanged, he denied the motion to dismiss. However, while the in the Judge did not dismiss the infant, he did indicate that depending on how the facts regarding this case were developed (e.g. the maturity of the child, the child’s experience, etc.), it was possible that the child could be dismissed later in the case.

Across the river, New Jersey Courts differ slightly with regard to whether or not an infant may be found negligent in a personal injury matter. The Courts have found that there is a rebuttable presumption of incapacity for infants less than seven years old. However, an infant could be found negligent despite being younger than seven depending on the infant’s capacity to exercise care under the circumstances. See Cowen v. Doering, 111 N.J. 451 (1988).

— Erik Anderson, Esq.

Reardon Anderson represents the interests of businesses, insurance companies and individuals throughout New Jersey and the metropolitan New York City area. Please visit our website at http://www.reardonanderson.com to learn more about our firm.