Pennsylvania Legal Update, Spring 2005

DANGEROUS DOGS AND PENNSYLVANIA LAW

Any person who has been attacked by a dog or whose domestic animal has been killed or injured by a dog, without provocation, may commence an official action to declare the dog dangerous. The action also may be brought by a dog warden or a local police officer--but the involvement of a police officer or a dog warden is not necessary. The case is heard and the determination is made by a local district justice. The district justice need not wait for the conclusion of any police or dog warden investigation.

A dog may be declared dangerous by a district justice based on the dog's history, which must include one or more of the following:

(a) infliction of severe injury on a human being without provocation,

(b) killing or severely injuring a domestic animal without provocation,

(c) biting or pursuing a human without provocation, or

(d) being used in the commission of a crime.

If a dog is determined by a district justice to be dangerous and the owner chooses to keep the dog, the owner must obtain a proper enclosure to confine the dog and must post a sign on his or her premises warning of the presence of a dangerous dog. The warning sign must include a symbol designed to inform children of the danger posed by the dog. Where the owner of a dangerous dog is a minor, the minor's parents are liable for the dog's conduct and must comply with the duties imposed on the owners of dangerous dogs.

In addition to properly confining the dog, the owner of a certified dangerous dog must post a $50,000 bond or provide the Commonwealth with ongoing confirmation of adequate insurance for at least $50,000. The owner of a certified dangerous dog must notify the authorities within 24 hours if the dog is loose, unconfined, dead, sold, donated, or has attacked a person or a domestic animal. A dangerous dog may not be outside its enclosure unless muzzled and restrained by a substantial chain or leash and under the physical control of a responsible person.

When a certified dangerous dog attacks a person or a domestic animal, its owner may be convicted of a misdemeanor, and the dog is to be immediately confiscated, quarantined, and "destroyed in an expeditious and humane manner." A dog may not be declared dangerous if the injured victim was a trespasser on private property, was tormenting, abusing, or assaulting the dog, or was committing a crime when attacked.

The owner of any dog who negligently, recklessly, or intentionally permits the dog to aggressively attack and cause severe injury or death to another person is guilty of a misdemeanor of the first degree. In addition, the dog shall be immediately confiscated by a state dog warden or a police officer, placed in quarantine for the proper length of time, and thereafter humanely killed in an expeditious manner, with the costs of quarantine and destruction to be borne by the dog's owner.

Townships and cities may enact ordinances that prohibit dog owners from permitting their dogs to run freely. These ordinances are sometimes referred to as "leash laws." The state Dog Law also requires that all dogs be confined within the premises of the owner and be firmly secured by means of a collar and chain or other device so that they cannot stray beyond the premises.

It is unlawful to poison a dog or to leave poison in any place, even on your own premises, where it may be easily found and eaten by a dog. If you feel threatened by a dangerous dog, give the dog's owner written notice of your concerns. Consider commencing an action under the Dog Law. Even if the dog's conduct does not meet the Dog Law's standards for dangerous dogs, its owner may still be responsible for injuries caused by the dog. Putting the owner on notice of your concerns is the first step in proving that he or she knew or should have known of the dog's dangerous tendencies.

CAR MANUFACTURER COULD BE NEGLIGENT

After suffering a violent assault by a stranger, a Pennsylvania woman won the right to sue General Motors Corporation for the negligent design of her new car's door-locking system.

The woman was driving a 1995 GMC Grand Am. The Grand Am's doors automatically unlock when the gear shift is placed in park and the ignition is turned off. While the woman was aware of this automatic unlocking feature and also was concerned about a particular individual she noticed in the shopping center parking lot, the woman did not relock her doors after they automatically unlocked. As she was preparing to leave the car, the stranger opened the driver's door, entered the car, and violently assaulted the woman.

The woman sued GM, claiming that the car was dangerously defective and that the company was negligent in manufacturing and selling cars that have doors with an automatic unlock feature. GM defended the action by focusing on the fact that the woman knew that the doors would unlock when she turned the ignition off, and it also argued that automatic unlock systems are not by nature defective or dangerous. GM noted that the automatic unlock feature can be disabled by the removal of a fuse. The jury that heard the case decided that the car was not dangerously defective, and the judge did not permit the jury to consider the woman's claim for negligence.

The woman appealed the verdict and the Pennsylvania Superior Court ruled that she was entitled to another trial. The court emphasized that the woman's claim of negligence deserved the jury's attention. When a consumer product is dangerously defective, the manufacturer can be held "strictly liable" for injuries caused by the product. Consumers are also entitled to pursue claims of negligence against the manufacturer of a product. In a negligence claim, a consumer must show that the manufacturer was careless and that the consumer was injured as a direct result of that carelessness. While GM was not guilty of making a dangerously defective product, it might be guilty of negligence, and the woman deserved her day in court to try to prove this claim.

More and more automatic features are being built into new cars. Some new cars have doors that automatically lock when the car begins to move. Other new cars have automated interior and exterior lights, and windows that open completely after the power switch is touched. Overriding these features by removing fuses or rewiring can be tricky and may result in the loss of the full use of those features.

Consumers should carefully review the automated functions of a new car before buying it. Depending on the ultimate outcome of the lawsuit described above, manufacturers may start to rethink the extent to which their newer car designs are increasingly removing a consumer's ability to control the functions of his or her car.

FLOOD INSURANCEMAKES SENSE

If you own property in a high-risk flood area, your mortgage lender probably requires that you maintain flood insurance. But if your home or business real estate is not in a high-risk area or you purchased the property without any commercial financing, you probably do not have any flood insurance.

In 1968, Congress created the National Flood Insurance Program (NFIP) to oversee and financially support a program of national flood insurance. Through private insurance companies and agents, the NFIP makes federally backed flood insurance available to homeowners, renters, and business owners in communities that cooperate in federal flood-control planning. According to the Federal Emergency Management Agency (FEMA), 25% of all flood claims occur in low- to moderate-risk areas. Sudden or heavy rains, melting snow, failed levees or dams, and tropical storms and hurricanes can cause flooding even in higher elevations.

Recently, a Pennsylvania couple sued their commercial insurance agent after they suffered a massive loss of inventory and serious property damage from a flood. The couple had no flood insurance on their business despite the fact that the Susquehanna River was directly across the highway from their building and a stream was located on their property. When they initially purchased their insurance, they had requested comprehensive coverage. Their agent did not make a personal inspection of the property.

The couple renewed their insurance coverage annually and after several years an employee of the agency visited the site to perform a "risk assessment." While the employee recommended some changes in property management to the couple, he did not address flood risks or flood insurance at all. Because their coverage seemed comprehensive, the couple never realized that they did not have any flood insurance.

The Pennsylvania Superior Court ruled that the couple was entitled to take the case to a jury trial. Noting that insurance agents are not responsible for continually reminding policyholders of their coverage limits or the terms of their policies, the court found that commercial insurance agents are responsible for inspecting properties and giving necessary advice on flood insurance at the outset of the customer's purchase of insurance. If a jury finds it likely that the couple would have purchased flood insurance, their agent can be held financially responsible to them for the damages they suffered in the flood.

Flood insurance is affordable. Because the federal government sets premium rates, insurance companies that sell flood insurance compete on service rather than on price. When shopping for flood insurance, ask for information on how quickly the company resolves and pays its claims. To find out which insurance companies sell flood insurance policies in your area, ask your agent or visit http://web.archive.org/web/20060531083522/http://www.fema.gov/

For some property owners outside of Pennsylvania, flood insurance is unavailable or unaffordable. The North Carolina Outer Banks, sections of the Florida panhandle, and selected areas in Delaware and South Carolina are not eligible for federally subsidized flood insurance. By withholding subsidized insurance, the federal government is trying to discourage land development in those areas. While some private insurance companies offer flood insurance not backed by federal financing, that insurance is so expensive as to be unaffordable for most property owners.

FEMA notes that most people who suffer flood damage have no flood insurance. Since flood insurance is not a standard provision in your homeowner's or business premises coverage, you may be completely without coverage. Look into securing flood insurance before spring rains and the hurricane season are upon us. Act now--flood insurance policies generally exclude coverage for the first 30 days of the policy. It will be too late to buy flood insurance when you hear that a major weather event is about to cause flooding in your area.

NO UNEMPLOYMENT COMPENSATION FOR THE FAMILY

A mother was recently denied unemployment compensation because her boss was her son. The mother worked as a librarian and receptionist in a law firm owned and operated by her son. Terminated because her services were no longer needed, the mother applied for unemployment compensation benefits. Pennsylvania's Unemployment Act does not permit workers to collect unemployment for "service performed by an individual in the employ of his son, daughter, or spouse, and service performed by a child under the age of eighteen in the employ of his father or mother." The mother went to court and challenged the Unemployment Act's exclusion of certain family employees as unconstitutional.

The Pennsylvania court rejected her argument, noting that, in order for the courts to strike down a law, the law must be "highly suspect." Since the Unemployment Act's exclusion of family employees from benefits does not discriminate based on religion, gender, age, ethnic origin, or race, and since it is rationally related to the state's desire to limit those entitled to unemployment benefits, the court found the law constitutional.

If you work for your son, daughter, or spouse, even if you are paid regularly and are "on the books," and even if all of the mandatory federal and state unemployment fund contributions are paid by your employer on your wages, you are not eligible for unemployment compensation benefits.

FDIC INSURANCE FOR REVOCABLE TRUSTS

In 2004, the Federal Deposit Insurance Corporation (FDIC) put in place new rules for insurance coverage of living trust accounts in FDIC-insured institutions. A living trust, sometimes called a family trust, is a formal revocable trust. Its owner specifies who will receive the trust assets when the owner dies. During his or her lifetime, the owner, also known as a grantor or settlor, maintains control of the trust assets and has the power to make changes in the trust.

The owner of a living trust account is insured up to $100,000 per beneficiary if each of the following three requirements is met:

(1) The beneficiary must be the owner's spouse, child, grandchild, parent, or sibling. Not every relative qualifies. For example, cousins, nieces, and nephews do not qualify, but stepparents, stepchildren, and adopted children do.

(2) The beneficiary must become entitled to his or her interest in the trust when the owner dies. FDIC insurance coverage would be based on the beneficiaries who satisfy this requirement as of the time when a bank fails.

(3) The title of the account at the bank must indicate, with terms such as "living trust" or "family trust," that the account is held by a trust.

While insurance coverage is based on the actual interests of each beneficiary, the FDIC will assume that the beneficiaries have equal interests in the trust account unless the trust states otherwise. By way of a simple example, if a father has a living trust leaving all of the trust assets equally to his three children, the account would be insured up to $300,000. The total coverage consists of $100,000 for each of the three qualifying beneficiaries, who would become owners of the trust when their father dies.