Employer Not Responsible For Employee Data Safekeeping

You start your job and give your employer all your personal information: your home address, social security number, perhaps even confidential medical and financial data. Did you know your employer has no duty to keep your confidential information safe from hackers? In a recent 2 – 1 vote, a three-judge panel of the Pennsylvania Superior Court ruled that employers cannot be held responsible for a data breach of employee information even if the employer was not utilizing current best practices to prevent a breach.

In the case of Dittman v. University of Pittsburgh Medical Center, decided January 12, 2017, the names, addresses, birthdates, salaries, social security numbers and other valuable data of 62,000 employees were stolen from University computers. The breach resulted in as many as 788 employees falling victim to tax fraud and identity theft. Yet, the court’s majority concluded that since data breaches are widespread and cannot be prevented entirely, it should not create a rule that would force employers to spend significant sums on technology when data breaches remain an unavoidable hazard.


The court did not evaluate the technology UPMC had in place, its cost, or the cost of more expensive measures that might have prevented the breach. In a stinging dissent, Judge Musmanno chided the majority for failing to even allow the plaintiffs the opportunity to demonstrate the University was aware of the threat of cyberattacks and did not act reasonably within budgetary constraints to safeguard employee information.  The Dittman decision has far-reaching implications.  To the delight of hackers, it may encourage some employers to spend less on data security, or at least on the security of data that doesn’t affect the employer’s bottom line if it is compromised. Look for this one to go up to the Pennsylvania Supreme Court. In the meantime, employees might want to spend a little themselves on LifeLock or similar services to protect their confidential information.

Representing Yourself Revisited

In these challenging economic times, everyone is trying to save a buck, especially when it comes to legal fees.  When there is a fair amount of money at stake, representing yourself may actually cost you money because you may end up losing a case a skilled attorney could have won.  However, for the myriad of small claims under $5,000 for everything from poor home repairs to unpaid debts, presenting your own claim in the local District Courts is an option worth considering.

In Pennsylvania, claims under $12,000 may be brought in the local District Magisterial Courts.  The claim must be filed where the defendant is, or where the action happened.  For example, if the claim is about defective repairs in your home in Yardley, PA, you may file the complaint in the District Court in nearby Morrisville (which covers the Yardley area) even though the contractor may have its office or shop over in Newtown.  However, if you take your car to a shop in Newtown and the repairs are done poorly there, then you must file your complaint in the District Court in Newtown, PA.  To find the District Court for your area, go to www.pacourts.us and click on “Minor Courts.”

Once you have located the appropriate court, you must file a complaint.  It is a simple, one-page form and can be obtained from the court.  Your complaint can be as brief as “Contractor performed work poorly and cost me $___ to have fixed.”  There is a fee to file your complaint.

Once the complaint is filed, the court will notify you of a date for the hearing.  You must show up for the hearing prepared to present any witnesses or evidence you have to support your claim.  If either party fails to show, the court may enter judgment in favor of the other party.

At the hearing, the better prepared you are to present your case, the better you help the judge understand the issues and allow him/her to rule in your favor.  If the case is about a contract, you must present a copy of the contract and be prepared to argue what language supports your right to the money owed.  If the complaint is about poor repairs, present photographs of the poor repairs.  Photographs are crucial evidence.  Unless the poor work is obvious, you may need an expert, for example, another qualified repairman to testify as to why the work was not done correctly and what it will cost to fix. 

Present to the court copies of repair bills or invoices that show how much you are owed.  Even better, prepare a short summary of your total damages listing each expense and attach the bills to your summary.  The easier you make the judge’s job, the more likely he/she is to rule in your favor. 

Finally, even if you intend to represent yourself, paying for an hour of an attorney’s time in a consultation is a wise investment.  The attorney will be able to review your case and point out potential problems to fix before the defendant or his/her attorney points them out to the judge at the hearing.  If you live in the Yardley or Newtown, PA area, call us at 215-493-8287.

How Flood Insurance Differs From Homeowners Or Business Loss

In my last blog (“Is Your Insurance Company Giving You Grief, Not Relief?” 12/14/12), I discussed some ways to handle a homeowners or business loss claim.  In particular, state law may give the home or business owner the ability to sue an insurance company for a “bad faith” refusal to pay the claim.  Unfortunately, your options with regard to a flood insurance claim are limited.

Unlike home owners or business loss insurance, flood insurance is underwritten by the federal government and governed by federal law.  Even though a policy may be written by a private insurance company, it is still subject to all the requirements of the National Flood Insurance Act of 1968 (NFIA).  A private “Write-Your-Own” (WYO) insurer is deemed a fiscal agent of the United States and may not issue a policy which deviates from the standard policy approved by the NFIA.  Therefore, flood insurance policyholders may not sue WYO insurance companies under state “bad faith” laws.  Lawsuits are permitted only for the disputed amounts under NFIA guidelines.

Once again, the policy holder must “strictly comply” with the timeframes for submission of a proof of loss.  While the deadline is normally sixty (60) days, FEMA often extends it for widespread disasters like Hurricane Sandy.  The insurance company adjuster may offer to submit a proof of loss on the policy holder’s behalf.  However, the policy holder does not have to accept the adjuster’s proof of loss and may submit a separate proof of loss with adequate support.

When submitting the proof of loss, the policy holder must sign and submit a completed FEMA “Proof of Loss” form 086-0-9 specifying a precise loss figure or “sum certain.”  Click here to download a copy of a Proof of Loss. Sending contractor or public adjuster estimates without the form is as bad as submitting nothing at all.  Without the form, the claim cannot be paid and any further challenge will be moot.  Contractor or public adjuster estimates should accompany the proof of loss to support the amount of damages claimed.  The policy holder should submit the proof of loss by fax, delivery service or other form of delivery providing a written confirmation of receipt. 

If the WYO insurance company denies all or part of a claim after review of the proof of loss, the policy holder may appeal the denial in writing to FEMA within sixty (60) days.  A letter will do.  Be sure to send the proof of loss by Fedex or certified mail to confirm delivery.  However, if FEMA affirms the denial or fails to act, a policy holder must file a lawsuit against the WYO insurer in federal court within one year of the insurance company’s denial.  Some flood insurance policies are written by FEMA itself, but the same procedures will apply. 

Careful review of one’s insurance policy and prompt response to insurance company inaction is necessary to protect your rights.  Our Yardley, PA office will be happy to answer your questions regarding your homeowners or flood insurance coverage.  Call (215) 493-8287 or email scott@fegleylaw.com.

Is Your Insurance Company Giving You Grief, Not Relief, After Hurricane Sandy?

In the wake of Hurricane Sandy, thousands of home and business owners in the Mid-Atlantic region are relying on prompt and fair payment of insurance claims to begin rebuilding.  Unfortunately, insurance companies may delay payment and offer substantially less than what the policy may cover.  The home or business owner is then faced with a dilemma of accepting the quick but lower offer or holding out. 

Whether the claim is made under a standard homeowners insurance policy, a business loss policy, or a flood insurance policy will affect your rights to dispute a low offer.  Be sure to read your policies carefully to be aware of the time limits in which you must file your claim as well as appeals or lawsuits if the claim is not resolved satisfactorily.  In this blog, I’ll discuss state laws in Pennsylvania and New Jersey affecting homes and businesses damaged by Hurricane Sandy.

           Home Owners and Business Loss Insurance:

Homeowners insurance and business loss insurance policies are contracts governed by state law.  Homeowners insurance typically covers rain, wind, falling trees and other storm damage, but not damage from rising flood waters.  Business loss also covers storm damage, except for floods, and can provide business interruption coverage as well.

The home or business owner must comply with the terms of the policy by giving timely notice of the loss to the insurer. Generally, policies also require a “proof of loss” to be submitted within sixty (60) days.  Read your policy to see what is required for the “proof of loss.”  The proof of loss may be supplied by a contractor or public adjuster on behalf of the policy holder.  The insurance company adjuster will provide an estimate also, which may deny payment for items allegedly not covered or assign reduced amounts for covered items. 

The insurance company should not withhold payment of a lower undisputed sum in an attempt to coerce a settlement of the overall claim.  Don’t listen to adjusters who tell you you have to sign a release or agreement for the entire amount before you get any money.  The insurer should promptly pay the amount not in dispute while efforts to resolve the amounts in dispute are ongoing.  Failure to do so may enable the policy holder to sue the insurance company for “bad faith.”

Pennsylvania has a specific law providing a right to sue insurance companies for “bad faith.”  The courts have defined “bad faith” as “any frivolous or unfounded refusal to pay the proceeds of a policy.”  A violation of the law may result in an award of punitive damages and attorney fees against the insurer in addition to the unpaid insurance proceeds.

New Jersey does not have a legislative law prohibiting “bad faith,” but its courts have allowed lawsuits against insurance companies in such circumstances. However, New Jersey will not find “bad faith” if the amount in dispute is “fairly debatable.”  New Jersey does not permit an award of punitive damages, “absent egregious circumstances,” or attorney fees. 

In my next blog, I’ll discuss home and business owners’ rights with regard to flood insurance and dealing with FEMA after Hurricane Sandy. 

Our Yardley, PA office will be happy to answer your questions regarding your homeowners or flood insurance coverage.  Call (215) 493-8287 or email scott@fegleylaw.com.

Is Your Insurance Company Causing A Hassle After The Flood?

The record rains of Hurricane Irene and the remnants of the tropical storm that followed a week later left tens of thousands with water in their basements (including yours truly).  Others like those living along the Delaware River in Yardley and Morrisville, PA or those living along major streams like the Neshaminy in Langhorne experienced far more devastating damage from the flood waters.  Unfortunately, many homeowners with standard insurance policies will not be covered for these losses.  Flood insurance is typically provided through a separate policy under Federal Emergency Management Association (FEMA) guidelines and is only available to persons living in designated flood areas.  Even a wet basement will not be covered unless the homeowner purchased a separate rider for overflow of sumps.

If you did have the foresight to purchase the insurance, then your insurance company owes you a duty of good faith to settle your claim quickly and fairly.  Covered costs should include steps taken to mitigate or prevent further loss, for example, hiring a remediation company to remove soaked wallboard and carpets before mold forms.  Hopefully, you photographed the water damage before, during and after any remediation and kept receipts for all expenses incurred.  Your insurance company may ask for proof of the damage and receipts to substantiate your claim.

If the insurance company fails to respond, repeatedly asks for resubmissions or otherwise causes unreasonable delay, or denies all or part of a claim without a reasonable basis, the insurance company may be liable to the homeowner for “bad faith.”  “Bad faith” is defined as the unreasonable refusal to pay the proceeds of an insurance policy.  Damages for “bad faith” may include the policy proceeds denied, additional damages caused by failure to pay the proceeds (for example, money spent on lodging where the homeowner could not complete repairs and live in the home), attorney fees, and even punitive damages in egregious cases. 

If your insurance company is holding out on your claim, attorney review of your insurance policy and the insurer’s conduct will educate you on the merits of your claim and a letter from the attorney may very well expedite resolution.  DO NOT simply settle for the insurance company’s first offer (unless, of course, it is for the policy limits).  I guarantee you they will not willingly offer you full compensation for your damages on the first request.

Of course, the best way to be prepared for a natural disaster is to know what your policy provides before the disaster occurs.  Consult your agent and increase your coverage if necessary.  Being informed of what is and is not covered, and how to present and prove your claim to the insurance company, will save you time and money once the waters recede.