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If an employee is injured on the job or in the course of employment, he or she may be entitled to workers’ compensation benefits under Georgia law. But what happens when an employee’s accident or injuries can be attributed to the negligence of someone other than the employer? While workers’ compensation does not preclude the employee from suing such persons, any subsequent award may be subject to “subrogation lien” filed by the employer.

Basically, a subrogation lien protects the employer’s ability to recover any money it paid out in workers’ compensation benefits. Georgia law establishes certain conditions for enforcing subrogation liens. The lien cannot “exceed the actual amount of compensation” paid to the employee, and the employer may not recover unless “the injured employee has been fully and completely compensated” for all “economic and non-economic losses.” It should also be noted if the employee fails to sue the negligent third party within one year, the employer (or its workers’ compensation insurer) may bring such a lawsuit itself.

Best Buy Co. v. McKinney

Georgia courts will not enforce subrogation liens that do not strictly comply with the law. For example, in a recent case the Georgia Court of Appeals rejected an employer’s subrogation lien because it failed to prove the employee had been “fully and completely compensated for his losses.”

The employee in this case was injured when he fell from a forklift at work. The fall caused “several facial bone fractures and brain damage.” The employee was “permanently disfigured” and continues to experience serious “cognitive problems.” Accordingly, the employer paid (and continues to pay) workers’ compensation benefits.

Two years after the accident, the employee sued a product liability claim against the manufacturers of the forklift. As permitted by Georgia law, the employer intervened to protect its potential subrogation lien. The victim and the liability defendants eventually settled for an undisclosed amount.

The employer then moved to enforce its subrogation lien. The employer noted it had paid over $173,000 in workers’ compensation benefits, which an expert witness argued “fully and completely compensated” the employee for his “head injuries.” Neither the trial judge nor the Court of Appeals agreed with this assessment.

The key problem, the Court of Appeals explained, was the employer failed to show what portion of the employee’s settlement was for “economic losses” rather than non-economic losses. This is critical because a subrogation lien may only be enforced against compensation for economic losses, and if the employer cannot identify which is which, the lien is unenforceable. (The settlement itself did not apportion damages between economic and non-economic.)

Additionally, the employer’s expert offered only “speculative” testimony which failed to consider the specific details of the employee’s injuries. Indeed, at trial the expert conceded he never interviewed the victim or reviewed his medical records. The expert merely opined the employee received more through settling his product liability case than a jury would likely have awarded at trial. This was not enough, the appeals court said, to prove the employee had been fully compensated.

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Premises liability refers to a property owner’s responsibility for any hazard on his or her land that causes injury to someone. In Georgia, premises liability is based on the owner’s “superior knowledge” of the hazard. That is, if the owner knew about a dangerous condition in advance and the injured person did not, the victim may sue for damages.

Forest Cove Apartments, LLC v. Wilson

Likewise, if the victim had “equal knowledge” of the hazard, Georgia courts will dismiss any premises liability claim. Here is a recent example. This case involves a contractor hired to repair several apartment units in an Atlanta public housing complex. Throughout 2011, the contractor and her crew repaired the joist supports under the subfloors of 26 apartments.

About a month after completing those repairs, the apartment manager asked the contractor to return and look at another unit where there was a reported mold problem. The contractor inspected the apartment, which she said “reeked of mold” and noted a seven-to-eight inch hole in the bathtub. Based on this assessment, the manager asked the contractor to inspect the subfloor underneath the bathroom floor. She did so the next day and discovered “horrendous” damage beyond the scope of what she initially expected.

While working in the damaged bathroom, the joist the contractor was standing on gave way, and she “fell into the downstairs kitchen onto an open hot oven, sustaining multiple injuries.” She subsequently filed a premises liability lawsuit against the owner and the manager of the apartment complex. Before the trial court, the defendants argued the contractor had “equal knowledge” of the defective floor joist and therefore they could not be held responsible. The judge rejected the defendants’ motion for summary judgment, but a three-judge panel of the Georgia Court of Appeals reversed, holding the contractor could not recover any damages.

The Court of Appeals agreed with the defendants the contractor “was aware of the hazardous condition of the floor joists before her fall,” as she had previously repaired the exact same defects in 26 other units in the defendants’ complex. She also personally inspected the unit where the accident occurred. Indeed, the court noted the contractor was speaking on the phone with the apartment just before the accident, informing him about the multiple problems with the unit. “Given this combined uncontroverted evidence,” the court said, “it is clear that [the contractor] had at least equal knowledge of the hazardous condition of the floor joists before she fell from the upstairs bathroom.”

The Court also added while an employer must generally keep his premises safe for employees, “an independent contractor is expected to determine for himself whether his place of employment is safe or unsafe, and ordinarily may not recover against the owner for injuries sustained in the performance of the contract.” Given the contractor here was responsible for removing damaged subfloors as part of their repair work, she alone was responsible for ensuring the safety of the work site.

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Georgia is a “comparative fault” state. This means in a personal injury lawsuit, any damages awarded a plaintiff must be reduced in proportion to his or her share of the liability. For example, Driver A and Driver B are in an automobile accident. Driver A sues Driver B for negligence, and a jury awards Driver A $10,000 in damages. If the jury also determines Driver A was 30 percent responsible for the accident, the judge would accordingly reduce the damage award from $10,000 to $7,000.

Bullock v. Volkswagen Group of America, Inc.

A federal judge in Columbus recently applied Georgia’s comparative fault rule to a product liability case. The plaintiffs are a husband and wife who were in a single-car accident. They alleged a defect in the vehicle’s turbocharger caused it to suddenly accelerate. The wife, who was driving at the time, said she lost control of the vehicle, which left the road and flipped over, seriously injuring her. Her husband also sought damages for his wife’s injuries under a “loss of consortium” claim. The couple named the manufacturers of the car and the turbocharger as defendants.

The case was tried before U.S. District Judge Clay D. Land in August of this year. On September 4, a jury awarded the plaintiffs a combined $7 million in damages: $6 million to the wife and $1 million to the husband. The jury further determined the manufacturers of the car and the defective turbocharger were 60 percent liable for the accident, while the wife was 40 percent responsible. (The two manufacturers conceded they were equally liable for any damages, so it was unnecessary for the jury to further apportion the 60 percent fault between them.)

One week after the jury’s verdict, Judge Land entered a final judgment reducing the damage awards by 40 percent. The plaintiffs argued Georgia law did not require such a reduction in a “strict liability product defect claim” like the one in this case. Judge Land noted this specific situation has not been previously addressed by the Georgia courts. But based on his interpretation of previous Georgia Supreme Court decisions, he concluded that court would likely hold the comparative fault rule applies in this case. “The comparative fault statute does not distinguish between causes of action based on the nature of the tortious conduct upon which the claim is based,” Judge Land said, adding there was “no exception” for strict liability on the part of a product manufacturer.

This not only applied to the wife’s injuries, but the husband’s loss of consortium despite the fact he was not at fault for the accident. Citing a prior decision by the Georgia Court of Appeals, Judge Land said “the comparative fault statute required a reduction in the passenger spouse’s damages even though the passenger spouse was not at fault and would have no tort claim against the driver spouse due to interspousal immunity.” Accordingly, the judge reduced the wife’s damage award from $7 million to $4.2 million, and the husband’s loss of consortium award from $1 million to $600,000.

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In personal injury cases, such as those arising from car or truck accidents, it may not be enough to prove the other driver was responsible. A victim may find it is impossible to recover damages even from an insured defendant if the insurer can prove the defendant did something which renders the policy inapplicable. In other words, a defendant’s own carelessness can leave a plaintiff with a worthless judgment.

Progressive Mountain Insurance Company v. Cason

Here is a recent example from a federal case involving a Georgia truck accident. The victim was driving his truck on Georgia Highway 232 when he was rear-ended by a second truck. As a result of the accident, the victim suffered a “severe concussion,” which caused him to miss several months of work. The victim claimed the second driver was at fault for the accident because he was speeding and did not look where he was going just before the collision occurred.

At the time of the accident, the second driver was driving his business partner’s truck. The partner also paid for the insurance on the vehicle. After the victim sued the second driver for negligence in federal court, the insurance company asked for a declaratory judgment holding it was not responsible for any judgment. (The second driver did not appear in court and therefore defaulted.)

The insurance policy contained language requiring the insured party to “promptly report each accident or loss even if an insured is not at fault.” Additionally, the insurance company must be informed “as soon as practicable” of any “accident, claim, or suit,” which may require coverage. In this case, the insurance company said it did not receive notice of the accident until 13 months after the accident, by which time the plaintiff had already filed his lawsuit. The insurer maintained this did not comply with the notice requirements of the policy, and therefore it was not required to defend or pay out any claim arising from the accident.

The courts agreed. In January, a federal judge in Augusta granted the insurance company’s request for a declaratory judgment against the accident victim. On September 15, the U.S. 11th Circuit Court of Appeals in Atlanta upheld the lower court’s decision. In an unsigned opinion, the appeals court said under Georgia law, “compliance with the ‘as soon as practicable’ language in a notice provision of an insurance policy is a condition precedent to coverage.” In other words, the victim cannot recover any damages through the insurer because the driver who caused the accident waited too long to report it.

Although the victim argued the language of the policy was ambiguous, the appeals court noted it was consistent with other Georgia cases. While an insured party has “some leeway in providing notice,” a delay of more than a few months may foreclose coverage altogether. In this case, the court said a 13-month delay was “unreasonable [] as a matter of law.” Moreover, it does not matter, at least under Georgia law, that the insurance company’s interests were not actually prejudiced by the delay.

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Many businesses and non-profit organizations have insurance policies that cover the negligent acts of their employees and agents. With respect to non-profits, such policies may also cover acts of unpaid volunteers working for the group. A federal judge in Valdosta recently considered how broadly to define “volunteer” in a case arising from a tragic automobile accident.

GuideOne Mutual Insurance Company v. Daniel

On Christmas Eve, 2009, a couple was traveling to see family when they got into an accident with another vehicle in Jeff Davis County. The husband was paralyzed from the navel down and suffered a host of additional serious injuries, including a concussion, six broken ribs, and lacerations to his spleen and liver. The couple subsequently filed a lawsuit in Georgia state court, alleging the second driver’s negligence caused the accident and his injuries.

The second driver was married to the pastor of a local Baptist church. The couple named the church as a defendant in their personal injury lawsuit, alleging the pastor’s wife “was an agent and/or employee of the Church” and acting within that capacity at the time of the accident. Accordingly, the couple also served the church’s insurance company, which provided a business auto policy.

The insurance company disclaimed coverage and filed a separate federal lawsuit against the couple. While the couple acknowledged the wife was not, in fact, an employee of the church, they maintained she was a “volunteer” covered under a separate endorsement contained in the policy. This endorsement said the insurer was liable for the negligent acts of “[a]nyone volunteering services to you…while using a covered ‘auto’ you do not own, lease, hire, rent or borrow in your business.”

The couple said this endorsement applied here because the pastor’s wife ran the church’s nursery as a volunteer. The insurance company replied she was not actually conducting any volunteer activities at the time of the accident—i.e., she was not traveling to or from the church. In response, the plaintiffs offered testimony from an insurance expert who said the volunteer endorsement was “ambiguous” by industry standards and should be interpreted to cover the pastor’s wife in this context.

On September 4, U.S. Senior District Judge Hugh Lawson granted summary judgment to the insurance company. He rejected the expert’s opinions regarding the interpretation of the volunteer rider, saying that was a matter for the court to decide for itself. And the court decided there was no ambiguity whatsoever in the insurance contract.

Under Georgia law, Judge Lawson explained, “liberal construction of an insurance policy cannot be used to create an ambiguity where none exists.” Here, the judge said the couple’s proposed interpretation of “volunteering services” would render the insurer liable for all accidents involving “any member of the Church who at any given time volunteered in the nursery, sang in the choir, taught Sunday School, or engaged in any other service to the Church under any and all circumstances.” Judge Lawson said that reading was “unreasonable” and not supported by either the insurance policy or Georgia law.

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Uninsured motorist coverage is designed to compensate car accident victims when the negligent parties lack sufficient insurance to cover all damages on their own. Typically a claimant must exhaust all other available insurance before receiving uninsured motorist benefits. But what happens when an insurance company represents both drivers in an accident, and the injured party has reason to believe the insurer is manipulating the situation to avoid paying a valid uninsured motorist claim? The Georgia Court of Appeals recently addressed such a case.

Chandler v. Liberty Mutual Fire Insurance Company

In April, 2010, a couple was traveling on a parkway with their daughter and another relative, the husband’s brother. While passing through a intersection with a green light, a drunk driver hit the family’s car, injuring all four occupants and damaging their vehicle. The wife in the injured vehicle and the negligent driver both had automobile insurance policies from the same company.

The attorney representing the couple and their daughter demanded the insurer pay $37,500 to settle all claims against the second driver, whose overall policy limit was $50,000 per accident. The wife further claimed $241,000 in benefits under her uninsured motorist policy. The husband’s brother negotiated a separate settlement with the insurance company.

The insurance company informed the couple the second driver’s insurance coverage had been exhausted and promised to pay the uninsured motorist claim. But the insurer later denied the wife’s uninsured motorist claim, saying the second driver’s policy had in fact not been exhausted. The couple then filed suit in Georgia state court against the insurer, arguing they were “purposely misled” by the insurer.

During pretrial discovery, the couple requested the insurer produce all documentation related to the husband’s brother’s settlement. The couple argued this evidence would held determine whether or not the second driver’s policy limit had been exhausted. The insurer objected, saying any information regarding the brother’s settlement was irrelevant. The judge reviewed the file, agreed there was nothing “discoverable,” and not only denied the couple’s motion but granted summary judgment to the insurer.

On appeal, the Georgia Court of Appeals reversed the trial court’s decision. By a 4-3 vote, the appeals judges said the trial court was wrong to deny the couple access to the brother’s settlement documents. “[W]e must construe the discovery procedure liberally in favor of supplying the [the plaintiffs] with the facts,” Judge M. Yvette Miller said, writing for the majority. Judge Miller said the trial court “took a narrow view of relevance,” and the Court of Appeals’ own review of the disputed file “shows that it contains evidence” the brother “settled for an amount sufficient to exhaust the limits of [the second driver’s] liability policy.” Because the couple was improperly denied access to this information, Judge Miller said the trial court was also premature in granting summary judgment to the insurance company.

Not all of the appeals judges agreed. Judge Stephen Louis A. Dillard, writing for the three dissenting judges, said “there was nothing included in these documents that appears reasonably calculated to lead to the discovery of admissible evidence.” And even if the plaintiffs had access to them, it would not prove the insurance company misled them.

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In many personal injury lawsuits, a victim’s ability to recover damages may be limited by the terms of any insurance policy covering the incident. For example, if you are injured on someone else’s property and bring a premises liability claim, the property owner’s insurance policy can dictate how much you are able to recover in court. That is why it is important to understand any exclusions or limitations on an insurance policy, and where necessary to seek judicial interpretation in order to protect your interests.

First Mercury Insurance Company v. Sudderth

Here is a recent case on point. In May 2010, a woman was at a bar in McDonough, Georgia, with some friends. While paying her tab, a fight broke out behind her, and she was hit by a chair thrown by one of the bar’s security guards. She experienced significant pain in her right foot and fell to the ground.

According to testimony from other eyewitnesses, the security guard was removing a drunk and disorderly patron from the bar. At one point, the guard placed the patron in a “bearhug” and dragged him across the floor of the bar. The patron then went “limp” as the guard ejected him from the bar. It was during this incident the guard threw the chair which inadvertently struck and injured the woman.

The woman subsequently sued the bar. This lawsuit was settled according to undisclosed terms. But a question remained as to the liability of the bar’s insurance carrier. The amount of the victim’s settlement was “contingent” on this issue.

The bar’s insurance policy provided a maximum of $2 million in coverage for any “bodily injury” sustained on the premises. But the policy also contained an endorsement which reduced the coverage limit to just $100,000 for any injury “based upon, related to, arising out of, directly or indirectly resulting from” an act of “assault and/or battery.” The insurance company argued this endorsement applied to the incident here, as the woman’s injuries resulted from the guard’s assault and battery on the unruly patron.

A federal judge agreed with the insurance company’s reading of the endorsement. The U.S. 11th Circuit Court of Appeals in Atlanta concurred. In an August 21 decision, the appeals court said there was no disputing the security guard “committed a battery,” which the insurance policy defined as “a harmful or offensive contact by a person or thing.” In this context, the court said, “A reasonable person would have found it offensive to be forcibly removed from the [bar] in the manner that [the security guard] removed [the patron].” Accordingly, any injury arising from the guard’s contact with the patron—even one to a third party—is subject to the lower policy limit.

The court went on to explain Georgia law did not bar the application of this restrictive endorsement. The victim argued “no reasonable person” would apply the endorsement to her situation. To the contrary, the court said, Georgia law requires strict adherence to the “unambiguous” terms of an insurance contract. Nor did the endorsement violate Georgia’s ban on “illusory” coverage—that is, the lower assault and battery limit did not render the policy’s overall coverage for bodily injury null and void.

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Under Georgia law, a landowner who invites others onto his or her property is liable for any injuries arising from the owner’s “failure to exercise ordinary care in keeping the premises and approaches safe.” This does not mean a property owner must anticipate every possible scenario where someone may be injured. Rather, a court will look at whether there is a “causal connection” between a landowner’s conduct and the injury alleged.

Allan v. Jefferson Lakeside, L.P.

In a recent case, the Georgia Court of Appeals examined the liability of a Marietta apartment complex owner for a tragic automobile accident which occurred on the property. The victim was a three-year-old boy who lived at the complex with his father. The child was riding in a rental car with his uncle, who was driving, and his father.

As the uncle drove out of the apartment complex, he pulled to the side of the property’s private access road to retrieve an item from the glove compartment. In doing so, the uncle accidentally moved his foot from the brake to the accelerator pedal, causing the vehicle to suddenly accelerate. As later described by the Court of Appeals, the “car struck the curb, went over it, the sidewalk, up 14 feet of slope, and down an additional 36 feet into the lake, where the car briefly floated.” Although the father and uncle managed to escape the sinking vehicle, they were unable to free the child, who died from drowning.

The child’s parents subsequently filed a wrongful death lawsuit against the apartment complex, alleging “their son died as a proximate result of [the landowner’s] negligence in failing to install a guardrail between the access road and the lake.” Before the trial court, the parents offered an expert witness who opined the failure to install a guardrail “violated applicable design standards and was the proximate cause of the child’s death.” Despite this expert’s testimony, the trial court granted the apartment complex’s motion for summary judgment.

The Court of Appeals affirmed the trial court. Judge Elizabeth L. Branch, writing for the appeals court, said there was no way the landowner could have reasonably foreseen this type of accident. She cited a number of Georgia cases where “a car has ended up in a place improbably far from where it was supposed to remain, with catastrophic results.” In none of these cases was the landowner deemed liable.

Judge Branch noted only in cases where “when a car may be anticipated to intrude upon a space sufficiently close to a place where invitees are expected to stand or sit,” may a jury hold the property owner liable. This was not such a case. As the judge explained, “it was not foreseeable that any driver on this access road would unintentionally accelerate from a full stop and cross a curb, a sidewalk, 14 feet up a slope, and 36 feet downward from the top of that slope before entering the lake at issue.”

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In Georgia, a dog owner can be held liable for an injury caused by his or her animal, provided the victim can demonstrate “the dog had the propensity to do the act that caused the injury and, if so … the owner had knowledge of that propensity.” This propensity test requires more than proof a dog exhibits generally “aggressive or menacing” behavior. Rather, as the Georgia Court of Appeals explained in a 1985 decision, “there should be an incident which would put a prudent man on notice to anticipate the event which occurred.”

Green v. Wilson

Recently, the judges on the Court of Appeals’ sparred over how narrowly to construe this “notice” requirement. The victim in this case worked as a house cleaner. The defendants owned a home cleaned by the victim and her co-workers. The homeowners also owned a border collie. According to the victim, it was normal procedure for her and the other house cleaners to “wait outside” until the owner locked the collie in a separate room. She testified the dog routinely “lunged, barked, and growled at the housecleaners.”

One day, the victim arrived at the defendant’s home to discover the dog had not been locked away, but rather was running freely in the front yard. The dog leaped over the fence and ran towards the victim. The victim “quickly jumped inside the van and shut the door as [the dog] barked, growled, and jumped against the van door.” During her escape, the victim “struck her arm against the van, sustaining an injury that required surgery.”

The victim later sued the homeowners for negligence. A trial judge granted summary judgment to the defendants, holding since there was no evidence the dog had ever chased anyone before, the homeowners were not “on notice.” The victim appealed.

In a July 16 decision, the Court of Appeals, by a vote of 4-3, reversed the trial court’s summary judgment and returned the case for trial. Judge Christopher J. McFadden, writing for the majority, said while the dog may not have previously chased anyone, the victim did present evidence of one prior incident where the dog “lunged at the housecleaners” as the owner held the animal back. Judge McFadden said there was “no meaningful distinction between this behavior and what happened on the day [the victim] was injured.” At the very least, there was a disputed question of fact as to whether a “prudent person” would realize the dog might chase someone if left unrestrained.

Judge Stephen Louis A. Dillard disagreed. Writing for himself and the other two dissenting judges, he argued the defendants could not be held responsible unless the victim provided evidence of “a prior incident of the same type as the incident at issue.” Judge Dillard said the victim and her co-workers admitted the dog had not chased them prior to this incident, and at best the animal’s behavior was “aggressive or menacing,” which falls below the standard for negligence required in Georgia.

It should be noted, however, the majority’s decision did not establish the defendants’ negligence. The victim will now simply have an opportunity to present her arguments to a jury, which may still ultimately determine the owners were not responsible.

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Thousands of Georgia residents take vacation cruises every year. You might wonder what happens if someone is seriously injured while at sea on such a cruise. For example, what legal standards apply when determining a ship operator’s negligence?

In a typical premises liability case—say, a slip and fall in a supermarket—the law of the state where the accident occurs govern any subsequent lawsuit. When a similar accident happens at sea, federal maritime law (sometimes called admiralty law) applies. In the United States, maritime law holds a ship owner owes a “duty of reasonable care” to protect its passengers from injury.

Sorrels v. NCL (Bahamas) Ltd.

Recently a federal appeals court in Atlanta held a woman injured in a slip-and-fall on a Norwegian Cruise Line (NCL) ship could proceed with her lawsuit against the company. The woman claimed she fractured her wrist after falling on the ship’s pool deck. The pool deck was wet due to rain earlier in the day. She subsequently sued NCL, alleging it “created a dangerous condition by failing to properly maintain the pool deck.”

Before the trial court, the plaintiff presented testimony from an expert witness who reviewed the “coefficient of friction” (COF) on the pool deck. The COF essentially measures “the degree of slip resistance” on a given surface. Here, the plaintiff’s expert determined the pool deck’s COF was “below minimum standard values that have long been accepted as required in order to classify a walkway surface as slip-resistant.” The expert further stated NCL should have known of the risk to passengers given prior accidents on the same pool deck.

The trial judge ruled the expert’s testimony inadmissible and granted summary judgment to NCL. First, the judge said the expert’s opinion that the pool deck failed to meet industry standards was unreliable, because those standards do not apply to cruise-ship passenger decks, only areas where crew members work. Second, the judge said the expert performed his COF tests on the pool deck “nearly a year and a half after the accident,” which did not mirror the conditions of the plaintiff’s fall. Finally, the judge rejected the expert’s view the uneven COF on the pool deck “will trap individuals via a false sense of security.”

On appeal, the U.S. 11th Circuit Court of Appeals said the trial judge abused his discretion to his first two findings. On the first point, the appeals court said it made no sense to apply two different standards to the same pool deck. In other words, both crew members and passengers travel throughout the ship; therefore the same COF standards should apply.

With respect to whether the expert’s test mirrored the conditions of the plaintiff’s accident, the appeals court said the evidence “was contrary to the district court’s finding.” Indeed, NCL acknowledged the pool deck was substantially the same as was at the time of the accident. And the appeals court said any “delay in viewing or inspecting the place where an accident took place normally goes to weight and not to admissibility.” So the expert can offer opinions to a jury based on his tests.

The 11th Circuit did not address the merits of the lawsuit. It only held the expert’s testimony was partially admissible, and as such, the trial court must now determine whether that evidence would allow a jury to conclude NCL “created a dangerous condition” on the pool deck.