Coverage Pointers - Volume XII, No. 23

Legislative and Regulatory Review
The Senate Insurance Committee met again this week and recommended a few bills be submitted to the full Senate.  There were two bills put on the Senate calendar as a result and both have been advanced to a third reading.
S4507 – Proposed by Senator Golden
This bill would add a new section to the Insurance Law and would provide insurers the ability to rescind or retroactively cancel a newly issued homeowners, personal auto, personal umbrella or commercial auto policy if the initial premium payment is not honored due to insufficient funds, the bank does not exist or the insured did not have authorization to use the account.  The cancellation would be retroactive to the inception date of the policy.  Additionally, if the insured injures a third party during the time the policy was in effect, the injured party’s recourse is with his or her own policy or the MVAIC as long as the injured party was not involved in any fraudulent activity.
According to the Sponsor’s Memorandum, Senator Golden introduced this legislation in an attempt to curb some of the fraud abuses the no-fault system is currently suffering from by removing the incentives for staged accidents.
S4847 – Proposed by Senator Klein
This proposed legislation grants the Superintendent of Financial Services the authority to investigate fraudulent activities such as drivers who drive with no insurance or who misrepresent their residence to obtain better rates.  This legislation would require insurers/self-insurers to report incidences of insurance fraud to the Superintendent of Financial Services. 
Reg. 68-C Claims for PIP Benefits
The original proposed changes contained the majority of the substantive changes, but there are a few to be highlighted in the amended proposed changes to this regulation.  The majority of the newly proposed changes are not substantive and only change the sentence structure.
65-3.2 Claims Practices PRINCIPLES

• 65-3.1 has been changed back to principles rather than goals the insurer must follow.
• Added that an insurer cannot request an EUO unless it has requested verification by other means and an EUO is still needed.
• Email and fax was added in the previous proposed change as a means to be used in the processing of a claim.  The previous provision stated “this” type of contact must be noted in the file.  The proposed change now state “All” contact must be noted in the claim file.
• An IME will be deemed a no-show if the applicant’s arrival is delayed for up to 30 minutes after the scheduled time for the examination.
• In the first draft “failure to follow the goals does not give rise to a private cause of action.”  THIS HAS BEEN REMOVED FROM THE PRPOSED REGULATION.

65-3.3 Notice of Claim

• Requirement to advise applicant of excuse of late submissions was removed from this section but §65-3.8 Payment or Denial of Claim (30 Day Rule).

65-3.5 Claims Procedure

• The time for forwarding forms required to process the initial claim was changed from 14 calendar days to 21 calendar days.
• An insurer must request other verification if needed within 21 calendar days of receipt of the form if it has not been previously provided.  Also, an insurer may request additional verification required to establish proof of claim within 21 calendar days of receipt of previously requested verification. 
• The requirement that the verification must be supplied to the insurer within 90 calendar days from the date of the request was removed.  Except, IME and EUO verification requests under the applicant’s or assignee’s control must be provided within 180 calendar days from the forwarding of the initial request or provide written proof justifying the inability to comply.
• The notice that must be sent detailing who verification is requested from and the nature of the request must be sent within 21 calendar days rather than 14 calendar days now.

IME Provisions

• IMEs can be scheduled no earlier than 15 calendar days from the forwarding of the first verification request scheduling the exam rather than between 10 to 30 days.
• As you know, the IME must be in a time and place reasonably convenient.  A reasonably convenient location is where the applicant resides, works, office for regular transaction of business or an alternate location that is agreed upon and documented.
• Reimbursement for documented wages and travel expenses incurred to attend an IME are not basic economic loss.  These expenses must be reimbursed not later than 30 days after the exam is completed or after receipt of the documentation of the expenses.
• An insurer must accommodate at least one reasonable request for an adjournment and reschedule the IME in each of the health service areas SO LONG AS THE REQUEST IS PROVIDED TO THE INSURER THE CALENDAR DAY PRIOR TO THE SCHEDULED EXAM.  The first proposal stated 48 hours.
• The previous draft had a provision that said IME request still does not pend the claim.  This provision has been REMOVED.

EUO Provisions

• May not require an EUO to establish proof of claim except based upon objective written standards.
• EUOS must be scheduled to be held within 15 to 45 calendar days rather than 10 to 30 calendar days from the forwarding of the first verification request scheduling the examination.
• The time, place and expense reimbursement provisions mirror the IME provision.  Also, the insurer must arrange for a translator upon written request.
• An insurer must accommodate at least one reasonable request for an adjournment and reschedule the exam SO LONG AS THE REQUEST IS PROVIDED TO THE INSURER THE CALENDAR DAY PRIOR TO THE SCHEDULED EXAM.  Previously this stated 48 hours prior.
• Insurer now has 21 calendar days rather than 14 calendar days to send notice of pending claim.
• Insurer may only request an EUO pertaining to the assignee ability to meet any state licensing requirements for good cause.
• Verification of a request for an EUO is deemed received by the insurer on the date receive signed EUO transcript but no later than 60 calendar days after the EUO was performed.
• Must provide notice to examined applicant or assignee that the transcript must be signed and returned within 60 days of receipt.  If it is not signed, it is deemed as though signed.  No changes may be made to the transcript more than 60 days after submission of the transcript to the examined applicant or assignee.
• Insurer is limited to one exam of an assignee to address the assignee’s ability to meet licensing requirements unless the insurer has a reasonable belief that new facts emerged concerning the assignee.
• Insurer does not need to prove the applicant or assignee’s no-show was willful or deliberate.

65-3.6 Follow Up Requirements

• The requirement that if verification is not supplied between 25 and 30 calendar days of the first request then the insurer must forward a second notice pending to the claim to the assignee for each claim submitted within 25 to 35 days of the first notice is DELETED.
• If the verification is an IME and applicant is a no-show for the first the second IME must be performed no earlier than 15 calendar days from the date of the follow-up notice scheduling unless it was adjourned upon mutual agreement.  The insurer must provide written notice of adjournment to the party to be examined.
• If the verification is an EUO and the party is a no-show, the second EUO must be held within 15 to 45 calendar days from the date of the follow-up notice scheduling the exam unless it was adjourned upon mutual agreement.  The insurer must provide written notice of adjournment to the party to be examined.

65-3.8 Payment or Denial of Claim (30 Day Rule)

• An insurer cannot issue a denial before receiving verification.  However, an insurer may issue a denial provided that the outstanding verification was requested form either the applicant or assignee more than 180 days from the date of the initial request.  This does not apply to IME or EUO requests.
• The copy of the IME or peer report must include a copy of any medical or scientific authority cited or an excerpt thereof.
• If the insurer denies a claim in whole or in part involving elements of basic economic loss or extended economic loss, the insurer must notify the applicant or assignee that proof of claim was received from on the prescribed denial of claim form.  Insurer only needs to include items material to the denied claim.

65-3.11 Direct Payments

• Unless there is a written agreement to the contrary, an assignee does not have any right to pursue direct payment from the assignor who did not use the prescribed form for assignment.

65-3.16 Measurement of No-Fault Benefits

• Within 21 calendar days of a submission by a dentist or plastic surgeon of a proposal for a course of treatment and charges will be reviewed by the insurer and must notify the provider whether or not payment will be made in accordance with the proposal.  This only applies in nonemergency situations where the treatment has covered expenses of $1000 or more.
• The previous draft required an insurer to estimate and pay the amount of unemployment benefits if the applicant, while disabled, is terminated from employment because of inability to work.  This provision is now DELETED.

65-3.19 Offsets

• No-fault coverage is afforded for injuries sustained by an independent livery driver if the independent livery base is a member of the independent livery driver benefit fund as set forth in Section 18-c of the Workers’ Compensation Law.
• If the independent livery base is not a member of the independent livery driver benefit fund, the applicant is not eligible to receive no-fault first-party benefits.  Workers’ compensation is then primary.

FIJAL’S FEDERAL FOCUS
Katherine A. Fijal
[email protected]

04/29/11         Fireman’s Fund Ins. Co. v. TD Banknorth Ins. Agency, Inc.
United States Court of Appeals for the Second Circuit – Connecticut
Does Connecticut’s Make Whole Doctrine Apply to Deductibles?
In 2005 Haynes Construction Company [“Haynes”] began work on a housing development and retained TD Banknorth [“TDB”] as its agent to procure insurance.  TDB procured a Builder’s Risk policy from Peerless Insurance and an Inland Marine Policy from Harford Insurance.  In February 2006, a fire destroyed a house being built on Lot 14 of the Haynes development.  Peerless denied coverage because Lot 14 was not listed in its Builder’s Risk policy – an error of omission by TDB.

TDB’s errors and omissions insurer was Fireman’s Fund.  Fireman’s Fund paid sums TDB was “legally obligated to pay as damages because of a negligent act, error or omission in the performance of TDB’s professional services.”  The E & O policy had a deductible of $150,000 per claim. 

In July 2006, TDB and Fireman’s Fund settled with Haynes for $354,000.  Fireman’s Fund paid $204,000 and TDB paid its deductible of $150,000.  Haynes assigned its rights against Peerless and Hartford to Fireman’s Fund and TDB collectively.

TDB and Fireman’s Fund as subrogee then filed suit against Peerless and Hartford for $354,000.  Peerless later paid $88,000 and Hartford paid $120,100 in exchange for complete releases.   TDB and Fireman’s Fund reserved all right that they may have against each other relating to the allocation of the settlement funds held in escrow.

In March 2008 Fireman’s fund commenced this action against TDB in the District of Connecticut, seeking a declaratory judgment that it was entitled to all of the escrow funds.  Fireman’s Fund claimed $10,000 in defense costs in addition to the $204,000 it paid Haynes.  TDB counterclaimed under Connecticut’s make whole doctrine seeking a declaration that it was entitled recover its $150,000 deductible from the escrow funds.

Both parties moved for summary judgment and the district court found that the subrogation clause in the E & O policy abrogated Connecticut’s make whole doctrine, and granted summary judgment to Fireman’s Fund.  The Second Circuit disagreed.

In reviewing Connecticut’s law on subrogation the Court determined that the right of legal or equitable subrogation is not a matter of contract; it does not arise from any contractual relationship between the parties, but takes place as a matter of equity, with or without an agreement to that effect.  Further noting that the equitable right of subrogation is subject to the “make whole doctrine,” which provides that the insurer may enforce its subrogation rights only after the insured has been fully compensated for all of its loss, the Court also stated that under Connecticut common law, the make whole doctrine is a default; however, the parties may abrogate it with express contract terms to that effect.

The Court held that the make whole doctrine, as part of the common law equitable right of subrogation, is not abrogated by generic or boilerplate subrogation clauses – if parties desire to contract around the make whole clause, they must state expressly that the doctrine is not to apply, silence is not enough.  In reviewing cases which have examined contracts and their boilerplate subrogation clauses the court found that taken together the cases suggest that a boilerplate subrogation clause does not displace the make whole doctrine; displacement requires wording that speaks specifically to the priority of recovery.  In addition, the court stated that even if the subrogation clause did abrogate Connecticut’s make whole doctrine, such abrogation would not apply to the $150,000 deductible.  The court noted that by its express terms, the E & O policy’s subrogation clause concerns only the sums that Fireman’s Fund pays on behalf of its insureds.  This allocation of rights does not apply to the $150,000 deductible which was paid by TDB and not by Fireman’s Fund.

The final argument posed by Fireman’s Fund was that the make whole doctrine did not apply to deductibles.  The court found that there were strong arguments on both sides of this issue.  While a straightforward reading of the make whole doctrine appears to admit no exception, the court found that Fireman’s Fund had a strong countervailing support for its position that deductibles are unaffected by the doctrine. The court noted that the equitable principle that underlies the make whole doctrine is that a loss should be borne according to the allocation of risk in the insurance contract; and, the risk of the deductible is specifically allocated to the policyholder, not the insurer.  The court also pointed out certain problems with applying the make whole doctrine to deductibles:  (1) an unhealthy incentive is created because the sooner an insurer pays its policyholder, the more it pays; and, (2) including deductible in the make whole doctrine also impairs the usefulness of deductibles in general.

Notwithstanding its analysis the Second Circuit found no statutory or precedential support for either Fireman’s Fund’s or TDB’s position on deductibles in Connecticut law.  The Court then certified the following question to the Connecticut Supreme Court – “Are insurance policy deductibles subject to Connecticut’s make whole doctrine?”

JEN’S GEMS
Jennifer A. Ehman
[email protected]

05/03/11         Liberty Ins. Underwriters, Inc. v. Perkins Eastman Architects,
Supreme Court, New York County
Architect’s Notice of Large Scale Problems at Construction Site Considered Sufficient Notice of “Circumstance” to Result in Coverage Under “Claims Made” Policy
This action arises out of the construction of a 700-room nursing home in Southampton, New York.  Perkins Eastman Architects (“Perkins”) was hired by the owner to design the project and render certain construction administration services. 

Liberty Insurance Underwriters, Inc. (“Liberty”) issued a “claims made” professional liability policy to Perkins for the period January 16, 2003 through February 16, 2004.  ACE American Insurance Company (“ACE”) then issued the next successive policy.  The Liberty policy contained a mechanism through which clams made after its term expired could also be covered.  The provision, entitled “Reporting of Circumstances That May Give Rise To A Claim,” provided that if Perkins became aware of a “circumstance” that could reasonably be expected to give rise to a “claim,” and if such was reported to Liberty in writing during the “policy year,” then any “claim” subsequently arising from such “circumstance” would be deemed to have occurred during the “policy year.” 

Three days before the Liberty policy expired, Perkins’ insurance broker faxed Liberty a notice that the contractor on the nursing home project was looking to pursue major claims and was alleging some design errors.  Liberty acknowledged receipt of this notice in a letter dated February 24, 2004, but indicated that within 30 days it needed more information concerning the factual particulars of the situation. 

Perkins responded on March 17, 2004 in a three-page letter explaining that the construction project was beset by problems.  The contractor had been terminated and reinstated twice and there were extensive delays.  The letter also indicated that the owner was experiencing legal and financial problems and was in negotiations with the contractor’s sureties to get them to honor the performance bond.  Perkins listed the owner, the contractor and the sureties as potential claimants.    

Thereafter, the owner declared the contractor to be in default and called on the sureties to take over completion of the project pursuant to their performance bond.  The sureties and the owners entered into a Takeover Agreement, which contained a non-conforming work notice log prepared by Perkins that purportedly identified all work performed by the contractor which was not in compliance.      

In June 2005, the sureties then sued the owner and Perkins in federal court.  They alleged that after commencing work on the project the sureties’ discovered substantial items of work performed or completed by the original contractor which were not in accordance with the contract, and which were not identified in the log.  As a result of these discoveries, the sureties were required to pay for extra work that was related to design changes. 

Upon receipt of the complaint, Perkins tendered the defense of the action to Liberty.  Liberty then advised that it considered the federal action to be a claim first made against Perkins in November 2005, after the policy period expired.  Specifically, it noted that the federal action involved the firm’s role as a contract administrator and did not relate to the potential design claims that were previously identified.  In other words, the claims arose out of the Takeover Agreement and Perkins’ conduct in monitoring and inspecting the original contractor’s work, not the actual original design.  After Liberty disclaimed coverage, Perkins tendered to ACE, its next carrier.

Perkins then brought this action for declaratory judgment.  In deciding the parties’ motions for summary judgment, the court determined that while Perkins may not have been aware of the exact claims that the sureties ultimately asserted in the federal action prior to the expiration of the Liberty Policy, the correspondence between Liberty and Perkins were clear that Liberty was given notice of events occurring during the policy year regarding problems with the project from which Perkins reasonably expected that a demand for money or damages could be made by the sureties.  Nothing limited the notice to design errors only.  The court reasoned that the fact that Perkins did not believe that any of its work on the nursing home project was deficient is not probative, since the issue is whether there was a reasonable belief that litigation would ensure, and not whether the lawsuit had merit.  Accordingly, the court determined that the Liberty policy was triggered and, in turn, the ACE policy was not.  

EARL’S PEARLS
Earl K. Cantwell
[email protected]         

IT’S ALL IN THE NAME

At times, the legal meaning and definition of various statutory and policy terms can define the parties’ rights and liabilities, and be determinative of legal claims.  That was so in the case of Royal Indemnity Company v. Tyco Fire Products, LP, 2011 Va. LEXIS 24 (January 13, 2011). 

The factual background was that a fire started on the exterior balcony of an apartment building on February 8, 2003.  Two exterior sidewall sprinkler heads installed on two separate balconies failed to activate, which permitted the fire to spread in the building, and to adjoining buildings.  Royal Indemnity sued Tyco, the manufacturer of the sprinkler heads, and Simplex, the installer of the sprinkler heads, after paying out on damage claims.  Royal essentially argued that the sprinkler heads failed to properly activate causing the damage, or at least more extensive damage, to the apartment complex. 

Tyco and Simplex filed motions asserting that the negligence-based causes of action were barred by a Virginia statute of repose (Virginia Code Section 8.01-250).  The trial court granted the motions ruling that the sprinkler heads were “ordinary building materials” under the five year statute of repose.  The Supreme Court of Virginia granted Royal an appeal.  The appeal succeeded in part, but was defeated in part.

The Virginia Supreme Court agreed with Royal Indemnity’s argument that the sprinkler heads were independent mechanical “equipment” and not “ordinary building materials.”  The statute of repose contains an exemption for manufacturers and suppliers of equipment and machinery.  The Virginia Court stated that the sprinkler heads were not essential structural components of buildings and other structures, but rather installed to serve a purpose unrelated to building construction.  The Court accepted the argument that an engineered sprinkler head is a piece of fire protection equipment.  Therefore, the statute of repose did not apply and on that issue the Virginia Supreme Court essentially agreed with Royal Indemnity.

Since the Court concluded that the sprinkler heads were equipment and not subject to the statute of repose, it next considered whether Simplex was a manufacturer or supplier of the sprinkler heads since the code exempts from its protection “manufacturers and suppliers of equipment or machinery”.  The Court agreed with Simplex’s argument that it was merely an installer of the sprinkler heads was thus entitled to statutory protection.  In essence, Tyco, the manufacturer of the fire protection sprinkler heads, fell outside of the protection of the Virginia statute since the sprinkler heads were “equipment.”  The installer of the sprinkler heads, Simplex, was protected by the statute since it was neither a “manufacturer” nor a “supplier”.

Royal Indemnity contains a number of lessons and instructive points:

• First, always look carefully at the applicable statute of limitations, and if there are any statutes of repose in the appropriate jurisdiction.

• Review the claim and orient your defense around relevant statutory definitions which, in the case, included whether the product was “equipment” or “ordinary building materials.”  Likewise, orient and revolve your defense around any operative policy definitions with respect to the goods, actions, or parties in question.

• Statutes and policies often contain inclusions or exclusions for certain classes of actors so it is important to define and distinguish who your client or insured may be within the statutory or policy scheme.  In this case, even though the Virginia Supreme Court found that the statute of repose was not operative, the installer was nonetheless able to get dismissed from the case because it was neither a “manufacturer” nor the “supplier” of the product. 

LIENING TOWER OF PERLEY
Michael F. Perley
[email protected]
Finally, a Safe Harbor?
U.S. Attorney for the Western District of New York Adopts Protocol for Medicare Set-Asides

The U.S. Attorney’s Office for the Western District of New York has adopted a Medicare Set-Aside protocol.  When we checked, we were told that this protocol is specific to the District and has not been adopted in other districts.  The driving force behind this is Assistant U.S. Attorney Robert G. Trusiak, who has been diligent in seeking enforcement of the Medicare Secondary Payer Act.  This protocol is limited to cases involving payments that exceed $350,000.  In addition, the protocol only applies to plaintiffs who are Medicare eligible at the time of the settlement.  In those circumstances it is the responsibility of the parties to make repayment for historical medical payments made by Medicare prior to the settlement.  These prior payments would be subject to the procurement costs as set forth in 42 CFR § 411.37(b).

Once a case meets that threshold, the following procedures follow with regard to the protocol:

• A joint application is prepared by the Medicare beneficiary, or his/her representative, and the primary plan (the insurance company).

• A request is filed with the Center for Medicare and Medicaid Services (CMS) to approve a Liability Medicare Set-Aside Arrangement (an LMSA) and no substantive response is received for 60 days from the date of the application.

• An affidavit is provided from the preparer (an outside vendor) of the LMSA that is true and correct based upon the Medicare beneficiary’s medical records and injuries being released as well as in conformance with the submission checklist for Workers’ Compensation Medicare Set-Asides as published by CMS.

• All documents are then filed with the U.S. Attorney.

Thereafter, the U.S. Attorney’s Office reviews the plan, requests additional information if necessary and, once satisfied, will issue a release for the Western District of New York that compromises the LMSA obligations related to the settlement, award or other payment, which we assume will be binding on the entire federal government.

According to its terms, the protocol may be withdrawn or used within the discretion of the United States Attorney’s Office for this District.

The issuance of this protocol reinforces our interpretation of liability carriers’ exposure for future medical expenses, namely, that the liability carriers, as a primary payer has an ongoing duty to protect the interests of Medicare for future medical payments.  We are aware that some disagree with this position; however, it appears that the United States Attorney has taken a position consistent with our prior opinions.

This protocol leaves many open areas.  It does not provide a safe harbor in cases where the amount of settlement is less than $350,000, nor does it provide any protection in cases where the plaintiff is not yet a Medicare beneficiary.  Both of these situations can result in exposure to liability carriers or defendants for failure to protect the interests of Medicare.  The fact the protocol is silent on these issues does not alter the obligation under the statute to consider the interests of Medicare in making any settlement or paying any judgment to a plaintiff or claimant.

We will monitor this situation to determine whether or not other districts in the federal system adopt similar protocols.  In the interim, we continue to urge our friends to act cautiously wherever there is a potential for future medical treatment extending to a time when the plaintiff or claimant would become Medicare eligible.

As always, if you have any questions, feel free to give me a call or drop me an e-mail at [email protected].

ACROSS BORDERS
Courtesy of the FDCC Website
www.thefederation.org

04/27/2011    AT&T Mobility LLC v. Concepcion
Supreme Court of the United States
The US Supreme Court Held that the Federal Arbitration Act Preempts a California Rule of Law that Arbitration Agreements Are Unconscionable and Unenforceable Unless They Provide for Class-wide Arbitration
In Laster v. AT&T Mobility, 584 F.3d 849 (9th Cir. 2009), cert. granted sub. nom AT&T Mobility v. Concepcion, 130 S. Ct. 3322 (2010), the plaintiffs had sought to maintain a class action on behalf of AT&T consumers who entered into agreements entitling them to "free" cell phones but who were subsequently charged sales taxes. Id. at 852.  AT&T moved to compel arbitration based on an arbitration clause contained in the consumer contract.  The District Court and the Ninth Circuit found the arbitration clause unconscionable under California law because it precluded classwide arbitration.  The Supreme Court, however, reversed the lower courts' decisions, holding that "[r]equiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA."  Concepcion thus establishes that the FAA prevents courts from refusing to enforce arbitration agreements merely because they preclude plaintiffs from proceeding as a class.
Submitted by: John R. Mitchell and Barbara A. Lum, Thompson Hine LLP

04/25/2011    Maryland Casualty Co. v. Acceptance Indemnity Ins. Co.
United States Fifth Circuit Court of Appeals
An Insurance Company Is Entitled to Recover a Pro-rata Share of Its Defense and Settlement Costs from Second Insurer That Denied Coverage to Their Common Insured, Even Though the Common Insured Had Been Fully Indemnified by the First Insurer
Plaintiff in underlying action brought suit against swimming pool company for negligent design and build out of pool. Pool company tendered defense to Maryland Casualty (1 policy) and Acceptance Indemnity (3 policies). Maryland agreed to defend but Acceptance denied coverage. Maryland settled the case for $590,000.00 in exchange for a full release for the insured. Maryland brought action in federal court seeking declaration that Acceptance had a duty to defend and indemnify the insured, and further sought its pro-rata share of defense costs and indemnity from Acceptance under theories of contribution, contractual subrogation and equitable subrogation. The district court found Acceptance had a duty to defend. It granted summary judgment in favor of Acceptance on the issue of contribution, but denied summary judgment on the subrogation claim. A jury found there was an “occurrence” and that Acceptance’s pro-rata share of the defense costs and indemnity was 75%.

The U.S. Circuit Court for the Fifth Circuit affirmed. The Texas Supreme Court previously held in the Mid-Continent case that one insurer could not recover against another insurer under theories of contractual or equitable subrogation where the common insured had been fully indemnified against its loss. Since the insurer stands in the shoes of its insured it had no contractual right to recover an additional pro-rata portion against the other insurer and could not assert subrogation rights against the other insurer since the insured had been fully indemnified and could not seek subrogation against the insurer itself. The Fifth Circuit rejected an overly broad view of Mid-Continent and held that Mid-Continent does not bar contractual subrogation merely because the insured has been fully indemnified. Further, Mid-Continent does not bar contractual subrogation where the insurer has denied coverage and has asserted its rights over the insured’s, leaving the insured not fully protected.
Submitted by: Ted L. Perryman, Roberts Perryman P.C., St. Louis, MO - Posted: 05/09/2011
REPORTED DECISIONS
Progressive Northeastern Ins. Co. v. Farmers New Century Ins. Co.

Appeal from an order and judgment (one paper) of the Supreme Court, Erie County (John A. Michalek, J.), entered May 27, 2010. The order and judgment, inter alia, granted the motion of defendant Farmers New Century Insurance Company and the cross motion of plaintiff for summary judgment.

CELLINO & BARNES, P.C., BUFFALO (GREGORY V. PAJAK OF COUNSEL), FOR DEFENDANT-APPELLANT.
RUPP, BAASE, PFALZGRAF, CUNNINGHAM & COPPOLA LLC, BUFFALO (ERIN L. CODY OF COUNSEL), FOR DEFENDANT-RESPONDENT.
KAPLAN, HANSON, MCCARTHY, ADAMS, FINDER & FISHBEIN, WILLIAMSVILLE (NICOLE B. PALMERTON OF COUNSEL), FOR PLAINTIFF-RESPONDENT.

It is hereby ORDERED that the order and judgment so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiff commenced this action seeking, inter alia, a declaration that it is not required to provide coverage to any of the defendants in connection with a one-vehicle collision. The vehicle involved was owned by defendant Megan R. Lindhurst, who had purchased an automobile insurance policy from defendant Farmers New Century Insurance Company (Farmers). Defendant James A. Blazina, who had purchased an automobile insurance policy from plaintiff, was a passenger in that vehicle. Contrary to the contention of Lindhurst on appeal, Supreme Court properly granted the respective motion of Farmers and the cross motion of plaintiff for summary judgment and declared, inter alia, that neither insurer was obligated to provide coverage for the collision. "[A]n issue decided in a criminal proceeding may be given preclusive effect in a subsequent civil action" (D'Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659, 664). As a result of the one-car collision in question, Blazina was convicted of, inter alia, criminal mischief in the fourth degree due to his actions in turning the steering wheel of the vehicle driven by Lindhurst when he had "no right to do so nor any reasonable ground to believe that he . . . ha[d] such right" (Penal Law § 145.00). Thus, the issues whether Blazina had a "reasonable belief" that he was entitled to use the vehicle, as required in order to qualify as an insured user under the Farmers policy, and whether he had "express or implied permission" to use the vehicle, as required in order to qualify for coverage under plaintiff's policy, have been conclusively resolved in the criminal proceeding with respect to both Lindhurst and Blazina (see generally D'Arata, 76 NY2d at 665). Contrary to Lindhurst's contention that plaintiff did not "definitively" disclaim coverage, we note that plaintiff was not required to provide "notice [of disclaimer] when there never was any insurance in effect" (Zappone v Home Ins. Co., 55 NY2d 131, 138). In any event, an insurer will not be estopped from disclaiming coverage where, as here, it timely "reserve[d] its right to claim that the policy does not cover the situation at issue, while defending the action" (O'Dowd v American Sur. Co. of N.Y., 3 NY2d 347, 355).
New York Marine and General Ins. Co. v. Sirius America Ins. Co.

Morris Duffy Alonso & Faley, New York, N.Y. (Iryna S. Krauchanka
and Andrea M. Alonso of counsel), for appellant.
Sliwa & Lane, Buffalo, N.Y. (Kevin A. Lane of counsel), for
respondents.

DECISION & ORDER
In an action, inter alia, for a judgment declaring that the defendant Sirius America Insurance Company is obligated to defend and indemnify the plaintiff Andresson & Bulgin Construction, Inc., and the defendant Jeffrey D. Gagliotti, doing business as Eminence Enterprises, in an underlying personal injury action entitled Petersen v Borrok, pending in the Supreme Court, Suffolk County, under Index No. 30513/05, the defendant Sirius America Insurance Company appeals from so much of an order of the Supreme Court, Suffolk County (Whelan, J.), entered May 28, 2010, as granted that branch of the plaintiffs' motion which was to compel it to respond to the plaintiffs' notice to produce dated January 6, 2010, insofar as the notice to produce sought disclosure of an agency agreement between it and nonparty UTC Risk Management Services, Inc.
ORDERED that the order is affirmed insofar as appealed from, with costs.
A party asserting that material sought in disclosure is privileged bears the burden of demonstrating that the material it seeks to withhold is immune from discovery (see Koump v Smith, 25 NY2d 287, 294; Bombard v Amica Mut. Ins. Co., 11 AD3d 647, 648; All Waste Sys. v Gulf Ins. Co., 295 AD2d 379, 380). Here, the defendant Sirius America Insurance Company (hereinafter the appellant) failed to meet its burden of establishing that the subject agency agreement between itself and nonparty UTC Risk Management Services, Inc., is privileged or otherwise exempt from discovery (see Diamond State Ins. Co. v Utica First Ins. Co., 37 AD3d 160, 161-162; Bertalo's Rest. v Exchange Ins. Co., 240 AD2d 452, 455). Accordingly, the Supreme Court properly granted that branch of the plaintiffs' motion which was to compel the appellant to respond to the plaintiffs' notice to produce dated January 6, 2010, insofar as it sought disclosure of the agency agreement.
Campoverde v. Fabian Builders, LLC

Farber Brocks & Zane, LLP, Mineola, N.Y. (William Brocks and
Sherri Pavloff of counsel), for third-party defendant-appellant.
Maroney O'Connor, LLP, New York, N.Y. (Ross T. Herman of
counsel), for defendant third-party
plaintiff-respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, and a third-party action, inter alia, for a judgment declaring that the third-party defendant Utica First Insurance Company is obligated to defend and indemnify the defendant third-party plaintiff, Fabian Builders, LLC, in the main action, the third-party defendant Utica First Insurance Company appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Martin, J.), dated November 25, 2009, as denied that branch of its motion which was for summary judgment declaring that it is not obligated to defend and indemnify the defendant third-party plaintiff, Fabian Builders, LLC, and the defendant third-party defendant, AG Masonry Corp., in the main action.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, that branch of the motion of the third-party defendant Utica First Insurance Company which was for summary judgment declaring that it is not obligated to defend and indemnify the defendant third-party plaintiff Fabian Builders, LLC, and the defendant third-party defendant, AG Masonry Corp., in the main action is granted, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that the third-party defendant Utica First Insurance Company is not so obligated.
The third-party defendant Utica First Insurance Company (hereinafter Utica) issued an insurance policy to the defendant third-party defendant, AG Masonry Corp. (hereinafter AG Masonry), that contained an exclusion for bodily injury to any employee of any contractor hired by or for any insured arising out of and in the course of the employee's employment for that contractor. The defendant third-party plaintiff, Fabian Builders, LLC (hereinafter Fabian), then hired AG Masonry to perform work on a construction site by way of a written contract, which required AG Masonry to name Fabian as an additional insured under its insurance policy. The plaintiff commenced this action against Fabian and AG Masonry to recover damages for personal injuries he allegedly sustained while working on the project for a subcontractor hired by either Fabian or AG Masonry. Utica denied coverage to AG Masonry, inter alia, on the ground that the employee exclusion precluded coverage. Utica denied coverage to Fabian, among other things, on the same ground.
Fabian then commenced a third-party action, inter alia, for a judgment declaring that Utica is obligated to defend and indemnify it in the main action as an additional insured of the policy issued to AG Masonry. Utica moved, among other things, for summary judgment declaring that it is not obligated to defend or indemnify Fabian and AG Masonry in the plaintiff's action. In the order appealed from, the Supreme Court, inter alia, denied that branch of Utica's motion which was for summary judgment declaring that it was not obligated to provide such a defense and indemnification. We reverse the order insofar as appealed from.
"An insurer's duty to defend is broader than its duty to indemnify, such that an insurer may be obligated to defend its insured even if, at the conclusion of an underlying action, it is found to have no obligation to indemnify its insured" (Global Constr. Co., LLC v Essex Ins. Co., 52 AD3d 655, 655-656; see Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137; Franklin Dev. Co., Inc. v Atlantic Mut. Ins. Co., 60 AD3d 897, 900). "An insurer must defend its insured whenever the allegations of a complaint in an underlying action suggest . . . a reasonable possibility of coverage'" (Global Constr. Co., LLC v Essex Ins. Co., 52 AD3d at 656, quoting BP A.C. Corp. v One Beacon Ins. Group, 8 NY3d 708, 714; see Automobile Ins. Co. of Hartford v Cook, 7 NY3d at 137).
The duty to defend an insured is not triggered, however, "when the only possible interpretation of the allegations against the insured is that the factual predicate for the claim falls wholly within a policy exclusion" (Howard & Norman Baker, Ltd. v American Safety Cas. Ins. Co., 75 AD3d 533, 534; see Automobile Ins. Co. of Hartford v Cook, 7 NY3d at 137; Global Constr. Co., LLC v Essex Ins. Co., 52 AD3d at 656). "An exclusion from coverage must be specific and clear in order to be enforced' (Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311), and an ambiguity in an exclusionary clause must be construed most strongly against the insurer" (Guachichulca v Laszlo N. Tauber & Assoc., LLC, 37 AD3d 760, 761; see Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398; Howard & Norman Baker, Ltd. v American Safety Cas. Ins. Co., 75 AD3d at 534). "However, the plain meaning of a policy's language may not be disregarded to find an ambiguity where none exists" (Howard & Norman Baker, Ltd. v American Safety Cas. Ins. Co., 75 AD3d at 534; see Bassuk Bros. v Utica First Ins. Co., 1 AD3d 470, 471).
Here, the plain meaning of the employee exclusion invoked by Utica is that the policy does not provide coverage for damages arising out of bodily injury sustained by an employee of any contractor hired by or for any insured in the course of the employee's employment (see Utica First Ins. Co. v Santagata, 66 AD3d 876, 878-879). In the plaintiff's complaint in the main action, he alleged that he sustained bodily injuries in the course of his employment for Tahoe Contracting Corp., an entity he alleged was hired to perform work on the construction project by either Fabian, an additional insured under the policy, or AG Masonry, the named insured of the policy. The only possible interpretation of these allegations is that the factual predicate for the plaintiff's claim falls wholly within the employee exclusion (see Howard & Norman Baker, Ltd. v American Safety Cas. Ins. Co., 75 AD3d at 534; Global Constr. Co., LLC v Essex Ins. Co., 52 AD3d at 656; Bruckner Realty, LLC v County Oil Co., Inc., 40 AD3d 898, 900; Physicians' Reciprocal Insurers v Giugliano, 37 AD3d 442, 444). In opposition to Utica's prima facie establishment of its entitlement to judgment as a matter of law, Fabian failed to raise a triable issue of fact. Accordingly, the Utica policy precludes coverage to Fabian and AG Masonry for the injuries allegedly sustained by the plaintiff, and the Supreme Court should have granted that branch of Utica's motion which was for summary judgment declaring that it is not obligated to defend and indemnify Fabian and AG Masonry in the main action.
Utica's remaining contention is not properly before the Court (see Katz v Katz, 68 AD2d 536, 542-543) and, in any event, has been rendered academic in light of our determination.
Since the third-party action is, in part, a declaratory judgment action, we remit the matter to the Supreme Court, Kings County, for the entry of a judgment declaring that Utica is not obligated to defend or indemnify Fabian and AG Masonry in the main action (see Lanza v Wagner, 11 NY2d 317, appeal dismissed 371 US 74, cert denied 371 US 901; Hanson v Turner Constr. Co., 70 AD3d 641, 643).
In the Matter of Travco Insurance Company v. Schwartz

Karen C. Dodson, New York, N.Y. (Michael L. Rappaport of
counsel), for appellant.
Dell, Little, Trovato & Vecere, LLP, Bohemia, N.Y. (Keri A.
Wehrheim of counsel), for respondents-
respondents.

DECISION & ORDER
In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration of a claim for supplementary underinsured motorist benefits, the petitioner appeals, as limited by its brief, from (1) so much of an order of the Supreme Court, Rockland County (Garvey, J.), entered February 22, 2010, as denied those branches of its petition which were to permanently stay arbitration or to temporarily stay arbitration proceedings pending a hearing to determine whether the claimants provided timely notice of their claims to the petitioner, and (2) so much of an order of the same court entered July 8, 2010, as denied that branch of its motion which was for leave to renew those branches of its petition which were to permanently stay arbitration or to temporarily stay arbitration proceedings pending a hearing to determine whether the claimants provided timely notice of their claims to the petitioner.
ORDERED that the appeal from so much of the order entered February 22, 2010, as denied that branch of the petition which was to temporarily stay arbitration proceedings pending a hearing is dismissed as academic in light of our determination of the appeal from so much of the order entered July 8, 2010, as denied that branch of its motion which was for leave to renew that branch of the petition; and it is further,
ORDERED that the order entered February 22, 2010, is affirmed insofar as reviewed; and it is further,
ORDERED that the order entered July 8, 2010, is modified, on the law, by deleting the provision thereof denying that branch of the petitioner's motion which was for leave to renew that branch of its petition which was to temporarily stay arbitration proceedings pending a hearing to determine whether the claimants provided timely notice of their claims to the petitioner, and substituting therefor a provision granting that branch of the motion, and upon renewal, granting that branch of the petition which was to temporarily stay arbitration proceedings pending a hearing to determine whether the claimants provided timely notice of their claims to the petitioner; as so modified, the order entered July 8, 2010, is affirmed insofar as appealed from, and the matter is remitted to the Supreme Court, Rockland County, for further proceedings consistent herewith; and it is further,
ORDERED that one bill of costs is awarded to the petitioner.
In the first instance, the Supreme Court properly denied those branches of the petition which were to permanently stay arbitration of the claim of the respondents Joann Schwartz and Maurice Schwartz (hereinafter together the respondents) for supplemental underinsured motorists benefits or to temporarily stay arbitration proceedings pending a hearing to determine whether the respondents provided timely notice of their claims to the petitioner. Contrary to the petitioner's contention, the respondents met their burden of establishing that they complied with their obligation under the policy to give the petitioner notice of the claim "[a]s soon as practicable" by submitting the uncontroverted affirmation of their counsel stating that the respondents were unaware of the seriousness of their injuries before November 19, 2007, when the respondent Joann Schwartz underwent knee surgery (see Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, 93 NY2d 487, 492-493; Matter of Tri-State Consumer Ins. Co. v Furboter, 71 AD3d 682; Matter of Progressive N. Ins. Co. v Sachs, 50 AD3d 803, 804).
However, in support of its motion, inter alia, for leave to renew, the petitioner submitted medical records, obtained from the respondents through discovery after the first order was entered, which raised a triable issue of fact regarding whether the respondents knew or should have known of the severity of seriousness of the their injuries at an earlier date, and thus, whether the respondents' notice was indeed timely (see CPLR 2221[e]; Matter of Continental Ins. Co. v Marshall, 12 AD3d 508; Matter of Blue Ridge Ins. Co. v Cook, 301 AD2d 598, 599; Matter of Nationwide Mut. Ins. Co. v DiGregorio, 294 AD2d 579, 580-581). Accordingly, the Supreme Court should have granted that branch of the petitioner's motion which was for leave to renew that branch of the petition which was to temporarily stay arbitration pending a hearing to determine whether the claimants provided timely notice of their claims to the petitioner, and upon renewal, granted that branch of the petition. Accordingly, the matter must be remitted to the Supreme Court, Rockland County, for a hearing to determine whether the respondents provided timely notice of their claims.
Vela v. Tower Insurance Company of New York

Max W. Gershweir, New York, N.Y. (Joshua L. Seltzer of counsel),
for appellant.
Craig A. Blumberg, New York, N.Y., for respondent.

DECISION & ORDER
In an action to recover damages for breach of a homeowner's insurance policy, the defendant appeals from so much of an order of the Supreme Court, Suffolk County (Cohen, J.), entered December 14, 2009, as denied its motion for summary judgment dismissing the complaint.
ORDERED that the order is reversed insofar as appealed from, with costs, and the defendant's motion for summary judgment dismissing the complaint is granted.
The defendant, Tower Insurance Company of New York (hereinafter Tower), issued a homeowner's policy (hereinafter the policy) to the plaintiff for a residential property in Central Islip (hereinafter the premises), which she purchased in December 2006. The policy contained a "residence premises" provision, pursuant to which coverage was provided for a one- or two-family dwelling "where you [meaning the insured] reside and which is shown as the residence premises' in the Declarations." When the premises sustained water damage in the sum of approximately $228,000, Tower disclaimed coverage on the ground, inter alia, that the plaintiff never resided at the premises. Thereafter, the plaintiff commenced this action to recover damages for breach of the policy. Tower moved for summary judgment dismissing the complaint, and the Supreme Court, among other things, denied the motion. Tower appeals, and we reverse the order insofar as appealed from.
The Supreme Court erred in denying Tower's motion for summary judgment dismissing the complaint. "The standard for determining residency for purposes of insurance coverage requires something more than temporary or physical presence and requires at least some degree of permanence and intention to remain'" (Government Empls. Ins. Co. v Paolicelli, 303 AD2d 633, 633, quoting New York Cent. Mut. Fire Ins. Co. v Kowalski, 195 AD2d 940, 941; see Fennell v New York Cent. Mut. Fire Ins. Co., 305 AD2d 452, 453). Tower demonstrated its prima facie entitlement to judgment as a matter of law by submitting, among other things, the policy and its declaration page indicating that the "residence premises" were the premises at issue herein, along with the plaintiff's policy application in which she asserted that the premises were owner-occupied, and her deposition testimony that the premises had been unoccupied since the closing and that, when the water damage occurred, she, her husband, and their children were living at another property in Queens County, which was owned by her husband.
In opposition, the plaintiff failed to raise a triable issue of fact (see Megafu v Tower Ins. Co. of N.Y., 73 AD3d 713). Contrary to her contention, the policy's "residence premises" provision is not ambiguous (see Marshall v Tower Ins. Co. of N.Y., 44 AD3d 1014, 1015) and, therefore, must be accorded its plain and ordinary meaning (see NIACC, LLC v Greenwich Ins. Co., 51 AD3d 883, 884). The plaintiff's mere intention to reside at the premises was insufficient to satisfy the policy's "residence premises" requirement. Moreover, the affidavits of the plaintiff and her husband stating that they slept at the premises many nights while making repairs to the premises must be viewed as presenting a feigned factual issue designed to avoid the consequences of the plaintiff's earlier admission in her deposition testimony that the premises were unoccupied at all times from the date of the closing to the date of the loss (see Buziashvili v Ryan, 264 AD2d 797, 798). Further, contrary to the plaintiff's contention, the policy's "residence premises" provision was not rendered ambiguous by language in other policy provisions pertaining to circumstances where the residence premises were not the insured's principal place of residence, or where the insured was required to maintain heat and shut off the water when the residence premises were unoccupied.
In view of our determination, we need not reach Tower's remaining contention.
Boyle v. Brennan

Scalzi & Nofi, PLLC, Hicksville, N.Y. (Vincent J. Nofi for
counsel), for appellant.
Silverstein & Kahn, Huntington, N.Y. (Ira Kahn and Larry
Warshaw of counsel), for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Suffolk County (Pitts, J.), dated March 2, 2010, which denied his motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with costs.
The defendant failed to meet his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendant claimed that the plaintiff's complaints were solely caused by pre-existing injuries. However, the defendant failed to submit any medical evidence, based on examinations of the plaintiff conducted after the subject accident, to demonstrate that the plaintiff's complaints did not constitute serious injuries or were not causally related to the subject accident (see generally Dufel v Green, 84 NY2d 795, 798). Consequently, the defendant's moving papers did not establish a prima facie showing of entitlement to judgment as a matter of law (see generally Alvarez v Prospect Hosp., 68 NY2d 320; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851; Zuckerman v City of New York, 49 NY2d 557).
Since the defendant did not sustain his prima facie burden, it is unnecessary to determine whether the papers submitted by the plaintiff in opposition were sufficient to raise a triable issue of fact (see Bright v Moussa, 72 AD3d 859, 860; Menezes v Khan, 67 AD3d 654, 655).
Jung Hyun Yuk v. Liang Chen

Cheven Keely & Hatzis, New York, N.Y. (William B. Stock of
counsel), for respondent Liang Chen.

DECISION & ORDER
In an action to recover damages for personal injuries and injury to property, the plaintiff appeals, as limited by her brief, from so much of an order of the Supreme Court, Queens County (Rosengarten, J.), dated February 9, 2010, as granted that branch of the motion of the defendant Liang Chen, joined by the defendant Rachel Ingraham, which was for summary judgment dismissing the first cause of action insofar as asserted against each of them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed insofar as appealed from, on the law, with one bill of costs, and that branch of the motion of the defendant Liang Chen, joined by the defendant Rachel Ingraham, which was for summary judgment dismissing the first cause of action insofar as asserted against each of them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) is denied.
The plaintiff alleged, inter alia, that she sustained personal injuries when her motor vehicle was struck by motor vehicles separately owned and operated by the defendants.
The defendants satisfied their burden of establishing, prima facie, that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). However, in opposition, the plaintiff raised a triable issue of fact by submitting reports from doctors in admissible form attesting that she had contemporaneous and recent limitations that resulted from trauma causally related to the subject accident (see Fraser-Baptiste v New York City Tr. Auth., 81 AD3d 878). Accordingly, the Supreme Court erred in awarding summary judgment to the defendants dismissing the first cause of action insofar as asserted against each of them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Benitez v Lashnitz, 70 AD3d 879).
Mitchell v. Casa Redimix Concrete Corp.

Camacho Mauro & Mulholland, LLP, New York, N.Y. (Kathleen
Mulholland and Peter J. Lo Polo of counsel), for appellants Casa
Redimix Concrete Corporation and Robert J. Nicodemo.
Cheven, Keely & Hatzis, New York, N.Y. (William B. Stock of
counsel), for appellants Jimmie J. Buie
and Zepora Meadows.
Lozner & Mastropietro (Pollack, Pollack, Isaac & DeCicco,
New York, N.Y. [Dean G. Delianites and
Brian J. Isaac], of counsel), for
respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendants Casa Redimix Concrete Corporation and Robert J. Nicodemo appeal, and the defendants Jimmie J. Buie and Zepora Meadows separately appeal, from an order of the Supreme Court, Kings County (Solomon, J.), dated February 25, 2010, which denied their separate motions for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is affirmed, with one bill of costs.
While we affirm the order appealed from, we do so on a ground other than that relied upon by the Supreme Court. Contrary to the Supreme Court's determination, the defendants, who relied on the same submissions, met their prima facie burdens of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957; see also Kearse v New York City Tr. Auth., 16 AD3d 45, 51-52).
However, in opposition, the plaintiff raised a triable issue of fact as to whether he sustained a serious injury to his lumbar and/or cervical spine under the permanent consequential limitation of use and/or the significant limitation of use categories of Insurance Law § 5102(d) as a result of the subject accident (see Dixon v Fuller, 79 AD3d 1094; Gussack v McCoy, 72 AD3d 644; Casiano v Zedan, 66 AD3d 730; Ortiz v Zorbas, 62 AD3d 770). The plaintiff also provided an adequate explanation for the gap in his treatment history (see Pommells v Perez, 4 NY3d 566, 577; see also Gaviria v Alvardo, 65 AD3d 567).
Rovelo v. Volcy

Richard T. Lau & Associates, Jericho, N.Y. (Kathleen E. Fioretti of
counsel), for appellant.
Siben and Siben, LLP, Bay Shore, N.Y. (Alan G. Faber of counsel),
for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the defendant Rolande Volcy appeals, as limited by his brief, from so much of an order of the Supreme Court, Suffolk County (Costello, J.), dated September 22, 2010, as denied his motion for summary judgment dismissing the complaint insofar as asserted against him on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, the motion of the defendant Rolande Volcy for summary judgment dismissing the complaint insofar as asserted against him is granted and, upon searching the record, summary judgment is awarded to the defendant Robert M. Galasso, Jr., dismissing the complaint insofar as asserted against him.
The appellant met his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition thereto, the plaintiff failed to raise a triable issue of fact.
The plaintiff alleged that she sustained a permanent consequential limitation of use of a body organ or member and/or a significant limitation of use of a body function or system, as set forth in Insurance Law § 5102(d). "To establish that she sustained an injury that falls within either of these categories of serious injury, the plaintiff was required to show the duration of the alleged injury and the extent or degree of the limitations associated therewith" (Ferraro v Ridge Car Serv., 49 AD3d 498, 498). Moreover, "any subjective complaints of pain and limitation of motion must be substantiated by verified objective medical findings based on recent examination of the plaintiff" (Young v Russell, 19 AD3d 688, 689). Here, while the plaintiff submitted medical evidence of contemporaneous examinations in which significant limitations in cervical and lumbar ranges of motion were noted by her treating chiropractor and physician, she failed to proffer any recent medical evidence regarding any range-of-motion limitations in her spine (see Pierson v Edwards, 77 AD3d 642, 643-644; Mejia v DeRose, 35 AD3d 407; Young v Russell, 19 AD3d at 689, Silkowski v Alvarez, 19 AD3d 476). Accordingly, in the absence of recent findings of range-of-motion limitations, the plaintiff failed to meet her burden in opposing the appellant's showing of prima facie entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d 320), and the Supreme Court should have granted the appellant's motion for summary judgment dismissing the complaint insofar as asserted against him.
In addition, the defendant Robert M. Galasso, Jr. (hereinafter Galasso), separately moved for summary judgment dismissing the complaint insofar as asserted against him on the same ground as that on which the appellant moved for summary judgment. Although Galasso's motion was denied, he did not appeal from the order. "Nonetheless, this Court has the authority to search the record and award summary judgment to a nonappealing party with respect to an issue that was the subject of the motion before the Supreme Court" (Rivera v Bushwick Ridgewood Props., Inc., 63 AD3d 712, 714; see Belafrikh v Tarzan Cab Corp., 69 AD3d 777, 778; Colon v Vargas, 27 AD3d 512, 514). Upon searching the record, we award summary judgment to Galasso dismissing the complaint insofar as asserted against him on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see CPLR 3212[b]; McIntosh v O'Brien, 69 AD3d 585, 588).
Madera v. Gressey

Raymond Schwartzberg & Associates, PLLC., New York
(Raymond B. Schwartzberg of counsel), for appellant.
Law Office of Steven I. Lubowitz, Scarsdale (Susan I. Lubowitz
of counsel), for Heidi A. Gressey, respondent.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for David Perez, respondent.
Mead, Hecht, Conklin & Gallagher, LLP., Mamaroneck
(Elizabeth M. Hecht of counsel), for Juan Cerda, respondent.
Order, Supreme Court, Bronx County (Lucindo Suarez, J.), entered December 29, 2009, which granted the motion of defendant David Perez, and the cross-motions of defendants Juan Cerda and Heidi Gressey, for summary judgment dismissing plaintiff's complaint based on the failure to establish a serious injury under Insurance Law § 5102, unanimously affirmed, without costs.
Defendants established their entitlement to judgment as a matter of law. Defendants submitted, inter alia, the affirmed reports of a neurologist, a radiologist and an orthopedist, who, based upon examinations of plaintiff and her medical records, all concluded that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
In opposition, plaintiff failed to raise a triable issue of fact. There was no objective medical proof of injury to the lumbar spine and right shoulder. Notwithstanding the arguably positive MRI report for the cervical spine, there were no objective findings to demonstrate any initial range-of-motion restrictions on plaintiff's cervical and lumbar spine or her shoulder, or any explanation for their omission (see Thompson v Abbasi, 15 AD3d 95, 98 [2005]). Plaintiff provided conflicting explanations for the four-year cessation of treatment.
Plaintiff's serious injury claim based on an alleged inability to engage in substantially all her daily activities for 90 of the first 180 days post-accident was refuted by her own testimony and bill of particulars. Plaintiff testified that she was only confined to bed for four days, and her bill of particulars alleged "several days" of confinement (see Williams v Baldor Specialty Foods, Inc., 70 AD3d 522 [2010]). Plaintiff further testified that she was thereafter capable of doing all of her "things."
In re Travelers Insurance Company v. Rogers

Paul Ajlouny & Associates, P.C., Garden City (Neil Flynn of
counsel), for appellants.
Law Offices of James J. Toomey, New York (Louis C.
Annunziata of counsel), for Travelers Insurance Company, respondent.
Morris Duffy Alonso & Faley, New York (Iryna S. Krauchanka
of counsel), for Maryland Insurance Company and Donald
Castgelton Sotelo, respondents.
Order, Supreme Court, New York County (Eileen A Rakower, J.), entered July 19, 2010, denying vacatur of an order, same court and Justice, entered January 8, 2010, which granted the petition of Travelers Insurance Company to permanently stay arbitration of an uninsured motorist claim, unanimously reversed, on the law and on the facts, with costs, the January 8, 2010 order is vacated, and the matter remanded to the Supreme Court for proceedings consistent with this order.
Supreme Court abused its discretion in refusing to vacate its prior order granting a permanent stay of arbitration of respondents Rogers and Westwater's uninsured motorist claim, which was granted upon their failure to appear at the petition hearing or to submit papers in opposition. Vacatur should have been granted on the ground of "fraud, misrepresentation, or other misconduct of an adverse party" (CPLR 5015[a][3]). A review of the record in this case reveals several potential instances of intentional and material misrepresentations of fact by petitioner, which, at least in part, may have formed the basis of Supreme Court's decision and order to permanently stay arbitration. Hence, it was an abuse of discretion to conclude that the failure to proffer a reasonable excuse precluded relief pursuant to CPLR 5015(a)(3), since that section does not require such a showing (cf. CPLR 5015 [a] [1]; see Shouse v Lyons, 4 AD3d 821, 822 [2004]). To the extent that some of respondents' allegations of fraud, misrepresentation or other misconduct are not conclusively established by the evidence in the record, they present issues of fact which should not be determined without holding a hearing (Readick v Readick, 80 AD3d 512, 513 [2011]; see also Tonawanda Sch. Emples. Fed. Credit Union v Zack, 242 AD2d 894, 894-95 [1997]).
Waldon v. New York Central Mutual Insurance Company

Calendar Date: February 17, 2011
Before: Peters, J.P., Lahtinen, Malone Jr., Kavanagh and Garry, JJ.

DeGraff, Foy & Kunz, L.L.P., Saratoga Springs
(Christine M. Carsky of counsel), for appellants.
Boeggeman, George & Corde, P.C., Albany (Cynthia
Dolan of counsel), for New York Central Mutual Fire Insurance
Company, respondent.
Keidel, Weldon & Cunningham, White Plains
(Stephen C. Cunningham of counsel), for Knox Insurance Agency,
Inc. and another, respondents.
MEMORANDUM AND ORDER

Lahtinen, J.
Appeal from an amended order and judgment of the Supreme Court (O'Connor, J.), entered November 30, 2009 in Albany County, which, among other things, granted defendants' motions for summary judgment dismissing the complaint.
This case involves a dispute as to whether plaintiff Alexandra Waldron is entitled to coverage under the $300,000 supplementary uninsured/underinsured motorists (hereinafter SUM) provision of the insurance contract that her father, plaintiff William Waldron, purchased from defendant New York Central Mutual Fire Insurance Company (hereinafter NYCM) through defendant Knox Insurance Agency, Inc. On February 24, 2003, Alexandra Waldron, a 22-year-old college student who had not been listed as a member of the household on the insurance policy, sustained serious injuries while in Florida when the motorcycle on which she was a passenger was struck by an automobile that crossed into the motorcycle's lane. Two months later, in late April 2003, William Waldron first advised Knox of the accident, but he indicated to Knox that he did not want to file a claim with NYCM at that time. In mid-July 2004, William Waldron told Knox to file a claim with NYCM. Shortly thereafter, NYCM denied coverage on various grounds, including that notice of the claim was untimely and that Alexandra Waldron was not an insured under the policy. Plaintiffs commenced this action seeking a declaratory judgment that Alexandra Waldron was entitled to SUM coverage, as well as asserting, among other things, negligence and breach of contract causes of action against defendants. Following discovery, all parties moved for summary judgment. Supreme Court denied plaintiffs' motion, granted defendants' motions, dismissed the complaint and declared that NYCM was not obligated to provide SUM coverage for the accident. Plaintiffs appeal.
Historically, New York adhered to the position that "an insurer that does not receive timely notice in accordance with a policy provision may disclaim coverage, whether it is prejudiced by the delay or not" (Briggs Ave. LLC v Insurance Corp. of Hannover, 11 NY3d 377, 381-382 [2008]; see Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d 332, 339 [2005]). Recent legislation amended the Insurance Law, which now requires an insurer to show prejudice (see Insurance Law § 3420 [a] [5], as added by L 2008, ch 388, § 2 [eff Jan. 17, 2009]). The new statutory language does not, however, apply in the current case as the pertinent policy was issued before the effective date of the statute (see Board of Mgrs. of the 1235 Park Condominium v Clermont Specialty Mgrs., Ltd., 68 AD3d 496, 497 [2009]). Nonetheless, even prior to the statutory amendment, when an insurer received notice of an accident in a timely fashion, the insurer could not properly disclaim a late SUM claim absent a showing of prejudice (see Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d 468, 476 [2005]; see also Matter of Brandon [Nationwide Mut. Ins. Co.], 97 NY2d 491, 498 [2002]; Bhatt v Nationwide Mut. Ins. Co., 61 AD3d 1406, 1406-1407 [2009]).
We address first whether William Waldron's communication with Knox in late April 2003 constituted timely notice of the accident to NYCM. The relationships of a purchaser of insurance, an agent or broker, and an insurance company are not always easily categorized (see People v Wells Fargo Ins. Servs., Inc., 16 NY3d 166, 171 [2011]). Generally, notice to an insurance broker is not necessarily considered notice to the carrier (see Board of Hudson Riv.-Black Riv. Regulating Dist. v Praetorian Ins. Co., 56 AD3d 929, 930 [2008]; but cf. Travelers Ins. Co. v Raulli & Sons, Inc., 21 AD3d 1299, 1300 [2005]), whereas notice to an agent of the insurer typically constitutes notice to the insurer (see Insurance Law § 3420 [a] [3]; D.C.G. Trucking Corp. v Zurich Ins. Co., 81 AD2d 990, 991 [1981], lv denied 54 NY2d 605 [1981]). The proof in the record established that Knox was an agent of NYCM.
NYCM's policy required that notice of the accident be given as soon as reasonably practicable, but in no event more than 30 days after the accident, absent proof providing justification for the delay. William Waldron's first communication with Knox was two months after the accident and, thus, beyond the 30-day limit in the policy. However, it is undisputed that his daughter had sustained very serious injuries in the accident and that he had immediately left New York to be with his daughter in Florida. Even two months after the accident when he notified Knox, his daughter was still hospitalized and there was continuing concern that she might lose a leg as a result of her injuries. Although William Waldron indicated to Knox — ostensibly because of concern of a premium increase — not to file a claim with NYCM, the agency relationship between Knox and NYCM resulted in the notice to Knox constituting notice to NYCM. In addition to verbal communication with Knox about the accident, William Waldron also provided a police accident report of the accident to Knox. The evidence is sufficient to raise a factual issue as to whether the delay of about one month beyond the 30-day notice requirement was sufficiently justified under the circumstances.
With regard to the SUM claim, the policy required notice of a SUM claim "as soon as practicable," which in the SUM context means "with reasonable promptness after the insured knew or should reasonably have known that the tortfeasor was underinsured [or uninsured]" (Matter of Metropolitan Prop. & Cas. Ins. Co. v. Mancuso, 93 NY2d 487, 495 [1999]; see Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d at 474; Matter of State Farm Mut. Auto. Ins. Co. [Jackson], 6 AD3d 1029, 1030 [2004]). Here, the police accident report provided to Knox by William Waldron two months after the accident left blank the section for driver's insurance. Even if this did not constitute notice of a potential SUM claim, NYCM failed to establish that the July 2004 notice of a SUM claim was untimely as a matter of law. NYCM did not submit proof addressing whether it was prejudiced by the delay and, in the event the factual issue about the timeliness of the initial notice of the accident is resolved favorably to plaintiffs, NYCM will be required to show prejudice (see Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d at 476).
Lastly, we are unpersuaded by NYCM's argument that plaintiffs have failed to raise an issue of fact as to whether Alexandra Waldron was a resident of her parents' household at the time of the accident. Although she was renting an apartment off campus while attending college, the record reflects that she maintained a bedroom in her parents' house, where she kept clothing, visited on weekends and lived on school holidays and semester breaks. Moreover, her college considered her parents' address to be her permanent one and she retained her parents' address for voting and tax purposes (see Konstantinou v Phoenix Ins. Co., 74 AD3d 1850, 1851 [2010], lv denied 15 NY3d 712 [2010]; Dutkanych v United States Fid. & Guar. Co., 252 AD2d 537, 538 [1998]).
Peters, J.P., Malone Jr., Kavanagh and Garry, JJ., concur.
ORDERED that the amended order and judgment is modified, on the law, without costs, by reversing so much thereof as granted defendants' motions for summary judgment dismissing the complaint and declared that defendant New York Central Mutual Fire Insurance Company is not obligated to provide supplementary uninsured/underinsured motorist coverage for the claim arising out of the February 24, 2003 motor vehicle accident; said motions denied; and, as so modified, affirmed.
Matter of ERIE Insurance v. Ross

Appeal from a judgment (denominated order) of the Supreme Court, Erie County (Joseph R. Glownia, J.), entered March 11, 2010. The judgment determined that the law of Massachusetts applies in the subject arbitration proceeding.

CHIACCHIA & FLEMING, LLP, HAMBURG (TIFFANY M. KOPACZ OF COUNSEL), FOR RESPONDENT-APPELLANT.
RUPP, BAASE, PFALZGRAF, CUNNINGHAM & COPPOLA LLC, BUFFALO (THOMAS P. CUNNINGHAM OF COUNSEL), FOR PETITIONER-RESPONDENT.

It is hereby ORDERED that the judgment so appealed from is unanimously affirmed without costs.
Memorandum: Respondent was injured when he was struck by a motor vehicle operated by Melissa Brea, a Massachusetts resident, while he was crossing a street in Boston, Massachusetts. Respondent is insured under an automobile insurance policy issued by petitioner to respondent's father in New York State. The policy provides supplemental uninsured/underinsured motorist (SUM) coverage and, after petitioner gave respondent permission to settle with Brea's insurance carrier, he filed a claim for SUM benefits with petitioner and subsequently demanded arbitration. By order to show cause, petitioner sought, inter alia, a determination that Massachusetts law applies to the issue of respondent's recoverable damages in the pending SUM arbitration. Massachusetts has a modified comparative negligence rule (see Mass Gen Laws Ann, tit 2, ch 231, § 85), whereas New York has a pure comparative negligence rule (see CPLR 1411).
Respondent contends that Supreme Court erred in determining that Massachusetts law applied with respect to the SUM arbitration. We reject that contention. With respect to issues involving the interpretation of the SUM endorsement or other aspects of the policy, the standard choice of law analysis would result in the application of New York law (see Matter of Allstate Ins. Co. [Stolarz—New Jersey Mfrs. Ins. Co.], 81 NY2d 219, 225-228; see generally Cooney v Osgood Mach., 81 NY2d 66, 73-78; Neumeier v Kuehner, 31 NY2d 121, 125-129). The purpose of SUM coverage, however, is to compensate an insured party when he or she is injured by an uninsured or underinsured driver (see Matter of Federal Ins. Co. v Watnick, 80 NY2d 539, 543). We thus conclude that an individual insured under a New York automobile policy who is injured in an accident in another jurisdiction should not be placed in either a better or worse position when filing a SUM benefits claim than he or she would have been if the tortfeasor had been fully insured. To apply New York law to the measure of damages in this case would not be consistent with the purpose served by SUM coverage, which is to take the place of a tortfeasor's insufficient insurance coverage.
In re East 51st Street Crane Collapse Litigation

Gallo, Vitucci & Klar, New York (Kimberly A. Ricciardi of
counsel), for appellant.
Raven & Kolbe, LLP, New York (Michael T. Gleason of
counsel), for Rite Aid of New York, Inc., respondent.
Schoenfeld Moreland, P.C., New York (Eric B. Schoenfeld of
counsel), for Lincoln General Insurance Company, respondent.
Order, Supreme Court, New York County (Karen S. Smith, J.), entered February 24, 2010, which, insofar as appealed from as limited by the briefs, declared Lincoln's settlement with plaintiff Rite Aid and the plaintiff in another consolidated action, entitled Juan Perez v New York City, et al. (Supreme Court, New York County, Index No. 104106/09), to be in full satisfaction of its obligations under a commercial general liability policy issued to defendant Joy Contractors, Inc., and declared extinguished Lincoln's obligations to provide a defense for the insured and additional insureds under the Joy policy, unanimously affirmed, with costs.
Fourth-party defendant Reliance Construction Ltd., d/b/a RCG Group, s/h/a Reliance Construction Group and RCG Group, Inc., concedes that it did not object to the Perez and revised Rite Aid settlements. Hence, it failed to preserve the issue whether the motion court properly approved of those settlements (CPLR 5501[a][3]; see e.g. Sadhwani v New York City Tr. Auth., 66 AD3d 405, 406 [2009], lv denied 14 NY3d 705 [2010]). Even were the question preserved, we find that the motion court properly exercised its discretion in approving the settlements (see Vigilant Ins. Co. v Bear Stearns Cos., Inc., 10 NY3d 170, 178 [2008]).
We reject Reliance's argument that the language of the policy issued to Joy requires Lincoln to continue defending the insureds even after the policy limit is exhausted. While the policy provides that Lincoln "will have the right and duty to defend the insured against any suit' seeking [bodily injury or property] damages," it also provides, "Our [the insurer's] right and duty to defend ends when we have used up the applicable limit of insurance in the payment of judgments or settlements . . . "
Construing this commercial general liability policy language "in light of common speech and the reasonable expectations of a businessperson" (Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383 [2003] [internal quotation marks and citation omitted]), we find that it "makes clear that the [insurer] has no obligation to defend after the liability limits have been exhausted" (Maryland Cas. Co. v W.R. Grace & Co., 794 F Supp 1206, 1220 n 11 [SD NY 1991], revd on other grounds 23 F3d 617 [2d Cir 1994], cert denied 513 US 1052 [1994]; see Federal Ins. Co. v Cablevision Sys. Dev. Co., 836 F2d 54, 57 [2d Cir 1987]).
Nor are we persuaded that public policy considerations should compel us to override the clear language of the policy to extend Lincoln's duty to defend. We note that there is a New York State Insurance Department regulation that has been construed as requiring automobile insurers to pay all defense costs until a case ends. However, automobile insurers are not excused from defense obligations by exhaustion of policy limits (see 11 NYCRR 60-1.1.[b]; Haight v Estate of DePamphilis, 5 AD3d 547, 548 [2004]).
The statutory mandate of a "continuous defense" duty on the part of automobile insurers is sensible in light of the expectations of the everyday consumers who benefit from, and in many instances are required to maintain, automobile insurance policies (see Continental Ins. Co. v Burr, 706 A2d 499, 501 [Del 1998] [automobile insurance policy language "will be read in a way that satisfies the reasonable expectations of the average consumer"]). Indeed, "[t]he [automobile liability insurance] regulation recognizes that a significant objective of mandatory insurance is the securing of competent defense counsel and payment of defense costs" (Delaney v Vardine Paratransit, 132 Misc 2d 397, 398 [1986]). However, there is no similar statutory or regulatory authority for the proposition that a similar duty applies in the context of CGL insurance acquired by businesses.
Ciampa Estates, LLC v. Tower Insurance Company of New York

Carroll, McNulty & Kull L.L.C., New York (Ann Odelson of
counsel), for appellants.
Law Office of Max W. Gershweir, New York (Joshua L. Seltzer
of counsel), for respondent.
Order and judgment (one paper), Supreme Court, New York County (Debra A. James, J.), entered March 12, 2010, which, insofar as appealed from as limited by the briefs, denied the motion of plaintiffs Ciampa Estates, LLC (Estates) and Everest National Insurance Company (Everest) for summary judgment and granted defendant's cross motion for summary judgment dismissing the complaint and declaring that defendant has no obligation to defend or indemnify Estates and Everest in the underlying action, unanimously affirmed, without costs.
An insured's failure to comply with the notice of claim provision vitiates a contract of insurance (see Great Canal Realty Corp. v Seneca Ins. Co., 5 NY3d 742, 743 [2005]). Here, the only timely notice of claim was submitted not by Estates, an additional insured under the subject policy, but on behalf of plaintiff Ciampa Management Corp. (Management), Estates' corporate affiliate. Notice from another insured, or from another source, does not satisfy an insured's obligation to provide timely notice (see Travelers Ins. Co. v Volmar Constr. Co., 300 AD2d 40, 43 [2002]). There was no evidence that Management was sending the notice as an agent of Estates (cf. United States Underwriters Ins. Co. v Falcon Constr. Corp., 2007 WL 1040028, *9, 2007 US Dist LEXIS 25391, * 29-30 [SD NY 2007]), and since Management was not even an insured, the two were not similarly situated (compare Motor Veh. Acc. Indem. Corp. v United States Liab. Ins. Co., 33 AD2d 902 [1970]). Furthermore, because defendant sent out its disclaimer of coverage within six days of ultimately receiving a notice of claim on behalf of Estates, the disclaimer was timely as a matter of law under Insurance Law § 3420 (see Matter of Temple Constr. Corp. v Sirius Am. Ins. Co., 40 AD3d 1109, 1112 [2007] [delay of eight days is not unreasonable as a matter of law]).
GPH Partners, LLC v. American Home Assurance Company

Ahmuty, Demers & McManus, Albertson (Brendan T.
Fitzpatrick of counsel), for appellant.
Coughlin Duffy, LLP, New York (Justin N. Kinney of counsel),
for respondent.
Order, Supreme Court, New York County (Milton A. Tingling, J.), entered January 26, 2010, which granted defendant Admiral Insurance Company's (Admiral) motion for summary judgment declaring that it has no duty to defend or indemnify plaintiff with regard to the underlying personal injury action, unanimously reversed, on the law, with costs, the motion denied, and it is declared that defendant Admiral has a duty to defend and indemnify plaintiff in the underlying action.
Supreme Court erred by considering only the language of the subject policy's wrap-up exclusion, without also examining whether Admiral timely asserted such exclusion as a basis for its disclaimer. "A disclaimer is unnecessary when a claim does not fall within the coverage terms of an insurance policy . . . [but] a timely disclaimer pursuant to Insurance Law § 3420(d) is required when a claim falls within the coverage terms but is denied based on a policy exclusion" (Markevics v Liberty Mut. Ins. Co., 97 NY2d 646, 648-649 [2001] [citations omitted]; A. Serdivone, Inc. v Commercial Underwriter's Ins. Co., 7 AD3d 942, 943-44 [2004], lv dismissed 3 NY3d 701 [2004]).
"[T]imeliness of disclaimer is measured from the time when the insurer first learns of the grounds for disclaimer of liability or denial of coverage" (see First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 68-69 [2003]). Thus, where an insurer "becomes sufficiently aware of facts which would support a disclaimer," the time to disclaim begins to run, and the insurer bears the burden of explaining any delay in disclaiming coverage (see Hunter Roberts Constr. Group, LLC v Arch Ins. Co., 75 AD3d 404, 409 [2010]). Where the basis for the disclaimer was, or should have been, readily apparent before onset of the delay, the insurer's explanation for its delay fails as a matter of law (id.). Even where the basis for disclaimer is not readily apparent, the insurer has a duty to promptly and diligently investigate the claim (see Those Certain Underwriters at Lloyds, London v Gray, 49 AD3d 1, 3 [2007]; City of New York v Welsbach Elec. Corp., 49 AD3d 322, 323 [2008]).
Admiral's May 1 and May 15, 2007 disclaimers were untimely as a matter of law. Via January 2007 emails, Admiral was on notice of plaintiff's claim for coverage. Grounds for disclaimer based on either delay in notice of the occurrence or the wrap-up exclusion should have been readily apparent to Admiral in January 2007, and, even if they were not, at a minimum, Admiral should have started an investigation at that time. Admiral's position that it only learned that plaintiff was making a coverage request via its attorney's April 23, 2007 letter requesting "confirmation" of coverage, and that it could not have known about the existence of the wrap-up policy until May 10, 2007, is not borne out by the record.
We have considered Admiral's remaining contentions and find them unavailing.
Shu Chi Lam v. Dong

Morelli Ratner PC, New York (Adam E. Deutsch of counsel),
for appellant.
Kelly, Rode & Kelly, LLP, Mineola (Susan M. Ulrich of
counsel), for respondents.
Order, Supreme Court, New York County (Paul Wooten, J.), entered October 2, 2009, which, in an action for personal injuries sustained when plaintiff pedestrian was struck by a motor vehicle, granted defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.
Defendants established their entitlement to judgment as a matter of law by submitting affirmed medical reports of an orthopedist and a neurologist who concluded that plaintiff did not sustain a "permanent consequential limitation of use" or "significant limitation of use" of his head, neck or left knee (Insurance Law § 5102[d]). Defendants also submitted affirmed reports of two radiologists who concluded that the MRIs of plaintiff's neck, left knee and brain revealed preexisting degenerative conditions in the neck and knee, and a prior stroke in the brain. Defendants further alluded to plaintiff's testimony that he had fractured his left knee 30 years ago.
In opposition, plaintiff failed to raise a triable issue of fact. He presented an affirmed report of his orthopedist, who found limited ranges of motion in the neck and left knee over one year after the accident, and concluded that the injuries were causally related to the accident. However, absent admissible contemporaneous evidence of alleged limitations, plaintiff cannot raise an inference that his injuries were caused by the accident (see Clemmer v Drah Cab Corp., 74 AD3d 660, 662-663 [2010]; Rivera v Honey Express Cab Corp., 70 AD3d 578 [2010]). Plaintiff also failed to submit more recent examination results to rebut the findings of defendants' experts of full ranges of motion more than a year after the orthopedist's examination. Although plaintiff's expert acknowledged that the MRI reports noted degenerative changes in the neck and left knee and a prior stroke in plaintiff's brain, he set forth no objective basis or reason, other than the history provided by plaintiff, for concluding that the injuries resulted from the accident (see Pommells v Perez, 4 NY3d 566, 580 [2005]; Clemmer, 74 AD3d at 662).
Dismissal of plaintiff's 90/180-day claim was also appropriate, since plaintiff failed to raise a triable issue of fact as to causation or submit medical proof in support of the claim (see Amamedi v Archibala, 70 AD3d 449, 450 [2010], lv
denied 15 NY3d 713 [2010]; Valentin v Pomilla, 59 AD3d 184, 186-187 [2009]).
Busch v. Fidelity National Title Insurance Company

Calendar Date: March 24, 2011
Before: Spain, J.P., Lahtinen, Kavanagh, McCarthy and Egan Jr., JJ.

McNamee, Lochner, Titus & Williams, P.C., Albany
(G. Kimball Williams of counsel), for appellant.
John Connor Jr., Hudson, for respondents.
MEMORANDUM AND ORDER

McCarthy, J.
Appeal from an order of the Supreme Court (Demarest, J.), entered April 5, 2010 in Franklin County, which denied plaintiff's motion for partial summary judgment.
Plaintiff owns real property covered by a title insurance policy issued by defendants' predecessor in interest. In 2003, plaintiff's neighbors claimed that an easement granted them the right to construct and use a road over plaintiff's property. To stop the imminent construction, plaintiff hired counsel to immediately commence an action to quiet title. Counsel informed defendants of the action. Defendants then approved the hiring of counsel to represent plaintiff and agreed to compensate him. After Supreme Court denied a preliminary injunction sought by plaintiff in the underlying action, defendants sent a letter to plaintiff's counsel purporting to settle the claim - not the underlying action - for $5,000. The parties dispute whether a settlement was actually agreed upon. Counsel sent defendants a bill and was paid by defendants for all outstanding invoices. Plaintiff thereafter discharged counsel and retained new counsel to represent him in the underlying action.
Plaintiff continued that action with counsel he retained - four different firms in all - until he eventually prevailed with a declaration in his favor by Supreme Court, affirmed by this Court (Busch v Harrington, 63 AD3d 1333 [2009]). While the appeal was pending, plaintiff commenced this action for breach of contract and a declaratory judgment. Before discovery was completed, plaintiff moved for partial summary judgment on the issue of liability. Supreme Court denied the motion. Plaintiff appeals.
Initially, we disagree with defendants' recent contention that they had no duty to defend plaintiff's title in the underlying action because he was a plaintiff rather than a defendant. Although plaintiff commenced the underlying action, it was brought in response to claims by neighbors against his title and an imminent threat that they would begin constructing a road on his property (compare Eliopolous v Nation's Tit. Ins. of N.Y., 912 F Supp 28, 31-33 [ND NY 1996]). Reflecting the need for an immediate response to the neighbors' assertions, counsel obtained a temporary restraining order and sought a preliminary injunction, then quickly informed defendants of the action. At that time, defendants agreed to provide counsel to protect plaintiff's title, and we reject their current argument that they never had any obligation to do so. Additionally, plaintiff's neighbors brought counterclaims attacking his title, so defendants were obligated to defend him at least on those claims.
Having determined that defendants had a duty to defend plaintiff's title in the underlying action, Supreme Court correctly held that questions of fact exist as to whether plaintiff or defendants breached any duties under the policy. Defendants paid plaintiff's initial counsel for about seven weeks worth of work ending in October 2003, but had no further involvement concerning the underlying action, which continued through at least 2009. Plaintiff retained his second counsel in November 2003, without obtaining approval from defendants. Plaintiff contends that he was required to obtain new counsel because defendants, in the letter containing their settlement offer,[FN1] refused to pay any further bills from his initial counsel. He also asserts that counsel had a conflict of interest, permitting plaintiff to obtain independent counsel (see 69th St. & 2nd Ave. Garage Assoc. v Ticor Tit. Guar. Co., 207 AD2d 225, 227 [1995], lv denied 87 NY2d 802 [1995]).
Defendants contend that they only refused to pay any further legal bills if plaintiff accepted their settlement offer, and his action in firing his first counsel and hiring new - unapproved - counsel was a breach of his duty to cooperate, as well as of a policy provision allowing defendants to select counsel (compare Rajchandra Corp. v Title Guar. Co., 163 AD2d 765, 768-769 [1990]). Defendants assert that they never fired initial counsel, counsel was not laboring under any conflict of interest and he could have continued his representation of plaintiff at their expense had plaintiff not terminated him. They contend that plaintiff further failed to cooperate, as he did not update defendants as to the progress of the litigation. Plaintiff asserts that his counsel informed defendants of major steps in the litigation. Considering these factual questions regarding possible breaches of the policy by either party, and whether defendants were thus required to provide plaintiff a defense in the underlying action, Supreme Court properly denied plaintiff's motion for partial summary judgment (see Emigrant Mtge. Co., Inc. v Washington Tit. Ins. Co., 78 AD3d 1112, 1114-1115 [2010]; Van Gordon v Otsego Mut. Fire Ins. Co., 232 AD2d 405, 406 [1996]).
Spain, J.P., Lahtinen, Kavanagh and Egan Jr., JJ., concur.
ORDERED that the order is affirmed, with costs.
Footnotes

Footnote 1: Although factual questions concerning the October 2003 settlement offer are relevant to the parties' later responses and dealings with each other and counsel, whether plaintiff at one point agreed to accept $5,000 in settlement is irrelevant. No written settlement agreement or release was ever executed and no settlement check was tendered or negotiated.

Berger v 292 Pater Inc.

Gannon, Lawrence & Rosenfarb, New York (Jason B.
Rosenfarb of counsel), for appellant.
Katz & Katz, New York (Andrea Katz-Ritscher of counsel),
for respondent.
Order, Supreme Court, New York County (Paul G. Feinman, J.), entered September 15, 2010, which, to the extent appealed from, denied so much of the motion of defendant-appellant Raymon Elozua d/b/a 292 Elizabeth St. Realty as sought summary judgment dismissing the complaint, and order, same court and Justice, entered January 10, 2011, which denied without prejudice so much of Elozua's motion as sought summary judgment on its cross claim for contractual indemnification against defendant 292 Pater Inc. d/b/a Rice, unanimously affirmed, without costs.
In this personal injury action, plaintiff alleges that she was injured when she tripped and fell on a piece of metal protruding from a vault step in front of premises owned by Elozua and leased by 292 Pater.
Paragraph R3 of the rider to the lease provided that 292 Pater would replace the vault step in accordance with Landmark Regulations within 180 days of lease commencement. It is undisputed that the step was never replaced.
Paragraph R7 of the rider provided that 292 Pater would indemnify Elozua from claims arising from or in connection with the use or occupancy of the premises. Paragraph R8 of the rider provided that 292 Pater would obtain insurance naming Elozua as an additional insured.
The court properly denied that branch of Elozua's motion for summary judgment dismissing the complaint. Elozua failed to meet his initial burden of establishing prima facie entitlement to judgment as a matter of law. Plaintiff's testimony and the photographs of the defect, which Elozua submitted in support of his motion, raise triable issues of fact concerning the existence of the defect and whether it was trivial. Further, the lease provision requiring replacement of the vault step raises a triable issue of fact with respect to notice. Accordingly, the burden never shifted to plaintiff (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]).
The court properly denied without prejudice that branch of Elozua's motion for summary judgment on its cross claim for contractual indemnification against 292 Pater. Although General Obligations Law § 5-321 does not preclude indemnification of a landlord for its own negligence where the lease was negotiated at arm's length by two sophisticated parties who "use insurance to allocate the risk of liability to third parties between themselves" (Great N. Ins. Co. v Interior Constr. Corp., 7 NY3d 412, 419 [2006]), it cannot be determined on this record whether the statute precludes Elozua from obtaining contractual indemnification from 292 Pater. Indeed, the record is devoid of evidence concerning the parties' sophistication and whether the negotiations were at arm's length.
Foley v. Consolidated Edison Company of New York, Inc.

Gallagher, Walker, Bianco & Plastaras, Mineola (Robert J.
Walker of counsel), for appellants-respondents/appellants.
O'Dwyer & Bernstien, LLP., New York (Steven Aripotch of
counsel), for respondent-appellant.
Kenney Shelton Liptak & Nowak, LLP, New York (Michael L.
Stonberg of counsel), for Consolidated Edison Company of New
York, Inc., respondent.
Camacho Mauro Mulholland, LLP, New York (Kathleen
Mulholland of counsel), for Roadway Contracting, Inc., respondent.
Order, Supreme Court, Bronx County (John A. Barone, J.), entered October 6, 2010, which granted defendant Consolidated Edison's (Con Edison) motion for summary judgment dismissing the complaint and any cross claims against it, granted third-party defendant Roadway Contracting, Inc.'s (Roadway) motion for summary judgment dismissing defendant John Deere Consumer Products, Inc., Homelite, Inc., Homelite Consumer Products Holding, Inc., and Ryobi Technologies, Inc.'s (John Deere) third-party action against it, and denied John Deere's motion to strike the complaint and Roadway's third-party answer as spoliation sanctions, unanimously affirmed, without costs.
Plaintiff commenced this action to recover for burn injuries he sustained while excavating a trench in lower Manhattan for his employer Roadway, which was a subcontractor for Con Edison. Plaintiff was burned when a hand-held saw manufactured by John Deere caught on fire as he was attempting to cut through a pipe.
The record evidence demonstrated that Con Edison did not control the method and means of plaintiff's work and at most exercised general supervisory powers over plaintiff, which cannot form a basis for the imposition of liability (see Goodwin v Comcast Corp., 42 AD3d 322 [2007]). In particular, while Con Edison directed Roadway crews to excavate certain sites, Roadway controlled the methods and means of such excavation. Further, and most significant to the claims in this action, Roadway furnished its own tools and equipment to complete its work, including the saw which caught on fire, and Con Edison had no control over the equipment used by plaintiff to enable it to avoid or correct the alleged unsafe condition of the saw (see Rizzuto v L.A. Wenger Contr. Co., 91 NY2d 343, 352 [1998]).
Although it is true that Con Edison inspectors were always on site, the mere presence of Con Edison's personnel on site is insufficient to infer supervisory control (see Matter of New York City Asbestos Litig., 25 AD3d 374 [2006]). Nor is a triable issue presented by the fact that Con Edison employees may have inspected the excavations and admonished Roadway employees to hurry the work (see Haider v Davis, 35 AD3d 363 [2006]). Moreover, there is no evidence that Con Edison "gave anything more than general instructions on what needed to be done, not how to do it, and monitoring and oversight of the timing and quality of the work is not enough to impose liability under [Labor Law] section 200" (Dalanna v City of New York, 308 AD2d 400, 400 [2003]). Finally, the fact that Con Edison had the authority to stop work for safety reasons is insufficient to raise a triable issue of fact with respect to whether it exercised the requisite degree of supervision and control over the work being performed to sustain a claim under Labor Law § 200 or for common-law negligence (see Hughes v Tishman Constr. Corp., 40 AD3d 305 [2007]).
Contrary to John Deere's contention, the contract between Con Edison and Roadway does not evidence that Con Edison had a contractual right of control sufficient to establish that it exercised control or supervision over plaintiff's work. The contractual terms relied on by John Deere merely establish that Con Edison had general supervisory authority and do not establish that Con Edison controlled how plaintiff performed the injury-producing work.
We further find that Supreme Court properly dismissed the Labor Law § 241(6) claim against Con Edison. Plaintiff failed to plead any specific Industrial Code violations, and did not address the issue in opposition to Con Edison's motion. Thus, plaintiff has indicated an intention to abandon this theory of liability (see Brown v Christopher St. Owners Corp., 2 AD3d 172 [2003], lv dismissed 1 NY3d 622 [2004]). Assuming, without deciding, that John Deere has a basis to assert violations of Industrial Code sections in support of its cross claim against Con Edison, we find that the sections cited by John Deere - 12 NYCRR 12-1.7, 12 NYCRR 23-9.2(a), and 12 NYCRR 23-10.3 - are inapplicable to this case.
Supreme Court properly granted Roadway's motion for summary judgment dismissing John Deere's third-party action. The written contract in evidence containing an indemnification clause was between Con Ed and Roadway and thus John Deere cannot claim indemnification based on that agreement. Further, Roadway established that it could not be liable for contribution or indemnification on the ground that plaintiff sustained a "grave injury" as defined in Workers' Compensation Law § 11. In particular, Roadway established that there was no evidence that plaintiff sustained permanent or severe facial disfigurement as a result of his burns.
Supreme Court providently exercised its discretion in denying John Deere's motion to dismiss the complaint and Roadway's third-party answer as sanctions for spoliation of evidence and in granting John Deere leave to seek an adverse inference charge at trial (see Ortega v City of New York, 9 NY3d 69, 76 [2007]). There was no evidence that plaintiff had control of the saw following the accident, and once he was released from the hospital nearly a month following the accident, he attempted to locate and preserve the saw from his employer to no avail. We also find no basis to preclude Roadway from moving for summary judgment based on the Workers' Compensation Law.
Plaintiff and John Deere are equally affected by the loss of the saw; neither party has reaped an unfair advantage in the litigation as neither party can inspect the saw (see De Los Santos v Polanco, 21 AD3d 397, 398 [2005]). Further, because plaintiff's action is based on design defect and failure to warn claims, the unavailability of this particular saw does not prejudice John Deere's ability to defend itself in this action, as the same alleged defect would appear in other products of the same design (see Rodriguez v Pelham Plumbing & Heating Corp., 20 AD3d 314, 315-16 [2005]).
We have considered appellants' remaining claims and find them unavailing.
Lopez v. Eades

Richard T. Lau & Associates, Jericho (Joseph G. Gallo of
counsel), for appellant.
Pazer, Epstein & Jaffe, P.C., New York (Matthew J. Fein of
counsel), for respondent.
Order, Supreme Court, Bronx County (Robert E. Torres, J.), entered July 8, 2010, which denied defendant's motion for summary judgment dismissing the complaint on the threshold issue of serious injury under Insurance Law § 5102(d), unanimously reversed, on the law, without costs, and the motion granted. The Clerk is directed to enter judgment in defendant's favor dismissing the complaint.
Defendant met his initial burden of establishing prima facie that plaintiff did not sustain a serious injury, by submitting the affirmed report of an orthopedic surgeon detailing the objective tests he performed on examination, his finding that plaintiff had full range of motion in her right wrist and right ankle, and his conclusion that plaintiff had no ongoing impairment resulting from the accident (see Christian v Waite, 61 AD3d 581 [2009]). Defendant also submitted the affirmed reports of a radiologist who reviewed MRIs taken within months after the accident and found no evidence of traumatic injury.
Plaintiff failed to proffer an adequate explanation for the six-year cessation of treatment following two physical therapy sessions (see Antonio v Gear Trans Corp., 65 AD3d 869, 870-871 [2009]; Eichinger v Jone Cab Corp., 55 AD3d 364, 364-365 [2008]).
Plaintiff's 90/180-day claim is refuted by admissions in her verified bill of particulars and deposition testimony that she was confined to bed for only one day and missed less than 45 days of work (see Williams v Baldor Specialty Foods, Inc., 70 AD3d 522 [2010]). She offered no competent medical proof to substantiate this claim