Coverage Pointers - Volume IX, No. 24

Dear Coverage Pointers Subscribers:

 

Our latest issue of Coverage Pointers is attached.

 

Our kudos to Mark Starosielec who has officially joined the Hurwitz & Fine Coverage Team.  Our readers know that since December 2006, Mark has been bringing you the Serious Side of Serious Injury column and he will continue to do so.  However, Mark has not, until now, been part of our Insurance Coverage practice group.  We needed to expand, again, the number of lawyers providing strategic advice (that's the key word) in the coverage field, and we are delighted to advise you that Mark accepted our invitation to begin spending a good deal more of his time on insurance coverage matters.

 

Those are good words to remember: Coverage decisions are strategic.

 

It is critically important that coverage decisions are made with both eyes steadfastly focused on the manner and means in which the disputes at hand - the underlying claim and the coverage disagreement - will be resolved.  Deciding to defend, or not; deciding to commence a declaratory judgment action, or not; risking the insured's default, or not; are all questions that need to be answered in the context of the risk-benefit analysis, dependent upon the strength of the position taken and the status of the insured.

 

In every coverage determination, an insurer must remember to analyze the policy by the well-known (and patented) Kohane Coverage Formula:

 

C = [(WI) - (WO)] + CPC

 

Coverage = What's In (WI) the policy by the grant of coverage, reduced by What's Out (WO) of the policy because of exclusions plus Compliance with Policy Conditions (CPC)

 

A determination on coverage is an art form that requires consideration of the practical outcome of the decisions made.  If we can help you in formulating a strategy, pick up the phone and holler.

 

We know our readership LOVES late notice cases.  This issue is chock full of them, with great advice for the carrier and policyholder alike.

 

Late Notice Investigations - Practice Pointers

 

As we all know, there is legislative activity afoot to restrict late notice disclaimers to instances where insurers can demonstrate prejudice.  While the number of late notice disclaimers will therefore diminish, the courts are, perhaps, providing some quid pro quo by looking more critically at the insured's excuses for late notice.

Take a close look at the Avery & Avery decision reported from the Second Department in this week's issue as emblematic of this newer approach. When an insured fails to live up to its obligations to give notice, it is not enough to announce, as so many do, that "I didn't think we were responsible for the accident."  The issue is whether the insured had a reasonable basis for a belief that no claim would be asserted and the courts have looked to determine what investigation the insured made to reach that conclusion.

 

Any late notice investigation should look at the efforts the insured made to determine the cause of the accident, its efforts to determine the seriousness of the injuries and the consideration the insured potential that the insured gave to the possibility of a claim being made against it (even if it did not believe it was responsible for the calamity).

 

Feel free to call us for strategic advice in this regard.

 

From the insurer's standpoint, our advice has been restated here countless times.  Document your file when conducting a late notice investigation.  If your decision to deny coverage comes more than 30 day after you've been given late notice of a claim, you will likely not be able to rely on that disclaimer if your file does not reflect an active investigation covering the "down time."

 

Today in History

 

Happy Anniversary FELA. 

 

Today is the 100^th Anniversary of the first Workers Compensation Act adopted in the United States, the Federal Employers Liability Act, which went into effect on May 30^th, 1908.

 

FELA "was enacted because the Congress was dissatisfied with the common-law duty of the master to his servant." Congress sought to ensure that the employees' suits would not be defeated by the same devices which Congress perceived to have been used in the immediate past by the railroads to avoid liability. Thus, FELA was designed to enable injured railroad workers to overcome a number of traditional defenses to tort liability that had previously operated to bar their actions. For example, the Act abolished the doctrine of assumption of risk, applied comparative rather than contributory negligence, and sought to prevent employers from contracting out of FELA liability. See S. Rep. 460, 60th Cong., 1st Sess. 2-3 (1908).  See, Wicker v. Conrail, 142 F.3d 690 (3^rd Cir. 1998)

 

Oh, by the way:  100 years before that?  May 30, 1808? Napoleon Bonaparte annexed Tuscany and it remained part of the French Republic for about six more years. 

 

Earl's Pearls

 

This week's issue has another helpful contribution from Earl Cantwell, this time on "Additional Insureds."

 

Who is John Doe?

 

The other day, we were retained to represent a party in a lawsuit and one of the parties in the matter was identified as John Doe.  We all knew that meant that his name was unknown and John Doe was used to indicate just that.  So of course, I began to wonder . why John Doe?  Why Jane Doe?  Who first selected the name Richard Roe?

The use of those names dates back to the reign of King Edward III (1312 - 1377).  Legal documents from that time label a mythical landowner as "John Doe," who leases land to a "Richard Roe." "Roe" then brings a proceeding to eject "Doe" from the land and since then, they have been the names used to identify unnamed litigants.

The names don't appear to have any special meaning, other than the fact that a doe is a female deer, while a roe is a smaller species of deer. 

The online legal dictionary FindLaw defines John Doe as a "party to legal proceedings (as a suspect) whose true name is unknown or withheld." The female equivalent is Jane Doe or Mary Major. A second male suspect is dubbed Richard Roe, and subsequent ones are referred to as John Stiles and Richard Miles. Is John Doe universal?  Nah.  In Ireland, the names used are Seán and Síle Citizen. In Italy, Mario Rossi and Pinco Pallino are used.  The Germans use Hans/Max/Otto and Erika Mustermann (Muster means "sample" and "mann" is common as a suffix in German names),

Since I know you'd ask, what's the oldest case on the books in New York involving our friend John Doe?  Well, it dates back to 1808, two hundred years ago.  It was John Doe v. Richard Roe and was reported at Ant. N.P. Cas. 80, 81 (N.Y. Sup. Ct. 1808).  This was an adultery matter.  The claim was that the wife has committed adultery with one Byron.  Byron testified and admitted to the adultery.  The attorney for the wife then wanted to prove that previously, the husband had charged the wife with adultery with one Harlson and had, in writing promised to pay Harlson $200 to swear to the adultery and IF Harlson was charged with "false swearing," to pay Harlson another $50 if convicted of perjury.  The attorney for the wife wanted to then establish that as soon as the husband's promise in writing had been presented to him, the husband withdrew the first claim of adultery and then filed the second, this one.

The attorney for the wife wanted to use the testimony of Harlson to impeach the credibility of Byron. The court refused to allow the use of the testimony and as far as we know, John Doe and his wife are married to this day (some two hundred years later).

Notes from Audrey Seeley, Queen of No Fault and Duchess of the Land of Porcupines

I hope that everyone had a great Memorial Day Weekend.  My holiday weekend ended up very nicely but started off rocky when both of my Alaskan Malamutes met a porcupine.  They are doing well and on the mend, but my wallet is sore.

 

The issue that I have been seeing more frequently and is reported in this edition is obtaining a sufficient IME report.  Specifically, the problem is that the IME physician reports positive objective findings but opines that no further care is medically necessary.  In other words, there is no explanation as to the lack of significance of the positive objective findings that lead to the opinion that further care is not medically necessary.  Ultimately, the decisions from the arbitrators are indicating that the IME report needs to explain whether there is any significance to the positive objective findings to support a conclusion that no further medical care is necessary.  Accordingly, physicians need to sufficiently support their conclusions in IME reports otherwise it may be fatal to the insurer's denial.

 

If anyone has any questions regarding IME please feel free to email me at [email protected] with the subject heading of NO FAULT IME.

 

Audrey

 

Audrey A. Seeley

This Week's Issue Includes:

• What's in a Wheel? While a Three-Wheeled ATV Might is a Motorcycle for Uninsured Motorist Benefits, a Four-Wheeled ATV is Not a Motor Vehicle.
• Where Insured Knows of Accident and Possibility of Claim (Even If Claim May be Meritless), It has Obligation to Give Notice
• Since $300,000 Single Limit Policy is Not Larger than $100,00/$300,000 Policy, SUM Coverage Not Available
• No Fault Carrier Entitled to Only One Bite of the Inter-Company Arbitration Apple
• Another Late Notice Winner for Insurer
• Eighteen Month Delay is Giving Notice of Accident is Ignored When Carrier Takes 60 (Unexplained) Days to Disclaim 

STAROSIELEC'S SERIOUS (INJURY) SIDE OF NEW YORK NO FAULT

Mark Starosielec
[email protected]

 

• Plaintiff-Taxi Driver's Lawsuit Stalls as Family Practitioner's Affidavit Can't Raise Triable Issue of Fact
• 90/180 Day Claim Out, But Plaintiff Survives SJ under Permanent Injury SI Category
• Do Not Pass Go: SJ Denied as Defendants Fail to Make Prima Facie Showing
• MRI Reports, Treatment Gap Explanation Help Plaintiff Survive Summary Judgment
• Quick and To the Point: SJ Denied as Plaintiff Raised a Triable Issue of Fact 

AUDREY'S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

 

Arbitration
 

• Positive Multiple Objective Findings in IME Without Further Explanation is Invalid Basis for Denial

Litigation

 

• Plaintiff and Insurer Fail to Meet Burden on Summary Judgment

• Yet Again, Court Will Not Vacate Master Arbitrator's Decision

 

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper

[email protected]

 

The Property:
 

• Where Carrier Failed to Prove that Fire Damaged Property had No Value, Insured was Entitled to Costs for Guard Services
• Failure to Identify the Policy or the Covered Property Renders Carrier's Proof of Loss Request Ineffective for Summary Judgment Purposes

 

And the Potpourri:
 

• Pursuant to Aarons v. Jutkowitz, Defendant is Entitled to Authorizations Permitting Discussions with Plaintiff's Treating Physicians
• Plaintiff's Motion to Confirm Settlement of Tort Action Permitted Where the Delay was the Result of the Worker's Compensation Carrier. 

EARL'S PEARLS

Earl K. Cantwell, II

[email protected]

 

"Additional Insured" - Maybe? 

 

Summer Training

 

This is the time to schedule our summer visits for training at your offices or regional meetings.  Audrey, Steve and I are available to come out and we offer a wide variety of topics for interactive presentations with your staff.  We have our Power Points packed and are ready to visit your claims staff to provide in-house educational programming.  We travel throughout the country.  Just contact us for scheduling.  Some topics of interest are suggested here, but we can craft a program around whatever you might need: 

1. Strategic Coverage Analysis
2. Primary and Excess Insurance - Rights & Responsibilities
3. SUM Claims Handling
4. Preventing Bad Faith Claims - First Party Cases
5. Preventing Bad Faith Claims - Liability Cases
6. Late Notice - Conducting a Proper Notice Investigation
7. The Cooperation Clause - How to Handle
8. NY Disclaimer Letter - Nuts & Bolts: How to Create and Write and Send a Disclaimer Letter, and How Not To. (The Reservation of Right Letter Myth)
9. No- Fault Arbitrations and Appeals: Mock Arbitrations, Preserving the Record, Taking an Appeal 
10. No Fault Regulations - Knowledge is Power
11. The "Serious Injury" Threshold; Early Dismissal with Properly Crafted Motions
12. An Auto Liability Policy Primer
13. A CGL Policy Primer
14. A Homeowners Liability Policy Primer
15. EUO's Under First Party Policies
16. How to Resolve Coverage Disputes:  DJ Actions, Insurance Law Section 3420 Direct Actions (Choice, Strategy and Timing)
17. Insured Selected Counsel: When is it Necessary and How to Avoid it? 
18. Mediation and the Role of the Mediator
19. ADR and How to Get to "Yes"
20. The Internet as a Tool for the Claims Representative
21. Construction Cases - The Interplay Between Indemnity Agreements and Insurance Policies
22. Other Insurance, Additional Insureds and Priority of Coverage 

            All the best.

 

Dan

Hurwitz & Fine, P.C. is a full-service law firm
providing legal services throughout the State of New York

Newsletter Editor

Dan D. Kohane
[email protected]

 

Insurance Coverage Team

Dan D. Kohane, Team Leader
[email protected]

Michael F. Perley
Audrey A. Seeley
Steven E. Peiper

Mark Starosielec

Fire, First-Party and Subrogation Team
Andrea Schillaci, Team Leader
[email protected]
Jody E. Briandi
Steven E. Peiper

NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]
Tasha Dandridge

APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]
Dan D. Kohane
Scott M. Duquin

Index to Special Columns

 

Starosielec’s Serious Side of “Serious Injury”

 Audrey’s Angles on No Fault

Peiper on Property
Earl’s Pearls

Across Borders

 

5/20/08            In the Matter of Progressive Northeastern Ins. Company v. Scalamandre
Appellate Division, Second Department
What’s in a Wheel?  While a Three-Wheeled ATV Might be a Motorcycle for Uninsured Motorist Benefits, a Four-Wheeled ATV is Not a Motor Vehicle.

The appellant was injured when her automobile collided with a four-wheeled "Raptor Quad" all-terrain vehicle (hereinafter ATV).  The appellant's car was insured at the time by Progressive and the ATV was uninsured. A demand for Uninsured Motorists Benefits were made and Progressive sought a stay, arguing that an ATV was not a “uninsured motor vehicle.”

 

Right you are, Progressive.  A four-wheeled ATV does not constitute a "motor vehicle" for purposes of invoking the policy's UM endorsement .  While UM coverage is extended to all motor vehicles as define in the Vehicle & Traffic Law, ATV’s are specifically excluded from the definition of motor vehicles set forth therein. A three-wheeled ATV involved could be considered a motorcycle, thereby rendering UM benefits available, but not a four-wheeled vehicle.

 

5/13/08            Avery & Avery, P.C. v. American Insurance Company
Appellate Division, Second Department
Where Insured Knows of Accident and Possibility of Claim (Even If Claim May be Meritless), It has Obligation to Give Notice
Avery leased premises from the landlord.  On March 4, 2004, Verrone, a client of Avery’s sub-tenant, fell on the steps. Avery’s principal was in the building and Verrone mentioned something about the “banister not going down to the bottom.” Verrone was taken off the property by the paramedics.  One of Avery’s employees learned that Verrone died and that one of Verrone’s relatives were taking pictures and exploring “the possibility of a claim."

On July 4, 2004, the landlord’s insurer received a letter of representation from an attorney for the Estate and advised the landlord – who was not on the premises the day of the accident – to notify its carrier.  On August 10, Avery’s broker first notified American Insurance, its carrier.

On August 17, 2004, an insurance adjuster from American, Avery’s carrier, spoke to Avery who advised of the visit by Verrone’s relative, the photographer.  American denied on late notice grounds on September 10, 2004, less than 30 days after it learned of the visit from the photographer.

The appellate court properly found that notice was late and the disclaimer timely and proper.

The insured’s four month delay in giving notice was unexcused.  Avery had the burden of showing the reasonableness of the excuse. The issue is whether the insured had a reasonable basis for a belief that no claim would be asserted The plaintiff asserted that the underlying action has no merit. However, at issue here is not whether the plaintiff reasonably believed that any claim brought by Verrone or on his behalf would lack merit. Rather, the issue is whether the plaintiff reasonably believed that no claim would be asserted against it

5/13/08            In the Matter of Automobile Insurance Company of Hartford v. Ray
Appellate Division, Second Department
Since $300,000 Single Limit Policy is Not Larger than $100,00/$300,000 Policy, SUM Coverage Not Available
On August 26, 2002, Ray was involved in a car accident while a passenger (along with Roberts, another passenger) in a vehicle owned by Gigante and insured by Automobile Insurance Company of Hartford (AIC).  The Gigante vehicle collided with one operated by Wood and insured with Great American.  The Great American policy had liability limits of $100,000/$300,000

The AIC policy had a single limit of liability coverage for BI and PD of $300,00 per accident and a underinsured (SUM) coverage in the amount of  $300,000 per person/ $300,000 per accident. Under the standard SUM endorsement, Ray and Roberts were insured for SUM benefits under the AIC policy.

Great American paid out its $300,000 in limits by paying Ray $100,000 and the remaining to Gigante and Roberts.  Ray then made a claim for underinsured benefits under the AIC policy.

The Court finds that since the AIC policy, with $300,000 single limits (including property damage coverage) was not larger than the $100,000/$300,000 policy carried by Great American. Since the AIC $300,000 combined policy limit includes property damage, the bodily injury liability limits of the Great American policy were not less than the bodily injury liability limits of the AIC policy.

5/13/08            In the Matter of Progressive Northern Ins. Company v. Sentry Ins.
Appellate Division, Second Department
No Fault Carrier Entitled to Only One Bite of the Inter-Company Arbitration Apple
On December 10, 2004, Duncalf, a Progressive insured was involved in an automobile accident with an insured of Sentry. On or about May 16, 2005, Progressive commenced an inter-company arbitration proceeding against Sentry with Arbitrations Forum, Inc. (arbitrator), seeking reimbursement, through a priority-of-payment claim (prior claim), of the first-party benefits paid to its insured  On July 11, 2006, the arbitrator denied the prior claim.

On or about September 19, 2006, Progressive commenced a second inter-company arbitration proceeding with the arbitrator seeking the same reimbursement (the instant claim), against Sentry.  Sentry argued that the decision in the prior claim was res judicata and in January 2007, the arbitrator in the instant claim agree, dismissing it. Progressive challenged that dismissal in court under CPLR article 75.

The arbitrator did not exceed its authority by rendering an award in favor of Sentry. It was clear that the instant claim made by Progressive arose out of the same transaction as the prior claim that was denied in the prior arbitration.  Progressive claims different facts and a different theory of recovery but seeks the same recovery.  However the arbitrator has broad power to rule on issues like this and the court will not disturb the findings.

5/13/08            Scordio Construction, Inc. v. Sirius America Insurance Company
Appellate Division, Second Department
Another Late Notice Winner for Insurer
Considering, that the construction company knew, from its obligations under the construction contract, of a potential claim at the time of the occurrence in July 2004, the notice given to its insurer, more than one year later, was unreasonable as a matter of law.

5/13/08            Tex Development Co., LLC v. Greenwich Insurance Company
Appellate Division, Second Department
Eighteen Month Delay is Giving Notice of Accident is Ignored When Carrier Takes 60 (Unexplained) Days to Disclaim
On October 10, 2003, the decedent was killed in an accident while performing construction work on property owned by the plaintiff Tex Development Co., LLC (Tex). Tex was insured under a commercial general liability insurance policy issued by the defendant Greenwich Insurance Company (hereinafter Greenwich). Tex Development procured that policy through its insurance broker, the defendant Stern Agency, Inc.

Three days after the accident, Tex notified its broker Stern and asked Stern to notify Greenwich.  Stern failed to notify Greenwich.

On or about April 5, 2005 – about 18 months later – a wrongful death action was commenced on behalf of the Estate of the decedent against Tex and Tex promptly notified Greenwich.   Greenwich then conducted an investigation into "notice and liability issues" which led to a June 2, 2005 late notice disclaimer (about 60 days later)  Tex then challenged the late notice disclaimer and sued its broker, Stern, for negligently failing to notify Greenwich when directed to do so.

The Court finds that Greenwich’s disclaimer took too long. Insurance Law § 3420(d) requires an insurer to provide a written disclaimer of coverage "as soon as is reasonably possible." An insurer's failure to provide notice of disclaimer as soon as is reasonably possible precludes effective disclaimer, even where the insured's own notice of the incident is untimely. The court held that Greenwich did not adequately justify the 60 day delay.
Editor’s Note:  We’ve said it before and we’ll say it again. When conducting an investigation relative to late notice, DOCUMENT what you are doing if you ever want to successfully explain a delay in an untimely disclaimer.  The “rule of thumb” for prompt disclaimer is still about 30 days and if a carrier is not prepared to disclaim in that time, it must properly, completely and thoroughly document its investigation.

STAROSIELEC’S SERIOUS (INJURY) SIDE OF NEW YORK NO FAULT

Mark Starosielec
[email protected]

 

5/29/08            Rodriguez v. Abdallah

Appellate Division, First Department

Plaintiff-Taxi Driver’s Lawsuit Stalls as Family Practitioner’s Affidavit Can’t Raise Triable Issue of Fact

The order granting defendants' motion for summary judgment dismissing the complaint was unanimously affirmed by the Appellate Division. The record evidence supports the motion court's determination that defendants established their entitlement to summary judgment. Defendants' experts - a neurologist, an orthopedic surgeon and a radiologist - submitted affirmed, objective medical reports sufficient to disprove plaintiffs' claims of serious injury. Plaintiffs' objective medical evidence - an affidavit by his treating physician, Dr. Melamed, a family practitioner - failed to raise a material issue of fact as to any of the SI category theories.

In particular, plaintiff failed to rebut defendants' objective medical proof that some 33½ months after the accident, the neurologist, after performing various tests on the injured plaintiff, found his neurological condition to be "essentially normal"; the orthopedic surgeon, after examination, found that any spinal injuries (sprains and strains) from the accident had healed and that disc bulges in the lumbar spine were degenerative and not traumatic. Dr. Melamed stated in his affidavit that he treated the injured plaintiff's symptoms for six months with physical therapy, chiropractic and acupuncture. He also alleged that he instructed this plaintiff to refrain from activities that caused discomfort, and the patient exercised his discretion by staying home from work for three months. Plaintiffs' proof, therefore, was insufficient to establish a material issue of fact. It failed to rebut defendants' doctors' conclusions as to the causation of the bulging disc condition or to objectively link it to the accident.

5/29/08            Onishi v N & B Taxi, Inc.

Appellate Division, First Department

90/180 Day Claim Out, But Plaintiff Survives SJ under Permanent Injury SI Category

While missing only 11 days from work following the accident is not enough to raise a triable issue of fact under the 90/180 day category, plaintiff was able to raise a triable issue of fact under the permanency category and thus survive summary judgment. Regarding plaintiff's claim of permanent injury, the Appellate Division held the defendants’ motion for summary judgment was properly denied. Defendants made a prima facie showing by submitting the affirmed report of their expert who examined plaintiff. Yet, the mere fact that defendants' expert did not address findings in diagnostic and operative reports indicating that plaintiff had a herniated disc does not mean that defendants failed to meet their initial burden. A herniated disc, by itself, is insufficient to constitute a "serious injury"; rather, to constitute such an injury, a herniated disc must be accompanied by objective evidence of the extent of alleged physical limitations resulting from the herniated disc. In opposition to defendants' prima facie showing, plaintiff raised a triable issue of fact, principally on the strength of the affirmation of his neurologist. Defendants' claim that plaintiff has a pre-existing medical condition that accounts for some or all of the injuries plaintiff claimed was caused by the accident was not raised by defendants before the lower court.

 

5/20/08            Banguela v. Babbo

Appellate Division, Second Department

Do Not Pass Go: SJ Denied as Defendants Fail to Make Prima Facie Showing

Examining plaintiff’s opposition papers was unnecessary as defendants failed to make a prima facie showing that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). As such, the Second Department reversed a lower court order which had granted defendants’ summary judgment motion. The separate defendants had relied on the affirmed medical report of an examining orthopedist. While he set forth his findings with respect to the range of motion of the lumbar and cervical regions of the plaintiff's spine, he failed to compare those findings to what is normal, and therefore his report was without probative value.

 

5/20/08            Kasel v. Szczecina

Appellate Division, Second Department

MRI Reports, Treatment Gap Explanation Help Plaintiff Survive Summary Judgment

Here, plaintiff successfully appealed a lower court order which had granted the defendant's motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury. The Second Department held the defendant met his prima facie showing. In opposition, the plaintiff raised a triable issue of fact. The opinion of the plaintiff's treating chiropractor was based on his most recent examinations as well as examinations which were contemporaneous with the accident. The treating chiropractor also reviewed the affirmed cervical and lumbar MRI reports prepared by the plaintiff's treating radiologist. Among other things, the reports documented disc bulges at C4-5 and C5-6 and disc herniations at L4-5 and L5-S1. Finally, the plaintiff adequately explained the gap in her treatment between January 2005 and June 2006.

 

5/13/08            Sanderson v. Lonero Transit, Inc.

Appellate Division, Second Department

Quick and To The Point: SJ Denied as Plaintiff Raised a Triable Issue of Fact

In a very brief opinion, the Appellate Division affirmed a lower court order which denied the defendants’ motion for summary judgment dismissing the complaint. While the defendants met their prima facie burden, the plaintiff raised a triable issue of fact in opposition.

 

 

AUDREY’S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

 

The reporting of No-Fault arbitration awards is not at the same level of reported case law, meaning there is no one source to turn to for comprehensive research of arbitration awards.  We encourage you to submit to us, in a PDF format, at [email protected], any recent no-fault arbitration awards, especially Master Arbitration awards, that address interesting no-fault issues.

 

Arbitration

5/28/08            In the Matter of the Arbitration Between Applicant and Respondent

Arbitrator Veronica K. O’Connor (Erie County)

Positive Multiple Objective Findings in IME Without Further Explanation is Invalid Basis for Denial

The Applicant, eligible injured person (“EIP”), sought lost wages and various medical expenses arising out of a January 8, 2007, motor vehicle accident.  The insurer denied lost wages and the various medical expenses based upon the independent medical examination report (“IME”) of Dr. Raghava Polavarapu.  The IME report revealed upon examination multiple objective findings yet the conclusion and opinion of Dr. Polavarapu was that further treatment was not necessary and the EIP could return to work.  The assigned arbitrator determined that the IME was not sufficient to support the denial.

 

Litigation

5/29/08            Rockaway Med. & Diag., P.C. a/a/o Kareem Bruce v. Utica Mut. Ins. Co.

Appellate Term, Second Department

Plaintiff and Insurer Fail to Meet Burden on Summary Judgment

The plaintiff’s summary judgment motion was denied as was the insurer’s cross-motion for summary judgment.  The plaintiff’s motion papers, which consisted of an attorney affidavit, an affidavit from the plaintiff’s office services supervisor and an unaffirmed undated medical necessity letter, were not in admissible form to establish its prima facie case.  The Court held that the office service supervisor’s affidavit failed to establish that he had personal knowledge of the plaintiff’s practices and procedures to lay an admissible foundation for the documents annexed to his affidavit to be admitted as business records.  The Court further noted that the plaintiff failed to attached the claim forms upon which it sought recovery.

 

With respect to the insurer’s cross-motion for summary judgment, the Court held that the insurer failed to demonstrate entitlement to same.  Further, the Court held that the insurer was not entitled to summary judgment for the plaintiff’s failure to comply with a so-ordered discovery stipulation as the insurer’s act of filing the summary judgment motion stayed the plaintiff’s time to provide responses to outstanding discovery demands.

 

5/29/08            L.I. Community Med., P.C. a/a/o Victoria Ramos v. Allstate Ins. Co. Appellate Term, Second Department

Yet Again, Court Will Not Vacate Master Arbitrator’s Decision.

The lower court properly denied the plaintiff’s petition to vacate a Master Arbitrator’s award as it was based upon the sufficient evidence before the arbitrator.  The initial arbitration decision determined that the plaintiff lacked standing to proceed with the arbitration because the assignment of benefits was to an entity different from the petitioner.  The Court held that the Master Arbitrator’s decision, which upheld the lower arbitrators award, had a rationale basis and was not arbitrary and capricious.

 

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper

[email protected]

 

The Property:

 

05/20/08          NAICC v Greenwich Ins. Co.

Appellate Division, Second Department

Where Carrier Failed to Prove that Fire Damaged Property had No Value, Insured was Entitled to Costs for Guard Services

 

In this matter, the carrier sought to deny coverage to its insured on the basis of a certain “loss conditions.”  In finding for the insured, the Second Department noted that the particular condition relied upon by carrier was ambiguous.  As such, the Second Department construed the ambiguity in favor of the interpretation advanced by the insured.  Having done so, the Court next ruled that carrier failed to establish the fire damaged property was valueless.  Accordingly, the insured was entitled to reimbursement for security costs that were expended to guard the damaged property.

 

05/13/08                      Gongolewsky v Empire Ins. Co.

Appellate Division, Second Department

Failure to Identify the Policy or the Covered Property Renders Carrier’s Proof of Loss Request Ineffective for Summary Judgment Purposes

 

Insured presented a claim to carrier after a water pipe burst in the insured’s bathroom.  Thereafter, carrier served a proof of loss request pursuant to Insurance Law 3407(a).  Because the proof of loss form did not identify the property at issue, or even the policy at issue, the Court found a question of fact as to whether the carrier had fully complied with the mandates of the Insurance Law.  Thus, a question of fact also existed with regard to the appropriateness of carrier’s denial.

 

And the Potpourri:

 

05/13/08                      Singh v Gurbhag Singh

Appellate Division, Second Department

Pursuant to Aarons v. Jutkowitz, Defendant is Entitled to Authorizations Permitting Discussions with Plaintiff’s Treating Physicians

 

The Second Department affirmed the trial court’s Order requiring plaintiff to provide medical authorizations permitting defendant to discuss plaintiff’s medical condition with treating physicians.   In so holding, the Court noted that by commencing the instant lawsuit plaintiff waived his right to keep his medical condition privileged.

 

05/22/08                      Cosgrove v County of Ulster

Appellate Division, Second Department

Plaintiff’s Motion to Confirm Settlement of Tort Action Permitted Where the Delay was the Result of the Worker’s Compensation Carrier.

 

Plaintiff had applied for, and was receiving workers’ compensation benefits as a result of a worksite injury.  Plaintiff then commenced a personal injury action against the County of Ulster.  The personal injury was subsequently resolved, with the understanding that the workers’ compensation carrier would receive 1/3 of the recovery.  In accordance with that agreement, plaintiff’s counsel contacted the workers’ compensation carrier to arrange for the delivery of the carrier’s share of the settlement.  

 

Although the carrier never responded to plaintiff’s counsel’s request, it later terminated plaintiff’s workers’ compensation benefits on the theory that plaintiff had entered into a settlement without the consent of the carrier. 

 

Plaintiff then requested that the previously agreed to settlement be confirmed nunc pro tunc.  The carrier opposed by arguing that the application was beyond three months from the date of settlement, and as such untimely.  In affirming the trial court’s approval of the settlement arrangement, the Second Department noted that the delay was caused due to the neglect of the workers’ compensation carrier.  Moreover, the court noted plaintiff’s prompt application to confirm the settlement after it learned of the carrier’s objection. 

 

EARL’S PEARLS

Earl K. Cantwell, II

[email protected]

 

“Additional Insured” – Maybe?

 

 

A common method of economic risk shifting is the “additional insured” requirement found in many contracts.  This “additional insured” status is usually provided via endorsement or written amendment to the underlying policy. True additional insured coverage provides both defense and indemnification, and entitles the “additional insured” to the same coverage available to a named insured. 

 

If only a Certificate of Insurance is provided instead of an endorsement, that may not be sufficient, since a Certificate of Insurance is not in and of itself a valid endorsement to a policy.  Many courts have ruled that insurance certificates do not provide or convey coverage.  Often, the actual language of the insurance certificate states that it is not evidence of coverage.  Just as importantly, a Certificate of Insurance certainly does not provide detail on what, if any, coverage is provided. 

 

An insurer’s obligation to an additional insured is largely governed by what the carrier agreed to do in the underlying insurance policy, not what the named insured may have agreed to by contract.  If an insured faces frequent demands to procure such additional insurance coverage, the policy may contain a “blanket endorsement” that extends additional insured status to any person with whom the named insured has agreed by contract to so name to its general liability coverage.  Additional insured status is usually limited to liabilities arising out of “ongoing operations” performed by the named insured on a given contract or project.

 

There are several additional insured endorsements that have been historically issued or drafted by ISO, and each one is different and needs careful scrutiny.   One of the most common issues is whether the endorsement states that (a) there is additional insured coverage with respect to liability arising out of the named insured’s ongoing operations for the additional insured; or (b) whether there are limitations such as providing coverage to the additional insured only with respect to liability caused by acts or omissions of the named insured. 

 

Many states have adopted forms of anti-indemnity statutes, but generally those statutes have not been interpreted to prevent naming a party as an additional insured.  While anti-indemnification statutes are generally very strictly construed, contract requirements obligating parties to be named as additional insureds are generally broadly interpreted.  Due to the legal questions caused by the anti-indemnification statutes, “additional insured” clauses now frequently replace conventional indemnity clauses as a primary method of risk and loss transfer. 

 

One issue typically encountered is determining whether an event, occurrence, or liability “arose out of” the named insured’s work.  Most courts have construed this language broadly and hold that coverage is not limited only to vicarious liability, but also find coverage for liability arising out of the named insured’s work, irrespective of whether the injury was caused by the named insured.  Another important issue is whether the additional insured endorsement covers completed operations.  Most courts find that the additional insured endorsement ends once the named insured completes its work, or “ongoing operations,” on the given contract or project.

 

These considerations lead to some practical suggestions:

 

• It is important to check the actual additional insured endorsement to determine if the version offered provides the coverage required. If the endorsement limits coverage to situations where the coverage is provide if liability is caused, in whole or in part, by the sub-contractor’s acts or omissions, the owner and/or general contractor should require the sub-contractor to procure the broader “all operations” endorsement.
  
   
• Make sure to receive and review the actual policy and endorsement, and do not accept a broker’s letter or Certificate of Insurance as evidence of the coverage.

 

ACROSS BORDERS

 

Visit the Hot Cases section of the Federation of Defense & Corporate Counsel website, www.thefederation.org. Dan Kohane serves as the FDCC’s Immediate Past President and Board Chair and past Website Editor

 

5/27/08            Weaver v. CCA Industries v. New York Marine & General Ins. Co.

Fifth Circuit Court of Appeals
Vendor’s Endorsement Provided Insurance Coverage to Company Marketing and Selling Product
Plaintiff brought a product liability action against CCA for injuries sustained from ingesting Permathene. Phoenix Laboratories, Inc. manufactures the diet drug using a formula provided by CCA. Then, the drug is then marketed and sold by CCA. CCA filed a third-party complaint demanding that Phoenix’s insurer, New York Marine, defend and indemnify CCA against plaintiff’s suit. The Fifth Circuit held that the insurance policy provided coverage to CCA under the policy’s vendor’s endorsement. CCA did not fall outside of the vendor’s endorsement as a result of its repackaging and labeling of the product or as a result of its provision of the formula for the drug to Phoenix.

Submitted by: Susan P. McWilliams and Sarah S. Batson, Nexsen Pruet, LLC

 

5/23/08                        Amos v. Allstate Insurance Company

Alaska Supreme Court

Liability Insurance: Cancelled Policy May Be Reinstated Subject to Gap in Coverage
Allstate’s insured failed to make a timely premium payment, causing a boat policy to lapse. After a boating accident (which was not reported to Allstate), the insured paid the outstanding premium. Allstate reinstated coverage subject to a coverage gap during the period of the cancellation. The insured thereafter reported the boating accident, which had occurred during the cancellation period. The trial court granted the insured’s motion for partial summary judgment, holding that Allstate could not reinstate the policy subject to a coverage gap, since the policy did not contain a provision allowing for a lapse in coverage. Because Allstate had accepted the premium payment, it had waived its right to deny coverage for the boating claim. The Supreme Court reversed, holding that, under Alaska law, an insurer may cancel an insurance policy for nonpayment of premium. Once a policy is cancelled, an insurer may conditionally accept past due premiums to reinstate the policy. Judgment reversed.

Submitted by: Bruce D. Celebrezze, Esq. & Jamison R. Narbaitz, Esq. of Sedgwick, Detert, Moran & Arnold LLP

 

5/23/08                        Landry v. Landry

Louisiana Supreme Court
Homeowners, Victims of Hurricane Rita, Awarded Wind Losses But Not Flood Losses, as Set Forth in Insurance Policy
Where policy covered wind and rain but excluded damages caused by flooding, insurer was not required to pay the full value of the insurance policy to homeowners who suffered a total loss of their home, where the loss was caused concurrently by wind, rain, and flooding. La. R.S. 2:695(A) allows an insurer who sets forth an alternative method of loss computation in the policy, in compliance with the statutory specifications, to use this specified alternative method of computation rather than payment of the face value of the policy in the event of total loss.

Submitted by: Susan P. McWilliams and Sarah S. Batson, Nexsen Pruet, LLC

 

REPORTED DECISIONS

 

Avery & Avery, P.C. v. American Insurance Company

Lawrence, Worden, Rainis & Bard, P.C., Melville, N.Y. (Jeremy
B. Honig of counsel), for appellant-respondent.
Annette G. Hasapidis, South Salem, N.Y., for
respondent-appellant.

DECISION & ORDER

In an action for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff in an underlying action entitled Verrone v Maryard Realty, Inc., pending in the Supreme Court, Kings County, under Index No. 13056/05, the defendant appeals from so much of an order of the Supreme Court, Kings County (Johnson, J.), dated October 26, 2006, as denied its motion for summary judgment declaring that it is not so obligated, and the plaintiff cross-appeals from so much of the same order as denied its cross motion for summary judgment.

ORDERED that the order is reversed insofar as appealed from, on the law, the defendant's motion for summary judgment is granted, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that the defendant is not obligated to defend and indemnify the plaintiff in the underlying action entitled Verrone v Maryard Realty, Inc., pending in the Supreme Court, Kings County, under Index No. 13056/05; and it is further,

ORDERED that the order is affirmed insofar as cross-appealed from; and it is further,

ORDERED that one bill of costs is awarded to the defendant.

The plaintiff leases the premises where the accident occurred from the landowner, an out-of-possession landlord. The subject premises are used as an office building. On March 2, 2004, Basile Verrone, a client of the plaintiff's subtenant, fell as he descended the steps from the second floor to the first floor of the subject premises. The plaintiff's principal was present in the building at the time of the accident, and Verrone said something to her about the "bannister not going down to the bottom." Verrone was removed from the building by paramedics. A few weeks later, the plaintiff's employee learned that Verrone had died. The plaintiff's principal further acknowledged that she was aware that Verrone's nephew came to the premises to take photographs of the scene of the accident and that his family was "exploring the possibility of a claim."

On or about July 2, 2004, an attorney retained to pursue a claim on behalf of Verrone's estate with respect to the accident notified the landowner of the subject accident and advised the landowner to notify its insurance carrier. On or about August 10, 2004, the plaintiff's insurance broker forwarded a notice of the claim to the defendant, the plaintiff's insurance carrier.

On August 17, 2004, an insurance adjuster for the defendant telephoned the plaintiff's principal. In his affidavit, the adjuster claimed that the plaintiff's principal informed him that Verrone's nephew came to the premises to take pictures a few days after the accident. The plaintiff's principal does not deny this assertion.

On or about September 10, 2004, the defendant disclaimed coverage on the ground that it did not receive timely notice of the claim.

In this action for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff in an action brought by the administrator of Verrone's estate to recover damages, inter alia, for personal injuries and wrongful death, the defendant moved for summary judgment on the ground that the plaintiff failed to notify it of the claim as soon as practicable. The plaintiff cross-moved for summary judgment, claiming it had a reasonable belief in nonliability. The Supreme Court denied both the motion and the cross motion, finding the existence of issues of fact. We reverse the order insofar as appealed from by the defendant.

Where, as in this case, the insurance policy requires that notice of the claim be given to the carrier as soon as practicable, compliance with that provision is a condition precedent to coverage. If the insured did not know about the accident, or had a "reasonable belief in nonliability," a delay in giving notice will be excused (White v City of New York, 81 NY2d 955, 957). However, the insured has the burden of showing the reasonableness of the excuse (id.). The issue is whether the insured had a reasonable basis for a belief that no claim would be asserted against it (see SSBSS Realty Corp. v Public Serv. Mut. Ins. Co., 253 AD2d 583; accord Genova v Regal Mar. Indus., 309 AD2d 733).

Here, the defendant established, as a matter of law, that the plaintiff did not have a reasonable belief that no claim would be asserted against it. The plaintiff had possession of the building, knew of the accident and that injuries were sustained on the day the accident occurred, and knew, within days of the accident, that Verrone's family was contemplating a claim. The delay of more than four months in notifying the defendant of the claim was unreasonable as a matter of law (see Evangelos Car Wash, Inc. v Utica First Ins. Co., 45 AD3d 727). In opposition, the plaintiff failed to raise a triable issue of fact.

The plaintiff asserts that the underlying action has no merit. However, at issue here is not whether the plaintiff reasonably believed that any claim brought by Verrone or on his behalf would lack merit. Rather, the issue is whether the plaintiff reasonably believed that no claim would be asserted against it (see SSBSS Realty Corp. v Public Serv. Mut. Ins. Co., 253 AD2d 583; accord Genova v Regal Mar. Indus., 309 AD2d 733). Accordingly, the defendant properly disclaimed coverage, and the Supreme Court should have granted the defendant's motion for summary judgment. Since this is a declaratory judgment action, we remit the matter to the Supreme Court, Kings County, for the entry of a judgment declaring that the defendant is not obligated to defend and indemnify the plaintiff in the underlying action (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).
MILLER, J.P., DILLON, McCARTHY and CHAMBERS, JJ., concur.

In the Matter of Automobile Insurance Company of Hartford v. Ray

Feeney & Associates, PLLC, Hauppauge, N.Y. (Rosa M. Feeney
of counsel), for appellant.
Andrea & Towsky, Garden City, N.Y. (Frank A. Andrea III and
Leslie Lopez of counsel), for
respondent.


DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for underinsured motorist benefits, the petitioner appeals from an order of the Supreme Court, Nassau County (McCormack, J.), entered November 1, 2007, which denied the petition.

ORDERED that the order is reversed, on the law, with costs, the petition is granted, and the arbitration is permanently stayed.

On or about August 26, 2002, the respondent, Marie Ray, was involved in an automobile accident while riding in a vehicle owned and operated by nonparty Mary Gigante (hereinafter the Gigante vehicle), an insured under a policy of insurance (hereinafter the petitioner's policy) issued by the petitioner, Automobile Insurance Company of Hartford, s/h/a Travelers Insurance Company. The Gigante vehicle collided with a vehicle operated by nonparty Jamie Wood (hereinafter the tortfeasor's vehicle). At the time of the accident, in addition to Ray, Roseann Roberts also was a passenger in the Gigante vehicle. The tortfeasor's vehicle was insured under a policy of insurance (hereinafter the tortfeasor's policy) issued by nonparty Great American Insurance Company (hereinafter the tortfeasor's insurer).

The combined policy limit for bodily injury liability and property damage under the petitioner's policy was $300,000 per accident. The policy limit for bodily injury liability under the tortfeasor's policy was $100,000 per person, and $300,000 per accident. The petitioner's policy also contained a supplementary uninsured/underinsured motorists (hereinafter SUM) endorsement with a single policy limit for uninsured/underinsured motorists' coverage in the sums of $300,000 per person/$300,000 per accident.

Pursuant to subparagraph (a)(2) of the Definitions section of the SUM endorsement of the petitioner's policy, which mirrors 11 NYCRR 60-2.3(f) (the statutorily-prescribed endorsement), Ray and Roberts, while occupying the Gigante vehicle, were insureds under that policy for purposes of the SUM endorsement.

The tortfeasor's insurer made a payment to Ray in the sum of $100,000, and also made payments to Gigante and Roberts, the total of which payments exhausted the full bodily injury liability limit of $300,000 under the tortfeasor's policy. Subsequently, Ray made a demand for arbitration of a claim under the SUM endorsement of the petitioner's policy for $300,000, the SUM endorsement limit per person under that policy.

The petitioner commenced this proceeding to permanently stay arbitration of Ray's claim. The Supreme Court denied the petition. We reverse.
Based upon the facial comparison of the policy limits for bodily injury liability under the tortfeasor's policy with those under the petitioner's policy, the SUM endorsement would not be triggered. Since the petitioner's $300,000 combined policy limit includes property damage, the bodily injury liability limits of the tortfeasor's policy were not less than the bodily injury liability limits of the petitioner's policy (cf. Matter of Prudential Prop. & Cas. Co. v Szeli, 83 NY2d 681, 686-687).

Under the circumstances here, involving a multiple-victim accident, the petitioner's policy would provide $300,000 in coverage for bodily injuries less any amount payable for property damage. By contrast, the tortfeasor's policy would provide $300,000 for bodily injuries plus any amount payable for property damage. Thus, the tortfeasor is not underinsured for purposes of Insurance Law § 3420(f)(2)(A) (see Matter of Prudential Prop. & Cas. Co. v Szeli, 83 NY2d 681, 685-687; Matter of Clarendon Natl. Ins. Co. v Nunez, 48 AD3d 460; Matter of Government Empls. Ins. Co. v Young, 39 AD3d 751, 753; Matter of Allstate Ins. Co. v DeMorato, 262 AD2d 557; Matter of Automobile Ins. Co. of Hartford Conn. v Stillway, 165 AD2d 572, 575).

Contrary to Ray's contention, the SUM endorsement of the petitioner's policy which incorporated the precise requirements for SUM coverage mandated by 11 NYCRR 60-2.3, including the prescribed offset provision, was not ambiguous and misleading (see Matter of Allstate Ins. Co. [Stolarzy New Jersey Mfrs. Ins. Co.], 81 NY2d 219, 224; Matter of Government Empls. Ins. Co. v Young, 39 AD3d 751, 752; Matter of State Farm Mut. Auto. Ins. Co. v Bigler, 18 AD3d 878, 879). Accordingly, the Supreme Court should have granted the petition and permanently stayed arbitration of Ray's claim for underinsured motorist benefits.

Based upon the foregoing, the parties' remaining contentions regarding the court's failure to direct pre-arbitration discovery have been rendered academic.

In the Matter of Progressive Northern Insurance Company v. Sentry Insurance

Carman, Callahan & Ingham, LLP, Farmingdale, N.Y. (Michael F.
Ingham and James Carman of counsel), for appellant.
Gallagher, Walker, Bianco & Plastaras, Mineola, N.Y. (Robert
J. Walker and Dominic Bianco of
counsel), for respondent.


DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to vacate an arbitration award dated January 23, 2007, the petitioner appeals from an order of the Supreme Court, Nassau County (Lally, J.), dated June 15, 2007, which denied the petition.

ORDERED that the order is affirmed, with costs.

On December 10, 2004, Mira Duncalf, an insured of Progressive Northern Insurance Company (hereinafter Progressive) was involved in an automobile accident with an insured of Sentry Insurance A Mutual Company (hereinafter Sentry). On or about May 16, 2005, Progressive commenced an arbitration proceeding against Sentry with Arbitrations Forum, Inc. (hereinafter the arbitrator), seeking reimbursement, through a priority-of-payment claim (hereinafter the prior claim), of the first-party benefits paid to its insured (hereinafter the prior arbitration) (see generally Insurance Law § 5105; 11 NYCRR 65-3.12[b]; 65-4.11). In a decision and award dated July 11, 2006, the arbitrator denied the prior claim.

On or about September 19, 2006, Progressive commenced a second arbitration proceeding with the arbitrator seeking the same reimbursement, albeit through a loss-transfer claim (hereinafter the instant claim), against Sentry (hereinafter the instant arbitration). In the instant arbitration, Sentry, inter alia, raised the affirmative defense of res judicata. In a decision and award dated January 23, 2007 (hereinafter the instant award), the arbitrator denied the instant claim on that ground. Subsequently, Progressive commenced this proceeding pursuant to CPLR article 75 to vacate the instant award. The Supreme Court denied the petition. We affirm.

The arbitrator did not exceed its authority by rendering an award in favor of Sentry (see CPLR 7511[b][1][iii]). It was within the arbitrator's authority to determine the preclusive effect of the prior arbitration on the instant arbitration (see Matter of City School Dist. of City of Tonawanda v Tonawanda Educ. Assn., 63 NY2d 846, 848; Board of Educ. of Patchogue-Medford Union Free School Dist. v Patchogue-Medford Congress of Teachers, 48 NY2d 812, 813; Matter of Globus Coffee, LLC v SJN, Inc., 47 AD3d 713, 714; Matter of Town of Newburgh v Civil Serv. Empls. Assn., 272 AD2d 405; see also Matter of County of Jefferson [Jefferson County Deputy Sheriff's Assn.], 265 AD2d 802; Matter of Port Auth. of N.Y. & N.J. v Office of Contract Arbitrator, 254 AD2d 194, 195; Rabinovich v Shchegol, 251 AD2d 25; Matter of Port Auth. of N.Y. & N.J. v Port Auth. Police Sergeants Benevolent Assn., 225 AD2d 503; Matter of Birchwood Mgt. Corp. v Local 670, Stationery Engrs., RWDSU, AFL-CIO, 154 AD2d 531; Vilceus v North Riv. Ins. Co., 150 AD2d 769, 770; Matter of Resnick v Serlin, 119 AD2d 825; Matter of Board of Educ., Florida Union Free School Dist. [Florida Teachers Assn.], 104 AD2d 411, 411-412, affd 64 NY2d 822).

Moreover, it is clear that the instant claim made by Progressive arose out of the same transaction as the prior claim that was denied in the prior arbitration (see Matter of Hunter, 4 NY3d 260, 269; Matter of Aetna Cas. & Sur. Co. v Bonilla, 219 AD2d 708, 708-709; Matter of Ulster Elec. Supply Co. v Local 1430, Intl. Bd. of Elec. Workers, 253 AD2d 765). While Progressive now alleges different facts regarding how the accident occurred, and a different theory upon which reimbursement is sought, the instant arbitration and the instant claim involve the same accident and the same parties, while Progressive seeks reimbursement of the same payments, albeit on a different legal theory (see Matter of Hunter, 4 NY3d 260, 269; Boronow v Boronow, 71 NY2d 284, 290; Smith v Russell Sage Coll., 54 NY2d 185, 192-193; Matter of Reilly v Reid, 45 NY2d 24, 29; Marinelli Assocs. v Helmsley-Noyes Co., Inc., 265 AD2d 1, 5).

Where, as here, the facts upon which the prior claim and the instant claim are based were related in time, space, and origin, and form a convenient trial unit, and their treatment as a unit conforms to the parties' expectations (see Boronow v Boronow, 71 NY2d 284, 289; Smith v Russell Sage Coll., 54 NY2d 185, 192-193; Matter of Reilly v Reid, 45 NY2d 24; Flushing Plumbing Supply Co., Inc. v F & T Mgt. & Parking Corp., 29 AD3d 855, 856; Couri v Westchester Country Club, 186 AD2d 715, 716; Matter of Bauer v Planning Bd. of Vil of Scarsdale, 186 AD2d 129, 130), the arbitrator's decision to bar the instant compulsory arbitration (see Insurance Law § 5105) was neither arbitrary nor capricious and was supported by a "reasonable hypothesis" (Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 224; see Matter of State Farm Mut. Auto. Ins. Co. v Lumbermens Mut. Cas. Co., 18 AD3d 762, 763). Thus, the instant award was not subject to vacatur under CPLR 7511(b)(1).

Progressive's remaining contentions are without merit or need not be reached in light of our determination.

Scordio Construction, Inc. v. Sirius America Insurance Company

 

White, Quinlan & Staley, LLP, Garden City, N.Y. (Terence M.
Quinlan of counsel), for appellant.
Thomas A. Toscano, P.C., Mineola, N.Y. (Marianne Cardo of
counsel), for respondent.


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 in an underlying action entitled Lara v 610 West End Corp., pending in Supreme Court, New York County, under Index No. 107928/05, the defendant Sirius America Insurance Company appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Schmidt, J.), dated February 15, 2007, as, in effect, denied those branches of its motion which were for leave to renew its opposition to that branch of the plaintiff's motion which was for summary judgment against it, which had been granted in an order of the same court dated November 6, 2006, and for summary judgment in its favor.

ORDERED that the order dated February 15, 2007, is reversed insofar as appealed from, with costs, that branch of the motion of the defendant Sirius America Insurance Company which was for leave to renew is granted, and, upon renewal, so much of the order dated November 6, 2006, as granted that branch of the plaintiff's motion which was for summary judgment against the defendant Sirius America Insurance Company is vacated, that branch of the plaintiff's motion is denied, that branch of the motion of the defendant Sirius America Insurance Company which was for summary judgment in its favor is granted, and the matter is remitted to the Supreme Court, Kings County, for the entry of an appropriate judgment, inter alia, declaring that the defendant Sirius America Insurance Company is not obligated to defend or indemnify the plaintiff in the underlying action.

Contrary to the Supreme Court's characterization, the appellant sought leave to renew, in addition to reargument, as it properly raised new facts not offered in opposition to the prior motion (see CPLR 2221[e][2]). Considering, among other things, the plaintiff's obligations in paragraphs 7 and 8 of the construction contract dated December 10, 2003, the plaintiff knew or should have known of a potential claim at the time of the occurrence in July 2004. The notice the plaintiff provided to the appellant more than one year later was, under the circumstances, unreasonable as a matter of law (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743; Reznick v Zurich N. Am. Specialities, 45 AD3d 750; Macro Enters., Ltd. v QBE Inc. Corp., 43 AD3d 728; 120 Whitehall Realty Assoc., LLC v Hermitage Ins. Co., 40 AD3d 719, 720-722; Blue Ridge Ins. Co. v Biegelman, 36 AD3d 736, 738; Modern Cont. Constr. Co., Inc. v Giarola, 27 AD3d 431, 432-433).

Accordingly, the Supreme Court should have granted that branch of the appellant's motion which was for leave to renew (see CPLR 2221[e]), and, upon renewal, inter alia, denied that branch of the plaintiff's motion which was for summary judgment against the appellant, and should have granted that branch of the appellant's motion which was for summary judgment in its favor. Since this is, in part, a declaratory judgment action, the matter must be remitted to the Supreme Court, Kings County, for the entry of an appropriate judgment, inter alia, declaring that the defendant Sirius America Insurance Company is not obligated to defend or indemnify the plaintiff in the underlying action.

Tex Development Co., LLC v. Greenwich Insurance Company

Steinberg & Cavaliere, LLP, White Plains, N.Y. (Kevin F.
Cavaliere of counsel), for plaintiff-appellant-respondent.
Menagh & Falcone, P.C., New York, N.Y. (Joseph S. Hubicki
of counsel), for
defendants-appellants-respondents.
Mintzer, Sarowitz, Zeris, Ledva & Meyers, Hicksville, N.Y.
(Leslie McHugh of counsel), for
respondents-appellants.
Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, New
York, N.Y. (Richard E. Lerner,
Patrick J. Lawless, and Glenn J.
Fuerth of counsel), for respondent.


DECISION & ORDER

In an action, inter alia, for a judgment declaring that the defendant Greenwich Insurance Company is obligated to defend and indemnify the plaintiff in an underlying action entitled Benhalima v Tex Development Co., LLC, pending in the Supreme Court, Queens County, under Index No. 7510/05, (1) the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Queens County (Taylor, J.), entered April 12, 2007, as denied its cross motion for summary judgment on its first and second causes of action declaring that the defendant Greenwich Insurance Company is obligated to defend and indemnify it in the underlying action, (2) the defendants Abdellatif Benhalima and Mustapha Ben Ahmed Badaoui, as administrators of the estate of Abdelaaziz Badaoui, separately appeal, as limited by their brief, from so much of the same order as denied their motion, in effect, for summary judgment on their cross claim declaring that the defendant Greenwich Insurance Company is obligated to indemnify the plaintiff in the underlying action, and (3) the defendants Stern Agency, Inc., and Ken Stern cross-appeal, as limited by their brief, from so much of the same order as denied their cross motion for summary judgment declaring that the defendant Greenwich Insurance Company is obligated to defend and indemnify the plaintiff in the underlying action, and dismissing the remainder of the complaint and all cross claims insofar as asserted against them.

ORDERED that the order is modified, on the law, by (1) deleting the provision thereof denying the plaintiff's cross motion for summary judgment on its first and second causes of action declaring that the defendant Greenwich Insurance Company is obligated to defend and indemnify it in the underlying action, and substituting therefor a provision granting the cross motion, (2) deleting the provision thereof denying the motion of the defendants Abdellatif Benhalima and Mustapha Ben Ahmed Badaoui, as administrators of the estate of Abdelaaziz Badaoui, in effect, for summary judgment on their cross claim declaring that the defendant Greenwich Insurance Company is obligated to indemnify the plaintiff in the underlying action, and substituting therefor a provision granting the motion, and (3) deleting the provision thereof denying that branch of the cross motion of the defendants Stern Agency, Inc., and Ken Stern which was for summary judgment declaring that the defendant Greenwich Insurance Company is obligated to defend and indemnify the plaintiff in the underlying action, and substituting therefor a provision granting that branch of the cross motion; as so modified, the order is affirmed insofar as appealed and cross-appealed from, with one bill of costs payable by the respondent to the plaintiff-appellant-respondent, the defendants-appellants-respondents, and the respondents-appellants appearing separately and filing separate briefs, and the matter is remitted to the Supreme Court, Queens County, for the entry of a judgment, inter alia, declaring that the defendant Greenwich Insurance Company is obligated to defend and indemnify the plaintiff in the underlying action entitled Benhalima v Tex Development Co., LLC, pending in the Supreme Court, Queens County, under Index No. 7510/05.

On October 10, 2003, Abdelaaziz Badaoui (hereinafter the decedent) was killed in an accident while performing construction work on property owned by the plaintiff Tex Development Co., LLC (hereinafter Tex Development). Tex Development was insured under a commercial general liability insurance policy issued by the defendant Greenwich Insurance Company (hereinafter Greenwich). Tex Development procured that policy through its insurance broker, the defendant Stern Agency, Inc.

On October 13, 2003, Tex Development's representative notified the defendant Ken Stern, who was associated with Stern Agency, Inc., about the accident. Although Tex Development's representative asked Stern to notify Greenwich about the accident, Stern failed to do so.

On or about April 5, 2005, the defendants Abdellatif Benhalima and Mustapha Ben Ahmed Badaoui (hereinafter together the administrators), who were the administrators of the decedent's estate, commenced an action (hereinafter the underlying action) against Tex Development. Alleging that Tex Development was responsible for the accident, the administrators sought to recover damages for wrongful death.

On April 18, 2005, Tex Development notified Greenwich about the accident and the underlying action. Greenwich then conducted an investigation into "notice and liability issues." 

On June 2, 2005, Greenwich disclaimed coverage on the ground that it had not been provided with timely notice of the accident. Indeed, Tex Development's insurance policy required it to notify Greenwich "as soon as practicable of an occurrence' or an offense which may result in a claim."

Tex Development then commenced this action against the defendants, seeking a judgment declaring that Greenwich was obligated to defend and indemnify it in the underlying action. Tex Development also sought damages from Stern Agency, Inc., and Stern (hereinafter together the Stern defendants) based on an allegedly negligent failure to provide notice of the accident to Greenwich.

Subsequently, Tex Development, the Stern defendants, and the administrators separately moved, inter alia, for summary judgment declaring that Greenwich was obligated to defend and indemnify the plaintiff in the underlying action. The Supreme Court denied the motions in their entirety. We modify.

Insurance Law § 3420(d) requires an insurer to provide a written disclaimer of coverage "as soon as is reasonably possible." An insurer's failure to provide notice of disclaimer as soon as is reasonably possible precludes effective disclaimer, even where the insured's own notice of the incident is untimely (see Matter of New York Cent. Mut. Fire Ins. Co. v Aguirre, 7 NY3d 772, 774; First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 67). The timeliness of an insurer's disclaimer is measured from the point in 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 at 68-69).

On their respective motions, Tex Development, the Stern defendants, and the administrators demonstrated their entitlement to summary judgment declaring that Greenwich was obligated to defend and/or indemnify Tex Development in the underlying action. Tex Development, the Stern defendants, and the administrators established, prima facie, that under the circumstances, Greenwich failed to provide a written disclaimer of coverage as soon as reasonably possible (see Delphi Restoration Corp. v Sunshine Restoration Corp., 43 AD3d 851, 852). In response, Greenwich, which had the burden of explaining its delay in providing the written notice of disclaimer (see First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d at 69), failed to raise a triable issue of fact.

The Stern defendants' remaining contentions are without merit.

Since this is, in part, a declaratory judgment action, we remit the matter to the Supreme Court, Queens County, for the entry of a judgment, inter alia, declaring that Greenwich is obligated to defend and indemnify the plaintiff in the underlying action (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).

Rodriguez v. Abdallah

Eric H. Green, New York (Hiram Anthony Raldiris of counsel), for appellants.
Law Office of John P. Humphreys, New York (Evy Kazansky of counsel), for respondent.

Order, Supreme Court, New York County (Deborah A. Kaplan, J.), entered March 30, 2007, which granted defendants' motions for summary judgment dismissing the complaint on the ground that the injured plaintiff, a taxi driver who was the victim of a rear-end collision while his taxi was stopped at a red light, did not sustain a serious injury within the meaning of Insurance Law § 5102(d), unanimously affirmed, without costs.

The record evidence supports the motion court's determination that defendants established their entitlement to summary judgment as a matter of law. Defendants' experts - a neurologist, an orthopedic surgeon and a radiologist, each board certified - submitted affirmed, objective medical reports sufficient to disprove plaintiffs' claims of serious injury on the theories of permanent consequential limitation of use of body organ or member, significant limitation of the use of a body function or system, and the 90-out-of-180-day period of disability immediately following injury. Plaintiffs' objective medical evidence - an affidavit by his treating physician, Dr. Melamed, a family practitioner - failed to raise a material issue of fact as to any of these theories (see Toure v Avis Rent A Car Sys., 98 NY2d 345 [2002]; Gaddy v Eyler, 79 NY2d 955 [1992]).

In particular, plaintiff failed to rebut defendants' objective medical proof that some 33½ months after the accident, the neurologist, after performing various tests on the injured plaintiff, found his neurological condition to be "essentially normal"; the orthopedic surgeon, after examination, found that any spinal injuries (sprains and strains) from the accident had healed and that disc bulges in the lumbar spine were degenerative and not traumatic; and that the radiologist, after review of an MRI taken less than two months after the accident, found no evidence of acute traumatic injury to the lumbar spine, that the disc bulges in the lumbar spine were "chronic and degenerative in origin," and that there was "no causal relationship between the claimant's alleged accident and the findings on the MRI examination." Specifically, Dr. Berkowitz, the radiologist, explained that she found "no evidence of acute traumatic injury to the lumbar spine such as vertebral fracture, asymmetry of the disc spaces, ligamentous tear or epidural hematoma." [*2]

Dr. Melamed stated in his affidavit that he treated the injured plaintiff's symptoms - pain, tenderness and spasms in the posterior cervical spine with highly restricted movement of the head and neck - for six months with physical therapy, chiropractic and acupuncture. He also alleged that he instructed this plaintiff to refrain from activities that caused discomfort, and the patient exercised his discretion by staying home from work for three months. Dr. Melamed's review of the MRI led him to conclude that the disc bulges were caused by the accident, not by the aging process; however, unlike Dr. Berkowitz, he offered no objective medical support for his opinion on this issue. Finally, Dr. Melamed stated that on the patient's last visit, approximately five weeks before he was examined by defendants' medical experts, he performed undisclosed range-of-motion tests in response to complaints of back pain with numbness and tingling aggravated by "pulling, pushing, stretching, cold and humidity." Dr. Melamed found a 30% restriction in the lumbosacral spine and a 15% restriction in the posterior cervical spine. He concluded, without detailing an objective basis for his assessment, that these conditions were caused by the injured plaintiff's accident, and that they would require physical therapy into the indefinite future, rendering the patient permanently disabled.

Plaintiffs' proof, therefore, was insufficient to establish a material issue of fact regarding an Insurance Law § 5102(d) serious injury under any of the theories alleged. It failed to rebut defendants' doctors' conclusions as to the causation of the bulging disc condition or to objectively link it to the accident (Carrasco v Mendez, 4 NY3d 566 [2005]; Montgomery v Pena, 19 AD3d 288, 290 [2005]; see also Otero v 971 Only U, Inc., 36 AD3d 430 [2007]). It failed to properly explicate the range-of-motion test results cited by disclosing the tests used and how the assessment was made (see Toure, 98 NY2d at 350). Thus, the evidence failed to sufficiently establish permanent consequential limitation of use of a body organ or member, or significant limitation of use of a body function or system. It also failed to establish a medically substantiated, non-permanent impairment satisfying the 90-out-of-180-day category (Cruz v Calabiza, 226 AD2d 242 [1996]; cf. Loesburg v Jovanovic, 264 AD2d 301 [1999]), offering instead an apparently self-imposed absence, based upon the injured plaintiff's subjective complaints of pain and discomfort (see Abramson v Premier Car Rental, 261 AD2d 562 [1999]; McLoyrd v Pennypacker, 178 AD2d 227 [1991], lv denied 79 NY2d 754 [1992]; Kimball v Baker, 174 AD2d 925 [1991]).

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

Onishi v. N & B Taxi, Inc.


 

Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Michael I. Josephs of counsel), for appellants.

Order, Supreme Court, Bronx County (Norma Ruiz, J.), entered on or about September 28, 2007, which denied defendants' motion for summary judgment dismissing the complaint for lack of serious injury (Insurance Law § 5102[d]), unanimously modified, on the law, plaintiff's claim for non-permanent injury (90/180 claim) dismissed, and otherwise affirmed, without costs.

Defendants established their entitlement to summary judgment dismissing plaintiff's 90/180-day claim based upon the revelation in plaintiff's deposition testimony and bill of particulars that he stayed home from work for only 11 days after the accident (see Guadalupe v Blondie Limo, Inc., 43 AD3d 669 [2007]). Plaintiff failed to raise a triable issue of fact as to whether he was incapacitated from performing all of his usual and customary activities for at least 90 out of 180 days following the accident. Although he testified that he was advised by his physicians to refrain from landscaping and heavy lifting, and that he was somewhat restricted in the activities of his daily living, such evidence is insufficient to raise a triable issue of fact as to whether plaintiff sustained a "90/180" injury (Thompson v Abbasi, 15 AD3d 95, 101 [2005]; see also Gorden v Tibulcio, __ AD3d __, 2008 NY Slip Op 03382, *3 [April 17, 2008]).

However, with regard to plaintiff's claim of permanent injury, the motion was properly denied. Defendants made a prima facie showing of entitlement to judgment as a matter of law dismissing that claim by submitting, among other things, the affirmed report of their expert who examined plaintiff. Contrary to the finding of Supreme Court, the mere fact that defendants' expert did not address findings in diagnostic and operative reports indicating that plaintiff had a herniated disc does not mean that defendants failed to meet their initial burden. A herniated disc, by itself, is insufficient to constitute a "serious injury"; rather, to constitute such an injury, a herniated disc must be accompanied by objective evidence of the extent of alleged physical limitations resulting from the herniated disc (Pommells v Perez, 4 NY3d 566, 574 [2005]; Servones v Toribio, 20 AD3d 330 [2005]; Kearse v New York City Tr. Auth., 16 AD3d 45, 49-50 [2005]). Thus, we recently rejected the notion that a defendant cannot meet its initial burden on summary judgment of demonstrating the absence of "serious injury" where the defendant's expert fails to address diagnostic reports indicating that the plaintiff has herniated or bulging disks (Style v Joseph, 32 AD3d 212 [2006]; see Santana v Khan, 48 AD3d 318 [2008]).

Nix v Yang Gao Xiang (19 AD3d 227 [2005]), cited by Supreme Court, is distinguishable. In Nix, this Court determined that a defendant's expert's report was insufficient to demonstrate that the plaintiff did not sustain a "serious injury" because the "report was conclusory, failed to indicate what, if any, objective tests were relied upon, and failed to address the objective findings of plaintiff's MRI and CT scan, which showed disc herniations and bulges." In other words, the report suffered from multiple infirmities. Here, however, defendants' expert's report was neither conclusory nor failed to demonstrate the absence of "serious injury." Similarly, Patterson v Rivera (49 AD3d 337 [2008]) and Wadford v Gruz (35 AD3d 258 [2006]) are distinguishable since the defendants' experts in those cases failed to address not only MRI reports indicating herniated discs but other evidence of serious injury as well.

In opposition to defendants' prima facie showing of entitlement to judgment as a matter of law dismissing his claim of permanent injury, plaintiff raised a triable issue of fact, principally on the strength of the affirmation of his neurologist. Defendants' claim that plaintiff has a pre-existing medical condition that accounts for some or all of the injuries plaintiff claimed were caused by the accident was not raised by defendants before Supreme Court. Furthermore, defendants abandoned their claim, raised in their reply papers before Supreme Court, that plaintiff's experts failed to explain a gap in treatment.

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

 

 

Banguela v. Babbo

Cannon & Acosta, LLP, Huntington Station, N.Y. (June Redeker of counsel),                                        for appellant.
Martin, Fallon & MullÉ, Huntington, N.Y. (Peter D. Garone of counsel),                                             for respondent Charles Babbo.
Epstein & Grammatico, Hauppauge, N.Y. (Lillian M. Kennedy of counsel),                                          for respondent John Barbely.


DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Suffolk County (R. Doyle, J.), dated March 14, 2007, which granted the separate motions of the defendants Charles Babbo and John Barbely for summary judgment dismissing the complaint 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, on the law, with one bill of costs, and the separate motions of the defendants for summary judgment dismissing the complaint insofar as asserted against each of them are denied.

The defendants, separately moving for summary judgment, failed to 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). In moving for summary judgment, the separate defendants relied on the same submissions, which included the affirmed medical report of Dr. Benjamin Nachamie, an examining orthopedist. While Dr. Nachamie set forth his findings with respect to the range of motion of the lumbar and cervical regions of the plaintiff's spine, he failed to compare those findings to what is normal, and therefore his report was without probative value (see Page v Belmonte, 45 AD3d 825; Malave v Basikov, 45 AD3d 539; Fleury v Benitez, 44 AD3d 996; Nociforo v Penna, 42 AD3d 514). Since the defendants failed to meet their initial prima facie burdens, it is unnecessary to consider whether the papers submitted by the plaintiff in opposition were sufficient to raise a triable issue of fact (see Page v Belmonte, 45 AD3d 825; Coscia v 938 Trading Corp., 283 AD2d 538). FISHER, J.P., FLORIO, ANGIOLILLO, DICKERSON and BELEN, JJ., concur.

Kasel v Szczecina

Decolator, Cohen & DiPrisco, LLP, Garden City, N.Y. (Joseph L. Decolator of counsel),                         for appellant.
Marvin Jay Berkeley, Uniondale, N.Y., for respondent.


DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order and judgment (one paper) of the Supreme Court, Suffolk County (R. Doyle, J.), entered April 27, 2007, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and is in favor of the defendant and against her dismissing the complaint.

ORDERED that the order and judgment is reversed, on the law, with costs, the defendant's motion for summary judgment dismissing the complaint is denied, and the complaint is reinstated.

The defendant 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; Meyers v Bobower Yeshiva Bnei Zion, 20 AD3d 456; Kearse v New York City Tr. Auth., 16 AD3d 45, 49-50). In opposition, the plaintiff raised a triable issue of fact as to whether she sustained a serious injury under the permanent, consequential, and/or significant limitation of use categories of Insurance Law § 5102(d) to the cervical and/or lumbar regions of her spine as a result of the subject accident. The opinion of the plaintiff's treating chiropractor was based on his most recent examinations of the plaintiff as well as examinations which were contemporaneous with the subject accident. The treating chiropractor also based his opinion on a review of, inter alia, the affirmed cervical and lumbar magnetic resonance imaging reports prepared by the plaintiff's treating radiologist, which were submitted by the defendant in support of the motion for summary judgment (see Casas v Montero, 48 AD3d 728; Zarate v McDonald, 31 AD3d 632; Ayzen v Melendez, 299 AD2d 381). Among other things, the reports documented disc bulges at C4-5 and C5-6 and disc herniations at L4-5 and L5-S1. The plaintiff's treating chiropractor opined that the plaintiff's spinal injuries and range of motion limitations observed were significant and permanent, were causally related to the subject accident, and were not caused by degeneration (see Altreche v Gilmar Masonry Corp., 49 AD3d 479; Clervoix v Edwards, 10 AD3d 626). Contrary to the defendant's contention on appeal, the plaintiff adequately explained the gap in her treatment between January 2005 and her most recent examination on June 30, 2006 (see Gibson v Tordoya, 44 AD3d 1000, 1001; Francovig v Senekis Cab Corp., 41 AD3d 643, 644; Black v Robinson, 305 AD2d 438, 439-440).
SKELOS, J.P., SANTUCCI, COVELLO, McCARTHY and CHAMBERS, JJ., concur.

 

 

Sanderson v. Lonero Transit, Inc.

Schnader Harrison Segal & Lewis, LLP, New York, N.Y. (Bruce M. Strikowsky, Carl J. Schaerf, and Erin Cowan of counsel), for appellants.
The Jacob D. Fuchsberg Law Firm, LLP, New York, N.Y.
(Andrew S. Buzin of counsel), for respondent.


DECISION & ORDER

In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Kings County (Schmidt, J.), dated May 15, 2007, which denied their 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 defendants met their 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, however, the plaintiff raised a triable issue of fact.
MASTRO, J.P., SKELOS, LIFSON and LEVENTHAL, JJ., concur.

In the Matter of Progressive Northeastern Insurance Company v. Scalamandre

Besen and Trop, LLP, Garden City, N.Y. (Robert E. Trop and
Vilma Blankowitz of counsel), for appellant.
Teresa Girolamo, Selden N.Y., for respondent.


DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of an uninsured motorist claim, Maria Scalamandre appeals from an order of the Supreme Court, Suffolk County (Spinner, J.), dated June 27, 2007, which granted the petition.

ORDERED that the order is affirmed, with costs.

The appellant was injured when her automobile collided with a four-wheeled "Raptor Quad" all-terrain vehicle (hereinafter ATV) at an intersection of public streets in Babylon. The appellant's car was insured at the time by Progressive Northeastern Insurance Company (hereinafter Progressive) and the ATV was uninsured. The appellant submitted a demand for arbitration seeking uninsured motorist (hereinafter UM) benefits under her Progressive policy. Progressive sought to permanently stay arbitration on the ground that the ATV did not constitute an "uninsured motor vehicle." The Supreme Court granted the petition. We affirm.

Contrary to the appellant's contention, Progressive's policy is not ambiguous. A plain reading of the language contained in the subject policy leads to the conclusion that a four-wheeled ATV does not constitute a "motor vehicle" for purposes of invoking the policy's UM endorsement (see Matter of Progressive Ins. Cos. [Nemitz], 39 AD3d 1121; see generally Sanabria v American Home Assur. Co., 68 NY2d 866; Bassuk Bros. v Utica First Ins. Co., 1 AD3d 470). In addition, although UM coverage extends to all "motor vehicles," as defined by Vehicle and Traffic Law § 125 (see Insurance Law § 5202[a]; Matter of Country-Wide Ins. Co. v Wagoner, 45 NY2d 581), ATVs are specifically excluded from the definition of motor vehicles set forth therein. Moreover, unlike the situation in Matter of Nationwide Mut. Ins. v Riccadulli (183 AD2d 111), wherein the three-wheeled ATV involved could be considered a motorcycle, thereby rendering UM benefits available, the "Raptor Quad" ATV was a four-wheeled vehicle. Consequently, this ATV does not fit the statutory description of a motorcycle, which is limited to a vehicle with no more than "three wheels in contact with the ground" (Vehicle and Traffic Law § 123; see Vehicle and Traffic Law § 125-a). Accordingly, the court properly granted the petition to permanently stay arbitration of the appellant's claim for UM benefits (see Matter of Liberty Mut. Fire Ins. Co. v Rondina, 32 AD3d 1230).

NIACC, LLC  v  Greenwich Ins. Co.

Gennet, Kallmann, Antin & Robinson, New York, N.Y. (Brian J.
Bolan of counsel), for appellant.
T. Kevin Murtha & Associates, P.C., Westbury, N.Y. (William
Bird III of counsel), for respondents.


DECISION & ORDER

In an action to recover damages for breach of an insurance contract, the defendant appeals from an order of the Supreme Court, Nassau County (Galasso, J.), entered April 9, 2007, which denied its motion for summary judgment dismissing the complaint and granted the plaintiffs' cross motion for summary judgment on the complaint.

ORDERED that the order is affirmed, with costs.

The unambiguous terms of an insurance contract must be accorded their plain and ordinary meaning (see Teichman v Community Hosp. of W. Suffolk, 87 NY2d 514, 520; Breed v Insurance Co. of N. Am., 46 NY2d 351, 355; Toyota Motor Credit Corp. v Felton, 305 AD2d 582, 583). Any ambiguity, however, must be construed against the insurer as the drafter of the policy (see Guardian Life Ins. Co. of Am. v Schaefer, 70 NY2d 888, 890; Commercial Union Ins. Co. v Liberty Mut. Ins. Co., 36 AD3d 645, 645; Matter of Eveready Ins. Co. v Farrell, 304 AD2d 830, 831). Whether or not a provision in an insurance policy is ambiguous is a question of law for the court to determine (see General Elec. Capital Corp. v Volchyok, 2 AD3d 777, 778; Atlantic Mut. Ins. Co. v Terk Tech. Corp., 309 AD2d 22, 28). "The test for ambiguity is whether the language in the insurance contract is susceptible of two reasonable interpretations'" (MDW Enters. v CNA Ins. Co., 4 AD3d 338, 340-341, quoting State of New York v Home Indem. Co.,66 NY2d 669, 671). The focus of the test is on "the reasonable expectations of the average insured upon reading the policy" (Penna v Federal Ins. Co., 28 AD3d 731, 732, quoting Matter of Mostow v State Farm Ins. Co., 88 NY2d 321, 326-327; see Butler v New York Cent. Mut. Fire Ins. Co., 274 AD2d 924, 925-926).

The Supreme Court correctly determined that certain provisions in a commercial liability policy issued by the defendant to the plaintiffs which pertained to "Loss Conditions" were ambiguous and that, construed against the defendant, the provisions required the defendant to reimburse the plaintiffs for guard services retained to protect the subject property after a fire that was the covered cause of loss. Contrary to the defendant's contention, the record does not establish that, after the fire, the property was valueless as a matter of law and that there was, therefore, nothing on the site to protect from further damage (cf. Deni v General Acc. Ins. Co., 175 AD2d 605). Accordingly, the Supreme Court did not err in denying the defendant's motion for summary judgment dismissing the complaint and in granting the plaintiffs' cross motion for summary judgment on the complaint.
RIVERA, J.P., SANTUCCI, ENG and CHAMBERS, JJ., concur.

Gongolewsky v Empire Insurance Company

Miranda Sokoloff Sambursky Slone Verveniotis, LLP, Mineola,
N.Y. (Michael A. Miranda of counsel), for appellant.
Mitchell J. Winn, Roslyn, N.Y., for respondent.


DECISION & ORDER

In an action to recover damages for breach of an insurance contract, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (F. Rivera, J.), dated March 2, 2007, as denied that branch of its motion which was for summary judgment dismissing the complaint and denied, as academic, that branch of its motion which was for leave to amend its answer.

ORDERED that the order is modified, on the law, by deleting the provision thereof denying, as academic, that branch of the defendant's motion which was for leave to amend its answer and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed insofar as appealed from, with costs payable to the defendant.

The plaintiff's home allegedly was damaged when a water pipe burst in an upstairs bathroom. She made a claim under a homeowner's policy of insurance issued to her by the defendant Empire Insurance Company (hereinafter Empire). After the claim was denied, she commenced this action alleging that Empire breached the insurance policy. Empire moved for leave to amend its answer to allege that the plaintiff failed to file a timely proof of loss, despite due demand, as required by Insurance Law § 3407(a), and for summary judgment dismissing the complaint based on that defense. The Supreme Court denied that branch of Empire's motion which was for summary judgment, finding that a due demand had not been made, and denied as academic that branch of Empire's motion which was for leave to amend its answer. We modify.

In the absence of prejudice or surprise to the opposing party, leave to amend a pleading should be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit (see Lucido v Mancuso, 49 AD3d 220; G.K. Alan Assoc., Inc. v Lazzari, 44 AD3d 95, 99; CPLR 3025[b]). Applying this standard, the Supreme Court improvidently exercised its discretion in denying that branch of Empire's motion which was for leave to amend its answer to assert a defense based on Insurance Law § 3407(a). Further, this defense was not waived (cf. Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d 201, Hedaya Home Fashions, Inc. v American Motorists Ins. Co., 12 AD3d 639; Yaccarino v St. Paul Fire & Mar. Ins. Co., 150 AD2d 771).

However, Empire failed to demonstrate, prima facie, that a due demand for a proof of loss was made upon the plaintiff (cf., Agora Intl. v Royal Ins. Co., 234 AD2d 489). Rather, the letter by which the demand was made came from attorneys identifying themselves as counsel for "Allcity Insurance Company," which is apparently a legally distinct sister company to Empire. Nonetheless, the letter did properly identify the property and the policy number. Thus, neither party demonstrated its prima facie entitlement to judgment as a matter of law on the issue of whether Insurance Law § 3407(a) was complied with (cf., Darvick v. General Acc. Ins. Co., 303 AD2d 540; DeRenzis v Allstate Ins. Co., 256 AD2d 303; Agora Intl. v Royal Ins. Co., 234 AD2d 489).

The parties' remaining contentions are without merit.
FISHER, J.P., RITTER, FLORIO and CARNI, JJ., concur.

Singh v Gurbhag Singh.

DECISION & ORDER

In an action, inter alia, to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Kitzes, J.), dated January 24, 2007, which, among other things, in effect, granted the defendants' cross motion to compel him to comply with outstanding discovery demands to the extent of directing him to execute authorizations allowing the defendants to obtain copies of certain tax returns and to execute certain medical authorizations compliant with the Health Insurance Portability and Accountability Act of 1996 (42 USC § 1320d et seq.).

ORDERED that the order is affirmed, without costs or disbursements.

The Supreme Court providently exercised its discretion in directing the plaintiff to execute authorizations allowing the defendants to obtain tax returns filed by the plaintiff and his company. While tax returns are generally not discoverable in the absence of a strong showing that the information is indispensable and cannot be obtained from other sources, the defendants were entitled to such discovery here because the plaintiff's deposition testimony demonstrated that he is self-employed, and he is claiming damages for earnings lost as a result of the alleged assault and battery at issue in this case (see Myrie v Shelley, 237 AD2d 337; Huntington Tobacco Co., Inc. Money Pension & Profit Sharing Fund v Fromer, 193 AD2d 718; Lane v D'Angelos, 108 AD2d 727, 728).

The Supreme Court also properly directed the plaintiff to execute medical authorizations compliant with the Health Insurance Portability and Accountability Act of 1996 (42 USC § 1320d et seq.), inter alia, permitting medical professionals who treated him to discuss the medical condition at issue in this litigation with defense counsel. The plaintiff waived any privilege he might have to this information when he brought suit (see Arons v Jutkowitz, 9 NY3d 393, 415-416).

The plaintiff's remaining contentions are without merit.
SPOLZINO, J.P., CARNI, DICKERSON and ENG, JJ., concur.

 

COSGROVE v COUNTY OF ULSTER

Calendar Date: March 28, 2008
Before: Peters, J.P., Carpinello, Kane, Malone Jr. and Stein, JJ.

Stockton, Barker & Mead, L.L.P., Albany (John P.
Paniccia of counsel), for appellant.
Basch & Keegan, L.L.P., Kingston (Maureen A.
Keegan of counsel), for James Cosgrove, respondent.

MEMORANDUM AND ORDER


Peters, J.P.

Appeal from an order of the Supreme Court (Ceresia Jr., J.), entered March 24, 2007 in Ulster County, which granted petitioner's application, in a proceeding pursuant to Workers' Compensation Law § 29 (5), for approval, nunc pro tunc, of a personal injury settlement.

In January 2001, petitioner was injured in a work-related accident on property owned by respondent and thereafter began receiving workers' compensation benefits from his employer's insurance carrier. Petitioner also commenced a third-party tort action against respondent. Petitioner's counsel discussed the case with a representative of the carrier who agreed that, if possible, the action should be settled and that one third of a settlement would go to the carrier. In November 2003, the case was settled for $15,000. Petitioner's counsel spoke with the carrier's representative and requested information as to where and to whom the carrier's portion of the settlement should be sent. According to petitioner's counsel, the representative stated that he would get back to her with more information, yet neither the representative nor anyone associated with the carrier ever did respond.

In May 2006, a law firm representing the carrier contacted petitioner's counsel and requested an update on petitioner's third-party action. In response, petitioner's counsel informed the firm that the carrier had approved the settlement and agreed to a one-third share of the proceeds, but that the $5,000 check was never disbursed due to the carrier's failure to instruct as to the details of disbursement. Following the carrier's termination of his workers' compensation benefits, petitioner commenced this proceeding seeking judicial approval of the settlement nunc pro tunc. Supreme Court granted the requested approval and the carrier now appeals.

Workers' Compensation Law § 29 (5) permits an employee to settle a third-party action arising out of the same accident as a workers' compensation claim so long as he or she obtains the prior written consent to the settlement from the carrier or, alternatively, judicial approval of the settlement within three months after the case has been settled (see Matter of Lautenschuetz v AP Greene Indus., Inc., 48 AD3d 948, 949 [2008]; Matter of Bernthon v Utica Mut. Ins. Co., 279 AD2d 728, 728 [2001]). "Although the failure to obtain either the carrier's consent or court approval will justify the discontinuance of workers' compensation benefits, '[a] judicial order may be obtained nunc pro tunc approving of a previously agreed-upon settlement, even in cases where the approval is sought more than three months after the date of the settlement, provided that the petitioner can establish that (1) the amount of the settlement is reasonable, (2) the delay in applying for a judicial order of approval was not caused by the petitioner's fault or neglect, and (3) the carrier was not prejudiced by the delay'" (DeRosa v Petrylak, 290 AD2d 596, 598 [2002], lv dismissed and denied 98 NY2d 643 [2002], quoting Matter of Stiffen v CNA Ins. Cos., 282 AD2d 991, 992 [2001], lv denied 97 NY2d 612 [2002]; see Matter of Taylor v Continental Ins. Co., 9 AD3d 657, 658 [2004]).

In our view, petitioner satisfied all three requirements. Regarding the delay in seeking judicial approval of the settlement, the oral approval of the settlement by the carrier's representative, the representative's assurance that further instruction as to the disbursement of the carrier's portion of the settlement would be forthcoming and the carrier's continued payment of workers' compensation benefits through 2006 lulled petitioner into reasonably believing that judicial approval of the settlement was unnecessary (see Matter of Stiffen v CNA Ins. Cos., 282 AD2d at 993; compare Matter of Wilbur v Utica Mut. Co., 228 AD2d 928, 929 [1996]). Further, petitioner brought the present application within a reasonable time after being notified by the carrier that it was rejecting the terms of the settlement. Under these particular circumstances, we agree with Supreme Court's finding that the delay in seeking court approval of the settlement was due to the affirmative actions on the part of the carrier or its representative, rather than petitioner's own neglect (see Matter of Stiffen v CNA Ins. Cos., 282 AD2d at 993; compare Matter of Bernthon v Utica Mut. Ins. Co., 279 AD2d at 729-730). Additionally, in light of respondent's viable defense to the tort action, the settlement was reasonable (see Matter of Snyder v CNA Ins. Cos., 25 AD3d 1055, 1056 [2006]; Matter of McCaffrey v James L. Lewis, Inc., 225 AD2d 981, 983 [1996]), and we discern no prejudice to the carrier as a result of the delay inasmuch as it retains the right to offset any future compensation benefits by the amount of petitioner's net recovery (see Neblett v Davis, 260 AD2d 559, 560 [1999]). "Since applications of this type are clearly directed to the discretion of the court" (Matter of Gilson v National Union Fire Ins. Co., 246 AD2d 897, 898 [1998] [citation omitted]; see Matter of Bernthon v Utica Mut. Ins. Co., 279 AD2d at 729) and we find no abuse of Supreme Court's discretion, the order must be affirmed.

Carpinello, Kane, Malone Jr. and Stein, JJ., concur.