Coverage Pointers - Volume X, No. 25

Dear Coverage Pointers Subscribers:

 

From most quarters of the Empire State, we have fascinating and timely coverage decisions in the attached issue.  You'll be ahead of the curve by reading this one from cover-to-cover (or is that pixel-to-pixel?).

 

Chaos Reigns in the New York Legislature:

If you are following the news in New York, two Democrat State Senators have aligned with the Republicans, giving the Republicans a majority of votes in the body.  That means that the Republicans control that House, the Majority Leader has been rousted out, all the Committee Chairs will be changed, and all this is occurring with five days left in the legislative session.  If that isn't enough, the Senate cannot pass any bills because the Democrats have locked the pending bills in a box and nobody admits to having a key. 

 

In the Meantime, the Courts Release Opinions in Anticipation of the Summer Slowdown

• The Court of Appeals has ruled that when considering offsets for underinsured coverage, payments made to others in the insured's car are not considered as a reduction of liability limits of the offending motorist so as to trigger the right to SUM coverage.
• The First Department finds that an action alleging additional insured status due to a contractual requirement that it be provided should not be allowed to proceed where the contract is presented demonstrating the contrary.
• The Second Department holds that a police officer injured by the criminal conduct of a person being interrogated is not entitled to uninsured motorist coverage as a result of the incident.
• The Third Department added nothing of value to this week's discussions.
• The Fourth Department decides three late notice cases, in one case elevating substance over form and in another reminding us of the evils of relying upon reservation of rights letters. 

From Audrey Seeley, the Queen of No Fault: 

Interestingly, there are a few decisions on use and operation, which personally is one of my favorite issues.  This issue comes up every so often but we usually don't see more than one decision within an issue.  There is also a decision on a case we previously reported on in January 2008 which was vacated and remanded for new hearing.  The Master Arbitrator determined that "lack of occurrence" is not a valid basis for a denial of claim.  It is an interesting read and is one that I am going to monitor to see if the carrier decides to file for de novo review.

 

Also, there will be a pure no-fault program again in Buffalo this November 2009.  I have been advised that the American Arbitration Association may be participating in this program.  This should be a balanced program as there will be a plaintiff and defense perspective provided.  If you are interested in attending please feel free to send me an email ([email protected]) and I will make sure that you receive more information on it when the brochure is distributed.

 

Audrey

[email protected] 
 

Feeling Groovy:

Simon and Garfunkel tip their hats to the 100 year anniversary of the dedication of the Queensborough Bridge.  Known originally, and still, as the 59th Street Bridge, it was also the span seen in the opening credits of the long running TV show, Taxi.

 

Earl's Pearls:

Our Earl Cantwell offers us a few pearls of wisdom on the Economic Loss Doctrine in his regular column.

 

From Steve Peiper, the Purveyor of Property and Potpourri:

Ok, a little exercise to start off this week.  Imagine, claims professionals, a world without the Labor Law (specifically Labor Law 240 and 241[6]). 

 

Ok, back to reality now.  Although the troubles with the Labor Law are more than well documented, we note that its existence often creates an interesting mix of coverage and defense issues.  Given that most defenses are limited in a Labor Law 240(1) or 241(6) case, a carrier is often left managing the inevitable exposure rather than defeating plaintiff's claim.  As a best case scenario, a two-pronged attack should be waged against plaintiff's claim while strategically handling the matter in a manner which will provide additional sources of revenue for resolution.  This week's potpourri offering is a great example of how to manage risk in a case that strict liability, per statute, will most likely be obtained by plaintiff.  

 

No first party decision upon which to comment this week.  Best wishes, see you in two weeks.   

Steve

[email protected] 

 How Far Have We Traveled in 100 Years?:

The North Adams (MA) Transcript

June 12, 1909, page 2

MRS, RAMSEY WILL CROSS

COUNTRY AT HIGH SPEED

Men Tabooed in Her Auto Trip.

Is Well Known Here 

Mrs. Alice H. Ramsey of New York, who was the guest of friends in this city last year for several days, has started on a cross-country automobile tour in which we will drive a 30-horse power car to Seattle.  She started from New York on Wednesday morning of this week, accompanied by three other women . and men are tabooed fro the car through the trip.

 

"We will cross the continent on the third speed wherever the law permits and expect to reach Seattle the latter part of next month," said Mrs. Ramsey as she started the car at Sixty-Fourth Street, New York., Wednesday, on her 4000 mile journey. It is the intention of Mrs. Ramsey and her friends to demonstrate not only that a woman can drive a car in a long distance run but that she can make the necessary road repairs without assistance from men.

 

Mrs. Ramsey, who is president of the "Women's Motoring Club," won the women's trophy in the automobile trip to Philadelphia and back last March and is considered the most skillful woman driver in the East.

Editor's Note:  Alice was 22 at the time and she completed her trip in 59 days, motoring in a Maxwell.  The three other women in the car did not know how to drive. In 1960, she received the titles of "Woman Motorist of the Century" from the American Automobile Association and "First Lady of Automobile Travel" from the Automobile Manufacturers Association. In 2000, she became the first woman to be inducted into the Automotive Hall of Fame. To read more about this woman and her journey, click here www.aliceramsey.com/triphighlights.htm

 

This Week's Issue:

There are several very interesting and important decisions in this week's offerings.  Among those, surely the first case - a decision from the Court of Appeals on SUM coverage, is  a must-read.  The "Red Alert" case bolded below is another and serves as a reminder of the dangers, in New York, of relying on "reservation of rights" letters without a subsequent and timely disclaimer.

 

Dan D. Kohane

[email protected]

• For Underinsured Coverage, Insureds are Able to Reduce the Coverage Limits of the Tortfeasor's Policy only when Payments Made under the Tortfeasor's Policy are to Individuals Not Covered under the SUM Endorsement
• The Truth Wins Out:  the Contract Did Not Require Additional Insured Status and a Motion to Dismiss the Declaratory Judgment Action was Granted (which Alleged such Status) when the Court was Given the Contract to Review
• Proper Notice to an Excess Carrier is Measured by the Requirements of that Policy; Until Proper Notice is Received, Excess Carrier has no Obligation to Respond 
• Substance Wins Over Form.  Disclaimers Sufficient to Apprise Insured and Injured Party of Reason for Disclaimer
• Is Being Told "You're Not Responsible" a Sufficient Excuse Not to Give Notice?
• Red Alert.  Red Alert (for the Non-Believers):  Reservation of Rights is Not a Substitute for a Disclaimer where Denial Based on Exclusion.  Non-Waiver Agreement Does Not Excuse Failure to Conduct Prompt Investigation
• In the Absence of Specific Choice of Law Provisions in Policy, where a Policy Covers Risks in Multiple States, the Law of the State of a Corporate Insured's Principal Place of Business Should be Govern the Policy
• That an Allegedly Infringing Product is Depicted in a Catalog Does Not Necessarily Transform an Infringement Claim into a Covered Advertising Injury Claim
• Questions of Fact on "Good Faith Belief in Non-Liability" Requires Trial, not Resolution by Summary Judgment
• Police Officer Injured as a Result of Intentional Criminal Conduct, Not Entitled to Uninsured Motorist Benefits
• The Policies, Not the Manuals, that Define Coverage
• National Union has no Patience and Therefore is Not Rewarded 

MARGO'S MUSINGS ON SERIOUS INJURY UNDER NEW YORK NO FAULT

Margo M. Lagueras

[email protected]

• Contemporaneous Objective Medical Evidence Is Required Even Where There Is Subsequent Surgery
• Finding of Range-of-Motion Limitation Based On Examination Two Years After Accident Is Too Remote to Raise an Issue of Fact as to Whether Limitation Was Caused By the Accident
• Chiropractor's Affidavit Contradicting His Treatment Notes Lacks Probative Value
• Physician's Conclusory Statements Are Insufficient to Establish Causation
• Affidavit Which Does Not Include Objective Medical Findings Made Within a Reasonable Time After the Accident Is Insufficient
• Experts' Unsupported Opinion That Plaintiff's Limited Range-of-Motion Was the Result of Her Lack of Effort Is Insufficient
• Assertions of Extreme Discomfort, Unsupported By Contemporaneous Medical Proof, are Insufficient to Support 90/180-Day Claim
• Medical Report Documenting Existence of Significant Range-of-Motion Limitations Will Not Support Defendant's Prima Facie Burden
• Motion to Vacate Requires Both a Reasonable Excuse and a Meritorious Claim
• Physician's Failure to Address Work Accident Renders Opinion Regarding Causation Speculative
• Attorney Affirmation, as Sole Opposition to Motion for Summary Judgment, Is Insufficient to Raise a Triable Issue of Fact 

AUDREY'S ANGLES ON NO-FAULT

Audrey Seeley

[email protected]

Arbitration

• Slip and Fall on Ice While Entering Vehicle - Use and Operation? - No. 

Litigation

• Treating Provider Was Independent Contractor and Billing Provider Not Entitled to Payment of Bills 

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper

[email protected]

• Common-Law Indemnity Permits NYC to Shift 100% of Liability to the Architect Who Jury Found only 40% Liable  

That's all for this issue, my friends.  Keep that great feedback coming in.  We pause to note that the next issue will celebrate the end of our 10th year of publication.

 

In the meantime, enjoy your summer and see you soon.

 

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
Katherine A. Fijal
Audrey A. Seeley
Steven E. Peiper
Margo M. Lagueras

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-Richburg
Margo M. Lagueras

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

Index to Special Columns

Kohane’s Coverage Corner
Margo’s Musings on “Serious Injury”
 Audrey’s Angles on No Fault
Peiper on Property and Potpourri
Earl’s Pearls
Across Borders

KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]

6/4/09              Allstate Ins. Co. v. Rivera and Clarendon Ins. Co. v. Nunez
New York Court of Appeals
For Underinsured Coverage, Insureds Are Able to Reduce the Coverage Limits of the Tortfeasor's Policy Only When Payments Made Under the Tortfeasor's Policy Are to Individuals Not Covered Under the SUM Endorsement
The long awaited Rivera and Nunez decision by the high court has now been reported.  Let’s review the facts.
In the Rivera matter, Allstate issued a policy to Mercado that provided liability limits of $25,000/$50,000 and SUM limits in the same amount.  In July 2005, Mercado and five passengers were in a car accident when their vehicle was struck by one insured by GMAC.  GMAC tendered $25,000 to Mercado and $5,000 each to the five passengers, thus exhausting its policy. Each of the five passengers sought SUM benefits under the Allstate policy with Allstate denying, indicating that the $50,000 policy was an offset.
In the Nunez matter, Nunez has a policy with Clarendon with bodily injury liability and SUM coverage of $25,000 per person/$50,000 per accident. In June 2001, while the policy was in effect, Nunez, his wife, and their two children were injured when they were struck by a vehicle insured by Progressive with $25,000/$50,000 limits. Progressive tendered its policy limit of $50,000, paying $15,000 each to three of the family members and $5,000 to the fourth family member. The Nunez family then sought SUM benefits under the Clarendon policy but Clarendon denied, arguing the offset.
Insurance Law § 3420 provides, in pertinent part:
"Any [automobile insurance] policy shall, at the option of the insured, also provide supplementary uninsured/underinsured motorists [SUM] insurance for bodily injury, in an amount up to the bodily injury liability insurance limits of coverage provided under such policy . . . [SUM] insurance shall provide coverage . . . if the limits of liability under all . . . insurance policies of another motor vehicle liable for damages are in a lesser amount than the bodily injury liability insurance limits of coverage provided by such policy. . . . As a condition precedent to the obligation of the insurer to pay under the [SUM] insurance coverage, the limits of liability of all bodily injury liability bonds or insurance policies applicable at the time of the accident shall be exhausted by payment of judgments or settlements"

Each co-occupant in the covered vehicles contends that he or she should be allowed to deduct the payments made to other co-occupants, thereby reducing the tortfeasor's bodily injury liability coverage to an amount less than the coverage limits on their vehicle, triggering SUM coverage. The SUM claimants argued that co-occupants constitute "other persons" under the endorsement, even though co-occupants are insureds under the policy.  The Court of Appeals rejected the argument holding that the "payments to other persons" that may be deducted from the tortfeasor's coverage limits for purposes of rendering the tortfeasor "uninsured" under a SUM endorsement do not encompass payments made to anyone who is an insured under the endorsement.

Insureds are therefore able to reduce the coverage limits of the tortfeasor's policy only when payments made under the tortfeasor's policy are to individuals — such as occupants of the tortfeasor's vehicle, injured pedestrians or those operating a third vehicle — not covered under the SUM endorsement.

6/9/09              West 64th Street, LLC, v. Axis U.S. Insurance
Appellate Division, First Department
The Truth Wins Out:  the Contract Did Not Require Additional Insured Status and a Motion to Dismiss the Declaratory Judgment Action Was Granted (which Alleged such Status) When the Court Was Given the Contract to Review
AXIS established, by offering up the contract, that there was no requirement in the maintenance agreement to name the owner as an additional insured. The documentary evidence submitted by plaintiffs, including a certificate of insurance issued the same day as the accident giving rise to the underlying personal injury action, did not confer coverage, bring plaintiffs within the additional insured coverage afforded by the policy, or otherwise raise any factual issue which would warrant denial of the motion.
Editor’s Note:  An “Attalawyer” goes out to Rob Noble and our friends at Traub, Lieberman for creative lawyering.  It sounds like the owner alleged in the complaint that the contract between it and the contractor required that the owner be listed as an additional insured.  In response, AXIS submitted the contract and the policy language and it was clear that there was no such requirement in the contract.  Accordingly, the policy endorsement that provided AI status if there was a contract that required that status was not triggered.

6/9/09              The Insurance Corporation of New York, v. United States Fire Ins. Co.
Appellate Division, First Department
Proper Notice to an Excess Carrier is Measured by the Requirements of That Policy; Until Proper Notice Is Received, Excess Carrier Has No Obligation to Respond 
The Court below found that the insured, BFC gave late notice of two claims to US Fire, its excess insurer and the court below also found that US Fire's disclaimer was untimely. US Fire issued its disclaimers on April 28, 2006, and the court determined that US Fire had notice on March 16, 2006.
The appellate court found, however, the record establishes that US Fire received notice on April 20th rather than March 16th.  The earlier notice did not give any information about the time, place and circumstances of the accident and the potential for the excess policy to be implicated.  That notice was not given until April 20.  BFC was required to provide US Fire "prompt written notice of an occurrence, which might result in a claim."  The disclaimers, issued eight days after receiving notice, were timely as a matter of law
6/5/09              HBE Corporation v. Sirius American Insurance Co.
Appellate Division, Fourth Department
Substance Wins Over Form.  Disclaimers Sufficient to Apprise Insured and Injured Party of Reason for Disclaimer
We’ve lived with this one for a few years and congratulate an obviously learned court in ruling in our client’s favor.

The insured and cross-claimants argued that while the carrier had denied defense to the named insured, in a timely manner based on late notice, with respect to the main action, it had to again deny coverage on the same late notice when cross-claims were interposed for indemnity. Our argument was that one denial is enough and it isn’t necessary to keep denying coverage on the same ground.
The disclaimer of coverage to plaintiffs and TJI was based upon a policy condition, i.e., that plaintiffs and TJI failed to notify defendant of the claim "as soon as practicable." Accordingly, Sirius was required to comply with Insurance Law Section 3420 (d) by providing both plaintiffs (two companies that had cross-claims against TJI) and TJI (the named insured) with written notice of its disclaimer. Here, the record establishes that the underlying accident occurred in October 2002, that defendant received notice of the accident on February 25, 2004, and that defendant sent a disclaimer letter to TJI on March 5, 2004 and to plaintiffs' attorney on March 10, 2004. According to plaintiffs, the disclaimer letter to their attorney dated March 10, 2004 did not provide the requisite notice with respect to plaintiffs' third-party action against TJI because it stated only that defendant would not defend or indemnify plaintiffs "in this matter," which referred only to the underlying main action. The plaintiffs argued that the disclaimer did not reference the third party action.  The court rejected plaintiffs' contention. The letters sent to TJI and plaintiffs' attorney stated that there was no coverage based on the failure to give defendant notice "as soon as practicable." That was enough. 
6/5/09              First Baptist Church of Olean v. Grey
Appellate Division, Fourth Department
Is Being Told “You’re Not Responsible” a Sufficient Excuse Not to Give Notice?
This is an odd one in that there is only a dissenting opinion.  The three-judge majority affirmed an Order, without discussion, determining that the Church was entitled to a defense and indemnity.  All we have to consider, therefore, are the facts as outlined by the defense.

In November 2000, Grey fell 20 feet to the ground during a construction project.  Employed by Grey Builders, Inc, (Builders), that company had been hired by the Church to do the work. The Church knew of the accident the almost immediately after the accident and knew that Grey had fractured his wrist.

Just under three years later, Grey sues the Church and for the first time, notice is given to the Church’s liability carrier and it promptly denies coverage based on late reporting. After the Church challenged the denial in a declaratory judgment action, the lower court considered cross-motions for summary judgment and held that there was a question of fact about the reasonableness of the Church’s excuse for what was obviously late notice.

The majority affirmed, holding, without discussion, that the reasonableness of the excuse was a question of fact.  The dissent properly outlined the standard for excuse:  did the Church have a reasonable good-faith belief that the occurrence would not result in a claim?  In determining whether such a belief was reasonable, a court should consider, whether the insured made an adequate inquiry into the injured party's condition to determine its seriousness and whether the insured made a deliberate determination' in evaluating potential liability.
The dissent reasoned that considering the fall, and the injury , that knowledge would cause a reasonable and prudent person to investigate the circumstances, ascertain the facts, and evaluate potential liability and no such investigation took place.  The Church submitted an affidavit of the Builder’s owner who told the Church that the Church was not responsible for the injuries and that the Builders “would take care of the worker’s injuries.” The dissent stated – we suggest correctly – that even if the injured party had told the Church it wasn’t responsible, that should not excuse the delay.  A reasonable person should, in that situation, envision liability and give notice.
Editor’s Note:  While a 3-2 decision on a legal issue is often sufficient to entitle Court of Appeals review – and this would be a good one for such review – this is a non-final order because of the lower court’s ruling, affirmed on appeal, that there is a question of fact that requires a hearing. Non-final orders are not subject to review, as of right, by the high Court.
6/5/09        Mayer’s Cider Mill v. Preferred Mutual Ins. Company
Appellate Division, Fourth Department
Red Alert.  Red Alert (for the Non-Believers):  Reservation of Rights Is Not a Substitute For a Disclaimer Where Denial Based on Exclusion.  Non-Waiver Agreement Does Not Excuse Failure to Conduct Prompt Investigation
This is the third late-notice decision from the Fourth Department this term.
Lansdowne, the son of a Mayer employee, was injured in October 1999, at age 12, when he placed his hand inside machinery at the Mill. He did not sue until 2007, the statute of limitations extended by his age. Preferred Mutual never disclaimed coverage, but an individual who served as plaintiff's secretary and treasurer signed a "Non-Waiver Agreement" on October 18, 1999 pursuant to which Preferred Mutual indicated that it would investigate the claim and reserved its right to disclaim coverage. In his complaint, the 12-year old claimed that he was an independent contractor working for the Mill; Mayer denied that the child was an employee or a contractor. By letter dated May 31, 2007, Preferred Mutual advised plaintiff that its investigation into the matter was continuing, noted that the policy did not apply to employees, and continued to reserve its right to deny coverage.
The court finds that Preferred Mutual failed to provide the requisite written notice of disclaimer to plaintiff as soon as was reasonable possible.  There was no evidence that Preferred Mutual conducted a prompt investigation and no justification for waiting over seven years from the execution of the non-waiver until its denial.
Editor’s Note:  We know that there are some faithful readers that still believe that a reservation of rights letter provides an insurer with some degree of comfort in New York as it does in many other states.  We know that every couple of months, a case comes along like this one which reinforces our office’s mantra that a reservation of rights letter is no substitute for a disclaimer.  Please read this one carefully.  Look what the carrier did.  Within a few days after the accident, it sent out an ROR and even had a non-waiver signed.  It promised to investigate and reserved its right to disclaim.  That was not enough to protect its coverage defenses.  It lost its right to rely on policy exclusions by not completing a timely investigation and promptly disclaiming.
6/4/09              Travelers Casualty and Surety Company v. Honeywell International, Inc.
Appellate Division, First Department
In the Absence of Specific Choice of Law Provisions in Policy, where a Policy Covers Risks in Multiple States, the Law of the State of a Corporate Insured’s Principal Place of Business Should be Govern the Policy
A contract of liability insurance is generally "governed by the law of the state which the parties understood was to be the principal location of the insured risk."  However, where it is necessary to determine the law governing a liability insurance policy covering risks in multiple states, the state of the insured's domicile [at the time of contracting] should be regarded as the principal location of the insured risk." A corporate insured's domicile is the state of its principal place of business, not the state of its incorporation.  Here, the policies did not specifically select a particular state’s law.  The principal place of business was New Jersey and despite several New York connections (addresses on some policies, broker location etc.), the Garden State’s law would be applied.
6/4/09              Axelrod v. Magna Carta Companies
Appellate Division, First Department
That an Allegedly Infringing Product is Depicted in a Catalog Does Not Necessarily Transform an Infringement Claim into a Covered Advertising Injury Claim
The insurance policies covered claims of copyright infringement arising out of plaintiff's advertising of goods, products or services. The underlying complaint alleged that plaintiff infringed the underlying plaintiff's copyright by, in pertinent part, "reproducing, manufacturing, and/or distributing" charms that are copies of charms created by the underlying plaintiff and by "preparing derivative works based on" the copyrighted charms.

However, the allegations did not speak to advertising activities nor was there reference to preventing any type of false, misleading or injurious advertising.  While the catalog was attached as an exhibit, no claims were advanced that the catalog itself or the product depictions therein, were infringing "derivative works."

There was an amended complaint alleging advertising injury but the insured waited 20 months before notifying the carrier of a need for defense. The fact that there had been a previous denial of coverage based on the original pleadings does not justify a delay on the part of the insured in advising of this new and potentially covered claim.  A delay in denying coverage under a second policy on the part of the carrier was not fatal where the policy never provided coverage for the claim in the first place.
Editor's Note:  Thanks to Michael Savett and Ken Portner (Weber Gallagher Simpson Stapleton Fires & Newby LLP, Philadelphia, PA,) who represented Magna Carta, for advising of this decision.

6/4/09              Preferred Mutual Insurance Company v. New York Fire-Shield Inc. Appellate Division, Third Department
Questions of Fact On “Good Faith Belief In Non-Liability” Requires Trial, Not Resolution by Summary Judgment
The insured  manufactured fire and flame retardant products, including a product known as "Inspecta-Shield." On October 28, 2004, two United States Marines were severely burned while wearing an item of camouflage clothing known as a "ghillie suit" in the course of a military exercise. The ghillie suits were manufactured by a company known as Ghillie Suits.Com, Inc. and sold with a small bottle of fire retardant spray which was Inspecta-Shield.
The following month, the insured learned of the accident and their product’s use. However, no notice was given to its liability or excess carrier for two years and not until a suit was commenced against it. .
Preferred disclaimed on late reporting under both policies and commenced a DJ action to confirm its denial. The insured then sued its insurance agent alleging negligence.  Preferred then moved for summary judgment of the late notice.  The agent then claimed it had no role in the late notice.
The insured claimed that it had a good faith belief in non-liability and that excused its late notice.  
The insured soon learned that its product was involved but the insured also claimed that he did not "believe" that Inspecta-Shield was involved in the accident or that a claim would be made against it. The reasonableness of his belief and his credibility on this critical point is best reserved for resolution by a jury.
6/2/09              In the Matter of American Manufacturers Mut. Ins. Co. v. Burke
Appellate Division, Second Department
Police Officer Injured as a Result of Intentional Criminal Conduct, Not Entitled to Uninsured Motorist Benefits
Burke, a police officer, was injured when the driver of a car he had stopped for questioning, accelerated her vehicle while the officer was half in and half out of her car.  He filed for Uninsured Motorist Benefits.  The driver of the car had plead guilty to assault in the second degree, admitting that she intentionally drove off even though the appellant was struggling with her and the steering wheel.   The Court found that the injuries did not result from an accident and permanently granted the carrier a stay of UM arbitration.

6//2/09             KSW Mechanical Services, Inc. v. Willis of N.Y., Inc.
Appellate Division, First Department
The Policies, Not the Manuals, Define Coverage
The insured claimed that the broker was liable for fraud in representing the kinds of coverage purchased because of representations in a construction project insurance manual.  However, the manual contained a disclaimer that it merely provided an overview and the policies, not the manual, governed the coverage.  The court found that this was one of those rare circumstances where the court can decide “as a matter of law” that the insured could not have reasonably relied on the manuals and dismissed the suit.

6/2/09              Yoda, LLC v. National Union Fire Ins. Co. of Pittsburgh, PA
Appellate Division, First Department
National Union has No Patience and Therefore is Not Rewarded
National Union had earlier appealed to the court and the court had agreed that , as no discovery had yet been exchanged in the declaratory judgment action, the lower court had acted prematurely when granting summary judgment on National Union’s obligation to provide the second tier of liability coverage .Despite that ruling – and before any further discovery -- National Union immediately moved for summary judgment seeking a declaration with respect to the order of coverage.  The Appellate Division agreed with the lower court that this motion was, of course, premature for the same reasons it was premature the first time it went up on appeal...   
Editor’s Note: As Yoda said once before: "I cannot teach him. The boy has no patience."  Star Wars Episode V: The Empire Strikes Back.

MARGO’S MUSINGS ON SERIOUS INJURY UNDER NEW YORK NO FAULT
Margo M. Lagueras
[email protected]

6/11/09            Jean v. Kabaya
Appellate Division, First Department
Contemporaneous Objective Medical Evidence is Required Even Where there is Subsequent Surgery
Defendants’ expert orthopedist reported that the plaintiff had normal range-of-motion in his left knee, no sin of traumatic injury, and that the cartilage changes were due to degenerative condition, likely as a result of sports activities.  In fact, the same changes observed during arthroscopic surgery of the left knee were also present in the right knee.  In opposition, the plaintiff’s expert failed to address the defendants’ showing of pre-existing degenerative changes and the plaintiff submitted insufficient contemporaneous objective medical evidence showing significant limitations in the knee resulting from the accident.  Such a showing is required, even where there is surgery.

6/11/09            Depena v. Sylla
Appellate Division, First Department
Finding of Range-of-Motion Limitation Based On Examination Two Years After Accident is Too Remote to Raise an Issue of Fact as to Whether Limitation was Caused by the Accident
Defendants’ experts found that the plaintiff’s knee and shoulder conditions were due to pre-existing degenerative condition and did not cause significant limitations.  They further found that the condition in the lumbar spine was pre-existing and that there were no range-of-motion limitations of the cervical spine.  An MRI of the right knee revealed degenerative changes but no sign of recent injury.  Plaintiff’s expert failed to address the findings of degenerative changes, or that the range-of-motions limitations of the lumbar spine were due to prior surgeries, and offered no evidence to support his conclusion that the plaintiff’s conditions were due to the accident.  His examination of the plaintiff was two years after the accident and therefore was too remote to raise an issue of fact concerning causation.

6/05/09            Pina v. Pruyn
Appellate Division, Fourth Department
Chiropractor’s Affidavit Contradicting His Treatment Notes Lacks Probative Value
The plaintiff was involved in two accidents, the second of which was at issue here.  The treatment notes of her chiropractor describing the treatment between the two accidents, and that received after the second accident, established that the injuries and disability from work were the result of only the first accident.  The court found that the chiropractor’s affidavit, that was prepared for litigation, lacked probative value because he did not deny having the opportunity to correct the alleged errors in his notes, nor did he account for the notation that he found the plaintiff’s condition after the second accident to be the same as before it. 

6/05/09            Spanos v. Fanto
Appellate Division, Fourth Department
Physician’s Conclusory Statements are Insufficient to Establish Causation
On appeal, the court found that the defendants submitted “persuasive evidence” that the alleged injuries were related to a preexisting condition and therefore should have been granted summary judgment as the plaintiff’s opposition consisted of the conclusory statement of the examining physician that the right hip and leg pain were causally related to the accident, and the further observation that he found no objective evidence of injury.

6/04/09            Peprah v. McDonald
Appellate Division, First Department
Affidavit Which Does Not Include Objective Medical Findings Made Within a Reasonable Time After the Accident is Insufficient
Simply put, the defendant’s expert’s examination of the plaintiff disclosed no objective medical findings to support the claim of serious injury, and the affidavit of the plaintiff’s expert did not include any objective medical findings made within a reasonable time after the accident to oppose the motion.

6/04/09            Torres v. Knight
Appellate Division, First Department
Experts’ Unsupported Opinion that Plaintiff’s Limited Range-of-Motion was the Result of Her Lack of Effort is Insufficient
The defendants were not liable for the car accident in which the plaintiff was allegedly injured, and she conceded as much.  The only liable person was the driver of a stolen car, who was never served in the action.  The court found the need, however, to render a decision regarding the issue of the plaintiff’s alleged serious injury because not to do so would have collateral estoppel effect on her uninsured motorist claim.  It determined that the defendants’ experts, who reported significant limitation in the plaintiff’s cervical and lumbar range-of-motion and did not identify any potential cause other than the accident, failed to support, with objective medical evidence, their opinions that the plaintiff’s limitations were due to her own lack of effort. 

6/02/09            Taylor v. American Radio Dispatcher, Inc.
Appellate Division, First Department
Assertions of Extreme Discomfort, Unsupported by Contemporaneous Medical Proof, are Insufficient to Support 90/180-Day Claim
Based on positive MRI findings, Taylor’s experts reported that she sustained a tear of the meniscus of the right knee and a tear of the anterior talo-fibular ligament which would require arthroscopic surgery.  Insufficient, rules the court, because no contemporaneous evidence of the extent and duration of the injuries was presented.  Also insufficient is plaintiff’s claim under the 90/180-day category because, again, no contemporaneous range-of-motion restrictions were submitted.  Plaintiff’s assertions that she suffered extreme discomfort which prevented her from being able to work as an apprentice construction worker or bartender simply did not raise a triable issue of fact.

6/02/09            Hwa Soon Um v. Hoi Ku Yang
Landman v. Sarcona
Appellate Division, Second Department
Medical Report Documenting Existence of Significant Range-of-Motion Limitations Will Not Support Defendant’s Prima Facie Burden
In both appeals, the plaintiffs win a reversal because the defendants did not meet their burden when they relied on the affirmed reports of their examining orthopedists and/or neurologists who noted significant limitations in the range-of-motion of the cervical and/or lumbar spines.  Additionally, in Landman, the examining orthopedic surgeon also opined that the noted limitations in the plaintiff’s cervical spine were due to age and evidence of degenerative disease but the court found that unsupported opinion to be conclusory.

6/02/09            Martins v. Yukhayev
Appellate Division, Second Department
Motion to Vacate Requires Both a Reasonable Excuse and a Meritorious Claim
Here, the plaintiff was rear-ended by a taxi.  The defendants brought a motion for summary judgment to dismiss the complaint and the plaintiff defaulted resulting in the unopposed motion being granted.  The plaintiff then timely moved to vacate the order and the court accepted his explanation of law office failure.  The Appellate Court, however, determined that the trial court erred in vacating the default because the plaintiff did not raise a triable issue of fact in opposition to the defendants’ motion regarding the issue of his alleged serious injury and therefore failed to meet the second requirement for vacatur: the meritorious claim.

6/02/09            Rivera v. Bushwick Ridgewood Props., Inc.
Appellate Division, Second Department
Physician’s Failure to Address Work Accident Renders Opinion Regarding Causation Speculative
The plaintiff’s treating physician stated that the plaintiff’s injuries to her cervical spine, lumbar spine, left should and left knee were permanent.  His affirmation failed, however, because, with regard to the cervical spine, it was not based on recent examination revealing significant range-of-motion limitations, and with regard to the left shoulder and left knee, there was no evidence that was contemporaneous with the accident.  In addition, he failed to address the fact that the plaintiff was involved in an accident at work in which she injured her lumbar spine.  This failure rendered speculative his conclusion that her lumbar spine injuries were causally related to the motor vehicle accident.  The court further noted that the MRI reports, which revealed evidence of disc herniation and bulges in the lumbar spine, and tendonitis of the left shoulder, were not evidence of serious injury without objective evidence of the extent of the alleged physical limitation and its duration.

6/02/09            Huerta v. Longo
Appellate Division, Second Department
Attorney Affirmation, as Sole Opposition to Motion for Summary Judgment, is Insufficient to Raise a Triable Issue of Fact
Here the court allowed the defendants’ late motion and found they met their prima facie burden while the plaintiff, whose opposition consisted solely of his attorney’s affirmation, was insufficient to raise a triable issue of fact.

 

AUDREY’S ANGLES ON NO-FAULT
Audrey Seeley
[email protected]

Arbitration

6/5/09              In the Matter of the Arbitration Between Applicant and Progressive Preferred Insurance, Arbitrator Mary Anne Theiss (Onondaga County)
Slip and Fall On Ice While Entering Vehicle – Use and Operation? – No.
On March 28, 2008, the Applicant, eligible injured person, while attempting to enter her motor vehicle slipped on an icy surface sustaining a knee injury.  The question is whether this is use and operation of motor vehicle under Insurance Law §5103(a)(1) entitling the Applicant to first-party benefits.

The assigned arbitrator determined that the Applicant’s injuries did not arise out of the use and operation of a motor vehicle.  Relying upon the two seminal cases on this issue – Walton v. Lumbermens Mut. And Cas. Co., 88 NY 2d 211 (1996) and In Re Manhattan & Bronx Surface Transport Operating Authorty v. Gholson, 420 NYS2d 298 (2d Dept. 1979), the arbitrator reasoned that the three factors must be found to arise out of the use and operation of a motor vehicle:

• The accident must arise out of the inherent nature of the automobile;
• The accident must arise within the natural territorial limits and the incident use, loading or unloading must not have terminated; and
• The automobile must itself produce the injury and not merely contribute to cause the condition.

 

Here, not all three factors were met and the claim was properly denied by the insurer.  By the way, great job to my esteemed colleague, Michelle Murphy-Louden, Esq. who defended the insurer in this case.

6/2/09              In the Matter of the Arbitration Between Applicant and Capital District Transportation Authority, Arbitrator Veronica K. O’Connor (Erie County)
Injury to Bus Operator When Assisting Passenger Off Bus – Use and Operation? – No.
On November 10, 2008, a bus operator sustained injury to his or her left arm after assisting a passenger in a wheelchair off the bus.  The passenger was proceeding down the ramp and hit her power switch causing the wheelchair to angle to the left and jump the ramp.  The bus operator grabbed the wheelchair to stop it from going off of the ramp and during this process sustained a left arm injury.

The insurer denied the claim for no-fault benefits on the ground that the injury was not proximately caused by the bus.  The assigned arbitrator relying upon the Walton and Gholson cases upheld the insurer’s denial.  The arbitrator reasoned that based upon the Applicant’s testimony and the evidence submissions the Applicant’s injuries were sustained as a result of the wheelchair and not the motor vehicle.

6/5/09              In the Matter of the Arbitration Between Applicant and Allstate Insurance Company, Arbitrator Veronica K. O’Connor (Erie County)
Insurers Cannot Deny Based Upon Lack of Occurrence AND If Insurer Received Timely Notice of a Claim in Arbitration Submission It Must Issue a Timely Denial.
Here’s The Angle:  When we first reported on this arbitration in January 2008 had not only great facts but had reasoning sound in the basic tenets of insurance coverage.  Since then it was vacated by a Master Arbitrator who had determined that a no-fault insurer cannot rely upon lack of occurrence as a basis for denial.  So the lesson insurers at this point should take from this decision is not to deny for “lack of occurrence.”  We say at this point because this case could be submitted for de novo review.  Upon reading the Master Arbitrator’s reasoning it was baffling what happened to the insurer’s ability to rely upon the exclusion on bodily injury intentionally caused by an insured person.  The original decision recited this exclusion and it seemed as though that was asserted in the denials.  This decision indicates that the only basis for the denials was lack of occurrence.

The second lesson from this decision is that if the insurer receives timely claims for the first time as part of the arbitration demand you should issue a timely denial.  We stress that the decision notes that the claim was timely reported as part of the arbitration demand.  Our viewpoint on this differs as it seems prejudicial to an insurer to be forced to properly address a claim that is being presented to it for the first time as part of an arbitration demand.  The point of arbitration is to determine whether an insurer’s failure to pay or even failure to deny a claim was appropriate.  In other words, by the time it reaches arbitration there was submission of the claim to the insurer and either the claim was denied or nothing was done.  If the claim is being presented for the first time to the insurer in arbitration through the receipt of the demand how can it be properly evaluated whether the insurer’s action was proper.

Despite this, we will keep tracking this one to determine if de novo review is sought by the insurer. 

Here’s The Analysis: We originally reported on this matter back in January 2008 when Arbitrator McCorry upheld the insurer’s denial.  We heard that the case was Master Arbitrated and apparently vacated and remanded for a new hearing, that was before Arbitrator O’Connor.  Here is Arbitrator McCorry’s initial decision we previously reported on:

1/11/08  In the Matter of the Arbitration Between Applicant and Respondent Arbitrator Thomas J. McCorry (Erie County)
Applicant’s Fight with a Vehicle’s Occupant and no Contact with the Vehicle are not an Occurrence and Excluded under the Policy.
The Applicant, eligible injured person (“EIP”), sought no-fault benefits after he engaged in a fight in the parking lot with another individual who was in his truck.  The insurer properly denied no-fault benefits on the ground that there was no “occurrence” and the exclusion for bodily injury intentionally caused by an insured person applied.
The Applicant was the leader of four person band that played in Buffalo.  While the band was performing at a local bar, the customers would buy the band shots of Jack Daniels.  The band would line up the shot glasses for the owner to keep a record.  There was conflicting testimony but it is estimated that between six and fourteen shots were consumed by either the Applicant or by the Applicant and at least two band members during the evening.  (We know that this story is not going to end well). 
When the band finished playing for the evening they proceeded to load up their equipment.  During that time, a dispute occurred between the Applicant (the band’s leader) and the drummer over the drummer failing to help load the amplifiers in the Applicant’s truck.  (It’s always the drummer isn’t it.  The drummer never listens.) 
This dispute escalated and what occurred next had different versions (Isn’t that the case when Jack Daniels is involved?).  The arbitrator reported that according to the drummer, he was in his truck with his girlfriend in the process of driving out of the parking lot when the Applicant approached him signaling him to stop.  The two engaged in a heated conversation during which the drummer advised he was quitting the band (of course).  The Applicant attempted to punch the drummer through the truck’s open window.  The drummer put his truck in reverse and sped away.  The vehicle did not strike the Applicant and the Applicant did not fall to the ground.
The drummer’s story was supported by his girlfriend and another band member.  The arbitrator found the drummer’s story more credible and also noted that while the Applicant’s girlfriend witnessed this she never supplied an affidavit to stand by her man.  The arbitrator made a final observation that the Applicant during the hearing had to be repeatedly cautioned to keep his outbursts under control.  It was noted that these did not help his cause.

The decision reports on the Master Arbitration decision that vacated the original award.  Interestingly, the Master Arbitration decision indicated that under NyackHospital v. State Farm Mut. Auto. Ins. Co., 11 AD3d 664 (2d Dept. 2004), an insurer must advise the claimant with a high degree of specificity of the grounds on which the disclaimer is based.  Here, Allstate keep in mind asserted in its denial lack of an occurrence and the exclusion for bodily injury intentionally caused by the insured.  The Master Arbitrator determined that a denial on lack of occurrence is not a proper ground for denying no-fault coverage. (Huh??)  Therefore, the lower arbitrator should have rejected the denials.  (Whatever happened to the exclusion Allstate properly relied upon???)  The case was remanded to a new arbitrator to determine whether Applicant met his prima facie case and to what extent his injuries were caused by the use and operation of the motor vehicle.  (Huh??)

Arbitrator O’Connor heard the testimony of the Applicant (band leader) and his girlfriend (remember she did not testify at the original hearing).  It was noted by the arbitrator that the insured, drummer, did not testify at the hearing and neither did his girlfriend.  (At the original hearing both testified.)  The Applicant testified that the drummer’s truck struck the Applicant’s left hip and ran over both of his feet. 

The interesting thing in this award is that it is mentioned that all of the denials were based upon the lack of occurrence defense.  The original award discussed not only lack of occurrence but also the exclusion for bodily injury intentionally caused by the insured.  The assigned arbitrator was constrained to the Master Arbitrator’s determination that lack of occurrence is not a proper ground for denying no-fault coverage.  Therefore, that ground could not be used to deny coverage.

The Applicant easily established a prima facie case and the last issue on medical expenses was, pursuant to the Master Arbitrator’s instructions, whether the injuries resulted from the use and operation of the vehicle.  Since only the Applicant and his girlfriend supplied testimony that there was contact between the Applicant and vehicle the arbitrator determined the injuries did arise out of the use and operation.

Now, this case was originally only regarding medically expenses but blossomed into a wage claim as well totaling $21,168.00.  The applicant amended the AR-1 in July 2007 and provided an NF-6 (Employer Wage Verification Report) that was sent to the insurer then scanned into AAA’s ECF system in August 2007.  The amount in dispute was never amended on AAA’s ECF system and therefore never addressed in the original arbitration.

At this hearing, the Applicant’s law firm submitted an affidavit that it submitted this NF-6 to AAA.  Further, it was purportedly sent to the insurer on two occasions – June 2007 and July 2007, which was the Amended AR-1.  The insurer submitted an affidavit that it never received the NF-6 and therefore never issued a denial.  The insurer did admit to receiving the NF-6 as part of the Amended AR-1.  The insurer argued that this document is part of the arbitration submission and not the no-fault file therefore a denial would not be generated.

The arbitrator did not find this argument persuasive and determined that the insurer had notice of the lost wage claim and did not issue a timely denial.  Further, even if the insurer timely issued a denial it most likely would have been on the lack of occurrence basis which was determined not to be a valid basis for denial.  (Ugh.)

Litigation

6/8/09              A.M. Medical Services, P.C. a/a/o Raisa Faskhutdinova v. Travelers Ins. Co.
Appellate Term, Second Department
Treating Provider Was Independent Contractor and Billing Provider Not Entitled to Payment of Bills
The Defendant’s summary judgment motion was properly granted on the basis that the services billed were rendered by independent contractors.  Under 11 NYCRR §65-3.11 a billing provider is not a “provider” under the regulations if the medical services were not rendered by it or its employees but by an independent contractor.  The plaintiff’s evidence, W-2 forms for the treating providers and an affidavit from the owner attesting to the providers were employees and the claims forms contained typographical errors stating they were independent contractors, did not create an issue of fact precluding summary judgment.  The court specifically noted that under AM Med. Servs. PC v. Progressive Cas. Ins. Co., 22 Misc3d 70 (2008) the plaintiff cannot correct defects in the bills submitted once the litigation has been commenced.

6/8/09              Bath Med. Supply, Inc. a/a/o Charles E. Boddy v. Country Wide Ins. Co.
Appellate Term, Second Department
Treating Provider Was Independent Contractor and Billing Provider Not Entitled to Payment of Bills
The Plaintiff’s summary judgment motion was reversed as the defendant established that the claim was delayed due to verification requests.  The insurer’s affidavit from its no-fault litigation supervisor demonstrated that the verification requests were timely mailed and contained an adequate description of the standard office practice and procedure used to ensure such requests were properly addressed and mailed.  The plaintiff’s argument was rejected that the denial of claim forms do not contain the same date that final verification was request as the date contained in the insurer’s affidavit.  The court held that if the denial of claim forms suggest the insurer may have requested further verification after receiving the initial verification sought then it does not contradict the affidavit of the insurer.  Despite this, the court continued on to state that the insurer submitted an affirmed peer review that established lack of medical necessity.

The remaining decisions have been broken down into three categories that we routinely see in no-fault claims:

1.         Plaintiff’s Summary Judgment Denied For Failure to Submit Admissible Evidence to Establish a Prima Facie Case.

6/8/09  Post Traumatic Med. Care, P.C. a/a/o George Ferrer v. Travelers Home and Marine Ins. Co.
Appellate Term, Second Department

6/2/09  A B Med. Services PLLC a/a/o Joshua Jacobs v. Country-Wide Ins. Co.
Appellate Term, Second Department

6/2/09  RLC Med., P.C. a/a/o Denise DeAngelis v. Allstate Ins. Co.
Appellate Term, Second Department

6/2/09  Careplus Med. Supply, Inc. a/a/o Paul Anderson v. Utica Mut. Ins. Co.
Appellate Term, Second Department

6/2/09  Careplus Med. Supply, Inc. a/a/o Jose Bravo v. Travelers Indemnity Co.
Appellate Term, Second Department

6/2/09  Inwood Hill Med., P.C. a/a/o Zenedia Urena v. Progressive Cas. Ins. Co.
Appellate Term, Second Department

6/1/09  Fiveborough Chiropractic & Acupuncture, PLLC a/a/o Tina Barrios v. American Employers’ Ins. Co. 
Appellate Term, Second Department

2.         Defendant’s Summary Judgment Motion Denied For Failure to Submit Admissible Evidence to Establish Lack of Medical Necessity.

            6/2/09  Westchester Neurodiagnostic, P.C. a/a/o Michelle Cooley v. Allstate Ins. Co.
Appellate Term, Second Department

3.         Defendant’s Summary Judgment Motion Denied For Failure to Establish Nonappearance for Scheduled IME.

            6/2/09  Careplus Med. Supply, Inc. a/a/o Andres Montoya v. AutoOne Ins. Co.
Appellate Term, Second Department.

6/2/09  Inwood Hill Med., P.C. a/a/o Zenedia Urena v. Progressive Cas. Ins. Co.
Appellate Term, Second Department

PEIPER ON PROPERTY (and POTPOURRI)

Steven E. Peiper
[email protected]

6/9/09             Cunha v City of New York
Court of Appeals
Common-Law Indemnity Permits NYC to Shift 100% of Liability to the Architect Who Jury Found Only 40% Liable
JLJ had been retained by NYC to perform certain roadway construction in Brooklyn.  Plaintiff, an employee of JLJ, was injured when a trench collapsed around him while he was in the course of his employment with JLJ.  Plaintiff then commenced the present action naming NYC as the sole defendant, and alleging violations of Labor Law § 200, Labor Law § 241(6) and common law negligence. 

At the time of trial, NYC smartly moved to dismiss the common law negligence and Labor Law § 200 claims against it.  Having only Labor Law §241(6) remaining, NYC then compromised its claim with plaintiff.  At the same time, NYC had been pursuing a common-law indemnity claim against the engineer on the project, Hak’s Engineering. 

Although the bodily injury claim had been resolved (and damages capped, as a result), the remaining third-party common-law indemnity claim NYC maintained over Hak’s proceeded to verdict.  At the conclusion of trial, the jury concluded that Hak’s bore 40% of the liability attributable to plaintiff’s injury (the jury did not comment upon the remaining 60%).  Because NYC had previously been found, as a matter of law, to have been free of negligence (hence the dismissal of Labor Law §200 and common law negligence claims), the law of the case dictated that none of that 60% of unaccounted for liability could be attributable to NYC. 

Upon appeal, the First Department ruled, and the Court of Appeals affirmed, the well known right that a party may be entitled to common law indemnification where said party is only “strictly” liable for damages under certain sections of the Labor Law.  Here, NYC’s only liability was strict liability under Labor Law § 241(6), and as such it was entitled indemnification from Hak’s. 

In so holding, the Court of Appeals ruled that the fact that NYC settled the bodily injury action prior to a determination of the Labor Law § 241(6) claims had no impact upon NYC’s ability to prosecute a common law indemnity claim against Hak’s.  Rather, the dispositive issue in this case was that Labor Law § 200/common law negligence had previously been dismissed as a matter of law. 

Moreover, the Court also refused to apportion Hak’s proportionate share of liability pursuant to Article 16 of the CPLR.  Rather, where, as here, there were no other tortfeasors available to apportion damages, there is no offset available.  Obviously, there was no offset against plaintiff or JLJ (all claims would be barred by Workers’ Compensation § 11).  In turn, although there was a finding that Hak’s was 40% at fault, it ended up absorbing 100% of the liability because there were no other pockets available.

Note: Although not expressed in the opinion, I would bet that NYC also had a contractual indemnity claim against JLJ but JLJ’s carrier denied coverage.  Rather than chasing JLJ’s assets, NYC proceeded down a road where recovery was much more likely

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

THE TWO SIDES OF “ECONOMIC LOSS”

Two recent cases decided two days apart arrived at totally different rulings concerning the “economic loss doctrine” as applied to claims against construction design professionals such as architects and engineers.  These cases highlight the need to research the particular applications of that doctrine in each state depending on the site of the contract or project, give renewed importance to “choice of law” provisions contained in construction and professional contracts.  

In the first case was decided March 24, 2009, Flagstaff Affordable Housing Limited Partnership v. Design Alliance, Inc., 2009 WL 755285, 2009 Ariz. App. Lexis 40 (Az. App. 2009), an Arizona appellate court held that the economic loss doctrine did NOT preclude an owner’s claim against an architect for negligent design of an apartment project.  The owner hired the architect to design a new apartment complex, but regulatory authorities  filed a complaint that the design violated the Fair Housing Act.  The owner allegedly incurred substantial expense in remedying the design deficiency.  The owner brought suit against the architect to recover remediation expenses.  The lower court dismissed the lawsuit based on the economic loss rule, but the owner appealed and prevailed on appeal.

The issue was apparently one of first impression in Arizona, and the Arizona Court of Appeals ruled that the economic loss rule did not apply to bar claims alleging negligent design.  The Court noted that, in Arizona, the economic loss doctrine had been applied to cases involving construction defects and product liability, but in the construction defect cases the alleged defects had been actual physical defects in construction as opposed to pure design error. 

The Arizona court ruled that the economic loss doctrine did not bar professional negligence claims.  The court ruled that these claims are based in tort, not contract, and the duty was imposed by law because of the architect’s professional and specialized status.  In this court’s view, the architect’s professional duties were independent of any contract, so the purpose of the economic loss doctrine which is to maintain a distinction between tort and contract actions and remedies was not implicated.  In addition, the court ruled that applying the economic loss doctrine to limit negligence claims against design professionals would be at odds with public policy of holding design professionals accountable. 

The court further noted that the Arizona courts had previously held that the economic loss rule did not bar claims against professionals such as attorneys and accountants who result in economic loss, and it would be incongruous not to extend recovery of economic losses in malpractice claims against architects.

In short, a contrary rule in the view of this court would impair the longstanding common law tort of professional negligence. 

A contrary result was reached next door by the Nevada Supreme Court in Terracon Consultants Western, Inc. v. Mandalay Resort Group, 2009 WL 790364, 206 P.3d 81 (Nev. March 26, 2009), decided just two days after the Arizona case.  In Terracon, the Nevada Supreme Court held that the economic loss doctrine precluded negligence claims against design professionals who provided services in a commercial setting where the negligence was alleged to have caused economic loss only without associated personal injury or direct property damage.

In Terracon, the owner, Mandalay Resorts, contracted with the engineering firm Terracon to provide services in connection with the construction of a resort facility.  Terracon prepared a geotechnical report with recommendations for the design of the foundation.  However, due to excessive settling, public officials determined that there was a danger to the resort’s structural integrity, and Mandalay was required to reinforce the foundation before proceeding with construction. Mandalay sued Terracon in state court, and the case was removed to Federal Court.  Terracon moved for partial summary judgment on the professional negligence claim.  The Federal Court certified to the Nevada Supreme Court the question of the scope of the economic loss doctrine.

The Nevada Supreme Court summarized that the economic loss doctrine precludes plaintiffs from seeking to recover under a negligence theory for purely economic damage without any personal injury or property damage.  The doctrine applies to both contracting and non-contracting parties.  The stated purpose of the doctrine is to maintain a distinction between damages available under tort law and those compensable under contract law. 

The Nevada Supreme Court ruled and advised the Federal District Court that, under Nevada law, the economic loss doctrine applies to bar negligence claims against architects and engineers when their services are performed in a commercial setting because the purpose of the doctrine is to maintain a bright line between contract and tort recovery.  Furthermore, in commercial construction projects, the contractual provisions generally cover issues involving economic losses.  In this court’s view, the remedies provided by contract law are better suited to address purely economic losses.  Therefore, Mandalay Resorts could not recover from Terracon under a theory of professional design negligence. 

These cases illustrate that it is important to determine what state’s law is going to apply to a negligent design case.  Choice of law provisions in the retainer and construction contracts become critical.  It is also important to review and revise contracts to see whether and to what extent they provide for and allocate responsibility for economic losses since, if there are contractual provisions dealing with that subject matter, courts may be more prone to relegate the parties to contractual arguments and liability as opposed to tort/negligence theories imposed by law.  The cases also illustrate that this issue is in flux and subject to motions and appeals.  In the Arizona case, the trial court decision was reversed on appeal, and in the Nevada case the Federal District Court did not feel comfortable ruling on Nevada law without certifying the question to the Nevada Supreme Court to address the issue.

ACROSS BORDERS

6/1/09              Bosserman Aviation Equipment v. United States Liability Insurance Company
Third District Court of Appeals of Ohio
Pollution Exclusion Does Not Apply to Employee’s Claim of Chemical Exposure Confined within the Workplace
Bosserman Aviation Equipment, Inc. (Bosserman) filed a declaratory judgment action against its insurer, United States Liability Insurance Company (U.S. Liability), demanding indemnity and defense of an action brought against Bosserman by one of its former employees, in which the former employee alleged that he was injured after being exposed to harmful chemicals contained in aircraft fuel while reconditioning and repairing aircraft refueling equipment within the course and scope of his employment. The trial court and appellate court rejected U.S. Liability’s argument that coverage was precluded under the pollution exclusion of the policy at issue, which excluded coverage for bodily injury “arising from the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants.” The court held that the employees’ “exposure to the fuel while conducting tasks within the normal course of his job duties in the confines of his workplace was outside the reasonable expectation of the exclusion, as such exposure is not analogous to the traditional environmental contamination to which the clause was intended to apply.” The court also held that “a pollution exclusion clause of this nature does not apply to an exposure to toxic chemicals confined within an employee’s work area, as there is no discharge, dispersal, release, or escape of pollutants.”
Submitted by: Joseph Gill and Joanna Gomez (Currie Johnson Griffin Gaines & Myers, P.A.)

REPORTED DECISIONS

KSW Mechanical Services, Inc., v. Willis of New York, Inc.

Loeb & Loeb LLP, New York (David M. Satnick of counsel),
for appellant-respondent.
James F. Oliviero, Long Island City, for KSW Mechanical
Services, Inc., respondent-appellant.
Law Offices of Beth Zaro Green, Brooklyn (Erika Aljens of
counsel), for American Home Assurance Company, respondent-
appellant.
Order, Supreme Court, New York County (Milton A. Tingling, J.), entered August 1, 2008, which, to the extent appealed from, denied defendant Willis of New York's motion to dismiss plaintiff's first, second and fourth causes of action and defendant American Home Assurance's motion to dismiss the fourth cause of action, unanimously reversed, on the law, without costs, and the motions granted.
Plaintiff's fraud claims based on alleged misrepresentations regarding coverage made in a construction project insurance manual are not viable for lack of reasonable reliance as a matter of law in light of the manual's disclaimers stating that it provides an overview and that the policies alone govern coverage. Since the claims are flatly contradicted by the documentary evidence (see Biondi v Beekman Hill House Apt. Corp., 257 AD2d 76, 81 [1999], affd 94 NY2d 659 [2000]), this is one of those rare circumstances in which summary disposition of the issue of reasonable reliance is appropriate (cf. Brunetti v Musallam, 11 AD3d 280, 281 [2004]).
Yoda, LLC v. National Union Fire Ins. Co. of Pittsburgh, PA

Sedgwick, Detert, Moran & Arnold LLP, New York (Jeffrey
M. Winn of counsel), for appellant.
Miranda Sambursky Slone Sklarin Verveniotis LLP, Mineola
(Michael A. Miranda of counsel), for Yoda, LLC, Riverhead
Pooh, LLC and United National Insurance Company,
respondents.
Law Offices of Kenneth A. Wilhelm, New York (Barry
Liebman of counsel), for Han Soo Lee and Soon Ok Jang,
respondents.
Orders, Supreme Court, New York County (Doris Ling-Cohan, J.), entered September 16, 2008 and September 15, 2008, which, respectively, denied defendant National Union's pre-discovery motion for summary judgment declaring that it is obligated to provide only the final tier of liability coverage in the underlying Labor Law action, and denied National Union's motion for a protective order staying discovery, unanimously affirmed, with costs.
When ruling on National Union's first appeal to this Court (50 AD3d 492 [2008]), we agreed with its argument that insofar as no discovery had been exchanged, the Supreme Court had acted prematurely when granting summary judgment to the extent of declaring that National Union was obligated to provide second tier liability coverage in the underlying Labor Law action. We also held that unresolved questions concerning, inter alia, National Union's "delay in disclaiming while monitoring the underlying . . . litigation" precluded, as a matter of law, a determination that it was not obligated to provide second tier liability coverage (id. at 492).
Despite these rulings, immediately upon this matter's remand to the Supreme Court and before the exchange of any discovery between the parties, National Union moved for summary judgment to declare that it is obligated only to provide final tier liability coverage upon the exhaustion of plaintiff United National Insurance Company's liability policy. In light of this Court's earlier ruling, the Supreme Court properly denied National Union's pre-discovery motion (see Kern Suslow Secs., Inc. v Baytree Assocs., Inc, 283 AD2d 230, 230-31 [2001]; J-Mar Serv. Ctr., Inc. v Mahoney, Connor & Hussey, 45 AD3d 809, 809-810 [2007]).
National Union's request that the Justice presiding over this matter be recused and a new Justice assigned is improperly raised for the first time on appeal (see Matter of Peter G. v Karleen K., 51 AD3d 541, 542 [2008]). Were we to consider such  request, we would conclude that recusal is unwarranted (see R & R Capital LLC v Merritt, 56 AD3d 370 [2008]).
We have considered National Union's remaining arguments and find them unavailing.
In the Matter of Allstate Insurance Company v. Rivera

In the Matter of Clarendon National Insurance Company v. Nunez
Jonathan A. Dachs, for appellants. Marshall D. Sweetbaum, for respondent. New York State Trial Lawyers' Association and New York Insurance Association; amici curiae. Case No. 90: Jonathan A. Dachs, for appellants. John R. Casey, for respondent. New York State Trial Lawyers' Association, amicus curiae.

JONES, J.:
At issue in both of these appeals is whether supplementary uninsured/underinsured motorists (SUM) coverage was triggered. In both appeals, we conclude that it was not.
In the first appeal, Allstate Insurance Company issued an automobile insurance policy to Petra Mercado that provided bodily injury liability and SUM coverage of $25,000 per person/$50,000 per accident. In July 2005, while the policy was in effect, Mercado and five passengers in her car were injured when they were struck by a vehicle driven by Nilza Rodriguez and insured by GMAC Insurance Company, which provided the same bodily injury liability coverage as the Allstate policy. GMAC tendered its coverage limit of $50,000, paying $25,000 to Mercado and $5,000 to each of her five passengers. Subsequently, the five passengers sought SUM benefits under the Allstate policy. By letter dated February 20, 2007, Allstate denied SUM coverage, stating that "[s]ince the $50,000 liability policy of Nilza Rodriguez is an offset to our Uninsured Motorist coverage, we will not be able to honor any claims for Uninsured Motorist coverage under [the Allstate] policy."
In the second appeal, Clarendon National Insurance Company issued an automobile policy to Francisco Nunez with bodily injury liability and SUM coverage of $25,000 per person/$50,000 per accident. In June 2001, while the policy was in effect, Nunez, his wife, and their two children were injured when they were struck by a vehicle insured by Progressive Northwestern Insurance Company, which provided the same liability coverage as the Clarendon policy. Progressive tendered its policy limit of $50,000, paying $15,000 each to three of the family members and $5,000 to the fourth family member. The Nunez family then sought SUM benefits under the Clarendon policy. By letter dated October 7, 2005, Clarendon denied SUM coverage, stating that "[s]ince the amount the four claimants will receive from Progressive ($50,000) is equal to the SUM limits of the Clarendon policy ($50,000)[,] the four claimants are not entitled to receive any SUM benefits."
The SUM claimants under the Allstate and Clarendon policies demanded arbitration. Allstate and Clarendon (petitioner insurers) each commenced a CPLR article 75 proceeding for a permanent stay of arbitration. In both cases, the SUM claimants (respondents) argued that SUM coverage was triggered under Insurance Department regulation 11 NYCRR § 60-2.3 (f).
The Appellate Division ruled for petitioner insurers and permanently stayed arbitration in both cases. We granted the SUM claimants in Matter of Allstate and Matter of Clarendon leave to appeal, and now affirm in both cases.
Insurance Law § 3420 provides, in pertinent part:
"Any [automobile insurance] policy shall, at the option of the insured, also provide supplementary uninsured/underinsured motorists [SUM] insurance for bodily injury, in an amount up to the bodily injury liability insurance limits of coverage provided under such policy . . . [SUM] insurance shall provide coverage . . . if the limits of liability under all . . . insurance policies of another motor vehicle liable for damages are in a lesser amount than the bodily injury liability insurance limits of coverage provided by such policy. . . . As a condition precedent to the obligation of the insurer to pay under the [SUM] insurance coverage, the limits of liability of all bodily injury liability bonds or insurance policies applicable at the time of the accident shall be exhausted by payment of judgments or settlements"

(Insurance Law § 3420 [f] [2] [A] [emphasis added]). The plain language of Insurance Law § 3420, therefore, provides that SUM coverage is only triggered where the bodily injury liability insurance limits of the policy covering the tortfeasor's vehicle are less than the third-party liability limits of the policy under which a party is seeking SUM benefits.
This statute "calls for a facial comparison of the policy limits without reduction from the judgment of other claims arising from the accident" (Matter of Prudential Prop. & Cas. Co. v Szeli, 83 NY2d 681, 686 [1994] [held that "underinsured motorist coverage is triggered when the limit of the insured's bodily injury liability coverage is greater than the same coverage in the tortfeasor's policy"]). Further, section 3420 (f) (2) "was enacted to allow policyholders to acquire the same level of protection for themselves and their passengers as they purchased to protect themselves against liability to others" (Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso (93 NY2d 487 [1999], citing Mem of State Executive Dept, 1977 McKinney's Session Laws of NY, at 2445, 2446; see also Raffellini v State Farm Mutual Automobile Ins. Co., 9 NY3d 196, 203-204 [2007]; Szeli, 83 NY2d at 685-686).
The Legislature may authorize an administrative agency "to fill in the interstices in the legislative product by prescribing rules and regulations consistent with the enabling legislation" (Matter of Medical Socy. of State of NY v Serio, 100 NY2d 854, 865 [2003], quoting Matter of Nicholas v Kahn, 47 NY2d 24, 31 [1979]). "In so doing, an agency can adopt regulations that go beyond the text of that legislation, provided they are not inconsistent with the statutory language or its underlying purposes" (Matter of General Elec. Capital Corp. v New York State Div. of Tax Appeals, Tax Appeals Trib., 2 NY3d 249, 254 [2004]). "A duly promulgated regulation that meets these criteria has the force of law" (Raffellini, 9 NY3d at 201). However, "if [a] regulation runs counter to the clear wording of a statutory provision, it should not be accorded any weight" (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459 [1980] [citation omitted]). As relevant here, the Legislature has vested the Superintendent of Insurance with "broad power to interpret, clarify, and implement the legislative policy" by promulgating regulations (Medical Socy., 100 NY2d at 863-864, quoting Ostrer v Schenck, 41 NY2d 782, 785 [1977]).
In 1992, the Superintendent of Insurance promulgated Insurance Department Regulation 35-D, codified at 11 NYCRR § 60-2, which requires that "[e]very SUM endorsement issued shall be the [SUM] Endorsement prescribed by subdivision (f) of this section" (11 NYCRR 60-2.3 [c])[FN1] . Under Regulation 35-D, the term "insured" means:
(1) you, as the named insured and, while residents of the same household, your spouse and the relatives of either you or your spouse;
(2) any other person while occupying:
(i) a motor vehicle insured for SUM under this policy; or
(ii) any other motor vehicle while being operated by you or your spouse; and
(3) any person, with respect to damages such person is entitled to recover, because of bodily injury to which this coverage applies sustained by an insured under paragraph (1) or (2) above"

(11 NYCRR § 60-2.3 [f] [I] [a]). Further, Regulation 35-D defines an "uninsured motor vehicle" as
"a motor vehicle that, through its ownership, maintenance or use, results in bodily injury to an insured, and for which . . . (3) there is a bodily injury liability insurance coverage or bond applicable to such motor vehicle at the time of the accident, but; . . . (ii) the amount of such insurance coverage or bond has been reduced, by payments to other persons injured in the accident, to an amount less than the third-party bodily injury liability limit of this policy"

(11 NYCRR § 60-2.3 [f] [I] [c] [3] [ii]).
Each co-occupant in the covered vehicles contends that he or she should be allowed to deduct the payments made to other co-occupants, thereby reducing the tortfeasor's bodily injury liability coverage to an amount less than the coverage limits on their vehicle, triggering SUM coverage. The SUM claimants therefore argue that co-occupants constitute "other persons" under the endorsement, even though co-occupants are insureds under the policy. We are unpersuaded.
The "payments to other persons" that may be deducted from the tortfeasor's coverage limits for purposes of rendering the tortfeasor "uninsured" under a SUM endorsement do not encompass payments made to anyone who is an insured under the endorsement. It is important to note that the phrase "other persons" is used elsewhere in the endorsement to denote persons other than those insured under the policy. The Notice and Proof of Claim condition directs that "the insured or other person making claim" shall give written notice of claim "under this SUM coverage" (11 NYCRR § 60-2.3 [f] [III] [Condition 2]). It is evident that, in the phrase "the insured or other person," the reference to "other person" means someone who is not "the insured." As each claimant here falls within the endorsement's definition of an "insured," which encompasses all passengers in the covered vehicle, claimants are not "other person[s]." Insureds are therefore able to reduce the coverage limits of the tortfeasor's policy only when payments made under the tortfeasor's policy are to individuals — such as occupants of the tortfeasor's vehicle, injured pedestrians or those operating a third vehicle — not covered under the SUM endorsement. This guarantees that those who have purchased SUM coverage will receive the same recovery they have made available to third parties they injure — but no more.
The position of the SUM claimants and the dissent notwithstanding, this is the only construction that is consistent with the plain language of Insurance Law § 3420, the enabling legislation that Regulation 35-D must conform to, and the core principle underlying SUM coverage — that insureds can never use a SUM endorsement to obtain a greater recovery for themselves than is provided under the policy to third parties injured by the insureds (see Raffellini, 9 NY3d at 203-204; Mancuso, 93 NY2d at 492; Szeli, 83 NY2d at 687). To demonstrate this principle, we need only look at what would occur in Matter of Clarendon were we to adopt the claimants' position. The four members of the Nunez family received $50,000 under the tortfeasor's policy and, by each claimant characterizing the other three family members as "other person[s]," the family now seeks to obtain an additional $50,000 under the SUM coverage provided in their own policy, for a total recovery of $100,000. Yet, if the Nunez vehicle was operated negligently, causing an accident that injured four pedestrians, the total recovery those injured parties could obtain under the Clarendon policy would be $50,000, the per accident limit.
Therefore, reading Insurance Law § 3420 (f) (2), our well-settled interpretation of this statute and Regulation 35-D together, we hold that SUM coverage is not available (that is, SUM coverage cannot be triggered) because (1) the bodily injury liability insurance coverage limits provided under the respective tortfeasors' policies were equal to the third-party bodily injury liability limits of the Allstate and Clarendon policies, (2) the payments made to the SUM claimants did not reduce the amount of the bodily injury insurance coverage provided under the tortfeasors' policies to "an amount less than the third-party bodily injury liability limit of [the Allstate and Clarendon policies]" (11 NYCRR § 60-2.3 [f] [I] [c] [3] [ii]) and (3) allowing such additional coverage would provide an insured/policyholder with more coverage than that provided to an injured third party under his or her policy.
Accordingly, the orders of the Appellate Division should be affirmed, with costs.


CIPARICK, J. (dissenting):
Because the majority improperly forecloses the availability of Supplementary Uninsured Motorists (SUM) benefits to claimants, passengers injured in a car accident, by defining them as outside the purview of Insurance Regulation 35-D (see 11 NYCRR § 60-2.3 [f] [I] [c]) and labeling them as something other than "other persons injured in the accident," I respectfully dissent and would hold that Regulation 35-D's plain language, history and the basic purpose of the SUM coverage provision triggers benefits for claimants.
In Matter of Allstate, six claimants were occupants of a vehicle injured in a car accident. The driver of the non-offending vehicle had an insurance policy issued by Allstate. The offending vehicle was insured by non-party GMAC Insurance. The GMAC policy provided a coverage amount of $ 50,000 per accident and $ 25,000 per person. GMAC paid $ 25,000 to the driver of the struck vehicle and $ 5,000 to each of the five other claimants, thereby totaling the $ 50,000 maximum coverage amount per accident.
Similarly, in Matter of Clarendon, four claimants were riding in a vehicle struck by an offending vehicle insured by non-party Progressive Northwestern Insurance Company. After accepting liability for the accident, Progressive paid out of its $ 50,000 per accident coverage $ 15,000 each to three of the claimants and $ 5,000 to the fourth claimant, thereby totaling its $ 50,000 cap per accident. In both cases, the owners of the non-offending vehicles in which claimants rode had contracted and paid for an insurance plan providing for SUM coverage. Claimants, in both cases, sought SUM coverage for the inadequately recompensed injured persons, but Allstate and Clarendon, respectively, denied their claims.
Today, in denying claimants SUM benefits, the majority reads Regulation 35-D as not having contemplated SUM benefits for claimants, even though they were "other persons injured in the accident." In interpreting the meaning of a regulation, courts must defer to the Superintendent of Insurance's interpretation of his statutorily-vested authority and to his special expertise, unless such interpretation of the statute or regulation is wholly irrational or contrary to its clear meaning (see Matter of Med. Malpractice Ins. Assn. v Supt. of Ins. of State of N.Y., 72 NY2d 753, 761-762 [1988]). Courts must give effect to the plain words of a regulation and presume that it was crafted carefully to mean what it states in plain and ordinary language.
Regulation 35-D states that a vehicle is underinsured for purposes of triggering SUM coverage where
"a motor vehicle . . . results in bodily injury to an insured, and for which . . . there is bodily injury liability insurance coverage . . . applicable to such motor vehicle at the time of the accident, but . . . the amount of such insurance coverage . . . has been reduced, by payments to other persons injured in the accident, to an amount less than the third-party bodily injury liability of this policy" (see 11 NYCRR § 60-2.3 [f] [3] [c] [3] [ii]).
The majority concludes that co-vehicle occupants are not "other persons injured in the accident" by reading into the regulation a meaning excluding co-claimants as "other persons" and classifying them as "insureds." Co-claimants, however, meet all of the criteria required by the plain language of the regulation to trigger SUM coverage: they are indeed injured parties in a car accident; the drivers/owners of the vehicles had bodily injury liability coverage; and claimants' coverage was reduced by payments made to co-claimants —- "other persons." Put simply, when a tortfeasor's coverage is reduced by payments to others —- either co-claimants or strangers —- less coverage is available under that policy to compensate them. Accordingly, under Regulation 35-D, claimants must be considered "other persons injured in the accident."
Significantly, Regulation 35-D is silent as to any exception, limitation or other qualification to the phrase "other persons." Nowhere does the regulation exclude as "other persons" a co-passenger or family relative of an insured. If the regulation was meant to exclude a co-passenger, it would have been a simple matter for the drafters to so state, and the regulation's lack of any such exception is powerful evidence that no such limiting gloss was meant to be read into it (see McKinney's Cons Laws of NY, Book 1, Statutes § 74). Rather, the Regulation's words were intended to mean what they say in ordinary and everyday terms. The majority's rendering of an artificial and strained distinction between co-vehicle occupants and strangers to the insured vehicle in the definition of "other persons injured in the accident" is unwarranted and inconsistent with the plain language of the regulation as incorporated into these insurance policies.
In my view, the language of the SUM provisions is clearly, straightforwardly and unambiguously in favor of triggering SUM coverage for claimants, but to the extent that it can be read as having any ambiguity, the legal consequences of any such lack of clarity in the substance of these insurance contracts should not militate against claimants (see e.g. Matter of Mostow v State Farm Ins. Co., 88 NY2d 321, 325-327 [1996]; Sperling v Great Am. Indem. Co., 7 NY2d 442, 447-449 [1960]; Mutal Life Ins. Co. v Hurni Packing Co., 263 US 167, 176 [1923]). In this regard, insurers have not challenged the regulatory language at issue here at any point as improper, unfair or unauthorized, even when other portions of Regulation 35-D were challenged.
Words of an insurance policy, furthermore, must be viewed from the position of an average person applying common speech (see Buckner v Motor Veh. Acc. Indem. Co., 66 NY2d 211, 213-214 [1985]; Ace Wire & Cable Co. v Atena Cas. & Sur. Co., 60 NY2d 390, 398 [1983]). "The language employed in a contract of insurance must be given its ordinary meaning, such as the average policyholder of ordinary intelligence, as well as the insurer, would attach to it" (City of Albany v Std. Acc. Ins. Co., 7 NY2d 422, 430 [1960]; see also Album Realty Corp. v Am. Home Assur. Co., 80 NY2d 1008, 1010 [1992]). Here, claimants would not have reasonably expected the language "other persons injured in the accident" to refer to any persons other than those —- like themselves —- who were injured in a motor vehicle accident. Nor were the owners of the policies in a position to have their form contracts amended, if they so chose, or to otherwise alter the text of Regulation 35-D.
The majority, citing Insurance Law § 3420 (f) (2) (A), argues that SUM coverage is available only where the policy limits of a tortfeasor's vehicle are less than the third-party limits of the policy providing for SUM benefits (see maj op at 4), but the Superintendent of Insurance has been vested with the authority to promulgate rules and regulations that may expand upon such definitions (see Matter of Med. Socy. of State of N.Y. v Sergio, 100 NY2d 854, 863-864 [2003]; Ostrer v Schenck, 41 NY2d 782, 785 [1977]). In promulgating Regulation 35-D, which the majority does not here challenge, the Superintendent was well within his authority to broaden the definition of an uninsured motor vehicle (see e.g. Matter of Am. Mfgs. Ins. Co. v Morgan, 296 AD2d 491 [2d Dept 2002]; Matter of New York Cent. Mut. Fire Ins. Co. v White, 262 AD2d 415 [2d Dept 1999]), as well as that of an underinsured motor vehicle (see Matter of Allstate Ins. Co. v Sung Ju, 56 AD3d 551 [2d Dept 2008]).
In addition, the majority looks for support in the Notice and Proof of Claim provision (see 11 NYYCRR § 60-2.3 [f] [condition] [2]), where there is a distinction between "the insured or other person making claim," and injects that distinction into the plain language of the regulation at issue (see maj op at 7). There is no evidence, however, that the language found in the Notice and Proof of Claim provision can be interpreted to rule out the possibility that claimants in the SUM coverage provision, who the majority claims fall within the endorsement's definition of an "insured," cannot be deemed "other persons." On the contrary, the fact that when the drafters intended to make such a distinction between the insured and other persons they did so in clear and unambiguous language is telling that no such distinction here was intended.
Moreover, providing SUM coverage to claimants is not, as the majority states, contrary to the purpose and history of SUM coverage. New York's uninsured and underinsured motorist protection statutes were enacted to protect innocent victims of motor vehicle accidents caused by motorists who, for whatever reason, could not be counted on to make their victims whole (see Matter of Vanguard Ins. Co. (Polchlopek), 18 NY2d 376, 381 [1966]).
With that purpose in mind, SUM coverage "is designed to increase the level of protection afforded to policyholders injured by negligent drivers who lack adequate liability insurance" (Matter of Metro. Prop. & Cas. Ins. Co. v Mancuso, 93 NY2d 487, 492 [1999]). It was devised to mitigate the liability coverage deficit caused by an inadequately insured vehicle —- underinsured vehicles. It was not meant to be restricted to uninsured motorists. Here, where there appears to be a parity between the policies, in a motor vehicle accident involving numerous passengers, the tortfeasor's liability will be dramatically less than the per person coverage under the claimant's policy. SUM coverage was meant to alleviate this liability gap.
In conclusion, I believe that the majority has read into Regulation 35-D an unwarranted and unreasonable limitation to exclude claimants from SUM coverage. Clearly, claimants meet the expressly written criteria for SUM coverage. Most notably, they are "other persons injured in the accident," and thus should receive SUM benefits. Accordingly, I respectfully dissent and would reverse the orders of the Appellate Division.
* * * * * * * * * * * * * * * * *
In each case: Order affirmed, with costs. Opinion by Judge

Jones. Judges Graffeo, Read, Smith and Pigott concur. Judge Ciparick dissents and votes to reverse in an opinion in which Chief Judge Lippman concurs. Decided June 4, 2009
Footnotes
Footnote 1: As Insurance Law § 3420 (f) (2) and Regulation 35-D are in derogation of the common law, they must be narrowly construed.

Axelrod v. Magna Carta Companies

Bruce D. Katz, New York, for appellant.
Weber Gallagher Simpson Stapleton Fires & Newby LLP,
Philadelphia, PA (Kenneth M. Portner of counsel), for
respondents.
Order, Supreme, Court, New York County (Karla Moskowitz, J.), entered November 14, 2007, which, upon the parties' respective motions for summary judgment, declared that defendants were not obligated to defend and indemnify plaintiff in an underlying copyright infringement action that plaintiff settled, and severed, for purposes of assessment, defendants' counterclaims for costs, disbursements and attorneys' fees, unanimously modified, on the law, to vacate the severance of defendants' counterclaim for attorneys' fees and to dismiss such counterclaim, and otherwise affirmed, without costs.
The subject policies cover, in pertinent part, claims of copyright infringement arising out of plaintiff's advertising of goods, products or services. The underlying complaint alleged that plaintiff infringed the underlying plaintiff's copyright by, in pertinent part, "reproducing, manufacturing, and/or distributing" charms that are copies of charms created by the underlying plaintiff and by "preparing derivative works based on" the copyrighted charms. As the motion court correctly held, such allegations do not show advertising activities (see Quitman Mfg. Co. v Northbrook Natl. Ins. Co., 266 AD2d 105 [1999]). Nor does the underlying complaint's "Prayer for Relief," which makes no reference to preventing any type of false, misleading or injurious advertising (see A. Meyers & Sons Corp. v Zurich Am. Ins. Group, 74 NY2d 298, 303 [1989]). Nor does plaintiff's catalog, which was attached to the underlying complaint, where the underlying complaint did not allege harm based on use of the catalog but apparently submitted the catalog solely as evidence that plaintiff was selling the infringing charms (id. at 304), and, as the motion court held, cannot be construed as asserting a claim that the catalog itself, or the product depictions therein, were infringing "derivative works." The motion court also properly rejected plaintiff's argument that the underlying plaintiff's demand for any and all "matrices" indicated that it was seeking delivery of all materials used to print plaintiff's catalog. Read in context, the underlying plaintiff was seeking matrices that were used to manufacture the copyrighted charms, not the materials used to print plaintiff's catalog.
Plaintiff's 20-month delay in notifying defendants of the new claim alleging advertising in the underlying amended complaint was unreasonable as a matter of law (see Martini v Lafayette Studio Corp., 273 AD2d 112, 113 [2000]). Plaintiff was not relieved of the obligation to notify defendants of this new claim simply because defendant insurer Public Service Mutual had disclaimed coverage based on the allegations in the original underlying complaint (compare AJ Contr. Co. v Forest Datacom Servs., 309 AD2d 616, 617-618 [2003]; Moye v Thomas, 153 AD2d 673 [1989]). Nor did defendant insurer Paramount waive its right to disclaim coverage of the claim raised in the underlying amended complaint; the doctrine of waiver is simply inapplicable where, as here, the defense is the nonexistence of coverage (see Albert J. Schiff Assoc. v Flack, 51 NY2d 692, 698 [1980]). The motion court correctly found that defendants Paramount and Magna Carta Companies did not issue policies relevant to the underlying action. There is no evidence that Magna Carta issued a policy to plaintiff, and no genuine issue of fact exists as to whether coverage was barred under the "Designated Premises Endorsement" in the Paramount policy (see Accessories Biz, Inc. v Linda & Jay Keane, Inc., 533 F Supp 2d 381, 388-389 [SD NY 2008]).
Since no statute, agreement or court rule provides for attorneys' fees in this case, the motion court improperly directed an assessment thereof (see generally Chapel v Mitchell, 84 NY2d 345, 348-349 [1994]), and we modify accordingly.
Travelers Casualty and Surety Company v. Honeywell International, Inc.,

Simpson Thacher & Bartlett LLP, New York (Helena Almeida
of counsel), for Travelers Casualty and Surety Company,
appellant.
Seward & Kissel LLP, New York (Dale C. Christensen, Jr. of
counsel), for Employers Insurance Company of Wausau and
National Casualty Company, appellants.
Smith, Stratton, Wise Heher & Brennan, LLP, New York
(Steven D. Cantarutti of counsel), for Employers Mutual Casualty
Company, appellant.
Traub Lieberman Straus & Shrewsberry LLP, Hawthorne
(Robert P. Siegel of counsel), for Evanston Insurance Company,
appellant.
Hogan & Hartson LLP (James P. Ruggeri of counsel), for
Hartford Accident and Indemnity Company, First State
Insurance Company, New England Reinsurance Corporation and Twin
City Fire Insurance Company, appellants.
Wilson, Elser, Moskowitz, Edelman & Dicker LLP, New York
(Carl J. Pernicone of counsel), and London Fischer LLP, New
York (Perry Kreidman of counsel), for MidState ReInsurance
Corporation, appellant.
Christie Pabarue Mortensen & Young, Philadelphia, PA
(Bradley J. Mortensen of counsel), for Arrowwood Indemnity
Company, appellant.
K & L Gates LLP, Pittsburgh, PA (Michael J. Lynch of
counsel), for Honeywell International Inc., respondent.
Order, Supreme Court, New York County (Walter B. Tolub, J.), entered April 1, 2008, which, in a declaratory judgment action involving, inter alia, the obligations, if any, of plaintiff-appellants and defendants-appellants (the insurers) to indemnify defendant-respondent (the insured) for certain asbestos-related claims, upon the parties' respective motions for partial summary judgment, insofar as appealed from, determined that New Jersey law, not New York law, governs the subject insurance policies, unanimously affirmed, without costs.
In Certain Underwriters at Lloyd's, London v Foster Wheeler Corp. (36 AD3d 17 [2006], affd 9 NY3d 928 [2007]), this Court, after noting that a contract of liability insurance is generally "governed by the law of the state which the parties understood was to be the principal location of the insured risk" (id. at 21-22 [internal quotation marks omitted]), held that "where it is necessary to determine the law governing a liability insurance policy covering risks in multiple states, the state of the insured's domicile [at the time of contracting] should be regarded as a proxy for the principal location of the insured risk" (id. at 24), and that, for such purposes, a corporate insured's domicile is the state of its principal place of  business, not the state of its incorporation (id. at 25; see also Appalachian Ins. Co. v Di Sicurata, 60 AD3d 495 [2009]). There is no dispute that the principal place of business of the insured's predecessor, the purchaser of the policies, was in New Jersey. Neither the predecessor's use of a New York address on some of the policies (while also using a New Jersey address on some of the same policies or only a New Jersey address on yet other policies), nor the predecessor's use of New York brokers, nor the use of New York amendatory endorsements on some of the policies (while New Jersey's or other states' or no state-specific amendatory endorsement was used on others), nor any of the other incidental connections to New York on which appellants rely, raises a triable issue of fact as to whether the predecessor made a conscious choice of New York law at the time of contracting, or whether the application of New York law constituted the parties' reasonable expectation, where not one of the policies contains a choice-of-law provision and all parties knew that the risks were spread nationwide and that the predecessor's principal place of business was in New Jersey (cf. Foster Wheeler at 27-28).
Preferred Mutual Insurance Company v. New York Fire-Shield Inc.

Calendar Date: February 9, 2009
Before: Cardona, P.J., Mercure, Malone Jr., Kavanagh and McCarthy, JJ.


Wilson, Elser, Moskowitz, Edelman & Dicker,
L.L.P., New York City (Richard E. Lerner of counsel), for appellant.
Sugarman Law Firm, L.L.P., Syracuse (Timothy J.
Perry of counsel), for defendant and third-party plaintiff-
appellant.
Keidel, Weldon & Cunningham, White Plains
(Stephen C. Cunningham of counsel), for third-party defendant-
respondent.
MEMORANDUM AND ORDER


McCarthy, J.
Appeals from an order and an amended order of the Supreme Court (Dowd, J.), entered June 2, 2008 and October 6, 2008 in Chenango County, which, among other things, denied plaintiff's motion for summary judgment declaring that it was entitled to disclaim coverage in the underlying action.
Defendant manufactures fire and flame retardant products, including a product known as "Inspecta-Shield." On October 28, 2004, two United States Marines were severely burned while wearing an item of camouflage clothing known as a "ghillie suit" in the course of a miliary exercise. The ghillie suits were manufactured by a company known as Ghillie Suits.Com, Inc. and sold with a small bottle of fire retardant spray. As it turns out, the fire retardant spray included with the ghillie suits was actually Inspecta-Shield.
While defendant had no knowledge at the time of this accident that its product was being repackaged and sold by Ghillie Suits.Com, it learned of same the following month, in November 2004, when defendant became aware that two Marines had been severely burned while wearing ghillie suits that had been sold with Inspecta-Shield. Defendant did not, however, advise either its insurance agent (third-party defendant) or its general and excess liability insurance carrier (plaintiff) of this incident until nearly two years later when the two injured Marines commenced an action against it, among others, alleging strict liability (design defect and failure to warn), negligence and breach of implied warranty of fitness for a particular purpose.
Plaintiff disclaimed coverage based on defendant's failure to comply with the notice provisions of two insurance policies issued to it (a commercial general liability policy and an excess commercial general liability policy) and also commenced this action seeking a declaration that it was entitled to so disclaim. Defendant, in turn, commenced a third-party action against Aversa Agency, Inc., its insurance agent, alleging breach of contract, negligence and negligent misrepresentation. Thereafter, plaintiff moved for summary judgment claiming that defendant failed to give notice of an occurrence as soon as practicable such that it was not obligated to provide a defense or coverage to defendant. Aversa moved for dismissal of the third-party action claiming that it played no role in the late notice provided by defendant and, therefore, was not the cause of defendant's "lack of coverage." Defendant opposed both motions and cross-moved for partial summary judgment claiming that it gave notice within a reasonable time and as soon as practicable such that it was entitled to a defense and coverage.
In an amended order, Supreme Court granted defendant's cross motion, declared plaintiff's disclaimer of coverage invalid and dismissed the third-party complaint. Although plaintiff and defendant each filed a notice of appeal, only plaintiff pursues a modification of Supreme Court's amended order. Upon our review of the record, we find that the issue of whether defendant had a good faith belief in nonliability which excused its two-year delay in giving plaintiff notice cannot be decided as a matter of law in favor of either party. We therefore modify Supreme Court's amended order accordingly.
The notice provisions of the two insurance policies issued to defendant by plaintiff are virtually identical and require defendant to notify plaintiff "as soon as practicable" of an occurrence "which may result in a claim" (emphasis added). Indeed, where notice is required under an insurance policy, the insured bears the burden of proving that there was a reasonable excuse for the delay in giving notice (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 744 [2005]). To be sure, "an insured's good-faith belief in nonliability, when reasonable under the circumstances, may excuse a delay in notifying the insurer" (Spa Steel Prods. Co. v Royal Ins., 282 AD2d 864, 865 [2001] [internal quotation marks and citation omitted]). The issue of whether an insured had a good faith belief in nonliability, and whether that belief was reasonable, ordinarily presents an issue of fact (see id. at 865; Morehouse v Lagas, 274 AD2d 791, 794 [2000]; Reynolds Metal Co. v Aetna Cas. & Sur., 259 AD2d 195, 200 [1999]). It is only when the facts are undisputed and not subject to conflicting inferences that an issue can be decided as a matter of law (see Greenwich Bank v Hartford Fire Ins. Co., 250 NY 116, 131 [1928]). Here, not only is there room for disagreement on the inferences to be drawn from the facts (see id. at 131), any inference, at this procedural stage, must be drawn in favor of plaintiff (see Reynolds Metal Co. v Aetna Cas. & Sur., 259 AD2d at 202). Applying the foregoing precepts to this case, we find that, at least at this procedural stage in the litigation, an inference may be drawn that defendant was not only aware of the accident as of November 15, 2004, but also aware that Inspecta-Shield was being implicated in it.
The record reveals that defendant, through an employee, learned on November 12, 2004 that ghillie suits were being sold with a fire retardant spray referred to as "'Inspecta-Shield' Class 'A' Fire Retardant." Specifically, on this date, defendant's employee documented a telephone call from an individual who advised her that Ghillie Suits.Com was selling an item known as a ghillie suit and "that the jacket comes with an 8 ounce bottle of [defendant's] product" (emphasis added). Notes from this conversation further indicate that the employee went to the Web site of Ghillie Suits.Com at which time she documented, "Sure enough our product was there (rebottled in black bottles with black and white label)" (emphasis added). On this date, again according to these notes, the employee gave the caller instructions on the recommended application of Inspecta-Shield on a ghillie suit. Indeed, the Web site, which this employee clearly viewed, warns that a ghillie suit is made of flammable material such that Ghillie Suits.Com "strongly" suggested that it be treated with "its" fire-proof spray if to be worn near sources of sparks, fire or other combustible materials. In our view, it is possible to infer that, as of this day, defendant was aware that its product was not only being sold with ghillie suits, but also being applied to them to make them fire retardant.
Three days later, on November 15, 2004, this same employee learned from an investigator with the United States Department of Energy that two people were burned while wearing ghillie suits. The employee's notes from this day reveal that she recounted to this investigator her conversation from three days earlier and that she again provided recommended treatment methods for a ghillie suit. This same day, a second telephone conversation is documented by the employee. Notes from this conversation reveal that the original caller from three days earlier was in fact a United States Marine captain. It was then revealed to the employee that the two individuals who had been burned while wearing the ghillie suits were Marines. Specifically, the employee noted that the Marine captain "told [her] that two [M]arines had been severely injured when the[ir] suits caught on fire." Here again, a fair inference can be drawn from these notes that two individuals were burned and severely injured while wearing garments fire-retarded with defendant's product.
The record further confirms that defendant's president and chief executive officer became aware of Ghillie Suit.Com on November 12, 2004. He then personally spoke with the investigator from the Department of Energy on November 15, 2004 at which time he directly learned that two people were burned and injured while wearing ghillie suits. Defendant's president then agreed to assist in the Department of Energy's investigation into the flammability of ghillie suits by treating one with Inspecta-Shield and sending it to a laboratory. Significantly, by December 7, 2004, defendant was so certain that its product was being marketed and sold by Ghillie Suit.Com, its attorney issued a cease and desist notice to the company.
All of these facts, and the reasonable inferences that can be drawn from them, could lead a factfinder to conclude that defendant knew as of November 15, 2004 that two Marines were burned and severely injured while wearing garments treated with its flame-retardant product [*4]and that defendant's belief in nonliability was therefore not reasonable under the circumstances. While defendant's president maintains that he did not "believe" that Inspecta-Shield was involved in the accident or that a claim would be made against it, the reasonableness of his belief and his credibility on this critical point is best reserved for resolution by a jury (see Morehouse v Lagas, 274 AD2d at 794). In short, we find that Supreme Court erroneously decided the question of reasonableness as a matter of law and "that this case should be governed by the general rule that the reasonableness of [defendant's] alleged good-faith belief of nonliability is a question of fact to be resolved by a jury" (Marinello v Dryden Mut. Ins. Co., 237 AD2d 795, 798 [1997]).
As a final matter, we note that the relief requested by Aversa in its motion to dismiss the third-party complaint was expressly contingent on a finding by Supreme Court that defendant provided late notice [FN1]. No other legal ground or argument was advanced by Aversa in support of dismissal. Since the issue of notice cannot be determined as a matter of law in favor of either party at this juncture, we find that the third-party complaint should be reinstated.
Cardona, P.J., Mercure, Malone Jr. and Kavanagh, JJ., concur.
ORDERED that the order and amended order are modified, on the law, without costs, by reversing so much thereof as granted defendant's cross motion for partial summary judgment and as partially granted third-party defendant's motion for summary judgment; defendant's cross motion denied and third-party defendant's motion denied to said extent; and, as so modified, affirmed.
Footnotes

Footnote 1:Specifically, the attorney for the insurance agent asserts in its moving papers to Supreme Court that "[i]n the event this court rules that late notice was provided by [defendant] and that [plaintiff] owes no obligation to [defendant], then this court should dismiss the third-party complaint on the basis that any alleged misconduct by [Aversa] was not the cause of [defendant's] lack of coverage." In finding that Supreme Court erred in deciding the issue of the reasonableness of notice as a matter of law, it follows that there is now no basis to grant the limited relief requested by Aversa.

First Baptist Church of Olean v. Grey

Appeal from an order of the Supreme Court, Cattaraugus County (Larry M. Himelein, A.J.), entered October 16, 2007 in a declaratory judgment action. The order, insofar as appealed from, denied the motion of defendant American States Insurance Company for summary judgment.


MURA & STORM, PLLC, BUFFALO (ROY A. MURA OF COUNSEL), FOR DEFENDANT-APPELLANT.
WAGNER & HART, OLEAN (JANINE C. FODOR OF COUNSEL), FOR PLAINTIFF-RESPONDENT.
FRANCIS M. LETRO, ESQ., BUFFALO (RONALD J. WRIGHT OF COUNSEL), FOR DEFENDANTS-RESPONDENTS. It is hereby ORDERED that the order so appealed from is affirmed without costs.


All concur except Hurlbutt, J.P., and Peradotto, J., who dissent and vote to reverse the order insofar as appealed from in accordance with the following Memorandum: We respectfully dissent. In our view, Supreme Court erred in denying the motion of defendant American States Insurance Company (American States) for summary judgment seeking a declaration that it is not obligated to defend or indemnify plaintiff, First Baptist Church of Olean, also known as First Baptist Church (Church), in the underlying personal injury action commenced by John S. Grey, a defendant herein, against the Church.
Grey was injured on November 30, 2000 while performing construction work on the side of a barn structure owned by the Church when he fell 20 feet to the ground from the extension ladder on which he was standing. Grey was at that time employed by Grey Builders Co., Inc. (Grey Builders), which had been hired by the Church to perform construction work on the structure. A Church employee assisted Grey, who was transported by ambulance to the hospital. It is undisputed that, within a day of the accident, a Church trustee was informed of the accident and that Grey was transported by ambulance to the hospital, and learned that Grey had fractured his wrist. It is also undisputed that the Church completed an accident report.
On October 8, 2003, Grey and his wife commenced the underlying action against the Church and, that same month, the Church provided notice of the accident and lawsuit to American States, its insurance carrier. By letter dated November 4, 2003, American States disclaimed coverage based on the failure of the Church to comply with the policy provision requiring the Church to provide prompt notice of "an occurrence' that may result in a claim." The Church thereafter commenced this action seeking a declaration that American States is obligated to defend and indemnify it in the underlying action. The court denied the ensuing motion of American States for summary judgment declaring that it is not obligated to defend or indemnify the Church, as well as the cross motion of the Church for summary judgment seeking a declaration to the contrary. The court determined that there were triable issues of fact whether the Church had a reasonable good-faith belief that it was not liable or that a claim would not be made against it.
It is well settled that the prompt notice requirement "operates as a condition precedent to coverage" (White v City of New York, 81 NY2d 955, 957) and that, "[a]bsent a valid excuse, a failure to satisfy the notice requirement vitiates the policy" (Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 440). Thus, based on the policy language, the issue before us is whether the Church had a reasonable good-faith belief that the occurrence would not result in a claim (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743; Dryden Mut. Ins. Co. v Greaser, 269 AD2d 792). In determining whether such a belief was reasonable, a court should consider, inter alia, "whether the insured [made] an adequate inquiry into the injured party's condition to determine its seriousness . . ., and whether the insured [made] a deliberate determination' in evaluating potential liability" (Philadelphia Indem. Ins. Co. v Genesee Val. Improvement Corp., 41 AD3d 44, 46-47).
Here, the record establishes that the Church, within a day of the accident, was aware that Grey had fallen 20 feet from a ladder to the ground, had been transported by ambulance to a hospital, and had fractured his wrist. Although in our view "[s]uch information would cause a reasonable and prudent person to investigate the circumstances, ascertain the facts, and evaluate his [or her] potential liability" (Security Mut. Ins. Co. of N.Y., 31 NY2d at 442), the Church performed no such investigation and instead determined that the accident was a "minor incident" that would be covered by Grey Builders' insurance company. We thus conclude that the Church "failed to exercise reasonable care and diligence in ascertaining the facts about the alleged accident and in evaluating [its] potential liability. Thus, the otherwise unreasonable delay of [almost three years] in giving notice may not be excused or explained on the basis of lack of knowledge' or a belief of nonliability' " (id.; see Haas Tobacco Co. v American Fid. Co., 226 NY 343, 347; Philadelphia Indem. Ins. Co., 41 AD3d at 47). Had the Church performed a reasonable investigation, it would have learned that there was a possibility of liability and thus that a claim might be brought (see Steinberg v Hermitage Ins. Co., 26 AD3d 426, 427-428; Zadrima v PSM Ins. Cos., 208 AD2d 529, 530, lv denied 85 NY2d 807).
Although the owner of Grey Builders submitted an affidavit in opposition to the motion of American States in which he asserted that he had informed the Church that it was not responsible for the injury and that Grey Builders would take care of the worker's injuries, that affidavit is insufficient to raise a triable issue of fact that would preclude summary judgment. Even if the injured worker himself had informed the Church that he was not going to bring a lawsuit against it, the Church would not be excused for its almost three-year delay in providing notice to American States. "[T]he fact that the injured party voiced the intent not to sue anyone will not excuse the insured's delay when the facts and circumstances surrounding the happening of the injury are such that a reasonable person could envision liability" (Vradenburg v Prudential Prop. & Cas. Ins. Co., 212 AD2d 913, 914; see E.B. Gen. Contr. v Nationwide Ins. Co., 189 AD2d 796; Platsky v Government Empls. Ins. Co., 181 AD2d 764, 765). Because the Church would not be entitled to rely on the assurances of the worker himself, we conclude that it likewise would not be entitled to rely on the assurances given by the owner of Grey Builders. In any event, there is no evidence in the record that the Church in fact relied on the owner's assurances.
We therefore would reverse the order insofar as appealed from, grant the motion of American States for summary judgment and grant judgment in its favor declaring that American States is not obligated to defend or indemnify the Church in the underlying personal injury action.
HBE Corporation v. Sirius American Insurance Co.

Appeal from a judgment (denominated order) of the Supreme Court, Niagara County (Richard C. Kloch, Sr., A.J.), entered February 13, 2008 in a declaratory judgment action. The judgment granted plaintiffs' motion for summary judgment with respect to the violation of Insurance Law § 3420 (d), declaring, inter alia, that defendant must defend and indemnify plaintiffs in the underlying personal injury action.


HURWITZ & FINE, P.C., BUFFALO (DAN D. KOHANE OF COUNSEL), FOR DEFENDANT-APPELLANT.
ZDARSKY, SAWICKI & AGOSTINELLI LLP, BUFFALO (PATRICK A. DUDLEY OF COUNSEL), FOR PLAINTIFFS-RESPONDENTS.


It is hereby ORDERED that the judgment so appealed from is unanimously reversed on the law without costs, the motion is denied and the declarations are vacated.
Memorandum: Plaintiffs, HBE Corporation (HBE) and Cornerstone Community Federal Credit Union (Cornerstone), commenced this action alleging, inter alia, that defendant violated Insurance Law § 3420 (d) by failing to provide timely written notice to plaintiffs that it would neither defend nor indemnify its insured, Thomas Johnson, Inc. (TJI), the third-party defendant in the underlying third-party action. The underlying main action was commenced by TJI's employee and his wife against HBE and Cornerstone (Orlikowski v Cornerstone Community Fed. Credit Union, 55 AD3d 1245, lv dismissed 11 NY3d 915). On a prior appeal we held, inter alia, that TJI was foreclosed from challenging the amount of the judgment in the main action inasmuch as HBE and Cornerstone were granted contractual indemnification in their third-party action against TJI based on TJI's default (id. at 1248-1249).
We conclude that Supreme Court erred in granting plaintiffs' motion for summary judgment with respect to the violation of Insurance Law § 3420 (d), declaring that defendant's disclaimer letter was invalid and that defendant must defend and indemnify plaintiffs in the underlying main action. We agree with defendant that the motion should have been denied because defendant established as a matter of law that it provided plaintiffs with the requisite written notice of disclaimer pursuant to Insurance Law § 3420 (d) (see generally Zuckerman v City of New York, 49 NY2d 557, 562).
Notice of disclaimer under Insurance Law § 3420 (d) is required "when a claim falls within the coverage terms of the insurance policy but is denied based on a policy exclusion" (Arida v Essex Ins. Co., 299 AD2d 902, 903; see Markevics v Liberty Mut. Ins. Co., 97 NY2d 646, 648-649). Here, the disclaimer of coverage to plaintiffs and TJI was based upon a policy exclusion, i.e., that plaintiffs and TJI failed to notify defendant of the claim "as soon as practicable." Thus, defendant was required to comply with section 3420 (d) by providing both plaintiffs and TJI with written notice of its disclaimer. Here, the record establishes that the underlying accident occurred in October 2002, that defendant received notice of the accident on February 25, 2004, and that defendant sent a disclaimer letter to TJI on March 5, 2004 and to plaintiffs' attorney on March 10, 2004. According to plaintiffs, the disclaimer letter to their attorney dated March 10, 2004 did not provide the requisite notice with respect to plaintiffs' third-party action against TJI because it stated only that defendant would not defend or indemnify plaintiffs "in this matter," which referred only to the underlying main action. We reject plaintiffs' contention. As noted, the letters sent to TJI and plaintiffs' attorney stated that there was no coverage based on the failure to give defendant notice "as soon as practicable."
Finally, we decline the request of defendant on appeal that, despite its failure to cross-move for a declaration that it has no duty to defend or indemnify plaintiffs, we should nevertheless search the record and grant it that relief (see CPLR 3212 [b]). Defendant failed to "tender . . . evidentiary proof in admissible form" with respect to plaintiffs' failure to provide timely notice of the occurrence to defendant (Zuckerman, 49 NY2d at 562), and defendant thus failed to establish its entitlement to such a declaration.

Mayer’s Cider Mill v. Preferred Mutual Ins. Com

Appeal from a judgment (denominated order) of the Supreme Court, Monroe County (Ann Marie Taddeo, J.), entered June 19, 2008 in a declaratory judgment action. The judgment, among other things, granted plaintiff's motion for summary judgment.

COHEN & LOMBARDO, P.C., BUFFALO (FRANK T. HOUSH OF COUNSEL), FOR DEFENDANT-APPELLANT.
WOODS OVIATT GILMAN LLP, ROCHESTER (ANDREW J. RYAN OF COUNSEL), FOR PLAINTIFF-RESPONDENT.

It is hereby ORDERED that the judgment so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiff commenced this action seeking a declaration that defendant Preferred Mutual Insurance Company (Preferred Mutual) must defend and indemnify plaintiff in the underlying personal injury action commenced against it by defendant James Lansdowne. We agree with plaintiff that Supreme Court properly granted its motion for summary judgment seeking that declaration. Lansdowne was injured in October 1999, at the age of 12, when he placed his hand inside machinery used to process apple cider, but he did not commence the underlying action until March 2007. Lansdowne is the son of one of plaintiff's employees and the younger brother of another of plaintiff's employees. Preferred Mutual never disclaimed coverage, but an individual who served as plaintiff's secretary and treasurer signed a "Non-Waiver Agreement" on October 18, 1999 pursuant to which Preferred Mutual indicated that it would investigate the claim and reserved its right to disclaim coverage. In his underlying amended complaint, Lansdowne asserted, inter alia, that he was a 12-year-old independent contractor who was paid an hourly sum by plaintiff, and plaintiff asserted as an affirmative defense in its answer that Lansdowne was "not its employee or independent contractor." By letter dated May 31, 2007, Preferred Mutual advised plaintiff that its investigation into the matter was continuing, noted that the policy did not apply to employees, and continued to reserve its right to deny coverage.
We agree with the court that Preferred Mutual failed to provide the requisite written notice of disclaimer to plaintiff "as soon as [was] reasonably possible" (Insurance Law § 3420 [d] [2]; cf. Zappone v Home Ins. Co., 55 NY2d 131, 136-137). The "timeliness of an insurer's disclaimer is measured from the point in time when the insurer first learns of the grounds for . . . denial of coverage, and the insurer has the burden of justifying the delay" (Wood v Nationwide Mut. Ins. Co., 45 AD3d 1285, 1286 [internal quotation marks omitted]). It is incumbent upon the insurance company to conduct its own prompt investigation (see id. at 1286-1287), and "the burden is on the insurer to demonstrate that its delay [in disclaiming coverage] was reasonably related to its completion of a thorough and diligent investigation" (Tully Constr. Co., Inc. v TIG Ins. Co., 43 AD3d 1150, 1152-1153).
Preferred Mutual contends that its investigation into Lansdowne's employment status remains ongoing and that its delay in disclaiming coverage is justified because plaintiff initially reported the claim "for informational purposes only." The record establishes, however, that Preferred Mutual had plaintiff execute the non-waiver agreement in October 1999, and the general liability loss notice completed by Preferred Mutual's agent did not state that the claim was reported for informational purposes only. The record further establishes that Preferred Mutual received notice that Lansdowne had retained counsel with respect to the subject accident no later than May 22, 2000 and that in March 2001 its representative was present during an inspection of the machine that caused Lansdowne's injury. There is no indication in the record that Preferred Mutual thereafter conducted any further investigation and, indeed, it took no action until Lansdowne commenced the underlying personal injury action against plaintiff in March 2007. Thus, although Preferred Mutual had prompt notice of the claim and contradictory information regarding Landsdowne's employment status immediately after the accident, it failed to conduct a timely investigation into the claim and has offered no reasonable explanation for its failure to do so. Any disclaimer by Preferred Mutual therefore is now untimely as a matter of law (see Wood, 45 AD3d at 1287).
Finally, we reject the contention of Preferred Mutual that the manufacturer and distributor of the machine in question are necessary parties to this action, pursuant to CPLR 1001 (a). The issue whether Preferred Mutual must defend and indemnify plaintiff has no bearing on any claim by Lansdowne against the manufacturer or the distributor, and they thus are not affected, "inequitably" or otherwise, by this action (id.).
In the Matter of American Manufacturers Mutual Insurance Company v. Burke

O'Neil & Burke, LLP, Poughkeepsie, N.Y. (Richard Burke of
counsel), for appellant.
Costello, Cooney & Fearon, PLLC, Syracuse, N.Y. (Maureen G.
Fatcheric and Christina F. DeJoseph of
counsel), for respondent.


DECISION & ORDER
In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, the appeal is from (1) an order of the Supreme Court, Dutchess County (Dolan, J.), dated July 17, 2008, which granted the petition to permanently stay the arbitration, and (2) a judgment of the same court entered July 28, 2008, which permanently stayed the arbitration.
ORDERED that the appeal from the order is dismissed; and it is further,
ORDERED that the judgment is affirmed; and it is further,
ORDERED that the petitioner is awarded one bill of costs.
The appeal from the intermediate order must be dismissed because the right of direct
appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]; Ilardi v Inte-Fac Corp., 290 AD2d 490).
In 2002, the appellant, a police officer, was seriously injured when a vehicle he stopped in the course of an investigation, operated by nonparty Lori Elmendorf, accelerated while he was partially inside the vehicle. At a subsequent criminal proceeding, Elmendorf pleaded guilty to assault in the second degree, admitting that she intentionally drove even though the appellant was struggling with her and the steering wheel.
Since the appellant had an automobile insurance policy issued by the petitioner-insurer, he filed an uninsured motorist claim for the incident, which the insurer disclaimed. The appellant thereafter demanded arbitration of the uninsured motorist claim from the insurer, who in turn commenced this proceeding for a permanent stay of that arbitration. The Supreme Court granted a permanent stay of arbitration, finding that the incident emanated from intentional conduct and not negligence. We affirm.
Given that the appellant's injuries were not the result of an accident, he was not entitled to uninsured motorist benefits under the subject insurance policy (see State Farm Mut. Auto. Ins. Co. v Langan, 55 AD3d 281, 283; Met Life Auto. & Home v Kalendarev, 54 AD3d 830, 831; State Farm Mut. Auto. Ins. Co. v Langan, 18 AD3d 860, 862; Matter of Allstate Ins. Co. v Massre, 14 AD3d 610; Westchester Med. Ctr. v Travelers Prop. Cas. Ins. Co., 309 AD2d 927; Matter of Progressive Northwestern Ins. Co. v Van Dina, 282 AD2d 680; Matter of Aetna Cas. & Sur. Co. v Perry, 220 AD2d 497). The appellant's arguments to the contrary lack merit (see Markevics v Liberty Mut. Ins. Co., 97 NY2d 646, 648-649; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 200; Matter of Government Empls. Ins. Co. v Spence, 23 AD3d 466, 467). Accordingly, the Supreme Court providently granted a permanent stay of arbitration. 
Hwa Soon Um v. Hoi Ku Yang

Richard T. Lau, Jericho, N.Y. (Kathleen E. Fioretti of counsel), for
respondent Hoi Ku Yang.
Epstein, Harms & McDonald, New York, N.Y. (Michael A.
Buffa of counsel), for respondents
Anthony Rambazis and NY Hospital
Medical.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiffs appeal from a judgment of the Supreme Court, Queens County (Satterfield, J.), entered May 2, 2008 which, upon an order of the same court entered March 31, 2008, granting the motion of the defendant Hoi Ku Yang and the separate motion of the defendants Anthony Rambazis and NY Hospital Medical for summary judgment dismissing the complaint insofar as asserted against each of them on the ground that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d), is in favor of the defendants and against them dismissing the complaint.
ORDERED that the judgment is reversed, on the law, with one bill of costs payable by the respondents appearing separately and filing separate briefs, the defendants' motions for summary judgment dismissing the complaint insofar as asserted against each of them are denied, the complaint is reinstated, and the order entered March 31, 2008, is modified accordingly.
The defendants, in moving for summary judgment, relied on the same submissions. The defendants failed to meet their prima facie burdens of showing that the plaintiff Hwa Soon Um did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Elyer, 79 NY2d 955, 956-957; see also Meyers v Bobower Yeshiva Bnei Zion, 20 AD3d 456). In this respect, the defendants relied, inter alia, on the affirmed medical report of Edward Toriello, the defendants' examining orthopedic surgeon. Dr. Toriello examined Hwa Soon Um on March 12, 2007, and noted the existence of a significant limitation in the range of motion of her lumbar spine on that date (see Torres v Garcia, 59 AD3d 705; Bagot v Singh, 59 AD3d 368; Hurtte v Budget Roadside Care, 54 AD3d 362; Jenkins v Miled Hacking Corp., 43 AD3d 393; Bentivegna v Stein, 42 AD3d 555, 556; Zamaniyan v Vrabeck, 41 AD3d 472, 473). Since the defendants failed to establish their prima facie entitlements to judgment as a matter of law with respect to Hwa Soon Um, it is unnecessary to reach the question of whether the plaintiffs' papers were sufficient to raise a triable issue of fact with respect to her injuries (see Torres v Garcia, 59 AD3d 705; Coscia v 938 Trading Corp., 283 AD2d 538).
The defendants met their prima facie burdens of showing that the plaintiff Ok Im Yoon did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. In opposition to the defendants' motions, however, the plaintiffs, via the affidavit of a treating physician, raised a triable issue of fact as to whether Ok Im Yoon sustained a serious injury insofar as she sustained a permanent consequential limitation of use or a significant limitation of use of her lumbar spine as a result of the subject accident (see Williams v Clark, 54 AD3d 942; Casey v Mas Transp., Inc., 48 AD3d 610; Green v Nara Car & Limo, Inc., 42 AD3d 430; Francovig v Senekis Cab Corp., 41 AD3d 643, 644-645; Acosta v Rubin, 2 AD3d 657).
In his affidavit, Dr. Ki Y. Park opined, based on his contemporaneous and most recent examination of Ok Im Yoon, as well as upon his review of affirmed reports of magnetic resonance imaging scans referable to her depicting, inter alia, herniated discs in the lumbar spine at L3-4 and L4-5, that the lumbar injuries sustained by Ok Im Yoon and the observed range-of-motion limitations referable to those injuries were permanent and causally related to the subject accident. Park further concluded that the injuries sustained by Ok Im Yoon amounted to a permanent consequential limitation of use and/or a significant limitation of use of her lumbar spine.
Ok Im Yoon, as well as Dr. Park, adequately explained the gap in treatment between May 31, 2005, and November 20, 2007 (see Pommells v Perez, 4 NY3d 566, 574, 577; Gutierrez v Yonkers Contracting Co., 61 AD3d 823; Black v Robinson, 305 AD2d 438, 439-440).
The defendants' remaining contentions are without merit.
Landman v. Sarcona

Richard T. Lau, Jericho, N.Y. (Gene W. Wiggins of counsel), for
respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Nassau County (Lally, J.), dated April 1, 2008, which granted the defendant's 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 reversed, on the law, with costs, and the defendant's motion for summary judgment dismissing the complaint is denied.
The defendant failed to meet her 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 support of her motion, the defendant relied, inter alia, upon the affirmed medical reports of Dr. Mathew Chacko and Dr. Vartkes Khachadurian. Dr. Chacko, the defendant's examining neurologist, noted significant limitations in the plaintiff's cervical and lumbar spine ranges of motion when he examined her on May 2, 2007, some 2½ years after the accident (see Bagot v Singh, 59 AD3d 638; Hurtte v Budget Roadside Care, 54 AD3d 362; Jenkins v Miled Hacking Corp., 43 AD3d 393; Bentivegna v Stein, 42 AD3d 555; Zamaniyan v Vrabeck, 41 AD3d 472). Moreover, the medical report of Dr. Khachadurian, the defendant's examining orthopedic surgeon, noted a significant limitation in the plaintiff's cervical spine range of motion when he examined her on March 21, 2007. Dr. Khachadurian opined that such limitation was due to the plaintiff's age and evidence of degenerative disease in her cervical spine. However, such opinion was conclusory (see Powell v Prego, 59 AD3d 417).
Since the defendant failed to establish her prima facie entitlement to judgment as a matter of law, it is unnecessary to consider the sufficiency of the plaintiff's opposition (see Bagot v Singh, 59 AD3d 638; Coscia v 938 Trading Corp., 283 AD2d 583).
Martins v. Yukhayev

Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Holly E. Peck and Stacy R. Seldin of counsel), for appellants.
Edmond C. Chakmakian, P.C., Hauppauge, N.Y. (Anne Marie
Caradonna 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 (Schack, J.), dated February 22, 2008, which granted the plaintiff's motion for leave to reargue his prior motion to vacate an order dated May 30, 2006, granting the defendants' unopposed 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), which had been denied in an order of the same court dated July 6, 2007, and upon reargument, in effect, vacated the order dated July 6, 2007, granted the plaintiff's motion to vacate the order dated May 30, 2006, and thereupon denied the defendants' 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 dated February 22, 2008, is modified, on the law, by deleting the provision thereof which, upon reargument, in effect, vacated the order dated July 6, 2007, granted the plaintiff's motion to vacate the order dated May 30, 2006, and denied the defendant's motion for summary judgment and substituting therefor a provision, upon reargument, adhering to the determination in the order dated July 6, 2007, denying the plaintiff's motion to vacate the order dated May 30, 2006; as so modified, the order is affirmed, without costs or disbusements.
The present action arises from a two-car motor vehicle accident which occurred in Manhattan, on September 17, 2004, in which a motor vehicle operated by the plaintiff was allegedly struck in the rear by a taxi cab operated by the defendant Ilmion Yukhayev and owned by the defendant Monica Taxi Corp.
In support of his motion to vacate his default, the plaintiff was required to present a reasonable excuse for his default and a meritorious claim. The determination of what constitutes a reasonable excuse for a default lies within the sound discretion of the trial court (see Bardales v Blades, 191 AD2d 667), and in exercising that discretion the trial court may accept law office failure as an excuse (see CPLR 2005; Parker v City of New York, 272 AD2d 310, 311; Searing v Anand, 127 AD2d 582).
Here, the Supreme Court providently exercised its discretion in accepting the plaintiff's explanation of law office failure for his failure to appear in court for argument on the summary judgment motion. The motion to vacate was timely made, and there was no pattern of delay, evidence of wilfulness, or prejudice to the defendants demonstrated (see Hageman v Home Depot U.S.A., Inc., 25 AD3d 760, Searing v Anand, 127 AD2d 582).
However, the plaintiff failed to raise a triable issue of fact in opposition to the defendants' prima facie 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. Accordingly, the Supreme Court erred, upon reargument, by, in effect, granting the plaintiff's motion to vacate his default.
Peprah v. McDonald

Barry Siskin, New York, for appellant.
Boeggeman, George, Corde, P.C., White Plains (Cynthia Dolan
of counsel), for respondent.
Order, Supreme Court, Bronx County (Kenneth L. Thompson, J.), entered on or about November 27, 2007, which granted defendant's motion for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and denied plaintiff's cross motion for summary judgment, unanimously affirmed, without costs.
The motion court correctly determined that defendant established his prima facie entitlement to summary judgment with the affidavit of his medical expert, Dr. Nathan, whose examination of plaintiff disclosed no objective medical findings supporting his serious injury claims (see Shinn v Catanzaro, 1 AD3d 195, 197 [2003]). Plaintiff, in response, failed to raise a triable issue of fact precluding summary judgment. The affidavit of plaintiff's medical expert was insufficient in that it failed to adduce evidence of serious injury based upon objective medical findings made within a reasonable time after the accident (see e.g. Santana v Khan, 48 AD3d 318 [2008]).
We have considered plaintiff's remaining contentions and find them unavailing.
Pina v. Pruyn

Appeal from an order of the Supreme Court, Erie County (Timothy J. Drury, J.), entered April 29, 2008 in a personal injury action. The order granted the motion of defendants Dennis E. Farrell and National Fuel Gas Company for summary judgment dismissing the complaint against them.

Law Office Of J. Michael Hayes, Buffalo (J. Michael Hayes Of Counsel), For Plaintiff-Appellant.
Feldman, Kieffer & Herman, Llp, Buffalo (Stephen M. Sorrels Of Counsel), For Defendants-Respondents.

It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiff commenced this action seeking damages for injuries she sustained in two motor vehicle accidents. We conclude that Supreme Court properly granted the motion of defendants National Fuel Gas Company and Dennis E. Farrell (collectively, National Fuel defendants), the defendants involved in the second accident, for summary judgment dismissing the complaint against them on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d) in that second accident.
The National Fuel defendants met their initial burden on the motion by submitting the records of plaintiff's chiropractor describing the treatment received by plaintiff between the time of the first and second accidents and that received after the second accident (see generally Zuckerman v City of New York, 49 NY2d 557, 562). Those records established that the second accident involved merely a gentle collision, that plaintiff's condition was the "same" after the second accident as it was after the first accident, and that plaintiff's disability from work in the period following the first and second accidents was related solely to the first accident.
In opposition to the motion, plaintiff submitted the affidavit of her treating chiropractor and the affirmation of her treating orthopedic surgeon, each of whom concluded that plaintiff's injuries were in part related to the second accident. We conclude, however, that the affidavit of the chiropractor and the affirmation of the orthopedic surgeon lack probative value and are insufficient to raise a triable issue of fact with respect to the issue of serious injury (see generally Gaddy v Eyler, 79 NY2d 955, 957-958; Damstetter v Martin [appeal No. 2], 247 AD2d 893). The chiropractor neither denied having the opportunity to correct the alleged error in his records linking plaintiff's injuries "solely" to the first accident, nor did he account for the notation in his progress notes that he viewed plaintiff's condition to be the "same" immediately after the second accident as it was before that accident. Further, the orthopedic surgeon did not consider the circumstances of either accident and provided no objective basis for his conclusion that plaintiff sustained a new injury or aggravated an existing injury in the second accident (see generally Mitchell v Atlantic Paratrans of NYC, Inc., 57 AD3d 336; Damstetter, 247 AD2d 893).
Spanos v. Fanto

Appeal from an order of the Supreme Court, Monroe County (Matthew A. Rosenbaum, J.), entered August 8, 2008 in a personal injury action. The order denied the motion of defendants for summary judgment.

Rupp, Baase, Pfalzgraf, Cunningham & Coppola Llc, Rochester (Matthew A. Lenhard Of Counsel), For Defendants-Appellants.
Segar & Sciortino, Rochester (Stephen A. Segar Of Counsel), For Plaintiffs-Respondents.

It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the motion is granted and the complaint is dismissed.
Memorandum: Plaintiffs commenced this action seeking damages for injuries allegedly sustained by Ronald Spanos (plaintiff) when he was struck by a vehicle owned by one defendant and operated by the other defendant. Supreme Court erred in denying defendants' motion seeking summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury in the accident (see Insurance Law § 5102 [d]). Defendants met their initial burden by submitting medical records and reports constituting "persuasive evidence that plaintiff's alleged pain and injuries were related to . . . preexisting condition[s]" (Pommells v Perez, 4 NY3d 566, 580; see Valentin v Pomilla, 59 AD3d 184, 186; Clark v Perry, 21 AD3d 1373, 1374), and plaintiffs failed to raise a triable issue of fact whether plaintiff's alleged pain and injuries were causally related to the subject accident rather than those preexisting conditions (see Valentin, 59 AD3d at 186; Coston v McGray, 49 AD3d 934, 935; Anania v Verdgeline, 45 AD3d 1473). The conclusory statement of the examining physician for defendants that plaintiff's complaints of "right hip and leg pain with minimal complaints of low back pain . . . are causally related to [the accident]" is insufficient to raise a triable issue of fact, particularly in view of the further statement of that physician that he found no objective evidence that plaintiff sustained an injury in the accident (see Dantini v Cuffie, 59 AD3d 490, 491; Eastman v Holland, 19 AD3d 444). Finally, we note that, although plaintiffs are correct that they generally would be entitled to recover for economic loss in excess of basic economic loss without proof of serious injury (see generally Colvin v Slawoniewski, 15 AD3d 900), they made no claim for such loss in this case (cf. Barnes v Kociszewski, 4 AD3d 824, 825).
Rivera v. Bushwick Ridgewood Properties, Inc.

Raven & Kolbe, LLP, New York, N.Y. (Ryan E. Dempsey of
counsel), for appellants.

DECISION & ORDER
In an action, inter alia, to recover damages for personal injuries, the defendants Bushwick Ridgewood Properties, Inc., and Ruben Cruz appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (F. Rivera, J.), dated December 17, 2008, as denied their motion for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, the motion of the defendants Bushwick Ridgewood Properties, Inc., and Ruben Cruz for summary judgment dismissing the complaint insofar as asserted against them is granted and, upon searching the record, summary judgment is awarded to the defendant Richard A. Brathwaite dismissing the complaint insofar as asserted against him.
Contrary to the Supreme Court's determination, the appellants 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, the plaintiff failed to raise a triable issue of fact.
Although Dr. Soe Nyunt, the plaintiff's treating physician, stated in his affirmation that the plaintiff sustained permanent injuries to her cervical spine, lumbar spine, left shoulder, and left knee as a result of the subject accident, his affirmation failed to raise a triable issue of fact. As to the plaintiff's cervical spine, Dr. Nyunt failed to set forth in his affirmation the results of any recent examination he performed on the plaintiff's cervical spine that revealed the existence of significant limitations of motion (see generally Diaz v Lopresti, 57 AD3d 832; Carrillo v DiPaola, 56 AD3d 712; Landicho v Rincon, 53 AD3d 568, 569; Cornelius v Cintas Corp., 50 AD3d 1085; Young Hwan Park v Orellana, 49 AD3d 721; Amato v Fast Repair Inc., 42 AD3d 477). While Dr. Nyunt's affirmation described a limitation of motion to the plaintiff's left shoulder based on a recent examination, neither Dr. Nyunt nor the plaintiff proffered any objective medical evidence that revealed the existence of a significant limitation in the left shoulder that was contemporaneous with the subject accident (see Leeber v Ward, 55 AD3d 563; Ferraro v Ridge Car Serv., 49 AD3d 498; D'Onofrio v Floton, Inc., 45 AD3d 525). With respect to the plaintiff's left knee, Nyunt again merely noted, in his affirmation, that the plaintiff sustained a limitation of motion based on a recent examination, but neither he nor the plaintiff proffered any objective medical evidence that revealed the existence of a significant limitation in the left knee that was contemporaneous with the subject accident. With respect to the plaintiff's lumbar spine, Dr. Nyunt failed to address the fact that the plaintiff was involved in an accident at work in 2007, in which she injured her lower back. The failure to address this accident rendered speculative Dr. Nyunt's conclusion that the limitations he noted in the plaintiff's lumbar spine were caused by the subject accident (see Donadio v Doukhnych, 55 AD3d 532; Seck v Minigreen Hacking Corp., 53 AD3d 608).
The affirmed report referable to a magnetic resonance imaging (hereinafter MRI) scan, prepared by radiologist Steven Veigh, merely revealed that the plaintiff, as of January 10, 2005, showed evidence of a disc herniation at L5-S1 and a disc bulge at L4-5. The mere existence of a herniated or bulging disc is not evidence of a serious injury in the absence of objective evidence of the extent of the alleged physical limitations resulting from the disc injury, as well as its duration (see Sealy v Riteway-1, Inc., 54 AD3d 1018; Kilakos v Mascera, 53 AD3d 527; Cerisier v Thibiu, 29 AD3d 507; Bravo v Rehman, 28 AD3d 694; Kearse v New York City Tr. Auth., 16 AD3d 45). The affirmed MRI report of radiologist Robert Scott Schepp concerning the plaintiff's left shoulder merely revealed that, as of November 18, 2004, the plaintiff suffered from tendonitis. For the purpose of ascertaining the existence of a serious injury, tendonitis, like disc bulges and herniations, must be related to objective evidence of the extent of alleged physical limitation resulting from the condition, as well as its duration.
The plaintiff also failed to submit competent medical evidence that the injuries she allegedly sustained in the subject accident rendered her unable to perform substantially all of her usual and customary daily activities for not less than 90 days of the first 180 days subsequent to the subject accident (see Roman v Fast Lane Car Serv., Inc., 46 AD3d 535; Sainte-Aime v Ho, 274 AD2d 569). The plaintiff admitted in her deposition testimony that she missed no time from work as a result of the subject accident.
Moreover, the plaintiff failed to adequately explain the gap in treatment from the time she stopped seeking treatment on a date only three months after the subject accident, until June 12, 2008 (see Pommells v Perez, 4 NY3d 566, 574; Garcia v Lopez, 59 AD3d 593).
The defendant Richard A. Brathwaite separately moved for summary judgment dismissing the complaint insofar as asserted against him on the same ground as that on which the appellants moved for summary judgment. Although Brathwaite's motion was denied, he, unlike the appellants, declined to appeal from so much of the order as was adverse to him. Nonetheless, this Court has the authority to search the record and award summary judgment to a nonappealing party with respect to an issue that was the subject of the motion before the Supreme Court (see Garcia v Lopez, 59 AD3d 593; Michel v Blake, 52 AD3d 486; Marrache v Akron Taxi Corp., 50 AD3d 973; Colon v Vargas, 27 AD3d 512, 514; cf. Dunham v Hilco Constr. Co., 89 NY2d 425, 429-430). Upon searching the record, we award summary judgment to Brathwaite dismissing the complaint insofar as asserted against him on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see CPLR 3212[b]).
Taylor v. American Radio Dispatcher, Inc.

Proner & Proner, New York (Tobi R. Salottolo of counsel), for
appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for respondents.
Order, Supreme Court, Bronx County (George D. Salerno, J.), entered January 15, 2008, which granted defendants' motion for summary judgment dismissing the complaint on the ground that plaintiff did not suffer a "serious injury" within the meaning of Insurance Law § 5102(d), unanimously affirmed, without costs.
Defendants established their prima facie case that plaintiff did not suffer a serious injury within the meaning of the statute by submitting the reports of two independent medical examinations, and plaintiff failed to raise a triable issue of fact. Her experts' reports opining, based on positive MRI findings, that, as a result of the accident, she sustained a tear of the anterior talo-fibular ligament and a tear of the meniscus of the right knee that will require arthroscopic surgery are insufficient, absent objective, contemporaneous evidence of the extent and duration of the alleged physical limitations resulting from the injury (compare Ayala v Douglas, 57 AD3d 266 [2008]; Bentham v Rojas, 48 AD3d 314 [2008]).
With regard to plaintiff's claim that her injury prevented her from performing substantially all of her usual and customary activities for 90 of the 180 days following the accident, there was no contemporaneous medical proof submitted by plaintiff that she was unable to perform any activities in the 180 days following the accident. Without objective findings of limitations of motion contemporaneous with the accident, plaintiff's assertions that she cannot stand, sit or walk for extended periods without experiencing extreme discomfort and has been unable to work as an apprentice construction worker or as a part time bartender since the accident are insufficient to raise a triable issue of fact as to whether there was a curtailment of her customary activities during the requisite 90/180-day period (see Brantley v New York City Tr. Auth., 48 AD3d 313 [2008]). Indeed, in the only contemporaneous evaluation of plaintiff's ability to work, dated less than two weeks after the accident, her treating physician left blank the entry in his records asking whether the patient was disabled from work.
Torres v. Knight

Carro, Carro & Mitchell, LLP, New York (John S. Carro of
counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovitz, P.C., New York
(Stacy R. Seldin of counsel), for respondents.
Order, Supreme Court, Bronx County (Betty Owen Stinson, J.), entered April 1, 2008, which granted the motion of Kamnaki Service, Inc. and Sidi Sall for summary judgment dismissing the complaint as against them, unanimously affirmed, without costs.
Plaintiff does not dispute the motion court's finding that defendants are not liable for the car accident in which she alleges she sustained a serious injury within the meaning of Insurance Law § 5102(d), and she tacitly concedes that she is unable to proceed against any other defendant because none are liable except the driver of a stolen car, who was never served in this action. We therefore affirm the grant of summary judgment dismissing the complaint on the ground that defendants' nonliability was conclusively established.
However, because the court's finding as a matter of law that plaintiff did not sustain a serious injury will have collateral estoppel effect on her uninsured motorist claim, the serious injury issue is not moot, and we therefore address it (see Urbina v 26 Ct. St. Assoc., LLC, 12 AD3d 225 [2004]; Tehan v Peters Print. Co., 71 AD2d 101, 104 [1979]). We find that defendants failed to demonstrate their entitlement to summary judgment dismissing the complaint on that ground.
Both defendants' neurology and orthopedics experts reported significant limitations of range of motion in plaintiff's cervical and lumbar spine (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 353 [2002]), and neither identified a potential cause of the injury other than the accident (see Diaz v Anasco, 38 AD3d 295 [2007]). Rather, the experts opined that plaintiff's limited range of motion was the result of lack of effort on her part. However, this opinion was unsupported by objective medical proof, and therefore it is insufficient to establish a prima facie case (see Lamb v Rajinder, 51 AD3d 430 [2008]; Busljeta v Plandome Leasing, Inc., 57 AD3d 469 [2008]).
Huerta v. Longo

Michael A. Cervini, Jackson Heights, N.Y. (Jonathan B. Seplowe
of counsel), for appellants.
Mendolia & Stenz, Westbury, N.Y. (Katherine Miranda of
counsel), for respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Queens County (Satterfield, J.), dated May 15, 2008, as granted that branch of the defendants' motion which was for leave to make a late motion for summary judgment and, thereupon, granted that branch of the defendants' motion which was for summary judgment dismissing the complaint insofar as asserted by the plaintiff Jose O. Huerta on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident.
ORDERED that the appeal by the plaintiff Rosalba Rojas is dismissed, as that plaintiff is not aggrieved by the portions of the order appealed from (see CPLR 5511); and it is further,
ORDERED that the order is affirmed insofar as appealed from by the plaintiff Jose O. Huerta; and it is further,
ORDERED that one bill of costs is awarded to the defendants.
The defendants demonstrated good cause for their delay in making a motion for summary judgment, and the Supreme Court providently exercised its discretion in entertaining the late motion (see CPLR 3212[a]; Miceli v State Farm Mut. Auto. Ins. Co., 3 NY3d 725, 726-727; Brill v City of New York, 2 NY3d 648, 562; Kunz v Gleeson, 9 AD3d 480, 481). On the merits, the defendants met their prima facie burden of showing that the plaintiff Jose O. Huerta 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). Huerta's opposition, consisting solely of an affirmation of his attorney, was insufficient to raise a triable issue of fact (see Jefferson v Village of Ossining, 18 AD3d 502, 503).

The Insurance Corporation of New York, v. United States Fire Insurance Company

Carroll, McNulty & Kull L.L.C., New York (Ann Odelson of
counsel), for appellant.
Melito & Adolfsen P.C., New York (S. Dwight Stephens of
counsel), for respondent.
Order, Supreme Court, New York County (Carol R. Edmead, J.), entered February 7, 2008, which, insofar as appealed from, denied the cross motion of defendant United States Fire Insurance Company (US Fire) for summary judgment dismissing the complaint as against it, reversed, on the law, without costs, and the cross motion granted. The Clerk is directed to enter judgment dismissing the complaint as against US Fire. Appeal from order, same court and Justice, entered June 24, 2008, which, inter alia, denied US Fire's request to rescind an insurance policy, unanimously dismissed, without costs, as abandoned.
While the motion court found that the insured, defendant BFC Construction Corp., gave late notice of two claims to US Fire, its excess insurer, the court also deemed US Fire's disclaimer untimely. US Fire issued its disclaimers on April 28, 2006, and the court determined that US Fire had notice on March 16, 2006.
However, the record establishes that US Fire actually received proper notice on April 20 rather than March 16. Pursuant to the terms of its excess policy with US Fire, BFC was required to provide US Fire "prompt written notice of an occurrence, which might result in a claim." Notice was to include how, when and where the occurrence took place; the names and addresses of injured parties and witnesses; and the nature and location of any injury or damage. "An insurer's obligation to cover its insured's loss is not triggered unless the insured gives timely notice of loss in accordance with the terms of the insurance contract" (Power Auth. of State of N.Y. v Westinghouse Elec. Corp., 117 AD2d 336, 339 [1986], citing Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436 [1972]; see also Travelers Ins. Co. v Volmar Constr. Co., 300 AD2d 40 [2002]). Accordingly, US Fire's disclaimers, issued eight days after receiving notice, were timely as a matter of law (see e.g. Public Serv. Mut. Ins. Co. v Harlen Hous. Assoc., 7 AD3d 421, 423 [2004]). 
All concur except Nardelli and Catterson, JJ. who concur in a separate memorandum by Catterson, J. as follows:

CATTERSON, J. (concurring)
I concur with the result reached by the majority but write separately because I believe that the issue of notice obligations under the primary policy of insurance and under an excess policy of insurance requires greater explication.
This is a dispute between a primary insurer (plaintiff) and an excess insurer (hereinafter referred to as "U.S. Fire"). The plaintiff issued a commercial general liability policy to the defendant BFC Construction Corp. (hereinafter referred to as "BFC") for the period January 1, 2001 to January 1, 2002. U.S. Fire, through Crum & Forster, issued an excess insurance policy to BFC for the same period. BFC has primary coverage from other insurers in addition to plaintiff.
The primary policy issued by plaintiff has a $2 million general aggregate limit (except for products-completed operations, which are not at issue). The excess insurance policy issued by U.S. Fire states:
"1.YOU must see to it that WE receive prompt written notice of an occurrence, which may result in a claim. Notice should include:
a.How, when and where the occurrence took place;
b.The nature and addresses of any injured persons and witnesses.
c.The nature and location of any injury or damage arising out of the occurrence.
"2.If a claim is made or suit is brought against YOU, YOU must see to it that WE receive prompt written notice of the claim or suit.
"3.YOU and any other involved insured must:
a.Immediately send US copies of any demands, notices, summons, or legal papers received in connection with the claim or suit [...]"
The policy also says, "A notice given by, or on behalf of, the insured, or written notice by, or on behalf of, the injured person or any other claimant, to any licensed agent of ours in New York State with particulars sufficient to identify you, shall be deemed notice to us."
On March 9, 2006, Tom Ward of Ward North America, LP — plaintiff's third-party claims administrator, sent an e-mail to Jill Pompeii of Crum & Forster. He wrote:
"As we discussed, this matter [Dagati v. BFC Constr.] is scheduled for trial on March 16, 2006. As I advised you, the Inscorp [i.e., plaintiff's] policy issued to BFC Construction had $1 million per occurrence and $2 million aggregate coverage. To date, $1.2 million has been paid as indemnity, leaving $800,000 as the remainder of the aggregate.

"I am issuing the attached letter today to our insured. You should receive a hard copy shortly.
"Inscorp currently has two other claims open on this policy: Daniel Torres [...] and Regolodo [...]"

The attached letter stated, "the General Aggregate Limit is likely to be used up in the payment of judgments or settlements."
Pompeii replied, "it is my tentative plan to attend this trial [...] [P]lease provide details regarding where and when pretrial settlement negotiations will occur."
Ward forwarded the e-mails to another person within his company, adding, "I don't know if she [Pompeii] is monitoring the other two claims [Torres and Regolodo]."
On March 16, 2006, Ward North America faxed to Crum & Foster a letter that it had sent to BFC on March 15. The letter said:
"Our office previously received a copy of the Summons and Complaint filed on behalf of Daniel Torres. It is alleged that Mr. Torres sustained injury on July 30, 2001 on a sidewalk located adjacent to your construction project at 223/225 East 7th Street, New York [...]
"Please allow this correspondence to serve as The Insurance Corporation of New York's notification that based upon occurrences, offenses, claims or suits which have been reported to INSCORP and to which this insurance may apply, the General Aggregate Limit is likely to be used up in the payment of judgments or settlements."
Ward North America also faxed Crum & Foster a copy of the summons and complaint in the Regolodo action.
On April 20, 2006, Ward North America sent Crum & Foster a tender letter stating that the primary policy was likely to be exhausted and that the excess policy would now be implicated.
U.S. Fire disclaimed any obligation to defend or indemnify BFC in light of the late notice in both cases. It also rejected Ward's tender in the Torres case.
In February 2007, the plaintiff brought the instant action. It sought a declaration that its policy had been exhausted and that U.S. Fire was required to defend and indemnify BFC in Regolodo. It also sought $375,000 (the amount it had allegedly overpaid in the Torres settlement). Finally, it sought the "amount of defense costs which have been and will be incurred in the Regolodo action since January 31, 2007."
U.S. Fire answered. One of its affirmative defenses was that "[the] [p]laintiff and BFC failed to provide timely notice of the Torres and Regolodo claims to U.S. Fire."
Ultimately, the plaintiff moved for summary judgment and U.S. Fire cross moved on the basis of, inter alia, late notice. Supreme Court denied both motions.
Initially, U.S. Fire argues that the plaintiff could not rely on any correspondence prior to April 20, 2006 because under the terms of the excess policy, the actual insured, BFC Construction, was required to provide notice. U.S. Fire cites Sorbara Constr. Corp. v. AIU Ins. Co. (41 AD3d 245, 246, 838 N.Y.S.2d 531, 533 (1st Dept. 2007), aff'd, 11 NY3d 805, 868 N.Y.S.2d 573, 897 N.E.2d 1054 (2008)), for the proposition that the insurer's actual knowledge of the claim from another source does not relieve the insured of its own obligation to provide notice.
This misstates the issue and furthermore, it is not determinative of the outcome. In Sorbara, the question presented to the Court was whether notice to a worker's compensation policy carrier would be sufficient notice to a liability insurance arm of the same company. 41 AD3d at 246, 838 N.Y.S.2d at 533. In this case, notice was provided directly to U.S. Fire as the excess carrier, rather than to a different division of the same carrier. Indeed, the notice provided by an agent of the primary liability carrier to U.S. Fire was specifically contemplated by the policy as quoted above.
In my view, the question then turns on whether the notice provided in the pre-April 20, 2006 correspondence is sufficient under the terms of the excess policy. For the reasons that follow, I would find that the pre-April 20 correspondence failed to comport with the clear policy provisions.
Under the law in existence at the time the dispute arose [FN1], it was beyond dispute that:
"prompt notice to primary insurers is a condition precedent to coverage. Apart from the fact that their coverage does not immediately attach after an occurrence but rather attaches only after the primary coverage for the occurrence is exhausted (see, e.g. Hartford Acc & Indem. Co. v. Michigan Mut. Ins. Co., 93 A.D.2d 337, 462 N.Y.S.2d 175, aff'd 61 N.Y.2d 569, 475 N.Y.S.2d 267, 463 N.E.2d 608), excess insurers have most of the rights and obligations of primary insurers. They have the right to investigate claims and to participate in settlement negotiations [...] Accordingly, all of the salient factors point to the conclusion that excess carriers have the same vital interest in prompt notice as do primary insurers and that the Security Mut. rule should be applicable. American Home Assur. Co. v. International Ins. Co., 90 N.Y.2d 433, 442-443, 661 N.Y.S.2d 584, 588, 684 N.E.2d 14, 18 (1992), citing, Security Mut. Ins. Co. of N.Y. v. Acker-Fitzsimons Corp., 31 N.Y.2d 436, 340 N.Y.S.2d 902, 293 N.E.2d 76 (1972).

Given the clear pronouncement of American Home, the sufficiency of the notice provided by the primary insurance carrier to U.S. Fire as excess carrier must be measured by the specific terms of U.S. Fire's policy. The terms of the policy circumscribe the "vital interests" of the excess carrier.
The excess policy, as set forth above, plainly required that notice include far more detail about the occurrences at issue than was supplied by the primary carrier. Indeed, the record contains no evidence that the primary carrier ever complied with the bulk of the notice requirements. The March 16th fax to U.S. Fire merely attached the summons and complaint in Regolodo and a letter concerning Torres. The March 14th email asked U.S. Fire to attend the trial in Dagati. The March 9th email to U.S. Fire merely notified U.S. Fire that Dagati was scheduled for trial. None of these communications satisfied the policy provisions.
It should also be noted that none of these communications put U.S. Fire on notice that the excess policy would be implicated, or even that it was "reasonably likely" that the excess policy would be involved. See Long Is. Light. Co. v. Allianz Underwriters Ins. Co., 24 AD3d 172, 173, 805 N.Y.S.2d 74 (1st Dept. 2005), lv. dismissed, 6 NY3d 844, 814 N.Y.S.2d 77, 847 N.E.2d 374 (2006). Thus, the only possible notice to U.S. Fire was the tender letter of April 20, 2006. Given the paucity of information conveyed to U.S. Fire prior to that time as well as the age of the claims involved, U.S. Fire's disclaimer was timely.
West 64th Street, LLC, v. Axis U.S. Insurance

Flynn, Gibbons & Dowd, New York (Lawrence A. Doris of
counsel), for appellants.
Traub Lieberman Straus & Shrewsberry LLP, Hawthorne
(Robert S. Nobel of counsel), for respondents.
Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered January 22, 2008, which granted defendants-respondents' motion to dismiss the complaint and all cross claims against them, and declared that they have no obligation to defend or indemnify plaintiffs in connection with an underlying personal injury/Labor Law action, unanimously affirmed, with costs.
The motion court properly granted defendant insurers' motion to dismiss pursuant to CPLR 3211(a)(1) since the documentary evidence submitted in support of the motion "resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff[s'] claim" (Fortis Fin. Servs. v Fimat Futures USA, 290 AD2d 383, 383 [2002] [internal quotation marks omitted]; see
GuideOne Specialty Ins. Co. v Admiral Ins. Co., 57 AD3d 611 [2008]). The court was not required "to accept at face value every conclusory, patently unsupportable assertion of fact" found in the complaint, but could consider documentary evidence, proved or conceded to be authentic (Four Seasons Hotels v Vinnik, 127 AD2d 310, 318 [1987]).
Defendant insurers established that the blanket additional insured endorsement in the policy issued to plaintiffs' maintenance contractor provided coverage to any person or organization "that the insured is required by written contract to name as an additional insured," and that the contract between plaintiffs and the maintenance contractor did not contain such a requirement. Thus, plaintiffs were not additional insureds under the policy (see ALIB, Inc. v Atlantic Cas. Ins. Co., 52 AD3d 419 [2008]; Nicotra Group, LLC v American Safety Indem. Co., 48 AD3d 253, 254 [2008]). The documentary evidence submitted by plaintiffs, including a certificate of insurance issued the same day as the accident giving rise to the underlying personal injury action, did not confer coverage, bring plaintiffs within the additional insured coverage afforded by the policy, or otherwise raise any factual issue which would warrant denial of the motion (see Kermanshah Oriental Rugs, Inc. v Gollender, 47 AD3d 438, 440 [2008]; Tribeca Broadway Assoc. v Mount Vernon Fire Ins. Co., 5 AD3d 198, 200 [2004]).
We have considered plaintiffs' remaining contentions and find them unavailing.
Jean v. Kabaya

Baker, McEvoy, Morrissey & Moskovits, P.C., New York
(Stacy R. Seldin of counsel), for appellants.
Hach & Rose, LLP, New York (Philip S. Abate of counsel), for
respondent.
Order, Supreme Court, Bronx County (Paul A. Victor, J.), entered January 12, 2009, which denied defendants' motion for summary judgment, unanimously reversed, on the law, without costs, and the motion granted. The Clerk is directed to enter judgment in favor of defendants dismissing the complaint.
Defendants established prima facie entitlement to judgment by submitting the report of their expert orthopedist indicating that plaintiff had normal range of motion in his left knee and that there was no finding suggesting a traumatic injury. The expert further opined that the cartilage changes in plaintiff's left knee were due to a degenerative condition, probably caused by plaintiff's sports activity. Indeed, the same cartilage changes found in plaintiff's left knee during his arthroscopic surgery were also affecting in his right knee, according to the expert.
In response, plaintiff proffered insufficient objective medical evidence contemporaneous with the accident to reveal significant limitations in his knee resulting from the accident (Ali v Khan, 50 AD3d 454 [2008]). This requirement exists even where there is surgery on the knee (Danvers v New York City Tr. Auth., 57 AD3d 252 [2008]). Furthermore, plaintiff's expert physician failed to address defendants' prima facie showing that the knee condition was due to preexisting, degenerative changes unrelated to any traumatic injury attributable to the accident (Colon v Tavares, 60 AD3d 419 [2009]; Valentin v Pomilla, 59 AD3d 184 [2009]).
Plaintiff missed only two weeks of school and no work as a result of the accident. Without any objective medical evidence, plaintiff's statements that he was limited in his ability to perform his normal daily activities as he had before the accident were insufficient to establish a serious injury under the 90/180-day test of Insurance Law § 5102(d) (see Nelson v Distant, 308 AD2d 338, 340 [2003]).
Plaintiff's argument regarding the evidence relied upon by defendants' expert physician is raised for the first time on appeal, and is thus not properly before us.
Depena v. Sylla

Law Office of Thomas Torto, New York (Jason Levine of
counsel), for appellants-respondents.
PeÑa & Kahn, PLLC, Bronx (Ralph P. Franco, Jr. of counsel),
for respondent-appellant.
Order, Supreme Court, Bronx County (Mark Friedlander, J.), entered January 9, 2009, which granted defendants' motion for summary judgment dismissing the complaint alleging serious injury only to the extent it sought to dismiss the 90/180-day claim, unanimously modified, on the law, without costs, to grant the motion in its entirety. The Clerk is directed to enter judgment in favor of defendants dismissing the complaint.
Defendants established prima facie that plaintiff did not sustain a permanent consequential or significant injury, by submitting the affirmations of an orthopedist, neurologist and radiologist who found that the knee and shoulder conditions were degenerative in origin and did not cause significant limitations, that the lumbar spine condition was preexisting, and that there were no limitations in range of motion of the cervical spine (see Valentin v Pomilla, 59 AD3d 184 [2009]). The conflict between the neurologist's findings of normal range of motion and the orthopedist's findings of limited range of motion in plaintiff's lumbar spine does not require denial of the motion, since defendants submitted sufficient evidence to establish that any lumbar injury was the result of an earlier work accident and surgery.
Plaintiff failed to submit sufficient evidence to raise an issue of fact as to any of the alleged injuries. As to her right knee, a radiologist, Dr. Lubin, reported that an MRI taken after the accident showed "[g]rade II linear signal abnormality within the posterior horn of the medial meniscus likely representing degenerative changes." Defendant's radiological expert similarly opined that the MRI showed degenerative changes but no evidence of acute or recent injury. While plaintiff's orthopedic surgeon, Dr. Silverman, opined that the knee condition resulted from the accident, he failed to address the medical findings of degenerative change by the radiologists and provided no support for his conclusion (see Valentin, supra; Cruz v Aponte, 60 AD3d 431 [2009]).
Dr. Silverman also failed to address defendants' experts' findings that plaintiff's restricted range of motion in the lumbar spine was attributable to her prior surgeries and that her shoulder showed evidence of degenerative changes and no limitation in range of motion. Although plaintiff's MRIs showed herniated discs in the cervical spine, defendants' experts found full range of motion, as did a doctor and an acupuncturist who treated plaintiff after the accident (see Valentin, supra; Onishi v N & B Taxi, Inc., 51 AD3d 594 [2008]). Dr. Silverman's finding, two years after the accident, of some limitation in range of motion is too remote to raise an issue of fact whether the limitation was caused by the accident (see Lopez v Simpson, 39 AD3d 420 [2007]).
Plaintiff's claim that she could not perform substantially all her daily activities for 90 of the first 180 days following the accident because of an injury or impairment caused by the accident was not substantiated by competent medical evidence (see Uddin v Cooper, 32 AD3d 270, 272 [2006], lv denied 8 NY3d 808 [2007]).
Cunha v City of New York

 
Michael A. Heran, for third-party appellant.
Joel M. Simon, for third-party respondent.

PIGOTT, J.:
Plaintiff was injured while working on a roadway excavation in Brooklyn. The City of New York had hired plaintiff's employer, JLJ Enterprises, Inc., as the prime contractor for the work and Haks Engineers, P.C. to perform engineering inspection services in connection with the project. The contract between the City and Haks contained certain indemnification provisions.
On May 14, 2002, City employees, as well as inspectors from Verizon and Con Ed, who were present on the job site, had determined that because a trench had telephone and cable lines running through it, it could no longer be cleared by machinery. As a result, plaintiff was ordered by JLJ to go into the trench to dig by hand. Because the trench was not protected by any shoring or sheeting, it collapsed, causing injury to plaintiff.On November 15, 2002, plaintiff and his wife commenced a personal injury action against the City, alleging violations of Labor Law §§ 200, 240 and/or 241. In turn, the City commenced a third-party action against Haks seeking to recover on theories of contractual and common-law indemnification.
The City moved for summary judgment dismissing plaintiff's Labor Law § 200 claim as well as for judgment on its third-party claim for indemnification against Haks. That motion was denied. Thereafter, further discovery was conducted and a trial date was scheduled.
Four days before trial, the City renewed its motion for summary judgment by order to show cause. By an order, dated April 3, 2006, Supreme Court granted in part the City's motion, dismissing the Labor Law § 200 claim.
On the date trial was to commence on plaintiff's remaining Labor Law § 241 (6) cause of action [FN1], the parties indicated that a settlement agreement had been reached. The agreement provided that plaintiff was to receive $1.2 million, of which the City was to pay $800,000 and Haks was to pay $400,000. The City conceded a violation of Labor Law § 241 (6) premised on a violation of Industrial Code Rule 23.4 et seq. to wit: The shoring and trench where the accident occurred was greater than five feet and the trench collapsed causing injury to plaintiff.
Despite the settlement agreement, the City and Haks disputed the issue of liability and apportionment between them and the case proceeded to trial on the third-party action. At the end of the trial, the jury was asked to answer three questions on the verdict sheet, namely (1) "Was the defendant [Haks] negligent?", if so, (2) "Was the negligence of defendant [Haks] a substantial factor in bringing about the accident?", and (3) "What is the percentage of fault of defendant [Haks]?" The City objected to the third question, arguing that the jury should not be asked to apportion liability.
The jury found Haks negligent, that its negligence was a substantial factor in bringing about the accident, but that it was only 40% at fault for plaintiff's accident. The jury was not asked to, and did not, say where the other 60% of the fault lay.
After the jury was discharged, the City moved for a verdict to be directed against Haks in total of 100% based on the contract indemnification clauses. The City argued that because it was only vicariously liable and had no active negligence, it was entitled to a directed verdict on indemnity. Supreme Court denied the motion. The City appealed.
The Appellate Division reversed on the law and remitted the matter to Supreme Court for an entry of an amended judgment conditionally in favor of the City and against Haks in the amount of 100% of the damages recovered by plaintiffs from the City (45 AD3d 624). As relevant to this appeal, the court held that because the City was only vicariously liable for violating the provisions of the Labor Law, it was entitled to full common-law indemnification from Haks, the party actually responsible for the incident (id. at 626). Thus, the court held that it was error for the jury to be instructed to allocate fault (id.). It concluded that "[s]ince the jury found [Haks] was negligent, and that finding has not been appealed, the judgment must be reversed and an amended judgment must be entered awarding [the City] full common-law indemnification against [Haks] for the amount of its settlement with [the City]" (id.).
The same panel denied Haks' motion to reargue or for leave to appeal to this Court. We granted leave to appeal and now affirm.
This Court has recognized that an owner held strictly liable under the Labor Law is entitled to "full indemnification from the party wholly at fault" (Chapel v Mitchell, 84 NY2d 345, 347 [1994]). While the duty imposed by § 241 may not be delegated, the burden may be shifted to the party actually responsible for the accident, either by way of a claim for apportionment of damages, or by contractual language requiring indemnification (see Allen v Cloutier Const. Corp., 44 NY2d 290, 301 [1978]).
We disagree with Haks that common-law indemnity does not lie because the City was never held to be vicariously liable to plaintiff by a judgment of the court. The fact that the City voluntarily elected to concede liability on the Labor Law § 241 (6) claim should not preclude an indemnification claim. Assuming, as Haks contends, that the City had the burden of proving its own vicarious liability as an element of its third-party claim against Haks, the City produced sufficient evidence to meet that burden. And assuming that Haks was entitled to a jury ruling on the issue of whether the City was vicariously liable to plaintiff, it waived that right by not asking that the issue be submitted to the jury.
Further, it is well settled that a party may settle and then seek indemnification from the party responsible for the wrongdoing as long as the settling party shows that it may not be held liable in any degree (see Rosado v Proctor & Schwartz, Inc., 66 NY2d 21 [1985]). Here, the issue of the City's active negligence was already determined by the order of the Supreme Court dated April 3, 2006, which dismissed plaintiff's Labor Law § 200 claim against the City. Moreover, during trial, Haks conceded that the City's active negligence was not at issue; it neither objected to nor disagreed with the Court's position that the City did not have any negligence and that its only responsibility was pursuant to Labor Law § 241 (6). 
Haks also raises the issue of the potential liability of other parties and relies on our recent decision in Frank v Meadowlakes Dev. Corp. (6 NY3d 687 [2006]) for the proposition that the City is entitled to only partial indemnification from Haks. In Frank, we held that CPLR article 16 limited the amount that can be recovered in indemnity when a tortfeasor's liability is 50% or less. In that case, the injured plaintiff sued the owner of the job-site, Meadowlakes, and the general contractor, DJH Enterprises, Inc. ("DJH"). Meadowlakes thereafter brought a third-party action for indemnification against plaintiff's employer, Home Insulations and Supply, Inc. ("Home"). Since the claim arose before the 1996 amendment to Workers Compensation Law sec. 11, Home was not immune from third-party liability. After a trial, the jury apportioned fault in the amount of 10% to plaintiff, 10% to Home and 80% to DJH. The court also directed a verdict against Meadowlakes and DJH based upon a violation of Labor Law § 240 (1). Plaintiff settled with Meadowlakes for $1.4 million and with DJH for $300,000.
Meadowlakes moved for common-law indemnification against Home for 100% of its settlement liability. Home appealed arguing, as relevant to this appeal, that because it was found only 10% at fault, it should be liable to Meadowlakes for only its proportionate share of negligence. We agreed, finding that Meadowlakes was not entitled to 100% recovery. In doing so, we held that the savings provision of CPLR 1602 (2) (iv) applied and that recovery from Home, as a party found 10% liable, was limited to its proportionate share with respect to noneconomic damages.
This case differs from Frank, however, in that no Article 16 issue exists inasmuch as no other tortfeasor could be found liable for plaintiff's injuries. Haks argues that the jury must have found another entity liable as they apportioned only 40% fault to Haks. This argument is flawed.
A likely interpretation of the jury's verdict is that the jury allocated culpability to plaintiff's employer, JLJ - but JLJ's fault was irrelevant and should not have been before the jury. Plaintiff did not sustain a grave injury and thus, his employer was not subject to being part of the action (see Workers Compensation Law sec. 11; CPLR 1601 [1]). To the extent the jury may have considered plaintiff himself at fault, his negligence must be excluded because he, like JLJ, cannot be an indemnitor (see Frank, 6 NY3d at 693). It is unlikely that the jury allocated active fault to the City; to the extent the verdict is unclear on that issue, the burden was on Haks to clarify it, by proposing an appropriate question to the jury.
Moreover, no apportionment for any other third-party was requested by Haks at any time during the proceedings. No evidence was submitted at trial that any other entity was negligent, nor could have any other entity been found negligent based upon the instructions provided to the jury, the verdict sheet, or the charge provided to the jury. Consequently, once Haks was found to be negligent-and since Haks was the only possible negligent party to the lawsuit-the City was entitled to 100% indemnification from Haks.
Because we find that the City prevails on its common-law indemnification cause of action against Haks, we need not address its contractual indemnification claim.
Accordingly, the order of the Appellate Division should be affirmed, with costs.
* * * * * * * * * * * * * * * * *
Order affirmed, with costs. Opinion by Judge Pigott. Chief Judge Lippman and Judges Ciparick, Graffeo, Read, Smith and Jones concur.
Decided June 9, 2009
Footnotes


Footnote 1: The Labor Law § 240 claim was previously withdrawn.